Investment Articles

In many instances, people shy away from investments because of the misconception that you either have to possess plenty of money to start investing or you have to possess plenty of knowledge to navigate the world of investments. Fortunately, this is not the case as you can actually make money one small investment at a time. Take note, however, that dabbling in investment is unlike winning the state lottery’s million-dollar jackpots. You have to exert time and effort, not to mention money, to make more money on your investments regardless if it is on penny stocks or on blue-chip stocks. Here then are the best ways how to succeed.

Learn All You Can

Your initial fear of dabbling in investments has a small basis to it. With the many technical terms, theories and practices to remember about the many types of investments, you will definitely feel at a loss unless and until you hit the books and ask the experts. Keep in mind, however, that even when you feel that you have learned all that you can, there are still things that you need to learn. As such, you must continually educate yourself on the latest news and events, the latest investment tools and the latest market trends as it applies to your investments. All these can become your instruments in earning more money from your relatively small investments.

Build Your Portfolio Slowly but Surely

Don’t fall into the trap of thinking that you must start big to earn big. Even Warren Buffett had to start at some point and so should you. It may be small certificates of deposits for starters, just as long as it can earn the highest interest. The interests earned can then be invested in more certificates of deposits or even certificates of stocks. With each earning, you can roll it to other investments or use it to grow one particular investment.

As can be implied, the important thing is that you stay in the investments market. Yes, you will go through “down periods” that can make the “up periods” appear in vain but that’s just how the market works. However, if you stay in the market, you will be able to make a respectable amount of money than if you had given up the market for good.

Diversify, Diversify and Diversify some more

Remember the adage about not putting all your eggs in one basket? This is applicable to investments, too. No matter how small your investment capital is, it pays to diversify them into many types instead of risking everything in one kind. Plus, remember that with high-rewards investments, the risks are equally high. You can either win or lose in these investments. It should be alright if you win but what if you lose? However, you must not diversify so widely that you cannot keep track of your investments either. You must stay on top of your investments, which is possible when you know what is happening with each one. In other words, don’t spread yourself and your investments too thin.

You do not need plenty of money to make more money from investments. You just need to learn about the business, start small and start today. Visit http://www.pennystocktradez.com/ to learn more.

When starting with gold coin investing, what kind of gold should you buy? That is a very common question asked by those starting out in the investing world as gold investors. But, most are disappointed when they find out that there is no single answer to that question, that there are as many right answers to that question as there are investors. So, to answer that properly for you, a second question needs to be returned to you: “Why are you wanting to buy gold?”

If you want to just get in on the price movement of gold, then you can get by with just acquiring buillion coins. But, if you want to preserve your asset base for the long haul, and you are worried about controlling your capital, then you should look to pre-1933 European and American gold coins as well as the buillion gold coins. The reason for the pre-1933 gold coins is that the US government has, since the 1930s, viewed these older gold coins as historic pieces, rather than just plain money, so they allow much more safety as investments than straight gold bullion.

The next question is about when you should buy gold. I could be smart and tell you to buy it when you need it, but you just can’t use the same strategy and approach to buying gold that you would with stocks or even real estate investments. It isn’t a matter of timing. It’s about first of all believing whether or not you need to own gold as part of your portfolio. If the answer to that question is a firm “yes,” then what are you waiting for? Go out there and invest in gold. Then it becomes a matter of not “when” but “what.”

A related thought regarding the timing of your gold purchases has to do with waiting for the necessity of buying gold to come up. This is the same as saying that you will just wait for the house to catch fire before buying a fire extinguisher. If you wait for a crisis to occur, you will be stuck with the rest of the panicking herd, shooting up demand and dropping the supply. You’d be stuck paying higher prices than if you made your purchases based upon when you were ready.

The thing about gold, and why it is an insurance for your asset protection, is that it is essentially the only main asset you will own that is not on someone else’s liability column. That means that the value of your gold is not dependent on someone else’s ability to pay (such as with bonds and in some cases stocks.). For this reason, gold is the bedrock of your wealth building.

To further your GOLD education check out my other articles and become a pro.

Emerging markets refer to countries, which have opened up their doors to international trade in the interest of developing their own economies. To understand this better, one has to understand the difference between a developed and an undeveloped economy. A developed economy is one, which is able to support itself in entirety, with the possibility of continuous growth due to the development of its own technology. An undeveloped one, of course, is its opposite. Thus, an emerging market economy is one, which is in transition from being an undeveloped/developing economy to a developed one.

For this purpose, emerging markets accept the inflow of foreign influence to enhance their business methods and their technology. This influence comes in the form of business relations and agreements between investors and the emerging market. By allowing foreign investors to establish businesses within the country, these markets gain part of its income, adding to its gross capital income, and in effect allow it allocate more resources. A well-established local business, in the same way, may also opt for expansion in other nations. This chain of trade practices improves the overall capacity of a country to do business, with its goal being able to become at par with already developed countries. This is what also determines the value of a country’s currency is in the world market.

An emerging market is characterized by the increase in both local and foreign investment. Increase in the local perspective signifies that business practices have improved. Foreign investments prove that the global community believes that a country has promise. Neither of these, however, is possible without effective economic reforms. These reforms differ from one country to the other, and these depend mostly on culture and resources. When the culture of a nation is highly conservative (like that of Japan in its early years), the inflow of foreign technology is resisted so change is highly improbable. Japan, in itself however, was a pioneer in many technological feats so it never got left behind. The resources of a country also limit its ability to do business. In history, Russia led the global community in trade before 19th century due to its large population and its vast resources. With the tide of the century, however, there came World War I, and Russia was it’s biggest casualty. To this day, however, Russia is still one of biggest emerging markets there is. The same applies to other emerging markets in the world today, including China, India, Indonesia, Brazil, Mexico, Argentina, South Africa, Poland, Turkey, and South Korea.

Each of these countries plays an important role as an individual market. Eventually studies have been made to develop these markets by coordinating their efforts, and so evolved terms such as BRIC, BRICS, BRICET and BRIMC. BRIC stands for the countries of Brazil, Russia, India, and China. The other terms were derived form BRIC, with the addition of South Africa (S), Eastern Europe (E), Turkey (T), and Mexico (M). The original BRIC thesis proposed that these four countries would eventually become the most dominant countries by the year 2050. This is because of the business network that exists between these countries even in the present day. China and India specialize in manufactured goods and services, while Brazil and Russia are vital suppliers of raw materials. An example of this working relationship is the production and distribution of IBM products.

Frank Collins is an traveler and an editor for Exploring Abroad.com

Investing is not a sure thing in most cases, some people consider it much like a game – you don’t know the outcome until the game has been played and a winner has been declared. However, anytime you play almost any type of game, you have a strategy. Investing isn’t any different – you simply need an investment strategy.

An investment strategy is basically a plan for investing your money in various types of investments that will help you meet your financial goals in a specific period of time. Each type of investment contains investments that you must select from. A bicycle store sells bikes – but those bikes consist of tires, helmets, cycling shorts, cycling shoes, tee shirts, etc. The stock market is also a type of store, but it contains different types of stocks, which contain different companies that you can invest in. there are thousands of publicly traded companies to choose from. If you haven’t done your research on each company, it can quickly become very confusing – simply because there are so many different types of investments and individual investments to choose from.

This is where your strategy, combined with your risk tolerance and investment style all come into play. If you are new to investments, learn how the market works, read the financial market news, and work closely with a financial planner before making any investments. They will help you develop an investment strategy that will not only fall within your risk tolerance and your investment style, but will also help you achieve your financial goals.

It is recommended that you never invest money without having a goal and a strategy for reaching that goal! This is essential. Nobody hands their money over to anyone without knowing what that money is being used for and when they will get it back. If you don’t have a goal, a plan, knowledge, or a strategy, you are, in fact, handing over your money. It is very important to always start with a goal and a strategy for reaching that goal!

Frank Collins is an active investor and reviews the Mortgage Markets and looks for bargains on California Investment Property.

Before any person is considering investing in Options, he or she has to know what they are, and how they work. First of all, one should know that an Option is a contract, which gives the owner the right to buy or sell shares of stock ( or an asset) at anytime before or on the expiration date of the option. Just like with equities, an investor may also decide if he or she wishes to take a short or long position on the asset depending on how they wish to play the trade. A call option is a contract which allows the owner to buy 100 shares of stock, or take a long position on it before or after the expiration date, whereas a put option is a contract which allows the owner to sell 100 shares of stock, or take a short position on it, before or after the expiration date.

Similar to the stocks in consideration, Options are likewise traded in the same fashion, and thus each one has its own bidding price and expiration. A certain option may only be executed or as traders more commonly say, exercised anytime before its expiration date. This is what makes options trading a risky business. Of course, when buying an option, it is said that your loss is limited to the premium of the option, which is the bidding price of the option. To understand this better, it is imperative to know what determines the bidding price.

The bidding price depends on several factors, namely the current market price, the expiration time, and the volatility of the underlying stock. The current market price determines whether an Option has intrinsic value or not. An Option is said to have intrinsic value (or in-the-money) when the current market price promises a profit in trade. A call option is said to have intrinsic value if the exercise price of the contract is lower than the current market price. Why? With the right to purchase shares at lower prices, investors get to enjoy bigger savings. Similarly, a put option is said to have intrinsic value if the exercise price of the contract is higher than the current market price. Why? With the right to sell shares at higher prices, investors enjoy additional profit. A secondary part of the option premium is the time premium. The time premium is dependent on the time before the contract expires.

A longer time would represent more time to monitor the behavior and movement of assets, therefore allowing investors to modify their trade strategies accordingly, which is why the further out the expiration date, the bigger the premium. The last factor is the volatility of options. Volatility, in this context, refers to the impression given by the behavior of the underlying asset. An asset, for example, with a consistent trade record is considered to be of low volatility, and is therefore predictable. Such options would have a low premium. On the contrary, if the underlying stock associated with an option were susceptible to violent price fluctuations, also called beta, it is said to be of high volatility, and rewarded with a higher premium.

The last thing that an investor must take into consideration is that when an option reaches its expiration, only the ones with intrinsic value may be exercised, or used to buy or sell the shares which they were meant for. In other words, those that are considered out of money become worthless. This is the reason behind the statement that: When buying an option, your loss is limited to the premium for which you paid for it. If you sell an option, and your loss is unlimited. There are many option strategies that one can employ and master over time.

Frank Collins is active in the financial world and reviews trends in the stock market and real estate as well such as new Mortgage programs that come available.

Gold bullion is a horrible investment! Its real return is practically zero over the past 100 years! It’s the investment “snuggie” of late night cable television!

I’m sure you’ve heard these statements before by popular investment gurus, who either don’t understand or ignore the true value of investing in precious metals.

Putting aside the fact that gold has appreciated at double-digit rates on average this decade against all of the world’s currencies and tripled in price over the past six years, let’s look at the metal not as an investment vehicle but as an insurance policy against loss of purchasing power.

Peruse this idea for just a brief moment.

To protect your home against destruction, you purchase an insurance policy, right? Gold bullion is a form of financial insurance and should be regarded as so. Not as an investment but as insurance against the erosion of purchasing power caused by the declining dollar.

Dollar convertibility into gold ended on August 15th 1971, when President Richard Nixon forever closed the gold window. No longer tied to the gold standard, the U.S. dollar could be printed in unlimited quantities or in other words just ‘float.’

Today, after 38 years of being backed by absolutely nothing but the full faith and credit of our U.S. government, our beloved dollar is worth a fraction of what it used to be. If you compare the buying power of that one dollar bill in 1971 versus today, you would be able to buy only EIGHTEEN CENTS, after adjusting for inflation.

Why The Dollar Will Lose Even More Value

In response to the financial crisis of the past year, the government turned on its printing presses to warp speed. As a result, the United States monetary base exploded from $800 billion in August of 2008 to $1.7 trillion. To put that into perspective that means there are now more than two dollars for every dollar that existed a year ago. Never in the course of history has the money supply expanded like this.

Thanks to our government’s monumental spending spree in their attempt to stabilize the financial system and kick-start the economy, our federal budget deficit has now soared to a new record level of $1.42 trillion dollars!

If that wasn’t bad enough, our national debt is now over $11 trillion. And unfunded liabilities such as Medicare and Social Security stand at a staggering $58 trillion.

In order to pay for all of this, the government is either going to have to cut spending (ain’t going to happen), raise taxes (get ready) or crank up the printing presses some more and try to print their way out of this mess. And that deficit is projected to rise to $9.1 trillion over the next decade.

A nation just can’t partake in the unchecked money printing in this way without the dollar diving in value! And the further the dollar is debased, the higher inflation will rise. This is the reason it is so, crucial that you possess gold. As an insurance policy to protect the buying power of the savings you worked so hard to put away.

Since 1971, the purchasing power of gold has endured and increased. History books are ladened with instances of paper money whose value has been annihilated. But not gold. Gold has endured through wars, inflation, hyperinflation, recession and depression.

Gold bullion is the ultimate store of value and protection of wealth. The value of gold has never been ZERO. Never. It could very well be the most important insurance policy you’ll ever purchase.

Protect your hard earned money from inflation and the devaluation of the dollar with pure gold bullion coins such as the beautiful $5 Gold Half Eagle. For great deals and selection, visit us at: http://BullionBargains.us

When it comes to getting into investing, many people find themselves hesitant, for a number of reasons. When asked, the number one reason people state for not wanting to invest their money is lack of knowledge.

Fortunately for these people, investing isn’t too complex to get into, and as many confident investors can tell you, it’s just a matter of getting started. Once you have tried a few investments that are good for beginners, investment knowledge begins coming quickly. There are a number of investment opportunities that are ideal for first time investors, and first timers might be surprised to learn that they are already investing and don’t even know it.

Interest bearing savings accounts are one type of investment that many people already have. These types of accounts are fairly simple – they pay a % return on the amount of money in the account, depending on the bank. As many people already have interest bearing savings accounts, a good type of investment to start out with is a certificate of deposit, or CD. Interest rates on CDs are typically higher than on savings accounts, and can be purchased at most any bank. One benefit of a CD is that you can choose the duration of the investment, and then collect interest until the CD reaches maturity. Despite the recent furore regarding the banks, they remain a safe place to put your money, but of course the paltry percentages being offered at the time of writing are often outstripped by rates of inflation. So if you reframe any savings accounts that you have as investments, they start looking like a poor choice.

Money market funds are often a good option for first time investors. These work in much the same way as interest bearing saving accounts, and have higher interest payouts. Like savings account, they are short term, and are a good alternative for first time investors who don’t want their money tied up in a CD.

Once you have tried out one or all of these types of investments, you’ll quickly realize how easy investing can be. From here, a popular option is to meet with a broker and discuss more complex investing options. As you continue learning, a good tip of advice is to maintain a low risk tolerance. A low risk tolerance simply means that the investor sticks to investment opportunities that are low risk, which is good for first time investors just getting started.

You should also realize that learning investment methods yourself is much easier than you may think and puts you in charge of your future. Try and make sure the information you’re getting comes from reliable – proven to be reliable – source. Anybody offering you investment information should have a publicly proven track record of making money from investing, and not just from writing about it!

Andy Markus is an online trader who is busy studying the methods of acclaimed trading guru Mark Shipman using his http://www.TheAutonomousMillionaire.com course.

I am often asked why I prefer the mini-Dow over the S&P Emini. While any index will do, I especially like the mini-Dow index.

Because of the faster movement of the Dow versus the S&P 500, the mini-Dow more closely follows it’s big board parent.

So if it is just a matter of speed, then the mini-Russell would be even better right? Not exactly. The problem with the Russell is the low volume. This will no doubt change in the future. The mini-Dow had too low a volume for my money just a couple years ago, but that has now changed.

One more reason why I prefer the Mini-Dow is that I like no-cost tools, and it is much easier to find a reliable Dow chart. In fact there are many free-online charts that work just fine.

No matter which Index you prefer, I feel it is an advantage to watch the big board chart, and not the mini chart. I also prefer the 5 minute time frame. (the one minute time frame can help with entries at times, but be careful, it can give many head fake moves too).

Many traders watch both, which is what I did years ago before deciding to focus on the big board. Here’s why. I found that I would not move on what the mini chart was telling me unless I confirmed it with the big board. A popular confirmation among traders. It finally hit me that if I would not make a trade without confirming it with the big chart, then why did I need the mini chart at all?

When I dropped the mini chart and focused on the big board movement, my trading improved. I have since confirmed this strategy with Hundreds of my students and other traders. Just recently, one of my students who moved on to using the mini-chart (a paid service I might add), came back to our style and is now focusing on the no-cost big chart we use. He also confirmed that his trading improved, and he now sees why I focus on the big one.

The mini chart (even in the 5 min time frame) is like trading with a 1 minute chart. There are too many head fake moves that get you in a trade before it has fully developed. The big board averages some of those moves out for you. It keeps you on the sidelines when you should be. Sure, you might not get in as early on some runs, but in the long term it will save you!

It is difficult to catch any move from top to bottom or vice-versa, but by watching the big board you can fairly easily get a nice chunk out of the middle. A few nice chunks a week will keep you from needing a bail out plan!

Doug West has worked in Financial Planning and Investment training for over 20 years. Listen to his online radio show at:

Forget day trading stocks and learn how to trade the mini index!

Dual Currency Deposit is an investment product commonly offered in the world of Private Banking. It has many other names – Extra Deposit, Premium Deposit, Maxi Yield Deposit etc. Dual Currency Deposit is a very popular product that generates much higher return than normal bank deposits. These returns can often be in excess of 10% p.a. This is a very attractive return in this current market environment when normal bank interest rate only offers around 1% p.a.

Dual Currency Deposit has a lot of similarities to a normal bank fixed deposit like a fixed maturity date, and a fixed interest rate. It even uses the term “deposit”. However, Dual Currency Deposit is not a deposit at all. It is strictly an investment product with very high risks associated with it.

Lets look at a simple example of Dual Currency Deposit before we dwell into the risks associated with it. Say, you have USD 300k placed in deposit. You are familiar with Australia and the Australian Dollar. You come across an advertisement in a reputable bank with the following key points:

• Earn a Higher Return than Bank Deposit
• Short Term investment. Term can be two weeks, one month, two or three months.
• On the day of investment you choose the alternate currency (in this case Australian Dollar) which you want to receive your investment at maturity
• Assume the currency Australian Dollar to US Dollar exchange rate is 0.9000
• You will receive you deposit back in either US Dollar or Australian Dollar at a predetermined level
• The predetermined level is 0.9200

The returns offered got your attention. The ad states with the above conditions, you will receive 12% p.a. for placing your deposit in this investment. However, you were in a rush and had to walk away.

Risks Associated with Dual Currency Deposit

On the surface the product sounds simple enough. Apart from receiving in US Dollar or Australian Dollar, everything else sounds like a normal fixed deposit. Dual Currency Deposit is a derivative instrument. You know the investment products (Derivatives) that Warren Buffet said he won’t invest in because he cannot understand them. Well, this is one of those products. Dual Currency Deposit has embedded Options in it. Option is a derivative instrument that is very complex and difficult to understand. Without going into too much detail about option, I like to highlight one of the risks of this product – Foreign Currency Risk.

Foreign currency moves much faster than most people realizes. During the 2008 financial crisis, it is not uncommon to have foreign currency moves more than 20% in a period of two weeks. This is the case with the Australian versus US Dollar exchange rate. Imagine our poor investor thinking they placed their hard earned money into a “deposit” and left it for two weeks and return to it only to realize that they suffered a major loss of 20% on their capital. Because the 12% they earned is on a per annum basis, they will only receive around 0.46% for the two weeks. That is cold comfort when compared to the losses they incurred on the exchange rate. Although this example I have given is extracted from an extremely volatile period, exchange rate is still subject to normal fluctuation in excess of 5% over a period of two weeks.

There are other risks associated with Dual Currency Deposit. Visit http://plainfinance.blogspot.com/ to see more articles relating to Dual Currency Deposit. Benjamin Finance is the author of this blog. He works in the banking and finance field. His aim is to raise financial literacy via his blog.

Sovereign Wealth Funds (SWF) are owned and managed by governments or central banks of various countries around the world to invest their trade surplus globally, usually on a long term basis. They are funded by trade surplus of international trade, foreign currency deposit, International Monetary Fund reserves and other national funds like pension funds and oil funds. With subprime crisis haunting the global financial sectors, several SWFs are being criticized for investing heavily in Citigroup, Morgan Stanley and Merill Lynch which left them gasping for cash infusion. Nevertheless, from $500 million in 1990 to $3.8 trillion in assets today, SWFs have their presence now spread across 27 countries.

Around two-third of SWFs are held by the commodity and oil exporting and gulf countries like Qatar Investment Authority, primarily with the objective of diversifying their revenue streams and reduce oil-related risk and their dependence on oil export revenue.

Over the last decade, large current account surplus enabled Russia and China to build up their sovereign funds. They seemed to have realized (after Asian financial crisis of 1997-98) that it is better to build up their own reserves instead of depending on IMF to bail them out at the time of crisis. Russia and China now manage around $450 million and $1.44 trillion in SWF assets respectively.

Industry experts predict that assets under SWFs’ control could reach $12 trillion by the end of 2015.

The two main purposes of SWFs are short term foreign currency stabilization and liquidity management. The Global Financial Stability Report (2007) classified SMFs into five groups depending on investment objectives of their respective governments. They are:

(i) Stabilization Funds

(ii) Saving Funds for Future Generation

(iii) Reserve Investment Corporate

(iv) Development Funds; and

(v) Contingent Pension Reserve Fund.

During the period of rising oil prices, SWFs of oil exporting nations drastically due to increase in their foreign exchange reserves which are then used to make strategic acquisitions across the world. On the other hand, SWFs of emerging economies like China, Singapore, Malaysia and South Korea tend to grow steadily.

Another point of difference is the SWF to Foreign Reserve Exchange ratio which is used to determine the proportion of reserves which are invested using SWFs. It has been observed that OPEC have higher ratio compared to emerging economies. Last year, ratio for Qatar Investment Authority was 5.9 times compared to China Investment Corporation’s 0.12 times.

For more information, please refer to http://understandingbasicsoffinance.blogspot.com

Geetika