Archive for the 'investing' Category

by Patrick Gunther
Would you trade in your Washington paper (currency) for Wall Street paper (stocks)? Right now it might be hard to trust either. But there is an upside to this economic mess if you plan strategically, and treat both types of paper like Indy car tires that need to be changed out in a pit stop from time to time when their usefulness is spent. During the course of this race, which I will map out for you in detail after an introduction, there are only two simple pit stops before the final finish.

There is a raging debate going on amongst economists, both of the Keynesian and Austrian persuasions, as to whether the economic slump is leading us toward a true deflation or an eventual hyperinflation. If the economy is mimicking the Great Depression, is one argument, then cash is king, and dollars (the reserve currency of the world) are where you should be vested. Steer clear of the stock market. Wait on the sidelines until market sentiment is so negative that there is a pervasive attitude of apathy and indifference. This will be the turning point, if that can be prognosticated.

The other side of the argument says that no way are we headed for a depression-style deflation, but rather an extremely inflationary environment, the likes of which we have never before beheld (except in third world countries). This is based upon the monetary and fiscal policies that the current administration and their eager counterparts at the Fed are engaging in with their rescue packages, bailouts, economic “stimuli,” and the dreaded last ditch effort of quantitative easing, a.k.a. debt monetization or MCOON (money created out of nothing.

You don’t know which camp is right. The so-called experts called it all wrong, including the dead-head Fed heads, Alan and Ben. ‘Span tinker-toyed with the interest rate all the way down to 1%, and ‘Anke is following suit (bettering it to 0-.25%), ignoring cause-and-effect linkages of his predecessor’s actions. Arbitrarily setting the interest rates has had and will have disastrous results. When there is a finite supply of something, such as gold, silver, oil, and other natural resources, fixing its price in the market place instead of allowing it to follow a natural supply-demand curve, ends up causing shortages. However, in fixing the price of money to an artificially low rate, instead of causing shortages causes its “real” value to diminish. This is because of the printing press and MCOON. There is an ability for the Fed to literally make money in amounts that you cannot comprehend. Do you know how much even $1 trillion dollars is? You may think you do (a one followed by twelve zeros), but you have likely never personally experienced more than .0001% of that amount ($100,000) at any one time. MCOON is a catalyst for inflation because it follows the natural law that states the more available anything becomes the less rare it is, and the less will be its intrinsic value. Thus, in the exchange of goods or services, you are required to pay increasingly more units of currency than before to make up for the worth(less)ness of each unit.

The game is to beat the central bankers by thwarting their efforts at taxing your wealth by MCOON (thus devaluing your dollars). Gold is the central bankers’ worst enemy. Listen to Greenspan speak about gold before his appointment as Chairman of the Federal Reserve: “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation… this is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.” The father of Keynesian Economics, John Maynard Keynes, called gold a “barbaric relic,” and said that we were all “dead in the end” anyway.

If central banks were made up of alchemists, with the ability to create gold, they would have. But the next best thing was to slowly withdraw its function (or at least try) and replace it with a substitute medium. This was done first by receipts for gold, and then keeping only a fraction of it in reserve. Eventually, gold was completely replaced by fiat (paper backed only by faith). How long will the faith in the dollar persist?

Here’s where the alchemy of gold stocks kicks in. While the Fed is busy printing dollars you can be accumulating gold stocks from solid junior mining companies with good 43-101’s. Printing by the fed now may cause a “type” of printing for your gold stock portfolio later. This is pit stop number one for you in the race. Here is where you trade in your low-tread tires (depreciating dollars) for new rubber (gold stocks). But remember, these new tires will wear down, too, and are not to be used indefinitely. Gold stocks will only take you so far, and will serve as your wheels only for a “season.” During this time you must have chosen wisely your pit crew (men such as Bob Moriarty, James Sinclair, Jay Taylor, Jason Hommel, and David Morgan) to assist you in changing out your tires.

If you act fast enough, building speed and position (accumulating cash) before the first pit stop, you’ll be ahead of the pack, and have a fresh set of tires (buy gold stocks) on before the rest of your competitors make their stops (pile into gold stocks, driving up their price).

Having eventually duplicated your efforts by having a diversified portfolio of junior gold stocks, you now have many sets of wheels (a whole team) on the speedway, and it becomes less important how each individual driver (gold stock) does than what the overall performance of the team is. By diversifying, you increase your odds of winning, and even one driver can make up for many sub par or mediocre ones. Also, second place, third, or even lower is no shame-you still come out a winner.

You see, in this race there will be a season in which the drivers (gold stocks) that have not crashed or gotten disqualified (become bankrupt) will all synergize. The leader will cause a draft big enough for all to fall in line behind and be effectively “pulled” along. Even the little guy’s performance will be enhanced. In a season to come you will see surviving gold stocks that started out as pennies per share become valued in the tens and hundreds of dollars per share.

You (and only you) get to choose the next pit stop at this point. Nobody can do it for you. This is the last one before the home stretch. Here is where you trade your gold stocks back in for cash. But this is also temporary. Very temporary. It is only to make sure you are fresh and finish strong. Because almost as soon as you make this trade, you finish the race. Here you trade the cash tires back in for golden tires. This isn’t rubber or paper. This is real gold bullion, and these tires are built to last.

Click here for your first pit stopClick here for the finish line

Article Source: Gold Stocks: 43,101 Reasons to Leverage the Alchemy Created by MCOON

by John Paul Whitefoot
If you love penny stocks (and judging by the number of heavy hitting stocks that have slipped into the penny stock range over the last 18 months…there are a lot of you out there) then the last month has been one of either great optimism, or great pessimism.

From March 9 to April 9, the Dow Jones industrial average gained 23%, the S&P 500 was up 26% and the Nasdaq Composite was up 30%. Small-cap stocks significantly outpaced large-caps, with the Russell 2000 Index up 36% in the same period. According to S&P’s Howard Silverblatt, this has been the steepest 23-day advance since 1933.

The recent price appreciation in U.S. equities led one investment officer to say the rally is “too explosive to be sustainable.” According to Birinyi Associates, when small-cap stocks outperform large-cap stocks to this degree after bear markets, rallies fizzle.

Will history repeat itself? Or will small-cap and penny stocks continue to trend higher?

According to one article I was reading (and no doubt there are ten times as many that point to the contrary) the pessimistic viewpoints seem to rest on one major assumption–that history is a good guide for the future.

And often times it is. Except in those cases where history has little or nothing to offer up for a comparative analysis. While we have all lived to tell the tale of past bear markets — it’s been awhile since we’ve seen anything like the last year or so.

In fact, it has probably been a century since the economy has experienced a sharp decline in the velocity of money like it did last year. Not since 1907 has the U.S. economy experienced a true panic like it did in late 2008.

Larry Summers, President Obama’s chief economic advisor, said that the economy behaved like a ball falling off the edge of a table in late 2008. Almost every major piece of economic data, the article noted, resembles the front half of a “V,” starting around September.

Vehicle sales fell to a level well below the scrappage rate, while housing starts fell to just one-third of the volume necessary to keep up with fundamentals, like population growth. The combination of a rapid decline in economic activity, rising foreclosures and mortgage defaults as well as mark to market accounting led to large losses at banks and panic selling of stocks.

If you believe some financial analysts, the economy and the market are just rebounding from the historically rare events of last year.

If this is the case, and most stocks are down and trading at what appears to be bargain prices, how can we separate the penny stocks from the chafe? After all, even excellent penny stocks saw investors overreact — sending their share prices off the table. But which penny stocks are going to bounce…and which will deservedly fall flat?

During a normal bear run, the markets will correctly anticipated the value of many stocks and discount them accordingly. A 50% drop in price is certainly a markdown — but it’s not a bargain if the value of the company has been cut in half, has deteriorating business units, or was overvalued to begin with.

This past autumn investors hammered penny stocks in virtually every sector. The question is, which penny stocks went through a justifiable correction, and which ones were the result of an erroneous, emotional overreaction?

Here are a few penny stocks you may be familiar with. While their share prices fell off the table this past autumn, they’re financially robust companies that became collateral damage- weighed down by the gloomy market sentiment. And, unlike most penny stocks, their share prices are bouncing.

Accelrys Inc. (Nasdaq — ACCL) is a profitable, financially solid company with over $53 million in cash, a strong international presence, and no long-term debt. Since the beginning of March, ACCL’s share price has risen 28.57%.

In early February ACCL announced that third quarter revenue increased 5% year-over-year to $20.6 million. Net income for the period was $1.01 million, or $0.04 per share compared to a (loss) of ($1.23 million), or $(0.05) per share in the same period last year.

California Micro Devices (Nasdaq - CAMD) is an innovative company with more than $48 million in cash, no long-term debt, and good long-term growth potential. Since the beginning of March CAMD’s share price has climbed 39.56%.

In late January CAMD announced that fiscal 2009 third quarter results (ended December 31, 2008) met revised guidance of $9.7 million. While demand for the company’s products dropped sharply due to the weakening global economy, the company’s strong balance sheet will help it weather the current economic storm. CAMD expects the current inventory correction will end by mid-2009.

Art Technology Group, Inc. (Nasdaq — ARTG) is a profitable, financially robust company with over $59 million in cash, no long-term debt, and improved operations. In early March ARTG was trading for as low as $1.95, and this week it hit an intra-day high of $2.96; for a short-term spread of 51.79%.

In March ARTG announced it entered into two strategic partnerships. In early February the company announced that fourth quarter revenue climbed 16% year-over-year to $45.4 million. Net income increased significantly to $3.5 million. Full-year revenue was up 20% at $164.6 million. The company also swung to full year profitability of $3.8 million.

If the recent upswing with small caps and penny stocks is looked at through the lens of recent history, then we could all expect the markets to retrace significantly. Since the last 18 months have been anything but typical, it’s difficult to frame some of the markets current optimism.

It’s quite possible that some penny stocks are trending back to where they were this past autumn — before emotions kicked in and they fell off the table. And that still provides astute penny stock investors with room to maneuver before the real market upswing commences.

John Whitefoot is a seasoned investor with a keen interest in international business and current affairs. With many years of experience in the investment community, John Whitefoot is the Senior Editor at http://www.PennyStockInsider.com/ and is devoted to uncovering the news, trends, and ideas that affect penny stocks on a daily basis.

Article Source: Is The Penny Stock Rebound Too Good To Be True?

by Julian Rogers Smith
With the economic recession looming large the risk in stock market investment has risen considerably. As far as finance and private equity is concerned, the investors have to be very particular about their wants. The need of the hour is taking the help of market specialists who can allow you to make the right decision.

Often the investors choose some particular companies to invest and ignore the rest. In fact sometimes an investor chooses a single company to invest. This is indeed a dangerous proposition because one is risking their entire asset on a particular company. In case that particular company fails, all the invested money is lost forever. Thus a prudent market advisor would advise the investors to invest in a number of companies.

If the investment amount is big, then one can even invest in more than 20 companies. Often the investors prefer investing in bonds but are unaware how to select the bonds which are perfectly suited to his needs. In such a scenario a market analyst can help. If the investor wants his or her portfolio to get the maximum attention, then he or she can consult with the professional people in this field. Other than this, he can even diversify his investment portfolio by keeping the money in mutual funds and hedge funds.

Another major mistake that the investors do is attempting to time the market. Often the investors buy the stocks when the share prices rise and attempt to sell it the moment it goes down. This is not a correct decision as for a common man it is tough to predict the rise and fall of the stock market. Taking help of a financial advisor is the best recourse in such cases.

Another common mistake done by the investors is when they keep the money with them after making considerable profits There are even some investors who prefer to keep their money in cash rather than investing it again. This can happen when they are restrained by the investment procedure or when they do not have any idea about the market conditions. Again the financial specialists will come to your rescue. Remember the share market might be uncertain but a specialist has proper idea of the market scenario and hence he can help you make a prudent investment choice.

Gerald Prizker is author of this article on 25% annual returns. Find more information about stock market crash here.

Article Source: Tips on investment Strategies during Recession

by Mel C
There are several different types of investment products on the market and to choose one to suit you, your needs and goals must be thought through carefully. Most stable investments should be for the long term, that is 5 years or more - more is better.

Perhaps the most popular investment product would be superannuation. This is because of the tax savings that are significant and also the fact that the government will add more money for free if you salary sacrifice up to a certain amount. There is a limit, of course, but it is certainly worth the effort. Superannuation can be DIY (do-it-yourself) or done for you. The latter option is the easiest, though many people like the idea of DIY.

Other investment products that are easy to get into are those such as managed funds offered by banks or other financial institutions. All you need to do is create the account and have a minimum deposit in it. Because the money is pooled with that of other investors, these let you diversify your investments a great deal more than if you were investing on your own. Diversification is another word for safety, in investing. But since banks need to make money out of these investments too, your share may not be as significant as if you were doing your own investing. It will, however be safer - so long as you choose the safe option.

A term deposit is an investment product of a simpler kind. Here you simply park your money for your chosen time and then get paid a good interest rate on it when the maturity date rolls around. Even a savings account could be considered an investment product, though the rate of return on most is usually not significant.

A more complex investment product is sometimes quite difficult to understand. All investment products should come with a disclosure statement that tells you how your money will be invested, what returns will be generated and in what way they will be paid to you. If you cannot understand anything that is in the statement, you should seek the advice of a professional or else don’t go ahead with it.

You need to know if you can get your money back early if necessary and if so, what fees apply. If you want to sell your investment, is there a ready market that enables you to do so? And it is wise to choose a product that is issued by a person or company that holds an Australian Financial Services license.

Remember that the better the expected return on your investment is, the higher the risk is likely to be.

Mel C writes about investment products including term deposits and superannuation funds.

Article Source: Investment Products

by Mel C
When you invest in stocks and shares you are virtually buying a piece of the company. This saves them the cost of borrowing the money they need and it gives you the right to participate in their success by being paid a dividend at the end of each year, or by the value of your stocks increasing, so that when you sell them you make a profit.

There are two more ways you can benefit financially by investing in stock. Firstly, when you are paid a dividend, it is with money that has already been taxed. Therefore, you receive what is called franking credits that you can use to offset tax you may have to pay on other income. And secondly, if you hold those stocks for more than twelve months, you will receive a 50% reduction on the capital gains tax that you must pay.

Stocks and shares usually have good liquidity - meaning that if you need to, you can get your money out of that investment in as little as three days. When you compare this with the time it takes to get your money when selling real estate for example, you will see that investing in stock is a good way to put your money to work

Mel C writes about the Australian stock market including unit trust and manged funds.

Article Source: Investing in Stock

by Mel C
Managed investment funds are investment schemes that pool the funds of various individual investors. The funds acquired from the investors are then invested by well experienced fund managers in a wide range of asset classes including bonds and property in line with the stated investment objectives of the managed funds. Managed funds in Australia require an investor to invest in the funds. The investor is then allocated various units that represent an equal number of the market value of the investment portfolio. The units normally have a dollar value, which is referred to as the ‘ unit price.’

The managed investment funds will earn income during the year that are in the form of dividends such as property funds, share or bonds and cash funds. The funds may also make profits based on the sold investments. The law requires that the income received from the funds and the realized capital gains of the funds be paid out to the holders of the units as fund distribution. Managed funds are a vital investment tool in the Australian financial sector. One, the funds provide investors with adequate control over the investments without the time consuming day to day management that is normally required by other forms of investment.

Managed investment funds enable diversification of funds. The funds allow access to various managers of funds, companies, countries, sectors and asset classes. However, such can only be achieved when an investor has lost of money to invest. The other advantage of managed investment funds is that the experts who are entrusted with the duty of ensuring that the funds are administered appropriately manage the money that is held by them. An investor is also allowed to select an investment strategy and to choose whether it would be appropriate to invest in the fund that is designed to deliver the required income.

There are various factors to consider when selecting managed investment funds. One is to determine the amount of risks that one is comfortable with. An investor is under an obligation to consider the period for the investment and the objectives. While considering the objectives, an investor is under an obligation to establish whether the investor will be focus on capital growth or returns. In addition, it will be important to determine the types of asset classes or sectors that an investor would want to invest in order to maximize on the investment option.

Mel C writes about a variety of topics including Managed investment funds and how to select the best managed investment funds for your circumstances.

Article Source: What Are Managed Investment Funds?

by Jack Powers
So you want to begin forex trading and be be part of the succesful crowd Good for you! . the forex market is is growing exponentially every day as more and more people discover that this is the only financial market where they can trade on the same term with the big investors!

How come? For one there is no inside trading in the forex market. Those of you who don’t believe that the stock market is full of inside trading after the last years of scandals in the financial industry needs to slap themselves in the face! That’s right! You will most likely never become a stock trading millionaire. Forex trading is on the other hand is the most volatile and largest market in the world today. More money finds new owners here every day than anywhere in the world. This is why small players have a shot at making lots of money.

But before you get out of your chair in anticipation and get your credit card, know that there are also players out there who look to take your money by using dirty tactics. Some of them call themselves brokers. In reality they are what is known as ‘bucketshops’. The word comes from the trading shops in US before the break of modern technology, where the only news were carried trough telegraph. In small towns everywhere, there would be these brokers who would take up trading for others. In reality they never traded what they said they would, but took the opposite position, and so betted against the trader. This is no longer legal. But some brokers do it to some degree.

This is why you must seek out reliable brokers who are market makers!

If you want to find out which forex brokers you can open an and make substantial profits, CLICK THE LINK! http://forextrading-tutorial.com/forex-brokers-reviews-where-to-trade

Article Source: How To Pick A Forex Broker? Watch Out For Scams!

by Huang Wu
Investing not only is an enterprise thing but should be included in our family financial strategies on a regular basis. For us average individuals, penny stocks, also known as small cap stocks, should be a good choice and an ideal place to go for testing water.

What is the deal with penny stocks really? In my opinion, penny stocks are called as it is for a reason, i.e. costing little money for one share. Therefore, it has the following advantages for me, an average investor.

Firstly, I can buy more of them with the same amount of money. With the small amount I can spare, I would rather buy a relatively large number of small cap stocks rather than a few of other expensive one. Even if they go bad, I can afford the loss.

Secondly, with the comparative large quantities of the smaller money making gadgets, I am exposed to a chance of better return when the same percentage of increase happens to all stocks on the stock market.

I have learned my lesson after all this time, so you should not go the same way. Keep the following tips in mind before jumping into the water.

Sparing ten percent of your monthly income for penny stocks would be a wise decision. You can invest less but not more. You still need your hard earned money to support your family. Investing more than ten percent of your income would be too risky.

Always put the eggs into several baskets. When it comes to investing in small cap stocks, you can buy more picks with the spared money. If your go the other way around, you might be going to undertake too much pressure once the stock prices fluctuate.

This lead to the question of how to have a winning list of good penny stocks picks. Come to small cap stocks website to find out immediately!

Article Source: Penny Stocks - Win Big and Lose Small With Small Cap Stocks

by Cedric Welsch
Trading currencies involves a continuous process of learning new methods to break into the market. There’s no room for being complacent because the business changes rapidly and rates fluctuate every now and then. This is why some people develop certain types of currency trading systems to be able to target their weakness and spot the right opportunities just as they occur.

One of these methods which is becoming increasingly popular is spot currency trading. In using this, you will need to heavily utilize the power of online marketing coupled with an experiential understanding on how the international world of forex trading occurs. Spot currency trading may not be a suggested method for newbies trying to break into the world of forex. You will need to have an individual expertise on the business, either that or you need to work closely with brokers or consultants who can guide you through the process.

Knowing How to Use Spot Currency Trading

Becoming successful using this method of currency trading involves a combination of professional and technical expertise. While you may be incurring lots of experience through your trading methods with fellow forex businessmen, you should never forget about the side of learning new information as well. Brush up on your knowledge by reading books that tackle the advancements in forex trading.

You can also watch out for online tutorials which can also help you learn the trade much easier and faster. Lots of forex experts even conduct free online workshops, provided you only subscribe to their websites and blogs. The important thing to pick up from these learning venues are the technical contingency plans and probabilities that should help you outline how you can use spot currency trading to your advantage. Online forums are also a fun yet fruitful way of knowing more about forex trading. You can also interact with other forex businessmen in these online portals.

The Benefits of Using This Trading Method

There are lots of advantages associated with spot currency trading. One of them is fast and timely transactions because you heavily rely on the internet to translate your purchases and selling points accordingly. By using the internet, you can always access your forex account wherever and whenever you may be. You can also talk to a wider group of people and trade across different countries with a few easy clicks.

Another thing with spot currency trading is that you can easily record your business proceedings as you do them online. Your transactions via email are saved in your inbox and your transactions via chat can also be saved as well. Should there be disruptions or issues arising in between, you can easily refer back to the discussions you have had to sort out things accordingly.

Another good thing about spot currency trading is that it enhances your forex intuition. You learn when to break in and when to drop forex openings. You learn to become more careful and weigh risks accordingly. In the end, you start to think long term more than just relying on what you have at the moment.

To develop your own forex trading strategy, you should consistently expose yourself with the latest forex currency trading news updates.Also, be on top of the most effective forex programs available through: online forex review scam

Article Source: Utilizing Spot Currency Trading

by Linda Queensario
Are you thinking about buying Krugerrand? It is no surprise that you might find yourself interested in making a Krugerrand purchase. These coins have become intensely favored by avid coin collecting enthusiasts and investors from around the entire globe. Originating from South Africa, Krugerrand gold coins have come to be appreciated by avid coin enthusiasts because they are capable of retaining value over time.

When you invest in these types of coins you will be buying gold coins that weigh precisely one ounce or less, and the coins created are a mixture of gold and copper. Novice coin collectors might fear that the copper mix in the Krugerrand will cheapen the value of the South African coin but this is not at all the case. When the coins are assessed for value, the gold in the coin’s mix is all that is considered. The actual alloy mix results in the one ounce coin possessing more than ninety percent gold and the actual weight in gold that the coin offers works out to be a total of 33+ grams.

An authentic Krugerrand is very easy to identify. On the obverse side of the Krugerrand, the portrait of Paul Kruger can be identified: Kruger was actually the final president of South Africa. His profile is facing left and arched in front of Kruger’s profile are the words “SUID AFRIKA” which is followed by the words “SOUTH AFRICA.” Meanwhile, the reverse side of the coin bears the image of an antelope seemingly frolicking in a thatch of greenery. The antelope depicted is actually a species of African gazelle. The date the coin was created is separated and depicted on both sides of the gazelle; the first two digits of the year appear on the left of the gazelle and the remaining two digits of the year appear on the right. Arched beneath the gazelle depiction are the words “FYNGOULD 1OZ FINE GOLD.” Arched above the image is the word “KRUGERRAND.”

The above description of the Krugerrand is primarily based upon the one ounce coin offering. There are different denominations of these gold coins which include the one-half ounce of gold, one-quarter ounce of gold, and one-tenth ounce of gold. The one ounce coin is the most coveted for clearly obvious reasons.

To learn more about Krugerrand, check out Gold Krugerrand.

Article Source: What You Need to Know Before Buy Krugerrand