FINANCIAL HOUSEKEEPING | Calculate your return on investment
Return on investment, or ROI, is one measure of investment performance, and yet many money-management firms do not include it on client statements.
Calculating ROI on your own can get a bit tricky, which is why www.whatismyroi.com is worth a look. The site is a paid service – an annual subscription costs $25 – but it offers a free 30-day trial, which may be enough time for investors to do the basic calculations on investments they own.
The site is labor-intensive, as it requires the user to enter a significant amount of data to accurately calculate return on investment, but savvy investors will like how the service allows them to calculate and compare their annual and compounded rates of return to stock- and bond-market indexes.
SHORT COURSE | Teaser rates
An introductory interest rate designed to attract borrowers to adjustable-rate loans – from credit cards to mortgages – is known as a teaser rate. Typically, these promotional rates last for a few months or up to a year before returning to a higher level that’s more in keeping with the average interest rates being charged in the credit markets.
Mortgage lenders say teaser rates are not just an enticement to borrow but allow homebuyers to settle in and adjust to all the costs of homeownership.
In recent years, lenders have tightened the terms on teaser rates, writing fine-print stipulations into contracts that call for rates to rise drastically and immediately if a payment is late or delayed, sometimes rising even if the late payment was made to a different creditor. Experts suggest knowing how a teaser rate works and what events could nullify the offer – or simply make it less than worthwhile – before signing on.
