Currently Browsing: Investing
Jun 25, 2012
Posted on Jun 25, 2012 | 0 comments
For many folks thinking about investing in bullion, many are wondering if they need a gold investing guide to make their way through what they perceive is a quagmire of high spot prices and instability. One of the first things I would caution against is assuming that precious metals are systemically unstable in terms of price. The second area of caution I would suggest is thinking that investing in precious metals is outside the scope of your budget.
Price History of Precious Metals
If we consider the history of silver and gold, over the long term we see that their prices are actually quite stable. One of the misunderstandings about silver and gold is that over the past decade we have seen their spot prices skyrocket because of their own innate instability. This is not the case, though. If you consider their price changes in light of the monetary policies of government, you will see parallel price changes in concert with fiat money and central bank activities. In other words, the spot prices of precious metals reflect outside economic forces. Granted, commodities are also based on supply and demand, but even this has been distorted by government and big business.
Getting into Precious Metals on a Budget
Even with the high price of gold, it is still quite possible to invest on a budget. Think about all of the pawn shops you see with banner signs declaring that they will buy your old gold. The reason they do this is because they know that scrap gold is a great way to get into gold for less than the spot price. You can do this too. I suggest going to garage sales, estate sales, and even the occasional antique mall and looking around for old gold and silver jewelry. In addition to these, old gold and silver coins are also viable ways to get your hands on precious metals.
In short, clearing away any misconceptions you have about investing in precious metals is going to to go a long way towards getting you where you need to be. Keep in mind that precious metals are a long term investment, and that weathering through price changes over time will be an exercise in patience that will be very profitable. For more information on investing in precious metals on a budget, check out some of the other blogs and sites online that give some helpful, and free, information.
Jun 14, 2012
Posted on Jun 14, 2012 | 0 comments
When you are considering investing in guns you have to first figure out which kind of guns you are going to be investing in. For investment purposes there are two major types, collectable guns and stocks in gun companies such as Smith and Wesson or Ruger. Each type has its advantages, and disadvantages.
Collecting guns can obviously be something of a hobby, which can be both a good and a bad thing. It can be good in that it’s a rather expensive hobby and so those who participate in it are usually very wealthy, so If they want your gun they are likely to pay almost any price for it. Which would obviously be a great thing if you were in a situation like that but what about if you were trying to buy a gun that you thought would be a good investment and you were bid up by a collector?
One of the things you have to be aware of when investing in collectable firearms is that the prices don’t fluctuate all that often. This can be both a blessing and a curse because you don’t experience many of the rapid changes that the stock market does. For example in 2007, when the stock market crashed as a result of the recession, many investors lost upwards of 30% of their portfolios, while collectable gun prices stayed relatively stable. I realize that this makes collectable guns sound much more enticing but let’s also discuss one of the major drawbacks of collectable investing -taxes. The capital gains tax on collectables can get as high as 28% whereas the long term capital gains tax on stocks maxes out at 15%. In addition to those tax risks, collectables are not a permissible investment in an IRA, which means you would miss out on further tax benefits.
So are stocks in gun companies any better than collectable guns, or stocks in other companies for that matter? One of the unique things about the gun industry is that it is recession-resistant. Nothing is truly recession proof but guns come closer than most. You might even say that the gun industry is more closely related to politics than to the economy. With a democratic president taking the white house, the fear of gun prohibition has been looming ever greater, and I suspect that if he is elected to a second term stocks in gun companies will soar. A president in his second (and final) term is way more likely to do something that is not popularly accepted, like outlawing guns, because he is not worried about being re-elected.
People have been buying guns in bulk lately because of this fear and it has caused gun companies to have their sales soar, at one point, in the middle of this bad economy, Ruger had to stop accepting new orders because their production couldn’t keep up. This is probably one of the reasons why Ruger’s stock is up 145% in the last 5 years while microsoft’s is down 3%. Like any other investment, an investment into guns can be risky and you should always do your research but it is definitely an area of the market that has been doing really well, and will likely continue to do well, but like I said it might depend on things other than the economy.
Jun 13, 2012
Posted on Jun 13, 2012 | 0 comments
Winning the lottery can instantly transport a lucky individual and their family into the arena of the financial elite.
However, just like canny businesspeople who have millions in the bank thanks to their enterprising skills, or even those who have inherited their wealth, people who gained their riches through the lotto have to be smart.
By applying some financial intelligence to a lotto jackpot win, people can make their windfall work for them and chief executive at Capital Asset Management Alan Smith knows just what steps such lucky souls need to take to safeguard their money.
Seek independent advice
The first thing the wealth management expert recommends lottery winners do is seek the know-how of an independent financial advisor – which is something the vast majority of money professionals will recommend in this instance.
He noted the people lotto winners need on-side are unlikely to be found at their local high street bank and so a little research may need to be carried out.
“Look at their websites, phone them up and probably speak to at least three out of the firms listed in your area and go and see them,” Mr Smith suggested.
Set out objectives
After seeking out a financial advisor, the wealth expert urged lottery winners to really think about how they want to spend their money.
He suggested making a comprehensive list of what an individual or family wishes to achieve with their newfound wealth, including significant purchases such as a new home or a big holiday.
Diversify your investment
Finally, Mr Smith recommended people look into investing their cash in several different places.
Some people may prefer more pedestrian methods of keeping a kitty – perhaps in pensions or ISAs – while others may favour playing the markets, but whatever they decide, the financial expert claimed spreading the cash about is the smartest thing to do.
“It always makes sense in my opinion to diversify – don’t put all your eggs in one basket. Build a diversified investment portfolio,” Mr Smith suggested.
So, depending on a lottery winner’s priorities, they may want to set aside trust funds for their children and grandchildren, pensions to ensure a comfortable old age and ISAs that will gain interest.
In addition, investing in commodities such as gold and stocks and shares can yield good returns if individuals play the markets wisely, while some may prefer to use their cash on property, art and other valuables that could gain in value or they could add value to.
Author Bio: Austin Weaver loves cricket and rugby, but his real passion is traveling. During the day he is a content and blog writer for the site www.theLotter.com lottery online ticket website, which sells lottery tickets throughout the world.
Jun 12, 2012
Posted on Jun 12, 2012 | 0 comments
As dominance in the global refining industry diverts away from developed nations like the US while advancing towards emerging economies, companies in the gas and oil industry need to modify their approaches to refining. Diesel and gasoline prices, normally varying according to demand from developed countries, now change with developing countries’ increasing demand for crude oils and fuels. The conventional link between Gulf Coast marginal refining cost, US gasoline prices and global crude prices has been cut. The factors driving these dynamics are also leading to waning attraction towards the refining industry composition.
Environmental and hyper oil prices are creating margins which could result in more refining asset sales and restructuring or bankruptcies such as the Petroplus Holdings closure in January 2012, which was among the top refiners in Europe. In addition, demand for gasoline in the US declined due to sluggish economy, increased demand for bio fuels and entry of electric and hybrid vehicles in the market. Despite the low margins and excess current industry supply, National Oil Companies still continue to expand their refining capacity.
What does this imply to the industry and private companies out to compete? The recovery projections in developed countries are constrained. Companies are seeking reduction of capacity strategies due to drop in petroleum based refined motor fuels. However, the demand will most likely decrease faster than supply, so net excess fuel capacity will increase with decline of utilization in the foreseeable future. The global refining industry will be confronted with cyclicality caused by increasing fluctuations that are defined by overall global economy, major refinery disruptions and global crude markets.
Despite the turmoil, some regional and global factors experience a potential upside. For instance, refiners in the Midwest of US currently reap from shale oil surge. Due to poor infrastructural network, the shale oil currently sells at a significant discount in comparison with global market crude prices. At the same time, refining companies at the Gulf Coast of US could get more profits when oil companies in the North-East reduce operations because of excess oil capacity in the Atlantic market. They can also benefit from construction of Keystone pipeline, which would transport crude from oil sands of Canada.
Most of the improvements will be experienced by companies that respond to market dynamics effectively. Major restructuring of the global refining industry is going on, touching all kinds of companies. Due to this, National Oil Companies, independent companies and International Oil Companies need to revise their investing strategies. All these mentioned companies will have to adjust to changing refining trends. However, International Oil Companies face the most difficult combination of opportunities and risks.
The developing economies such as Asia will continue to dictate global demand of fuel thereby creating major changes in the refining industry. Result of surveys carried out by OPEC indicate that between 2015 to 2020, the liquid fuels demand in Asia Pacific region increase by 2% annually while demand may drop slightly in Europe and North America. Therefore, International Oil Companies can prepare themselves to benefit from the new centres of demand.
Jun 11, 2012
Posted on Jun 11, 2012 | 0 comments
People who are not familiar with currency trading, also known as Forex trading, must see it as something very exotic, quite difficult to comprehend and generally unreachable. In reality, however, nothing could be farther from the truth. While becoming a Forex expert will take a little time, its important to know all about Forex at its most basic level –and that is how a Forex trade works.
- You choose the two currencies that you want to open a trade on.
- You determine the amount you want to trade.
- You determine the type of trade you want.
- You review the trade and make any changes (or change your mind)
- You initiate the trade.
- You sit back and watch the action happen.
- You count your blessings or lick your wounds.
Let’s expand on each step just a bit.
1) Choosing your two currencies to pair; you have a choice among hundreds, but most currency traders know to steer clear of currencies that are not frequently traded. That leaves you with what are known as the “hard” currencies; these include currencies from the United States (the U.S. Dollar or USD), the United Kingdom (Great British Pound or GBP), Japan (Yen or JPY), the Euro-zone (Euro or EUR), Switzerland (Swiss Franc or CHF), Australia (Australian Dollar or AUD), New Zealand (New Zealand Dollar or NZD), Canada (Canadian Dollar or CAD) and to a lesser extent, China (Chinese Yuan or CNY) and Hong Kong (Hong Kong Dollar or HKD).
2) Determining the amount to trade is entirely up to you; factor into the equation not only your trading account balance, but how much risk you are willing to tolerate (just in case your trade does not win). It’s important to know that you will never lose more than you trade.
3) Deciding which type of trade you want to put through; you have an option from among several choices, but we’ll give you the most basic two, which are the spot and futures markets. The spot market is the most straightforward; it is simply the immediate exchange of a single currency for another. The futures market is nearly as straightforward; it is the exchange of a currency for another on a future (predetermined by you) date.
4) Reviewing the trade; this step is critical to ensuring that you haven’t incorrectly entered a currency, amount, or trading date. In most cases, you can change your mind completely and cancel the trade.
5) Running your trade; generally, press the “Enter” key (yes, you can do it!) and accept the trade as it stands.
6) Reviewing the action as it occurs; this will give you the chance to reassess the scenario, and make changes to the terms as appropriate, i.e. taking your profit as it stands or minimizing your loss before it gets worse.
7) Celebrating your winning position; this is probably the easiest step. Licking your wounds isn’t – but that is not a reason to shy away from Forex trading; take it as a lesson well learned, and move on.
With these steps and suggestions in mind you should be able to start on the path to currency trading. Though you’ll want to take time to develop a proper strategy before investing, you can definitely use the steps above for practicing on a demo account before you risk any real money.
