Don’t charge stock purchases
Q. Is it smart or stupid to invest in stocks by borrowing against a credit card? — T.M., Bountiful, Utah
A.
It's not smart.
Think about it this way: The average credit card interest rate, according to a Forbes Advisor report, was recently a whopping 28%. If you're paying 28% interest on money you borrowed, you're going to want to earn more than that on it — a tall order. Over the long term, the average annual growth rate for the stock market has been around 10%; even Warren Buffett's amazing record just doubles that.
You might luck out with an amazing stock or two, but it's still hard to top 28%. Apple's stock has averaged 27% annually over the past five years, while Microsoft averaged 24%. But Starbucks averaged less than 13%, and IBM averaged 6%. You could even lose what you put in: Pfizer averaged a loss of 5%, and Airbnb averaged a loss of over 8%.
Q. What are the world’s biggest employers? — F.E., Middletown, Delaware
A.
Walmart and Amazon.com top the Fortune Global 500 list, with 2,100,000 and 1,541,000 employees, respectively. They're followed by China National Petroleum (1,087,049), Chinese power company State Grid (870,287), Hon
Hai Precision Industry (767,062), China Post Group (752,547), Accenture (721,000), Volkswagen (675,805), the U.S. Postal Service (576,065) and Chinese automaker BYD (570,060). Other major U.S.-based employers include
FedEx (518,249), Home Depot (471,600), Target (440,000) and Kroger (430,000).
Some military forces exceed those numbers, though. Per Statista. com, India's Ministry of Defence recently employed 3 million people, while the U.S. Department of Defense employed 2.9 million and China's People's Liberation
Army employed nearly 2.6 million.
Financial terms to know
There's a lot of jargon in the financial world. Here are some explanations of terms you'll likely run across.
American Depositary Receipt, or ADRs, and American Depositary Share, orADSes: Types of securities that allow Americans to easily invest in companies based outside the U.S., such as AstraZeneca and Nokia. An ADR is a receipt for the shares of a foreignbased company held by a U.S. bank, while an ADS is an actual share. ADRs and ADSes trade like stocks on U.S. exchanges, with shareholders entitled to all dividends and capital gains of the underlying stock.
Basis point: A common way to describe a change in interest rates. One basis point is 1⁄100 th of a percentage point, so half a percentage point can also be described as 50 basis points.
Institutional investors: Large-scale investors using their clients' money to invest — such as pension funds, insurance funds, hedge funds and mutual funds.
Prime rate: The interest rate that lenders charge their best, most reliable customers.
Real return: The inflation-adjusted return of an investment. For example, the stock market's long-term average annual return has been about 10%, while inflation has averaged around 3% over many decades. Subtracting 3% from 10% gives you the real return — approximately 7% annually.
Sector fund: A mutual fund that invests its shareholders' money in a particular market sector, such as financial services, energy, telecommunications or banking.
Special dividend: A dividend that's not part of a regular (typically quarterly) schedule. Some companies, such as Costco, issue dividends at times of their choosing, when they have ample extra cash they can distribute to shareholders.
Volume: The amount of a stock (expressed in shares or dollars) that is traded during a particular period.