Investment Articles

In Part One of this article, we highlighted strategies that proactive investors can use to better protect their financial security. The strategies mentioned in Part One were more oriented toward the investment account as a whole.

However, most securities claims involve allegations of unsuitability and/or breach of fiduciary duty regarding investment products and/or investment advisory services. Given the number of investment options available to investors today, it is easy for an unscrupulous stockbroker or investment adviser to take advantage of an investor, especially an inexperienced investor.

The following strategies can be used by the proactive investors to avoid some of the more common complaints in securities claims.

1. Choose appropriate classes of mutual fund shares to reduce expenses. Fees and other expenses reduce an investor’s return. Therefore, no-load mutual funds and/or exchange traded funds should generally be an investor’s first choice due to their reduced fee structure.

If an investor chooses not to use either no-load funds or exchange traded funds, A shares and B shares are the only type of mutual fund shares most investors should consider. Many investors immediately lean toward B shares since they do not require the investor to pay front-end sales charges, or commissions. B shares, however, may not be the best choice for the long-term investor due to the higher annual fees associated with B shares.

Generally speaking, A shares are often a better deal for a long-term investor due to the fact that annual fees for A shares are typically less than the annual fees charged by B shares. If an investor has a large amount of money to invest, A shares often offer breakpoints to reduce any applicable sales charges.

Breakpoints are not generally offered on B shares. B shares are often a better deal for short-term investors, since B shares do not impose a front-end sales charge. While B shares generally carry higher annual fees and often impose deferred sales charges if an investor redeems the shares within a specified period of time, the holding period during which deferred sales charge are applicable is usually relatively short.

The investor’s ability to redeem B shares without penalty within a short period of time also allows the investor to minimize the effect of the higher annual fees of the B shares. Some mutual fund companies offer to convert B shares into A shares after a certain period of time has elapsed. Each investor must evaluate their own situation to determine the choice that is best for them.

Investors with managed accounts should always check to see whether their advisor is using A shares or B shares in the management of their account. In most cases, it is generally agreed that advisors should only use A shares in managed accounts due to the lower annual fees charged by A shares and the fact that most mutual funds offer to waive sales charges for A shares held in managed accounts.

Another factor favoring the choice of A shares over B shares in managed accounts is the deferred sales charges on B shares. Since managed accounts often involve frequent reallocations of the account’s assets, holding B shares in a managed account may ensure that the value of the investor’s account is reduced by the payment of deferred sales charges.

2. Use breakpoints, when possible, to reduce the commissions on mutual fund purchases. Most mutual fund companies offer investors a discount on front-end sales charges once an investor has invested a certain amount of money in their mutual funds. Most mutual funds begin to offer such discounts once an investor has invested a cumulative total of $50,000 in their funds, with additional discounts for certain levels of additional investments. Recommendations spreading investments among a multitude of asset classes may be cause for questioning, especially when large amounts of money are being invested and/or the recommended amounts are just below breakpoint levels.

3. Get more than one opinion. Medical patients are often advised to get a second opinion on major medical decisions. Decisions affecting one’s financial security are equally important. Unsuitable investment advice can drastically affect one’s life. Unfortunately, some people holding themselves out as financial planners and investment advisors may be more interested in selling insurance and investment products than in the quality of the financial advice they are providing.

4. Avoid the variable annuity trap. Without question, variable annuities are one of the most over-hyped, most oversold, and least understood investment products. A much publicized article in the Wall Street Journal reported that annuity salesmen at an annuity “boot camp” were instructed to treat potential annuity customers “like blind twelve-year olds,” and to tell customers that the annuities were “like credit cards.”

The NASD and the SEC are investigating various complaints regarding the sale of these investment products and have already imposed sanctions in some cases. The high fees and expenses associated with variable annuities, along with their lack of liquidity and their negative tax aspects, make them an unwise investment choice for most investors.

Annuities can also have devastating effect on an investor’s estate plan, resulting in most of the investor’s money going to the company issuing the annuity rather than the investor’s heirs and loved ones.

5. Don’t buy life insurance for investment purposes. A popular mantra among insurance agents is that variable life insurance is the “Swiss army knife of financial planning.” Anyone who hears such advice should look for another financial adviser. If an investor needs life insurance, then they should buy life insurance that guarantees the amount of protection needed, which is the intended purpose of insurance.

Life insurance is neither intended for or appropriate for investment purposes. The high fees and expenses associated with insurance are totally inconsistent with one of the basic tenets of investing, namely to minimize loss of principal so as to maximize the amount of money working for the investor. While it is illegal for an insurance agent to misrepresent the nature of an insurance product, recent cases involving the alleged misrepresentation of life insurance as retirement/ investment programs demonstrate the need for investors to get advice from more than one investment advisor to better protect their interests.

6. Beware of “black box” financial planning and portfolio recommendations. Many financial advisers will offer to provide customers and potential customers with financial plans or asset allocation plans. The price for such plans can range from free to thousands of dollars.

In most cases these are created with software programs based upon the input entered by the financial adviser. While investors are warned that “past performance is no guarantee of future returns,” and we scoff at fortune tellers predicting the future, that is exactly what is generally used in creating such plans, historical returns or “guesstimates” of future returns, resulting in the familiar “garbage in, garbage out” scenario.

Furthermore, such software programs can be easily manipulated to produce whatever results are desired. Most of the commercial software programs are based upon a financial theory known as Modern Portfolio Theory, which is known to have an inherent bias toward certain types of investments.

By manipulating the input data in favor of the preferred investments, certain results can be guaranteed. This inherent instability of such computer programs has led one expert to refer to such programs as “error-estimation optimizers.”

James W, Watkins, III is an attorney, a CFP professional and an Accredited Wealth Management Adviser. His areas of expertise include wealth preservation, wealth protection and fiduciary law. He is CEO of InvestSense, LLC, a registered investment adviser firm located in Atlanta, Georgia. For additional articles and information, visit http://www.investsense.com. Mr. Watkins can be contacted at tawj3@yahoo.com and followed on Twitter @InvestSense.

There is a method that will give you the best return on investment but it requires a bit of homework to discover. It may only take you five minutes or it may take you a week, but there is one particular method that will give you the best return on your investments. The method you like will be specific to you.

In previous articles I have written about fundamental analysis and technical analysis with and without charts. One of these methods will form the foundation for how you develop your best method of investment to get the best returns. In other words, there is not one do-it-all for everyone.

The keys to finding your best return method are to first write down:

• Time – how much time are you willing to spend each day or week on making your investment decisions.
• Are you interested in long-term (many years) to cash in your profits or do you need to make money quickly or rapidly or in substantial amounts?
• Are you willing to take risks or do you want to play it safe?

Mutual funds, stocks and ETFs can work for almost all investors. The difference comes in how you screen them to meet your objectives based on how you answered those three key questions. The answers to some questions may not work with the answer to another question. For example, if you only have an hour of so a week, rapid stock trading isn’t going to work as that requires at least 30 minutes a day. If you are willing to let your profits accumulate over long periods of time, even years, then you may only need to trade once or twice a month at the most.

Long term investing can be accomplished with either technical or fundamental investing. Short and medium term trading (where you own a stock or ETF for days, weeks or months instead of many, many years) is best accomplished with technical analysis.

So, what is the best method for you?

Only want to spend an hour or two a month on medium to longer term investments?
• Technical analysis
• Stocks, ETFs, funds

Can spend many hours at a time but only a few times a year on long term investments?
• Fundamental or technical analysis
• Stocks, ETFs, funds

Can spend an hour a week on medium or long term investments?
• Technical analysis
• Stocks, ETFs, funds

You have an hour or more most days for short, medium or long term investments?
• Technical analysis
• Stocks, ETFs, some funds

The key to these methods is using a methodology that fits your trading pattern. Software programs are designed for investors who trade during the day, or investors who trade based on the end-of-day pricing either daily, weekly, monthly or even less frequently. Most chart programs can be used for any of these technical investment methods but they tend to be aimed at day or frequent traders.

Investment programs can be online, from an online broker or one you purchase separately. Some are easy to learn, others may take weeks or months. Some offer free, quick customer service, others charge after a certain time period. Some can be customized to work with your answers to the three key questions, your method and objectives; others have a particular set method that must be compatible with your objectives.

Author Raymond Dominick is the designer of Dynamic Investor Pro investment software for stocks, ETFs and mutual funds. He has been investing in the markets since his teenage years. An experienced business manager and journalist, he has been a registered investment advisor representative, also a professional photographer who loves escaping to the wonders of Glacier National Park in Montana.
View his software at: http://www.dynamicinvestorpro.com

Many a time, I see many newbie online investors empty their bank account into online investment programs they know little or nothing about its reliability and continuity and before long, they’ve burnt their fingers. Each time I witness this incident, it is something that really makes me very sad and empathic. So after witnessing and hearing of many of this victimizing incident for some time, it dawned on me to offer some help in my own little way by writing out some of the features online investors should look out for in a reliable online investment program before they start investing their money into them: in other to help ameliorate this pathetic situation.

Find Out If It Has An Offline Version

To know if an online investment program is reliable or not make out time to find out if the online investment program has an offline version. If you check and you see that there is an offline version, take a further step to find out if it is not a gambling program, if after your researches, you find out that it is not a gambling program then you know that its online version will be reliable; this is so as investment programs, online and offline are the same. Many people think the internet is a kind of Disney land where money is digitally processed- so even the riskiest of online investment programs they empty their bank account into them in other to get an overnight turnover.

The Percentage Of Interest

By the percentage of interest, I mean the percentage the investment firm promises to pay you within a given period of time. Yes the percentage is what you really have to critically scrutinize to see if it is normal and realizable and can stand the test of time. If you find out that the promised percentage is on the outrageously high side, then don’t invest in it; because if the percentage is very much on the high side, it means either it is a gamble where you are likely to loose your money within a twinkle of an eye or it is a scam program established to trap people’s money by offering outrageous percentage of interest.

The Programs Pedigree

Before you choose an online investment program to invest into, find out its pedigree. By this I mean find out how many people that are doing the business and how many percentage of them are actually making good profit from it. If after your research, you find out that its only a tiny percentage of the total people involved in it that are actually making substantial profit from the program, know that the program is not reliable and consequently you shouldn’t invest in it.

And another thing, find out how long the program has been on. If the program has stood the test of time, then the program is reliable and worth sticking out your neck on with some percentage of your money…

Darlington Ohaeri is a professional online gold trader: And also an online investment consultant. To learn more about the online gold trading business and how you can be making obscene profit from it, visit his web site http://www.putcash.com.

A fifth way to manage your investments is simply to let someone else do it. Unlike the four ways I previously wrote about, this method involves hiring someone and giving up control.

Essentially you hire, retain is the nicer wording, a financial planner or Registered Investment Advisor (RIA). There are advantages to doing this, just as there are disadvantages and pitfalls.

By hiring a professional you are asking someone whose job it is to trade in the markets to manage your money while giving up almost all control over your investments. If you have zero time to manage your investments, your 401k, your IRA retirement account this is a good way to go.

But notice I used the word “hiring.” This is important because you are not just “asking” someone to look over your money but to work for you. This means you are the employer, the boss. Just like at any other workplace if you are the boss hiring someone you should look over resumes, results of their past performance and interview candidates to see if they fit with your goals and objectives.

Interviewing financial planners or investment advisors is critical. They are not all the same. Just like some men have brown hair and others gray, advisors can be divided into various camps: conservative, aggressive, moderate plus they may have their own “investment programs” that they will fit you into, or maybe they only invest in mutual funds or long term investment strategies. In other words, how an investment advisor or planner works, his or her philosophy is important to you because it will have a direct bearing on your investment or retirement account.

If you decide to go this way and hire a professional to manage your money then you must let them do it. While I no longer take new clients, I recall one former client from a number of year’s back that called me almost every day. He wanted to know why I didn’t buy xyz or why I did buy cba; what was my reaction to yesterday’s market activities. He had a question for everything I did or didn’t do and probably spent more time watching the markets than I did.

I spent more time answering his questions and explaining my decisions then I did actually managing his account. Note that I said he was a former client; you have to let the advisor do the job once you hire them. Yes, you want reports and some communication but an employee can’t do their job if you stand over their shoulder all the time.

Presuming it is your choice to hire an investment advisor or financial planner, there are certain questions you need to ask when doing your interview:

1. How do they earn their money? Are they fee based, taking a percentage of the value of the portfolio (the best way)? Or do they take a commission on each trade? And how much?
2. Where will they invest your money – stocks, ETFs or mutual funds?
3. Can he work with your goals and objectives?
4. Is she registered or certified?
5. What is their track record?
6. How did most of their clients actually fare during this recent recession?

Professional investment advisors and financial planners use investment software, which you could use yourself, to guide them in making their investment decisions. I mention this only to reinforce my earlier comment that if you have zero time, not even 30 minutes a week, you should hire a professional to manage your investments rather than just occasionally looking at them or neglecting them altogether. In this situation of you having no time or no desire it is best to pay someone 1% or so to help grow your money. Just do it right: interview and let them earn their pay.

Author Raymond Dominick has been investing in the markets since his teenage years. He is the designer of Dynamic Investor Pro investment software. An experienced business manager and journalist, he has been a registered investment advisor representative, also a professional photographer who loves escaping to the wonders of Glacier National Park in Montana.
View his software at: http://www.dynamicinvestorpro.com

People invest for either of these two reasons:

To preserve their wealth or retain the buying power of their hard earned savings;
To accumulate wealth or grow their assets.

Whatever their reasons may be, they naturally are ways in the look out for high yielding investments. By high yielding investments, we mean those that give a higher percentage of return on their principal than what the banks’ certificate of deposits or US treasuries can provide… those that will more than offset the rate of inflation on their money.

Many of these investors understand that with higher yields come great amount of risks too (the fundamental principle of investment: the higher the risk, the greater the potential for gain)!

Included in this category of high yielding investments are stocks, forex, and commodity futures. These are investments where you may achieve a substantial appreciation in the value of your initial capital over a short period of time. The bad side here is, you may also lose most, if not all of your money over the same short period of time! This is the reason why seasoned traders would limit their placements on these high yield-high risk instruments to no more than 15% of their total portfolio value.

With uncertainties continuing to becloud our economy, we are once more seeing an exodus of investors out of the stock markets and into the safest money investments they can find to shelter what’s left of their lifetime savings until the economy stabilizes. These are the investors who want to know the answer to one common question -

“Is there a legitimate high yield investment with low risk for my money?”

Lest you fall prey to HYIP (High Yield Investment Programs) scams which are on the rise again, let me tell you that my answer to the above question is a categorical No! No, there is no existing high yield investment program with low or no risk at all. Never touch any investment program guaranteeing you sure profits or assured interest earnings (some of them offering as much as 45% per month),…not even with a ten foot pole!

There are, however, investment instruments that you may consider including in your investment portfolio which offers moderately high yields and entails lesser risks than the highly volatile stocks, forex, and commodity futures. These are:

High Yield Bonds or commonly known as Junk Bonds, so called because these are corporate bonds considered below investment grade at the time of the purchase. They are offered at a higher yield as the only means to attract more investors.
Real Estate Investment Trusts (REITs) which may be a publicly or privately held fund that works like a mutual fund whose portfolio is invested on apartments, hotels, office space, retail space, health care related properties, mortgages, storage and other types of real estate related property. Rental income from that real estate is generally distributed to the investors.
Retirement income funds which works like a mutual fund too where the investment is actively managed to provide regular retirement income, however, they don’t provide guarantees, and therefore you should expect your investment income and balances to fluctuate.
Master Limited Partnerships which is a publicly traded partnership that combines the tax benefits of a limited partnership with the liquidity of a publicly traded corporation. MLP’s are usually confined to businesses engaged in the use of natural resources such as petroleum and natural gas extraction and transportation.MLPs pay their investors through quarterly required distributions (QRD), the amount of which is stated in the contract between the limited partners (the investors) and the general partner (the managers).The amount of income generated by a master limited partnership will be dependent on the price and volume of the product or service they produce.

Although they entail a lesser degree of risk, one should approach the above listed investments with care and caution…even with some skepticism and reservations. As in always prior to making important investment decisions, you need to study each one carefully paying attention to details. Only when you are already familiar with the factors that contributes to their returns as well as what may trigger their losses should you consider including them in your investment portfolio. Better still, seek good, professional advice!

There is another new high yield on line investment opportunity you may not even have heard of. It is called Peer-to-Peer Lending (P2P Lending), or more commonly known as social lending. Through a P2P lenders website, individuals lend and borrow money directly from each other. This eliminates financial intermediaries like banks and credit unions. Peer-to-peer lending was meant to create a personal connection between borrower and lender, and therefore make borrowers more likely to repay their debts than people faced with large obligations to hated, faceless banks.

By removing the bank from the lending process, P2P Lending makes it possible for investors to earn a higher return and for borrowers to get a lower rate on personal loans. You can liken P2P Lending to an online financial community which brings together investors and creditworthy borrowers so that both can benefit financially.

Here is how P2P Lending works:

Prospective investors and borrowers sign up and become a member at a P2P lender’s website. This P2P lender acts as an intermediary (it does the record keeping, transfers funds among members, etc.) between the investor and borrower. The lending company earns its revenue through fees of, say, 0.5% to 1.0% of the loan, charged to both lender and borrower.

Based on relatively stringent standards, the P2P lender performs several checks (personal, employment, credit, etc.). As a general rule poor credit risks are automatically cut off and approves only the most creditworthy. Once accepted, a borrower may either be assigned to one of four (five in some) risk categories where he may borrow at the going rate in the risk category he was assigned on that day or, the loan application can be auctioned off to prospective lenders. Based on the pertinent data provided by the borrower and as published by the P2P lender in their website, the interested investors willing to fund the loan application will try to outbid each other by bidding down the interest rate initially set by the borrower.

The investor may, aside from bidding on loans, ask the P2P lender to spread his invested funds among several borrowers. They also have the option to choose on which risk category they are willing to lend. On the average, investors of P2P lenders achieve an average return of 9.5% with some P2P lenders fixing the rate between 8.2% to 11.9%. Some investors can earn as high as 20% for the riskiest loan since they are free to set their rates in some P2P lending sites.

P2P lending is not without its disadvantages as the lender has very little assurance that the borrower, who traditional financial intermediaries may have rejected due to a high likelihood of defaults, will repay their loan. However, some P2P lenders minimize their investors’ risks by approving only the most creditworthy borrowers while others limit approval only to the top 10%. Other P2P lenders even create a secondary market where loans are re-auctioned of an investor happens to want to have his money back!

Peer-to-peer lending is undoubtedly attractive for income seekers looking for better returns. Peer-to-peer lending allows investors to lend directly to real people, setting the time and interest rate for repayment. Many of the lenders are unsatisfied savers, who can get better returns by lending. Because it is a relatively new industry, one can expect changes to the lending practices and a lot of fine tuning. Despite this drawback, however, P2P continues to gain wider acceptance and patronage as an innovative way to make money.

BigDaddyRichard was a foreign currency trader for more than twenty years and have worked in various FX centers in Asia and the United States. He shares his experiences as a trader and as a citizen of this world through his blogs.

His blog site: Traders’ Hub

Olive oil is showing up in more and more kitchens and on more and more dinner tables throughout the world. The oil is cherished by cooks, enjoyed on salads, and healthy for the heart. Over the last two decades this combination of factors has led to increased consumption far beyond the Mediterranean Basin, the traditional home of the olive and its oil. It used to be that virtually all olive oil was produced as well as consumed around the Mediterranean and in the Middle East. Production has been sufficient for local (Mediterranean Basin) demand. As worldwide demand increases olive trees will be planted and olive oil produced outside of the countries that have historically been the leading producers. This is a big trend that will need capital and those who have the foresight may well profit from investment in growing, refining, exporting, distributing, or selling olive oil in regions as diverse as the UK, India, Japan, China, or the USA.

Olives and Who Makes the Oil

People have been making oil from olives for as long as 5,000 years according to archeological evidence in Greece. Today olives are grown and processed into to oil in Spain, Italy, and Greece who are the major producers at 36%, 25%, and 18% of worldwide production according to recent figures. As demand for more olives and more oil goes up these countries will probably not be able to answer the call. Greece, for example, devotes 60% of its cultivatable land to olive orchards already.

After the big three olive oil producers, come Tunisia (8%), Turkey (5%), Syria (4%), Morocco (3%), and Portugal (1%) in the same recent set of figures from 2005. These countries, from Spain at the top down to Portugal, produced 90% of the world supply in 2005. Every other nation produced less than 1% of world production. A big part of this is that olives are native to the Mediterranean Basin and grow best there. It is not just a matter of the plant surviving but that it produces high quality olives for refining into exportable oil.

As the figures show a handful of producers currently make the oil from olives. Now the question is who will step in to make more as worldwide demand multiplies? What kind of olives will work the best in what locations and who is going to invest the capital to make all of this work?

Where Are Folks Going to Plant Olive Trees?

Olives are grown throughout the world but they work best in the Mediterranean Basin. The space, climate, and soil conducive to growing exportable quality olive oils are on the opposite side of the Mediterranean Sea for the current major producers, Spain, Italy, and Greece. Tunisia (8%) and Morocco (3%) are already in the top seven producers. Now Algeria, the second largest nation in Africa is planning a million hectare planting of olive trees. Algeria lies to the immediate East of Morocco and on the Mediterranean Sea. Its climate is Mediterranean. Olives are grown for food and oil already in Algeria but the infrastructure has not been present on a sufficiently large scale to refine enough oil promptly enough to produce export quality oil. A major factor here is having enough processing plants dedicated to a set of orchards and the infrastructure needed to pick and process in a timely manner. Another factor has been that of foreign connections for export, marketing, and sales.

It turns out that folks are going plant a million hectares of olive trees in Algeria. That is, for those from the USA, 2.5 million acres. If planted in one block it would be 100 kilometers or 62.5 miles on a side. Foreign investors are bringing their expertise and capital to this project. In addition foreign companies are setting up projects in such a way as to attract the foreign capital necessary to plant orchards, tend orchards, pick olives, process olives to oil, and send processed oil through a supply chain to the supermarkets of places as far afield as North America, India, and Japan.

The supply chain for olive oil looks like this:

Producer-Farmer
Oil Mill or Cooperative
Refining into oil
Export
Wholesaler
Distributor
Consumer

What foreign expertise will bring to the mix will be expertise in choosing olive varieties, the building of a sufficient number of modern oil mills and the connections for export and distribution.

An example of a promising project in Algeria is one by a Spanish firm. This company has a subsidiary in Algeria. Through the subsidiary the company will plant 1, 500 hectares of the Arbequinia olive. This is a variety suitable for intensive culture. It is drought resistant and cold resistant. The small tree yields 20% weight per volume of oil from its small brown olives and is well known for the excellent taste of its oil.

The company will build a modern processing plant to assure prompt refining into high quality oil for international markets. It will develop the supply chain to move olives to processing, oil to export, and exports to wholesales in markets around the world.

As projects like this take hold the world wide demand for high quality oil will be satisfied. As private companies attract investors to this sort of profitable undertaking they will attract the necessary capital that has often been missing in order to develop a complete supply chain and enhance profits.

To continue the example above the Spanish company is allotting 500 of its 1,500 hectares for private investors. Investors will receive interest on investment as well as a “piece of the action.” After three years when the Arbequinia olive starts to produce investors will receive $2 US per liter of oil produced on “their’ hectare of land. The Arbequinia variety typically produces 11,000 kilograms of olives per hectare. The olives typically yield 19% oil. Thus a hectare of arbequinia olive trees will produce 11,000 times 0.19 equals 2,090 liters of olive oil. At $2 a liter this is more than $4,000 to the investor on top of yearly interest. This arrangement will last for ten years at which time the investor will receive his initial investment back, having doubled his money. In the end the investor helps increase olive oil production, makes money, and may even find a bottle of “their” olive oil at the supermarket.

http://www.userbancorp.com

Contact me on e-mail: geir.holstad@userbancorp.com

Olive trees are all over the Mediterranean Basin. They grow in other parts of the world too. The tree can live for centuries and, in fact, there are trees as old as 2,000 years. The tree bears an edible fruit and the olive can be pressed and processed to make olive oil. Anyone who has traveled extensively outside of the cities on the Mediterranean has likely seen their orchards. Many of these have been in families for many generations. All of this presents a pretty picture but how does anyone make any money with olives. For the investor looking offshore the question is what makes an offshore investment in olive trees successful?

The answer is not necessarily simple. In Spain, which is the world’s leading producer of the oil, it is not easy to find land to plant olives and then it is not easy to get into a cooperative or have a processing plant refine the fruit before it gets acidic and won’t produce high quality oil. In fact, unless an individual or company wants to buy out an existing set of orchards or a processing plant it is hard to get into the business in Europe. On the other hand there other locations.

The olive grows best in its native territory which is the Mediterranean Basin. However, the main producers are in Europe. North Africa has a compatible climate from Morocco through Algeria to Tunisia. Tunisia produces 8% of world production and is the forth leading producer after Spain, Italy, and Greece. Morocco produces a few percent of the world total but Algeria with the right climate and right soil is not in the picture, yet.

As the second largest land mass in Africa Algeria has lots of room. Algeria is now starting a massive program to plant a million hectares of olives. Foreign companies are taking part in this huge project through their local subsidiaries. One company will plant 1, 500 hectares with the Arbequinia olive. This tree grows a small brown olive that produces twenty percent weight per volume of oil, is cold resistant, and is drought resistant. The company plans to plant the tree in a “hyper intensive” culture with 1,760 per hectare. Five hundred hectares will be reserved for private investors who will gain both interest on their investment and payment of $2 per liter of olive oil produced on “their” hectare of land.

In a world where olive oil consumption is multiplying the place to invest in olives is not in the countries that are now the leading producers. The place to look is in the growing producers. One might think that producers will spring up around the world but the Mediterranean climate is still the best for olive production. Thus, the North African coast will be the place for investors to look for successful olive orchards, processing plants, and exporters.

http://www.userbancorp.com

Contact me on e-mail: geir.holstad@userbancorp.com

A unique investment opportunity exists in the production, distribution, and sale of olive oil. Worldwide demand is growing and the supply chain needed to provide high quality oil to the world is in the process of being expanded and improved. There are a number of offshore investment opportunities related to this increase in demand. We look at a specific example of how an investor can become a part of and profit from the response to increasing demand.

The Oil of the Olive

Olive oil is a staple of the Mediterranean diet and has been for thousands of years. It is used in many recipes and is popular on tables and in kitchens across the globe as well as in the Mediterranean Basin. Its popularity has grown and, especially, because of the heart healthy effects of the oil is becoming more popular world wide.

According to the UNCTAD commodities web site page on this oil, it refers exclusively to oil obtained from the fruit of the olive tree and excludes all other oils obtained by using solvents or re-esterification. The term virgin oil only applies to oil produced in a mechanical process and at lower temperatures so as not to damage the oil. Refined oil refers to processed oil that still has the “triglyceric” structure of olive oil. If something else is mixed with the oil it is not marketed as suchl. This last fact is specifically different from many cooking oils which will list a number of possible ingredients such as palm, soy, or corn oil, etc.

This oil has a unique taste and is definitely the preferred oil for Mediterranean style cooking. Because of its unique structure it is the preferred cooking oil for heart healthy diets.

Olive Oil Consumption

The countries around the Mediterranean Basin account for roughly 77% of worldwide consumption. However, this figure is changing. Because the oil is an integral part of the Mediterranean diet it has little room to expand. Because the oil is just entering international markets it has a lot of room to go. According to recent figures the top five consuming nations are as follows:

Italy: 30%
Spain: 20%
Greece: 9%
USA: 8%
France: 4%

Countries that don’t rank very high on the list, like Japan, have just caught on to olive oil and are showing exponential growth in consumption.

Olive Oil Production

Olive oil is not just a historic product of the Mediterranean. Roughly ninety-five percent on olive oil is produced in countries bordering on the Mediterranean Sea. Ninety percent of production comes from the top six producers, Spain, Italy, Greece, Tunisia, Turkey, Syria, and Morocco. Portugal comes in 7th with 1% of worldwide production even though it only borders on the Atlantic Ocean (as well as Spain).

As consumption has grown over the years it is highly doubtful that these countries can cope with the increasing demand. For example, reliable figures say that 60% of cultivatable land in Greece is planted in olive orchards. There is just not a lot of room to expand production on the North Side of the Mediterranean.

Production and consumption grew together through the 1970’s to mid 1990’s when production tailed off. However, demand for olive oil has continued to grow. Reliable figures and estimates are that olive oil consumption doubled between 1990 and 2000 and will have tripled again by 2020.

The place where the weather is still “Mediterranean” and the soil conditions suitable for growing olives is the North African coast of the Mediterranean. Here is where countries like Algeria and Morocco are catching up with Tunisia with the intent of becoming major olive oil producers and exporters. Algeria is promoting a huge olive tree planting project making available a million hectares (2.5 million acres) of land for orchards.

Investing in Olive Oil

Olive oil investments are not always easy to get into. Production is highly fragmented with orchards historically owned and tended on small properties by families for generations. Refining is more concentrated. For example, in Spain in 1995 there were 80 refining companies including cooperatives. In the major producing countries the market is very competitive and there are typically substantial barriers barring the entry of newcomers.

Due to the expansion of olive production into the North African portion of the Mediterranean Basin here is where more investment opportunity lies. Countries like Algeria are welcoming and inviting investment. An example follows.

A Specific Investment

A Spanish company with an Algerian subsidiary is investing in olive trees in Algeria. It plans to plant 1,500 hectares of which 500 hectares (1,250 acres or roughly two square miles) will be open to private investment.

The company will plant the Arbequinia olive on this land. This olive is fast maturing so that it starts to produce after three years. It is very cold and drought tolerant, and, important for the investor, can be planted in a hyper intensive culture. What this means is that the Arbequinia olive can be planted 1,780 to a hectare. With this level of planting the Arbequinia will produce roughly 11,000 kilo of small brown olives per hectare. Because this olive routinely produces 19% weight per volume of oil it will produce about 2,000 liters of oil per hectare. This fact is useful for investors as return on investment after three years includes payment of $2 per liter of oil produced.

Because the company intends to export high quality olive oil will build its own processing plant in order to insure prompt and professional processing of the Arbequinia olive for export.

Considering the increasing demand for good quality olive oil and the difficulty in investing in the Northern Mediterranean an excellent opportunity may well to invest in a project such as that of this company on the South side of the Mediterranean Sea.

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When making offers on commercial real estate it is imperative that you know what your interest rate is likely to be as your payments on your loan (debt service) will eat up most of your cash flow. Because of this, it is super important to know beforehand what sort of interest you will be paying. Granted, there are several factors at play in making this determination as the bank will assess the value of the property, the financial strength and credit worthiness of the guarantor for the loan, and several other parameters that banks love to keep a mystery.

Knowing the interest rate you will be paying will weigh heavily on what properties you can write offers on and for how much. In searching for a good loan, you can call several banks yourself but you may burn bridges with them or waste a ton of money on upfront fees if you don’t do it right. If you find yourself a solid commercial mortgage broker (make sure they are solid as there are many, many brokers who are “joker brokers”) it will be well worth it as they can steer you toward the banks they know are lending and they’ll know how to best present your loan package. When starting a relationship with a new broker, be sure to be very open and honest with them about your credit worthiness, financial standing. You must help them help you by divulging as much information as possible up front. If you lie and tell them your credit is 720 when it’s really 520 or have pending tax liens you’ll end up wasting a ton of time and money for everyone involved. Once the broker knows more about you, they’ll be able to give you a decent ballpark figure as to what your interest rate will be.

Keep in mind, commercial real estate loans are usually based on the 10 year treasury rate. Find out from your broker how many basis points to add to the 10 year treasury and you’ll know at all times what your interest rate will likely be once you lock it down with your bank.

There are still some good investment deals available in the marketplace. If you need help locating some good investment programs, please visit our website at http://www.invesco.info and leave your contact information so we can respond to your request.

IVESCO/Virtual Banking Companies Unlimited, LLC is a Portfolio Selection Agent for an International Private Placement Trading Platform. For additional details on our investment opportunities, please visit our website at http://www.invesco.info and register your contact information so we may respond to you promptly.

The following information will be really useful for those people who are going to invest their money into some of the investment programs that are available on the market today. The main theme of this article is whether it is possible to determine unsafe investments via the level of profit rate.

It should be started with that before you start dealing with high profit investments option you should think about what can be used as a source of that huge income that is offered. Well, this might be:

1. Lucky chance

For example, it might happen that you trade Forex and then, by a lucky chance, the currency goes your way and this consequently means that you earn a really huge amount of money. But, once again – this is a chance, so you will not have a stable income.

2. New technology

You invest into some new technology and this can really bring you very good returns. But, you should understand that nothing is stable. In other words it just means that time passes and that new technology will become old and useless – so, you will stop benefiting from this investment option.

3. Some high yield niche

Let’s say that there is niche that is known to a narrow range of people only and they get huge returns from it. Of course, it’s up to you whether to consider this idea seriously. But if such niche even exists then it means that sooner or later it will be opened to the world.

On the basis of these 3 points the following conclusion can be made:

High yield profits are not realistic because it is impossible to talk about high profits over a long period of time.

In order to provide you with more info and better understanding of the main issue of this article the following aspect should also be taken into consideration:

What level of profits can point at a scam investment program?

The truth is that the numbers are not the only thing you should pay your attention to when choosing an investment program. Yes, it is a really important aspect and if some of the investment programs promises 100% per day and they guarantee that you will get such returns during years, then you don’t need other info because this investment option is definitely a scam. This is just impossible.

So, besides numbers you should consider the way profit rates are positioned and offered to you.

If profits rates are high then the company should warn you that this investment involves big risk. If you don’t get such information then it means that this investment is a scam and you shouldn’t deal with it.

And what about investment programs with small profit rates? Well, still it doesn’t mean that such kind of program is 100% safe because scammers also play long term and that’s why they might offer not big but stable income for investors.

So, to conclude it all there is a need to point out that the level of profit rate is not the key (and the only) one aspect to consider when determining a scam.

Join the discussion about high profit investments and the level at which any promises for high income become unrealistic – on this YouTube.com channel.