Investment Articles

In an age where environmentalism and social responsibility have become a part of the mainstream consciousness, there has been a change within financial markets. The bottom line is no longer the sole decision making factor that investors typically take into account. A recent trend has been to invest in companies that align with your own personal set of beliefs. This phenomenon is known as ethical investing.

Investors who subscribe to this theory have to take into account a number of additional factors when deciding on companies within which to invest their capital. How they make this decision depends entirely on that individuals own ethos, but this typically includes concerns such as the sustainable practices of the company and the relative moral value of the products they produce.

Ethical investors will look to buy stock in companies that strive for positive change over pure profiteering. In other words, ethical investors partner up with ethical firms; like attracts like. Whether this means investing in firms who specialise in the research and development of new technologies, or companies who simply carry out their day to day business in an ethical fashion, these investors will choose stock upon what best represents their world view.

Just as they will be attracted to firms that share common goals with them, ethical investors will be repelled by those that don’t. This could be in the form of a geographical bias, by refusing to invest in firms from certain countries because of a poor environmental record. Perhaps the government in that nation is undemocratic, corrupt, or simply ineffectual from a humanitarian standpoint; if they fail to meet the ethical standards of this particular person they will refuse to invest, no matter the potential payoff.

In a similar fashion, ethical investors will shy away from individual firms with similarly unscrupulous track records. This will also tend to include various well known brands with a questionable history of underpaying their overseas labour, and any other business practices judged to be unsavoury in the eyes of the ethical investor.

The fact that life is not a simple question of “good versus evil”, especially not in the business world, only serves to complicate matters. Some firms which have previously been deemed to have acted in an unethical way have begun to clean up their act. Does a recent change of heart make up for a history of success built on an immoral foundation? For the ethical investor as a whole, there is no clear cut answer. Just as our own personal code of ethics is largely subjective, some investors will have stricter rules than others about who they will do business with. When talking about the “ethical investor”, it is less a case of membership and more an indication of a general movement away from purely financial based decision making.

This is a modified article from Mark Lister. To read the complete article visit www.craigsip.com. Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand’s largest and most established investment advisory firms. View investment options here.

Prosper.com and The Lending Club make it possible for individuals to invest in private, unsecured loans taken out by individual borrowers. An unsecured loan is, by its very nature risky. Prosper investing and Lending Club investing take some of the risk out of the equation by allowing the investor to choose loans and risk levels. The purpose of this article is to address the exact nature of those risks.

If a borrower stops making payments on a loan in which you are invested, the bank will take action. If the borrower actually defaults, the bank will pursue collection action. This might or might not result in you recovering some or all of your investment. The smart money says that your investment will not be recovered. Your job, if you have done it well, is to make sure that this default is a bump in the road rather than a disaster.

Avoiding a disaster begins with taking a close look at the loans and borrowers you can choose from. A borrower’s loan will have a letter grade issued by Prosper or The Lending Company. Prosper investments are graded A-E, and then HR for high risk. The Lending Club investments have over 25 subgrades, namely A1-G5. Different interest rates are attached to each grade, and they range from 7% all the way up to over 30%. So why not just invest in the high interest loans?

The reason why that is a bad idea is because the higher interest rate loans carry much higher risks. Prosper, whose loans creep into the high ranges more readily than The Lending Club’s, attracts more borrowers who present a risk of default. This is especially true given that Lending Club fees and Prosper fees, as well as a 1% commission charged to investors, are not included in the face amount you are getting from the loan. The borrower is actually paying more than what you are being paid.

The truth is, though, very few Prosper and Lending Club loans can truly be said to be low interest. There is some default risk no matter what the interest rate. The only sure way to protect oneself from default risk is to diversify the loan portfolio.

This means spreading your money across as many different loans as possible. Even a single loan at a relatively low rate can pose a risk. What if the borrower loses his job? He may default and you will have lost not only future interest, but your investment as well. This could be avoided by spreading the same money across many other loans. Recall that the minimum Lending Company investment or Prosper investment is only $25.00. Both Prosper investing and Lending Club investing can be made easy by investing in the pooled noted above

Unless you can truly afford to lose money, it is very important to diversify. The real world risk of default can be drastic. Even as few as 15% of loans going into default can drop the return on an investment you thought would pay 25%, to one that might only pay 7%. Both companies publish projected default rates for any grade of loan, which can reduce expected performance rates anywhere from 2% to 10%. Check these figures carefully and read the prospectus before investing.

Lending Club investing and Prosper investing are excellent vehicles for a potentially high rate of return. However, a Lending Club investment or a Prosper investment can carry significant risks, especially when the investor is chasing higher returns. Always check with an investment advisor before deciding.

Tom Zheiner has years of experience in evaluating borrowing and lending. He is an expert in peer to peer lending, which presents somewhat risky, but potentially rewarding, income investment opportunities. Please check his website, http://peerlendingtoday.com for more information.

A recent article in a noted financial magazine discussed the folly of market timing versus buying and holding good stocks. The author pointed out how a ten year investment in a strong stock could produce substantial gains, while admitting that buying and selling the same stock a few times during the 10 years produced almost twice the results…but only if you timed the purchase-sale correctly. In essence, with many examples and reasons, he shot down the concept of market timing while making his case for buy & hold.

The true folly of anti-market timing arguments is that they always focus on tracking particular tickers symbols and questioning the ability to buy or sell at the right time. You could argue that all programs that give buy-sell recommendations are market timing programs, but that would be stretching the argument way out. The advantage with some software is that they can tell you when a ticker is going down and when another ticker is outperforming your current holding, even if your current holding is still going up. This power means that losses are limited by your sell rules and gains become cumulative so as to far surpass results from simply holding an individual ticker.

The folly with taking a buy/hold approach has been fully illustrated with our recent recession and again with the recent turmoil and drops in the markets. News headlines during the recession pointed out how retirees had lost 40-60% of the value of their portfolios. The latest market swings have been almost as dramatic.

While many portfolios recouped a lot of their value when the markets swung up from the recession lows few, if any, fully recovered and then surpassed their pre-recession level to the same degree as the markets climbed out of the recession if they were still holding the same positions.

I know the recession hit my portfolio – but not nearly as bad as most because the software I was using told me to sell and move to cash. The same software then told me to buy just as the markets were swinging up so my gains were based on about the same value as before the crash.

The recent decline in the markets also triggered the software I use to sell and I moved 80% of my portfolio value into cash, placing me in an excellent position to obtain future gains as the market rebounds.
In other words, buy and hold means your stocks and your portfolio are going to jump upon a roller coaster ride. While I like riding the Space Mountain roller coaster at Disney World, I would rather my portfolio traced a route more like going on a scenic drive along a valley floor that has a few ups and down but is basically moving on a constant upward path – kind of like following the Missouri up river to its high mountain peak origins.

The key is not simply market timing, but rather to picking positions that are moving ahead better than others, even better than what your current holding is doing. This is accomplished by implementing:

• Relative strength analysis using alpha or relative strength momentum
• Implementing sell signals based on stops, ranking level and market movement – just to mention a few.

By selling to strength, limiting losses and exiting the market when risk becomes too great, your portfolio has a better chance for substantial gains with minimum losses.

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

Reading the recent business headlines, confidence surveys and economic strategy reports regarding the market volatility in Greece and the US, it is apparent that we are all concerned about things continuing to head downhill. This market volatility, including the insolvency issues in Greece and high unemployment rates in the US, will continue as governments reluctantly accept this outcome and in the aftermath global economic growth (and consequently investment returns) will remain below average for years to come. However, there are still some positive areas to be encouraged by, amongst the long list of worrisome points.

1. Share valuations are reasonable.
The price-to-earnings ratios in New Zealand, Australia and the US indicate good value for investors. The NZ market is currently trading at an average PE ratio of 13.5 (slightly less than its long-term average of 13.7) and the AU market is at 11.7 (some way below its long-term average of 14.3). The US market PE is currently 12.2, not quite as cheap as the lows reached in the financial crisis, but also much lower than the highs of over 16 that were reached in 2007.

2. Dividend Yields Above Long-Term Average
Dividend yields are (in a lot of cases) higher than those available in term deposits and fixed interest may provide some share price support as income-seeking investors have limited choice.

NZ Shares & Property Trusts – generating an annual dividend yield of 7%
AU Shares – yielding around 5% are achievable
US Share – yield on 10yr treasury bonds being outpaced by share markets average dividend yield (rare occurrence).

3. Interest Rates Likely To Remain Low For some time
Official Cash Rate expectations have taken a turn from the expectation that they would be raised by 0.5%, with local interest rates on hold for now and any move in the AU rates likely to be down rather than up. The vast majority of us are sitting on floating mortgage rates – keeping costs low for borrowers, assisting consumer and business sentiment and also helping yield the gap between shares and other forms of investment.

4. Oil Prices Have Fallen From Their High
Oil is a key component for most sectors of industry, and oil prices have a large impact on consumer confidence. The West Texas oil is 25% lower than its May high and Brent crude is 12% off its highs.

5. Corporate balance sheets are much stronger than they were in 2008.
The corporate world is on a much more secure footing than it has been in the past. Average debt levels in Australia are now at 27% (compared with the long term average of 50%). Corporate debt levels in New Zealand and the US have fallen by a similar amount.

This is a modified article from Mark Lister. To read the complete article visit www.craigsip.com. Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand’s largest and most established investment advisory firms.

Online share dealing accounts can offer a quick and easy way of starting out in stock market investment if you’re looking for a more hands on approach investing and are prepared to put up with a degree of risk.

How do I trade online?

Online share dealing for the individual involves setting up an account and buying and selling shares through it. When you set up an online share dealing account you will usually be required to pay a flat rate of between £6.00 and £20.00 per trade. Some accounts will also charge a quarterly membership fee too. You should make sure that you are aware of all the costs involved before committing to one particular account.

There are many online share dealing accounts available from a range of providers and you can often open an account simply by registering a debit card and providing a few personal banking details.

What do I do next?

1) Decide your limits. Before you begin you should decide on a maximum amount you would like to invest with. Trading can be exciting and fast paced, but you should be completely clear about your limits and the risk involved to your capital before you begin.

2) Do your research. It’s always best to invest in a company you already know something about, and research can help you to gauge risk involved in a particular company. Many share dealing account providers will offer a short trading history on individual companies, use this to your advantage

3) Diversify. Rather than buying many shares in a single company try to spread your investments across several companies. That way if one company goes down it will have less damage on your overall share portfolio.

Your shares will be held in an online portfolio which will also hold information about current share prices and any profit or loss you may have incurred. It’s best not to trade your shares too often as you will probably be charged per trade and these charges can add up and eat into any profit margins.

Is it right for me?

Share dealing online is most suitable for those will small sums to invest and feel comfortable with the processes and risks of investing in shares. It’s certainly not everyone’s cup of tea and you may want to speak to an investment advisor if you have a large sum of money to invest or if you are unsure about any aspect of investing in shares.

John T Hughes writes for Share Dealing Account, a leading online source of information on share dealing accounts in the UK.

What are the best Australian investments in 2011 and for the coming years? This article describes five of the best investments in Australian based on data and information provided by several of the leading advisers and institutions in Australia. While views and opinions may differ on the viability of these investments it is felt that these segments offer he best potential for a return on investment in both the short term as well into the foreseeable future. It should be noted that the information presented here is offered as opinion only and should not be considered as professional investment advice. For professional advice seek the services of a registered and licensed Australian financial adviser.

Property and Real Estate:
Property in both residential and commercial varieties remains a stable investment. Australian has seen significant growth in property values over the last ten years and this trend is set to continue into the future. In the second quarter of 2011 the Australian real estate market saw a 1.3$ increase in property values. The majority of experts in this are agree that a real estate bubble is not likely to occur making this a solid investment both today and into the coming years.

The Share Market:
The Australian Share market while affected by the global economy has not seen the major fluctuations experienced by overseas markets. Some of the hot share markets and segments to consider and those which are expected to increase in value over time are:

Energy

Financials

Health Care

Industrials

Materials

Telecommunication Services

Utilities

Managed Investment Funds:
Managed investment funds allow investors access to a professionally managed portfolio investments through a single security or contract. With managed investments an investor owns a percentage of the overall investment portfolio in consideration of the size of the investment and are therefore entitles to profit and dividend of the portfolio as well being subject to loss in circumstance where the portfolio values declines. As an investor it is important to compare the financials managed funds in order to determine their viability. Consult with a financial advisor to discuss various funds and management opportunities available to you.

While there are many more investment strategies to consider in Australia the three outlined here may be your best bet for the remainder of the year as well as into 2012. Remember to develop a reliable resource of research data and information to help make your investment decision informed ones.

Investing doesn’t need to be difficult. To quickly learn more about investing in Australia including shares and property investing visit http://investingaustralia.com.au

The Thrift Savings Plan currently offers ten investment funds. Five are U.S. and international stock and bond index funds: they replicate the performance of broad market indexes. The other five TSP funds, the Lifecycle Funds, are professionally managed portfolios which consist of a specific target allocation of the 5 individual TSP index funds.

The TSP Funds contain a diversified portfolio of thousands of individual stocks and bonds. Investing passively in index funds such as these is generally considered to be a good retirement savings strategy. The alternative is for you or an investment manager to actively pick individual stocks and bonds to buy and sell. Apart from being impractical for individual investors, this latter strategy usually also leads to inferior investment results: research has shown that most professional active fund managers under-perform a passively managed portfolio of index funds such as the TSP funds.

Here’s a summary of the five primary TSP Funds:

The G Fund is invested in U.S. Treasury securities which are guaranteed by the U.S. government. The nice thing about this fund is that it’s practically risk free (your investment is guaranteed not to lose any money), and yet the interest rate is substantially higher than what you would earn in other safe investments like bank savings accounts, certificates of deposit, or money market funds. If you are very risk-averse, this is definitely the place to park your savings.
The F Fund is a bond index fund, invested in high-grade U.S. government and corporate bonds. Its performance is very similar to the private sector iShares Barclays Aggregate Bond ETF.
The C Fund is a U.S. stock index fund that mirrors the returns of the S&P 500 Index, which consists of large U.S. corporations. Its returns are essentially the same as the SPDR S&P 500 ETF.
The S Fund is invested in the stocks of small to medium-sized U.S. companies. It’s designed to complement the C Fund, so if you invest in both, you basically own shares in almost all U.S. stocks. There aren’t a lot of index funds that track these companies, but if you own both the TSP S Fund and C Fund, then your investment returns will correlate closely to a broad U.S. stock market index fund like the Vanguard Total Stock Market ETF.
The I Fund is allocated to international stocks. It allows you to diversify your portfolio by investing in the stocks of companies in more than 20 developed countries in Europe, Australia, and Asia. There are several private sector equivalents to the I Fund, including the iShares MSCI EAFE Index Fund.

The other five funds, the TSP Lifecycle Funds, consist of professionally managed investment portfolios designed to meet investment objectives for a specific target date (the date on which you plan to begin withdrawing your money). The L Fund assets are invested in the individual TSP funds (the G, F, C, I, and S Fund) according to a target portfolio allocation which is adjusted every 3 months. The target allocation starts out risky, with a large percentage of stock funds such as the C, S, and I Fund. As the target date approaches, each L Fund becomes gradually more conservative, by shifting a larger portion of your assets into bonds such as the F Fund and G Fund. This investment strategy assumes that, while you’re still a long time away from retirement, you’re willing to take on greater risks in order to increase your potential investment returns. Also, while you’re still at the start of your career, you have a longer period to recover from potential investment losses, considering that you’ll continue to make monthly contributions to your account for many years.

Depending on your personal circumstances and target retirement date, you choose one of the five L Funds: L Income, L 2020, L 2030, L 2040 or L 2050 Fund. The L Income Fund is the most conservative asset mix and assumes that you’ve already started withdrawing your savings. The L 2050 Fund is the most aggressive allocation, currently 90% stocks and 10% bonds.

Benefits and Disadvantages of Investing in the TSP Funds

Many investment advisors recommend that for long-term retirement savings, you buy and hold a low-cost, broadly diversified portfolio of domestic and international stock and bond index funds. With the available TSP investment funds, you can do an OK job at this. By investing in all five individual TSP funds, or in one of the Lifecycle Funds, you’ll have a decent portfolio, with an ownership share in thousands of U.S. and international stocks and U.S. bonds. And the TSP funds have extremely low annual expense ratios, several times lower than comparable private sector mutual funds and ETFs, keeping more of your money working for you.

So what’s wrong with the list of currently available TSP investment choices? Some investors want to own Emerging Markets stocks (in addition to the Developed Markets international stocks in the TSP I Fund). Or an allocation to real estate (REITs), or inflation-protected securities (such as TIPS). And some would even like access to more exotic investments like international bonds, high-yield bonds, and other hedges against inflation (commodities and precious metals like gold and silver). Professional advisors would differ on how suitable these investments are. Most would agree that TIPS are a good idea, and for more risk-tolerant investors, perhaps a small allocation to REITs and Emerging Markets stocks.

One great benefit of investing in an L Fund is simplicity: it’s a “set it and forget it” investment plan. You choose an L Fund, determine your monthly contributions, and the fund administrators take care of everything else: regular portfolio rebalancing, and gradually adjusting the asset allocation as you approach retirement. But there are also a few downsides. First, the L Funds with the longer time horizons are fairly risky allocations (for example, currently 90% stocks and 10% bonds for the L 2050 fund), and you should make sure that you can stomach the inevitable volatility as a result of owning a portfolio dominated by stocks. If you’ve owned stocks for the past decade then you already know this: it can be quite a bumpy ride. Also, some investors want more control over their exact portfolio components, when to rebalance, and how soon to start shifting the allocation to a more conservative asset mix as they approach their planned retirement date. Some investors also prefer a tactical asset allocation, shifting their mix based on asset class trends, economic circumstances or other criteria. Owning a portfolio of the individual TSP funds will work better for these investors.

Learn more about the TSP Funds and get daily price and performance updates at http://www.tspfolio.com/tspfunds

Investment decisions should be based on solid analysis. Two of the many methods available to base your decision upon are ‘return’ and relative strength momentum as analyzed with an ‘alpha’ formula.

‘Return’ sounds pretty straight forward and is popular. In fact many chart programs are in effect illustrating the return of a ticker symbol simply by showing the movement of the ticker’s price. Either it is going up or down or perhaps gyrating nowhere. But normally there is a percentage change almost every day and if you bought and sold on this basis it would be easy to calculate your return just as you can calculate the return from previous days or history.

‘Alpha’ on the other hand is best used to try and predict the future movement of a stock, mutual fund or ETF.

Let me explain.

If you analyze a particular symbol that is part of a group of symbols using ‘return’ over a particular time period you will quickly and quite simply see which symbol has outperformed the others. You can take this a step further and say that the symbol with the best return for the past 10 or 30 days out of your group is the one to now buy. Investing in this manner can be very successful as the analysis indicates which symbols have the greatest growth or loss rate.

The difference between ‘return’ and ‘alpha’ is that ‘alpha’ is calculating not just the progress of the ticker symbol over your selected time period but it is comparing that progress, the change, to a benchmark like the S&P 500 and to all the other symbols in the group, and, most importantly, it is factoring in the rate of change and comparing this rate of change between all of the symbols in the group. In other words, ‘alpha’ is saying symbol X is moving at a more rapid pace than any of the other symbols and its pace also differs from the benchmark more than that of the other symbols in the group.

This concept of relative strength momentum analysis, of which ‘alpha’ is one means of calculation, can be used to predict changes. Because the analysis, or predictions, are calculating the relative differences between the ETF or stock symbols in your group the potential for accuracy and stronger profits are greater.

Personally, I have used ‘alpha’ as my favorite means of analysis for many years. But recently I decided to test ‘return’ to see which one would produce the best results. I ran tests from 1999 and from 2005 to the present. You might say I did a test drive to see if another model car would outperform the car I own.

Quite frankly I was amazed at the great results, the superb performance provided by ‘return’, especially when I incorporated a Market Exit signal into the analysis to pull me out of the markets when the S&P 500 was tanking.

However, the ‘alpha’ test drive still outperformed the ‘return’ and you might say, let it eat my dust. So I am sticking with my ‘alpha’ method of relative strength momentum analysis.

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

There has been a surprising, although not fully unanticipated, rise in the amount of alternative investors over recent years and various specialist investment companies now exist to cater for this demand by offering investments that are not only lucrative, but are also environmentally friendly.

Investing in our own planet is becoming big business these days and now there are a number of ways solo investors and larger companies and organisations can make money whilst concentrating on reducing their own carbon emissions.

Carbon Trading

Carbon trading is basically an economical approach to reducing pollution and the resultant build up of green house gasses in the earth’s atmosphere which in turn leads to climate change and global warming, and so far it has been very effective. Industries that emit pollutants into the atmosphere are now required to purchase permits to do so. The total amount they are permitted to pollute comes under strict controls. All industries must have these permits, and these permits are effectively carbon credits. Each carbon credit is worth 1 tonne of Co2 or the equivalent amount of emitted polutants.

This credit system encourages those who pollute to reduce their emissions, and when they do so they will have spare credit that they can trade to industries and businesses that need more credit to increase their own levels. This way the polluting business that buys the excess credit isn’t really adding any more Co2 to the atmosphere because they have purchased the credit from a business that has reduced their pollution level.

This trading provides avenues for investment by identifying those companies who are attempting to gain carbon credit by reducing emissions.

Pensions

Carbon credits are also a very popular choice for SIPPs (self invested personal pensions). Because only a few, very select investments are made each year, and the tax office allows for extra revenue to be made from SIPPs, there is a very good chance of excellent returns. If you’re going to put money away for your future retirement and you want an alternative investment, then you may as well invest it in something that will give you a good return and also protect rare Earth commodities for future generations too.

This is further enabled through investment specialists being able to offer short, medium and long term investments, with exit strategies in place to allow investors to get out when they want; very unlike collective investment schemes that don’t allow this type of management and manoeuvrability.

Select-Global is one of the most influential and innovative companies in the Alternative Investment and SIPP Investment arena.  We are dedicated to guiding our investors through the sometimes complex world of investment opportunities that the global Alternative Investment markets offer. Our mission is to provide the most up-to-date information and investment advice in the world’s most favourable Alternative Investment and SIPP Investment markets. We pride ourselves on the unparalleled levels of professionalism and the ethical services we offer our clients. http://www.select-global.com

Exchange Traded Funds like the broad-based SPDR Standard & Poor’s 500 ETF (NYSE: SPY) offer excellent stock diversification. But as the last decade shows, even optimal diversification is not sufficient to produce long-term capital growth with the usual buy & hold strategies.

The SPY ETF lost in the 2000-2010 decade around 15%. 10 years of holding ETFs without buffering them against medium term market price corrections and bear market downtrends resulted in a loss.

The two large market retracements of the current year 2011 illustrate already how intermediate downtrends affect annual ETF portfolio performance and that this volatile market environment isn’t over. It is evident, that any successful long-term ETF investment requires loss hedging. No hedging will be perfect, but any sophisticated hedging is better than none.

It is strange, that only very few investment advisors suggest ETF portfolio hedging against general market downtrends. Dollar averaging certainly isn’t sufficient and to no avail for investors which are not adding regularly new funds to their portfolio.

It is clear, that protection of Mutual Funds against market losses by trend trading or by trend directed allocation swaps between Mutual Funds and Bonds is too expensive transaction cost wise and that Mutual Funds miss options to protected them during market corrections. But for Exchange Traded Funds the situation is quite different: ETFs are liquid, exchange traded securities, the buying and selling of which in discount broker accounts is inexpensive. And there exist very liquid options for most popular ETFs. This allows any private investor to change asset allocation at least during bear markets or to learn more sophisticated option strategies to insure ETFs in self-directed internet discount broker or even in IRA accounts. The latter really boosts performance, a thing especially baby boomers really need.

Using ETF puts or writing ETF calls are efficient (though, of course, never perfect) strategies to protect ETFs both against medium term market corrections and against bear market losses. More sophisticated hedging strategies offer even the opportunity to make some ETF investment profits during bear markets. All this will improve the long-term wealth growth considerably.

www.best-smart-investing.com offers a tutorial of the full practical know-how of 4 easy to learn and to manage strategies to hedge Exchange Traded Funds against medium term market pullbacks and during bear markets. Two of the strategies even focus on the potential to generate double ETF returns or capital gains even in bear markets by very small additional investments. The strategies don’t require short-term trading and are not time-consuming. As most internet broker offer today test accounts, the test accounts can be used to test the strategies and to train its practical application.

The managing of ETF hedging strategies requires to be able to determine the begin and end of bull trends, bull trend corrections and bear down trends. The website www.winway-spy-signals.com publishes medium term trend signals for the Standard & Poor’s 500 index. These medium term signals allow any investor to time the hedging of broad-based ETFs, of course especially of SPDR S&P 500 ETF (NYSE: SPY), without trend guessing, without depending on market trend news (noise) or on time-consuming medium term technical market trend analysis.

In 2010 the SPDR S&P 500 ETF was hit by medium term pullbacks of 6%, 13,7% and 6,2%, causing a total of intermediate losses of 26%. In 2008 the intermediate losses where 16,1%, 13,2% and 38,2%. Imagine how hedging ETFs according to the strategies referred to above would have boosted the portfolio return during these two loss years and how alone compensating the intermediate losses of two years would have changed the total return of the decade, not to speak of the difference bear market hedging would have made in a bear market like the one which started in 2000.

René Schmid

I am a financial professional (but no investment advisor) and now a senior investor with over 3 decades of investment experience. In the course of my investing I learned, that avoiding general market risk is even more important than good asset allocation. I studied and tested over many years strategies to best hedge ETF investments efficiently against market pullbacks and crashes.