Based on a major study conducted since 1995 on the performance of savings and investments, keeping your cash in a best-buy savings account can often provide better returns than investing in stocks.

So, which is really better?

The research which was done by financial journalist Paul Lewis (not related to Martin Lewis, founder of, showed that most investment periods in the last 21 years, stashing money in best-buy cash savings accounts would have given a saver more than a FTSE 100 shares tracker (following the index of shares in the biggest 100 firms on the London Stock Exchange directory).

Traditionally, investments in shares has remained the best way to build your wealth; however, that does not seem to be the case now according to the research, which likewise emphasizes the stark reality of losing money through investing.

What did the research really confirm?

The study compared gains from a simple HSBC tracker fund (which 'tracks' the FTSE 100 index of shares) with cash put yearly into a best-buy one-year deposit account with a bank or building society – also referred to as a 'one-year bond'. It assumed that dividends were invested back while the cash was also invested back yearly together with earned interest. The study showed the following:

• Savings accounts overtook the overall gains on the tracker in 57% of the 192 five-year investment periods commencing monthly since 1 January 1995. On the other hand, the tracker scored only 43% of the same durations.

• Over longer time durations, the difference was even more pronounced. For instance, in more than 84 14-year periods from 1995, cash-savings handily overran investments in shares with an impressive 96% score.

• When considering a various periods of investment since 1995, such as from one to 11 years, the study found investments in funds that follow the FTSE 100 would have ended up losing money up to 33% of the time. However, keeping your money in a savings account assured you a gain over the original amount, a virtually risk-free proposition.

• Nevertheless, savings accounts did not win in each situation. The research showed that throughout the full 21-year period from 1995 to 2016, best-buy savings accounts would have delivered an average 5 % “annual compound return” (rate-of-return on your investment) against the 6% HSBC tracker fund would have produced.

But while shares led over the entire period, this finding is still remarkable. Although investors are ordinarily told an average 'risk premium' (which is the extra gain you expect to get by 'risking' an investment in a tracker instead of keeping a bank savings account) of 3% to 8%; however, this study seems to point to a slight gain near 1%.

In short, best-buy savings accounts are more advantageous than investing in the stock market since savings account will never be lost while investments in shares may disappear.

So, how was the research undertaken?

Paul Lewis, who presents Radio 4's Money Box program, acquired data from best-buy cash records since 1995 from Moneyfacts, a financial information publisher.

He states, "This new study of the data proves that people who choose to keep their cash safe in savings accounts have a higher rate of winning over those who prefer tracker funds in most of time periods.

"Likewise, it verifies that the risk of incurring losses on stock investments is quite real. Over any investment period of one up to five years from 1995 to 2015, about one out of four chances or more resulted in the investment’s failure. For longer periods of nine or ten years, the chance of failing was about one out of ten. Only a few financial consultants are aware of such odds and even fewer tell their clients about them.

"For so long, I have long assumed that the value of cash was played down by conventional study which tend to put out poor cash rates in comparison with overstated gains in stocks investments."

So, should we then do away with investing in shares?

It really depends on one’s risk capacity. Whereas this study sheds new light on the issue, whether you invest or save, it is an individual’s choice wholly dependent on one’s outlook on risk; hence, if you are comfortable with taking risks, you may find your fulfillment in shares.

Lewis's study discovered periods when shares gave a higher gain than cash, such as from 1 November 2008 to 1 September 2009; and during the entire 21-year-period, shares enjoyed a slight advantage.

In general, however, for investment periods of five years or more, cash savings gave a better return over shares: 38 against 24, respectively.

Moreover, Lewis says: "In every situation, cash may not be right for everyone. However, for a cautious investor over long periods of time of up to two decades, this study points to the advantage of well-managed active cash over a FTSE 100 tracker in most cases. The clincher for people who look for a sure winner is that a cash account will produce more money than what they put in."

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Everyone listens to Warren Buffett’s investing advice. Who will not want to listen to the world’s greatest investor and learn how he earned $72 billion net worth and enhanced his company, Berkshire Hathaway, into a formidable force valued at more than $212 billion.

One fact that sets Buffett apart from others is his refusal to advice the ordinary investor to follow his example. On the contrary, he tells investors to do the opposite. Nevertheless, Yahoo Finance shares the following Buffett’s well-known insights on investing for a long-term, durable growth:

1. Cash is the worst investment over time

Having cash around, whether in the bank or at home, can be a reassuring thing. But over time, cash is an unstable investment. That is a fact; and yet people do keep enough cash with them so that they can have a certain degree of financial freedom.

2. Invest in diversified index funds that track the S&P 500

If you already have enough experience as an investor, then you need to focus deeply. For the rest of the people, aim for complete diversification. In the long run, the economy turns out well. As such, do not buy at the wrong price or at the wrong time. In general then, buy index fund at a low rice, and gradually level into a dollar-cost average. Spending merely an hour each week investing will lead you nowhere.

Read the book: “Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor” by Jack Bogle, Vanguard founder. Or if you can, read all Bogle’s books to know all you need to know about funds.

3. Invest in yourself

Warren Buffett advices people to invest in their own abilities. “Anything you can do to develop your own abilities or business is likely to be more productive.” Even in life, such advice should not be ignored.

4. If you intend to invest in stocks, avoid any business you do not understand

Investors must consider only investments they can understand. Assuming you put all your family’s net worth into a business, would they consider going into that business? Or would they refrain from doing so because they know nothing about it? If that case, they should choose another business. Like Buffet and his long-time partner, Charlie Munger, who avoid businesses they do not understand, individual investors should do the same.

5. Focus also on the competition

Investing in a company’s stocks means investing in a part of their business. If you were, for example, to invest in a local gas station or convenience shop, how would they run it? Obviously, they would look at the competition, the competitive posture of both the sector and the immediate environment, the people running the competition and other matters.

6. Invest for the long-term

Buffett has this to say: “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for ten minutes.” Investing is like planting a tree for yourself: You begin with a seedling and hope to eat from its fruits later on.

7. The most difficult part of investing is learning to trust yourself

Stay away from mob-thinking. That is one sure way of becoming dumb. Buffett thinks investors are not really using their intelligence. One can be smart but also be illogical. To succeed in investing, divorce yourself from the greed and fears of the people you deal with even if you think that is very hard to do.



The International Financial Securities Regulatory Commission is established to promote investor confidence in the securities and capital markets by providing more structure and government oversight. The mission of the International Financial Securities Regulatory Commission is to protect investors and maintain integrity of the securities industry, overseeing major participants in the industry, including stock exchanges, broker-dealers, investment advisors, mutual funds, and public utility holding companies. The International Financial Securities Regulatory Commission is concerned primarily with promoting disclosure of important information, enforcing securities laws, and protecting investors who interact with these various organizations and individuals.

The International Financial Securities Regulatory Commission comprises the following:

•Membership of the Financial Supervision Commission

•Supervision Division

•Enforcement Division

•Policy Division

•Authorizations Division

•Operations Division

•Companies Registry



The International FinancialSecurities Regulatory Commission includes a number of non-executiveCommissioners who importantly bring a blend of different commercial experiencesto the decisions which the institution takes.

As a result suchCommissioners may have interests with which conflicts can arise in the courseof carrying out their work with the International Financial SecuritiesRegulatory Commission.

To maintain publicconfidence in its regulation, the International Financial Securities RegulatoryCommission wishes to demonstrate that the actions of Commissioners are dealtwith separately from other interests which they may hold.

The Code of Conductregarding Conflicts of Interest is published on this website and in theinterests of transparency; details of Commissioners’ current directorships havealso been published.

The conflicts ofinterests of staff generally are dealt with in the terms and conditions ofservice and the staff handbook and the International Financial SecuritiesRegulatory Commission’ Code is mirrored as appropriate in the staff version.



Types of Acquisitions

In general, acquisitions can be horizontal, vertical, or conglomerate. A horizontal acquisition takes place between two firms in the same line of business. For example, one tool and die company might purchase another. In contrast, a vertical merger entails expanding forward or backward in the chain of distribution, toward the source of raw materials or toward the ultimate consumer. For example, an auto parts manufacturer might purchase a retail auto parts store. A conglomerate is formed through the combination of unrelated businesses.

Another type of combination of two companies is a consolidation. In a consolidation, an entirely new firm is created, and the two previous entities cease to exist. Consolidated financial statements are prepared under the assumption that two or more corporate entities are in actuality only one . The consolidated statements are prepared by combining the account balances of the individual firms after certain adjusting and eliminating entries are made.

Another way to acquire a firm is to buy the voting stock. This can be done by agreement of management or by tender offer. In a tender offer, the acquiring firm makes the offer to buy stock directly to the shareholders, thereby bypassing management. In contrast to a merger, a stock acquisition requires no stockholder voting. Shareholders wishing to keep their stock can simply do so, however by doing so the shareholder maybe left with holding stocks within a company that no longer exists.

A bidding firm can also buy another simply by purchasing all its assets. This involves a costly legal transfer of title and must be approved by the shareholders of the selling firm. A takeover is the transfer of control from one group to another. Normally, the acquiring firm (the bidder) makes an offer for the target firm. In a proxy contest, a group of dissident shareholders will seek to obtain enough votes to gain control of the board of directors.

Taxable Versus Tax-Free Transactions

Mergers and acquisitions can be either tax-free or taxable events. The tax status of a transaction may affect its value from both the buyer’s and the seller’s viewpoints. In a taxable acquisition, the assets of the selling firm are revalued or “written up. “Therefore, the depreciation deduction will rise (assets are not revalued in a tax-free acquisition). But the selling shareholders will have to pay capital gains taxes and thus will want more for their shares to compensate. This is known as the capital gains effect. The capital gains and write-up effects tend to cancel each other out.

Certain exchanges of stock are considered tax-free reorganizations, which permit the owners of one company to exchange their shares for the stock of the acquirer without paying taxes. There are three basic types of tax-free reorganizations. In order for a transaction to qualify as a type A tax-free reorganization, it must be structured in certain ways. in contrast to a type B reorganization, the type A transaction allows the buyer to use either voting or non-voting stock. It also permits the buyer to use more cash in the total consideration since the law does not stipulate a maximum amount of cash that can be used. At least 50 percent of the consideration, however, must be stock in the acquiring corporation. in addition, in a type A reorganization, the acquiring corporation may choose not to purchase all the target’s assets.

In instances where at least 50 percent of the bidder’s stock is used as the consideration but other considerations such as cash, debt, or non-equity securities are also used the transaction may be partially taxable. Capital gains taxes must be paid on those shares that were exchanged for no equity consideration. A type B reorganization requires that the acquiring corporation use mainly its own voting common stock as the consideration for purchase of the target corporation’s common stock. Cash must comprise no more than 20 percent of the total consideration, and at least 80 percent of the target’s stock must be paid for by voting stock by the bidder.

Target stockholders who receive the stock of the acquiring corporation in exchange for their common stock are not immediately taxed on the consideration they receive. Taxes will have to be paid only if the stock is eventually sold. If cash is included in the transaction, this cash may be taxed to the extent that it represents a gain on the sale of stock.

In a type C reorganization, the acquiring corporation must purchase 80 percent of the fair market value of the target’s assets. In this type of reorganization, a tax liability results when the acquiring corporation purchases the assets of the target using consideration other than stock in the acquiring corporation. The tax liability is measured by comparing the purchase price of the assets with the adjusted basis of these assets.

Hostile Acquisitions

The replacement of poor management is a potential source of gain from acquisition. Changing technological and competitive factors may lead to a need for corporate restructuring. If incumbent management is unable to adapt, then a hostile acquisition is one method for accomplishing change.

Hostile acquisitions generally involve poorly performing firms in mature industries, and occur when the board of directors of the target is opposed to the sale of the company. In this case, the acquiring firm has two options to precede with the acquisition a tender offer or a proxy fight. A tender offer represents an offer to buy the stock of the target firm directly from the firm’s shareholders. in a proxy fight, the acquirer solicits the shareholders of the target firm in an attempt to obtain the right to vote their shares. The acquiring firm hopes to secure enough proxies to gain control of the board of directors and, in turn, replace the incumbent management.

Management in target firms will typically resist takeover attempts either to get a higher price for the firm or to protect their own self-interests.

Other defensive tactics include poison pills and dual class recapitalization. With poison pills, existing shareholders are issued rights which, if a bidder acquires a certain percentage of the outstanding shares, can be used to purchase additional shares at a bargain price, usually half the market price.

Do Acquisitions Benefit Shareholders?

There is substantial empirical evidence that the shareholders in acquired firms benefit substantially. Gains for this group typically amount to 20 percent in mergers and up 300 percent and above in tender offers above the market price.

The gains to acquiring firms are difficult to measure. The best evidence suggests that shareholders in bidding firms do gain. Losses in value subsequent to merger announcements are not unusual. This seems to suggest that overvaluation by bidding firms is common.


Do Acquisitions Benefit Shareholders?

Merger and acquisition activity in the United States has typically run in cycles, with peaks coinciding with periods of strong business growth US merger activity has been marked by five prominent waves:. One around the turn of the twentieth century, the second peaking in 1929, the third in the latter half of the 1960s, the fourth in the first half of the 1980s, and the fifth in the latter half of the 1990s.

This last peak, in the final years of the twentieth century, brought very high levels of merger activity. Bolstered by a strong stock market, businesses merged at an unprecedented rate. The total dollar volume of mergers increased throughout the 1990s, setting new records each year from 1994 to 1999. Many of the acquisitions involved huge companies and enormous dollar amounts. Disney acquired ABC Capital Cities for $ 19 billion, Bell Atlantic acquired Nynex for $ 22 billion, World com acquired MCI for $ 41.9 billion, SBC Communications acquired Ameritech for $ 56.6 billion , Traveler’s acquired Citicorp for $ 72.6 billion, Nation Bank acquired Bank of America for $ 61.6 billion, Daimler-Benz acquired Chrysler for $ 39.5 billion, and Exxon acquired Mobil for $ 77.2 billion.

Merger Guidelines

Do Acquisitions Benefit Shareholders?

In the vast majority of antitrust challenges to mergers and acquisitions, the matters have been resolved by consent order or decree. The United States Regulators Commission have sought to clarify how they analyze mergers through merger guidelines issued May 5, 1992 (4 Trade Reg. Rep . [CCH] 13,104). These guidelines are law. nevertheless, the antitrust enforcement agencies will use them to analyze proposed transactions.

The 1992 merger guidelines state that most horizontal mergers and acquisitions aid competition and are beneficial to consumers. The intent of issuing the guidelines is to “avoid unnecessary interference with the larger universe of mergers that are either competitively beneficial or neutral.”

The guidelines prescribe five questions for identifying hazards in proposed horizontal mergers:?? Does the merger cause a significant increase in concentration and produce a concentrated market Does the merger appear likely to cause adverse competitive effects Would entry sufficient to frustrate anti-competitive conduct be timely and likely to occur? Will the merger generate efficiencies that the parties could not reasonably achieve through other means? Is either party likely to fail, and will its assets leave the market if the merger does not occur?

The guidelines essentially ask which products or firms are now available to buyers and where could buyers turn for supplies if relative prices increased, which tends to yield lower concentration increases than Supreme Court merger decisions of the 1960s.

Rule 144: Selling Restricted Securities

When you acquire restricted securities or hold control securities, you must find an exemption from the US Regulator’s registration requirements to sell them in the marketplace. Rule 144 allows public resale of restricted and control securities if a number of conditions are met. This overview tells you what you need to know about selling your restricted or control securities. It also describes how to have a restrictive legend removed.

What Are Restricted and Control Securities?

Restricted securities are securities acquired in unregistered, private sales from the issuer or from an affiliate of the issuer. Investors typically receive restricted securities through private placement offerings, as compensation for professional services, or in exchange for providing “seed money” or start-up capital to the company.

What Are Restricted and Control Securities?

Restricted securities are securities acquired in unregistered, private sales from the issuer or from an affiliate of the issuer. Investors typically receive restricted securities through private placement offerings, as compensation for professional services, or in exchange for providing “seed money” or start-up capital to the company.

What Are the Conditions of Rule 144?

If you want to sell your restricted or control securities to the public, you can follow the applicable conditions set forth in Rule 144. The rule is not the exclusive means for selling restricted or control securities, but provides a “safe harbor” exemption to sellers .

The rule’s conditions are summarized below:

1. Holding of the Period. The Before you Sell the any Tel Restricted Securities in May at The Marketplace, you of MUST Them for the HOLD A Certain period of Time. Begins at The Relevant Holding period the when were bought at The Securities and Fully Paid for. Holding period at The only Applies to Tel Restricted Securities .

2. Adequate the Current Information. There of MUST BE Adequate Current Information at The Issuer of the About the before at The Securities Sale at The CAN BE Made. This means that GeneRally at The Issuer has complied the with at The periodic Reporting requirements Type.

3. To Ordinary Brokerage Transactions. All Sales All in All Respects the Handled of MUST BE AS Trading Transactions routine, and the receive Brokers May Not A Normal More Within last Commission.

Can the Securities Be Sold Publicly If the Conditions of Rule 144 Have Been Met?

Even if you have met the conditions of Rule 144, you are still unable to sell your restricted securities to the public until you have removed the legend from the certificate. Only a designated transfer agent can remove a restrictive legend from your shareholding.

Since removing the legend can be a complicated process, an investor buying or selling a restricted security should engage a transfer agent to facilitate the procedures for removing a legend.

At The International’s Financial Securities Regulatory Commission IS ESTABLISHED to the Promote Investor confidence in at The Securities and Capital Markets by PROVIDING More Structure and Government Oversight. At The Mission of at The International’s Financial Securities Regulatory Commission IS to Protect Investors and Maintain Integrity of at The Securities Industry , overseeing Major Participants in at The Industry, Including Stock Exchanges, Broker-Dealers, Investment Advisors, Mutual Funds, and public Utility Holding companies. at The International’s Financial Securities Regulatory Commission IS Concerned the Primarily the with Promoting Disclosure of Important Information, enforcing Securities Hurtado De Notaris, and Protecting Investors WHO InterAct the with these various organizations and individuals.



The InternationalFinancial Securities Regulatory Commission provides you with the latestpublic service information, including support guides, and special reports,summary of recent enforcements.

The Future of Mergers and Acquisitions

Beginning in 1980,with President Ronald Reagan's administration, The International FinancialSecurities Regulatory Commission has adjusted its policies to allow morehorizontal mergers and acquisitions. The states have responded by invokingtheir antitrust laws to scrutinize these types of transactions. Nevertheless,mergers and acquisitions have increased throughout the U.S. economy, includingthe health care industry, electric utilities, telecommunications corporations,and national defense contractors.

Mergers andacquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporatefinance management dealing with the buying, selling, dividing and combining ofdifferent companies and similar entities that can aid, finance, or help anenterprise grow rapidly in its sector or location of origin or a new field ornew location without creating a subsidiary, other child entity or using a jointventure. The distinction between a "merger" and an"acquisition" has become increasingly blurred in various respects(particularly in terms of the ultimate economic outcome), although it has notcompletely disappeared in all situations.

1. Improperdocumentation and changing implicit knowledge makes it difficult to shareinformation during acquisition.

2. Foracquired firm symbolic and cultural independence which is the base oftechnology and capabilities are more important than administrativeindependence.

3. Detailedknowledge exchange and integrations are difficult when the acquired firm islarge and high performing.

4. Managementof executives from acquired firm is critical in terms of promotions and payincentives to utilize their talent and value their expertise.

5. Transferof technologies and capabilities are most difficult task to manage because ofcomplications of acquisition implementation. The risk of losing implicitknowledge is always associated with the fast pace acquisition.

Only possible whenresources are exchanged and managed without affecting their independence.

Although often usedsynonymously, the terms merger and acquisition mean slightly different things.The legal concept of a merger (with the resulting corporate mechanics,statutory merger or statutory consolidation, which have nothing to do with theresulting power grab as between the management of the target and the acquirer)and the business point of view of a "merger", which can be achievedindependently of the corporate mechanics through various means such as"triangular merger", statutory merger, acquisition, etc. When onecompany takes over another and clearly establishes itself as the new owner, thepurchase is called an acquisition. From a legal point of view, the targetcompany ceases to exist, the buyer "swallows" the business and thebuyer's stock continues to be traded.

In the pure sense ofthe term, a merger happens when two firms agree to go forward as a single newcompany rather than remain separately owned and operated. This kind of actionis more precisely referred to as a "merger of equals". The firms areoften of about the same size. Both companies' stocks are surrendered and newcompany stock is issued in its place. However, actual mergers of equals don'thappen very often. Usually, one company will buy another and, as part of thedeal's terms, simply allow the acquired firm to proclaim that the action is amerger of equals, even if it is technically an acquisition. Being bought outoften carries negative connotations; therefore, by describing the dealeuphemistically as a merger, deal makers and top managers try to make thetakeover more palatable.

A purchase deal willalso be called a merger when both CEOs agree that joining together is in thebest interest of both of their companies. But when the deal is unfriendly (thatis, when the target company does not want to be purchased) it is alwaysregarded as an acquisition.

Although at presentthe majority of M&A advice is provided by full-service investment banks,recent years have seen a rise in the prominence of specialist M&A advisers,who only provide M&A advice (and not financing). These companies aresometimes referred to as Transition companies, assisting businesses oftenreferred to as "companies in transition."

The Great MergerMovement was a predominantly U.S. business phenomenon that happened from 1895to 1905. During this time, small firms with little market share consolidatedwith similar firms to form large, powerful institutions that dominated theirmarkets. It is estimated that more than 1,800 of these firms disappeared intoconsolidations, many of which acquired substantial shares of the markets inwhich they operated, the vehicle used were so-called trusts. In 1900 the valueof firms acquired in mergers was 20% of GDP. In 1990 the value was only 3% andfrom 1998 - 2000 it was around 10 - 11% of GDP. Companies such as DuPont, USSteel, and General Electric that merged during the Great Merger Movement wereable to keep their dominance in their respective sectors through 1929, and insome cases today, due to growing.

Technological advancesof their products, patents, and brand recognition by their customers. Therewere also other companies that held the greatest market share in 1905 but atthe same time did not have the competitive advantages of the companies likeDuPont and General Electric. These companies such as International Paper andAmerican Chicle, saw their market share decrease significantly by 1929 assmaller competitors joined forces with each other and provided much morecompetition. The companies that merged were mass producers of homogeneous goodsthat could exploit the efficiencies of large volume production. In addition,many of these mergers were capital-intensive. Due to high fixed costs, whendemand fell, these newly-merged companies had an incentive to maintain outputand reduce prices, however more often than not mergers were "quickmergers". These "quick mergers" involved mergers of companieswith unrelated technology and different management. As a result, the efficiencygains associated with mergers were not present. The new and bigger companywould actually face higher costs than competitors because of thesetechnological and managerial differences. Thus, the mergers were not done tosee large efficiency gains; they were in fact done because that was the trendat the time, Companies which had specific fine products, like fine writingpaper, earned their profits on high margin rather than volume and took no partin Great Merger Movement.