Deva Panambur, CFA®, CFP® is the founder of Sarsi, LLC. Sarsi, LLC is an independent, fee only, Registered Investment Advisor, serving individuals and institutions. We primarily provide the following services: 1.Financial Planning: Overall financial situation of the client including cash flow, debt management, risk management/insurance, estate planning and tax planning. 2. Investment strategy 3. Asset allocation and risk management 4. Manager/Investment product selection 5. Investment monitoring and reporting.
Prior to founding Sarsi, LLC in 2010, Deva was a Senior Vice President/Partner at Executive Monetary Management (EMM), a wealth advisor with over $2Bn in assets that was a part of Neuberger Berman, before being spun off into an independent firm in 2009. At EMM, Deva led manager selection and due diligence and had joint responsibility for economic analysis, strategy analysis, portfolio management and risk management pertaining to investments of ultra high net worth clients and institutions.
Prior to joining EMM, he was a portfolio manager at the alternative strategies group of Merrill Lynch; a research analyst at Chesapeake Capital Corporation- a hedge fund; and a risk and business analyst at Deutsche Bank Asset Management where he supported various investment groups. He began his career at International Seaports Pte. Ltd. in international project finance in the Far East and the United States.
Deva earned a Bachelor of Technology from the Indian Institute of Technology, India, a Master in International Management from the Indian Institute of Foreign Trade, India, and an MBA from Thunderbird School of Global Management, Glendale, AZ. He has been awarded the Chartered Financial Analyst designation and is a CFP® professional.
He regularly provides expert advisory services to top consulting firms and asset management companies regarding the business and investment aspects of the investment industry. He is an Adjunct Professor of Personal Finance at Montclair State University in New Jersey and in his spare time trains candidates appearing for the CFA exam.
MBA, Finance, Thunderbird (Arizona State University)
BTech, Metallurgy, Indian Institute of Technology
Fee only. Asset based and/or fixed.
Sarsi LLC (“Sarsi”) is a Registered Investment Advisory Firm regulated by the State of New Jersey in accordance and compliance with applicable securities laws and regulations. Sarsi does not render or offer to render personalized investment advice through this newsletter. The information provided herein is for informational purposes only and does not constitute financial, investment or legal advice. Investment advice can only be rendered after delivery of the Firm’s disclosure statement (Form ADV Part II) and execution of an investment advisory agreement between the client and Sarsi.
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Since you have a future obligation in a foreign currency ie Euro, you will need to purchase the Euro forward. In this way you can lock in a rate today. You can do this using forwards, futures or options. These instruments are a bit more difficult to access for retail investors and are quite complex and will need you to monitor them. But they are possible through firms such as Interactive Brokers. Keep in mind, when you hedge anything- you are removing the downside/uncertainty but are also giving up the upside (Except when you use options). You could hedge only a portion of the amount you need.
A simpler option may be opening a Euro account and over time depositing at least a portion of the Euro amount you would need. You can also try and see if the wedding vendors/merchants are willing to lock in a price in USD today and allow you to pay a deposit and then the rest nearer to the date of the wedding.
Congratulations on starting early. Your investment strategy should be based on your beliefs and how much effort you can put into it. Since, you are just beginning and finding your way around the investing world and would possibly be busy with your studies, you should keep your investment strategy as simple as possible. I would recommend investing in a portfolio of passive ETFs. Since you are young and likely have a long horizon, you can take more risk (i.e. more stocks). The easiest way to do this through one of the robo advisors. By answering a few questions, you will be able to pick the portfolio that suits you. This is also a good option for relatively lower assets. As you become more knowledgeable you can fine tune your investment strategy.
I don't remember the details in the movie, but when you buy credit default swaps on mortgage bonds you are required to pay a premium periodically (usually quarterly). This is very similar to the premiums you pay for any insurance such as a car or life insurance. The notional value is the value of bonds you are insuring. You don't need to own the bonds. (And hence the term 'financial engineering!)
If the price of the bonds falls, your counterparty (Banks who sold the credit default swaps) will make payments depending on how much the bonds fell from its initial value when the CDS was purchase.
For example, if you buy insurance on $100 worth of bonds and pay a premium of 1% you are required to make 25 cents every 3 months. If the value of the bonds falls to $75, you will get a payment of $25 (The amount by which the price of the bond fell). The $100 is called the notional value.
The $1.3Bn I believe is the notional value of the bonds on which Dr. Burry purchased insurance. Before the financial crisis the premiums were very low (Because most of the banks never thought the value of the bonds would fall- just as your car insurance will be low if the insurance company thinks you are unlikely to have an accident). So, he was paying a relatively low premium with very high expected pay off if, as he forecasted, the value of the bonds fell. It did fall and he reaped the benefit.
In 2017, If your combined taxable income including your long-term capital gains falls below $37,950 as a single filer or $75,900 if filing jointly with your spouse ($38,600 and $77,200 in 2018) then your long term capital gains will be taxed at 0%.
When looking at brackets, your ordinary taxable income is used first and then the long term capital gains- if your total taxable income falls in the lower brackets then long term capital gains is 0 but if your capital gains takes you to higher brackets then higher rates apply- 15% and then at the highest brackets 20%. So, for example if you had $0 ordinary income and had a very large long-term capital gain, say $1 million for the sake of this example- it does not mean you will be taxed at 0% rate. You will pay capital gains taxes between 0% and 20% for various portions of your capital gains.
Knowledge is certainly important, and you should read and learn as much as possible and speak to people who could educate and guide you. However, if you keep your investing plan simple, the earlier you start and the more disciplined you are in creating and sticking to an investment plan the more likely you are to succeed in your objectives. Here is an article on the importance of starting early to allow the time value of money/compounding work in your favor. https://www.investopedia.com/advisor-network/articles/how-make-time-value-money-work-you/ Investopedia has several other articles that may help you as well.
You are way ahead of your peers in thinking about these things and asking questions like this- keep it up! All the best.