News

Unscrupulous political fundraising

(image)

Capitol. SL / iStock

Here are three of the week’s top financial news, gathered from the web:

Unscrupulous political fundraising
The aggressive fundraising tactics of political campaigns are particularly likely to trap older Americans, Shane Goldmacher told The New York Times. Manipulative donation requests can inspire people of all ages to donate more money than they intended. But an analysis of refunded donations, “which often occur when backers feel dissatisfied or duped,” found that in 2020 “four times as much money was refunded to donors aged 70 and over than to adults at less than 50 years “. Some email campaigns specifically target older internet users with subject lines such as “Social Security”. The Democratic Congressional campaign committee sent out emails saying “Final Notice”, making it appear “as if the actual bills might be missing.” The Trump campaign last year received a “wave of fraud complaints” after “making automatically repeated donations every week,” a practice widely viewed as “the most egregious” fundraising abuse.

Why ETFs beat mutual funds
“America’s 40-year love affair with mutual funds seems over,” Stephen Foley told the Financial Time. Mutual funds have been losing ground to exchange traded funds for years. Now, a proposal to sharply increase capital gains tax for high net worth investors “could accelerate change.” Mutual fund managers “are required to distribute capital appreciation when a fund sells a stock that has appreciated.” In contrast, ETF managers, which are structured as a single stock that investors can buy or sell, rarely have to sell stocks in the companies they own. The flight to ETFs creates new risks for mutual funds, as shrinking funds might “have no choice but to sell the underlying stock.”

Losers turn to the stock market
Companies that are already listed on the stock exchange and are losing money are using the current stock market frenzy to raise funds, Lu Wang and Vildana Hajric told Bloomberg. “Nearly 750 loss-making companies have sold shares on the secondary market” in the past 12 months. They outnumber profitable company stock offers 2 to 1, the largest margin since at least 1982. While many companies are unprofitable on the IPO, older companies lose money for years – as AMC and GameStop selling more stocks is a new trend. Analysts “warn that the flood of stocks from losers is becoming extreme” and could represent “a bad omen for the market”.

This article first appeared in the latest issue of The week magazine. If you want to read more, you can try six risk-free issues of the magazine. here.

You may also like

Cosby could sue Pennsylvania County after being released from prison

Anti-revival fanatics attempt to politically purge the military

Judge rejects Britney Spears request to remove father from guardianship

source: news.yahoo.com

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button