March 11th, 2010

Gold Topping $500 Really is a Big Deal

As gold topped $500, the news became front-page across the country, and radio and TV financial programs led off talking about the price of gold. Invariably, all noted that gold had reached nearly a two-decade high. Yet it is doubtful any of the reporters assigned to the story really grasped the importance of gold topping $500.

Further, few reports dared suggest that the price of gold could climb still higher. Gold stands a good chance of seeing higher prices before the inevitable price correction, which always follows such a strong move.

Most reports saw $500 gold as a novelty, not the ominous sign that something is drastically wrong with the state of financial affairs in the United States. The truth: gold is responding to profligate spending in both the government and the public sectors. Further, gold is rising because of the massive inflation by the Federal Reserve under Alan Greenspan. Let’s take a brief glance at only one reason for gold’s jump above $500: federal spending.

The federal government now has more than $8 trillion in official (on the books) debt. Only three years ago, gross public debt stood at $6 trillion. For those calculating, that is a one-third debt increase in only three years. The United States took 226 years to run up a debt of $6 trillion. In three years, an additional $2 trillion was tacked on.

According to The Privateer, present projected spending will push the official debt to $11 trillion before the end of Bush’s second term. If this becomes reality, in only eight years the official federal debt will have nearly doubled. Additionally, there are the “off-books” liabilities.

Unfunded U.S. government liabilitiesSocial Security, Medicare, Medicaid, military pensions, federal workers’ pensions, and other promise such as picking up the tabs for bankrupt corporate pensionswill reach $50 trillion by the end of the year and climb to $70 trillion by the end of Bush’s second term.

The official debt is the accumulation of years of federal deficit spending. This fiscal year’s deficit (October 1, 2005 thru September 30, 2006) is projected to be $521 billion. Deficit spending looks to get worse.

Pulling statistics from the respected Congressional Budget Office’s January report on the federal budget and economy, Citizens for Tax Justice show annual deficits under Bush policies skyrocketing to $1.164 trillion by 2015. These projections are seven times the Bush administration’s numbers because the White House assumes, among other things, that current tax cuts “sunset,” that Iraq and Afghanistan expenditures will suddenly end, and that federal appropriations will “plummet” as a share of the economy.

The Congressional Budget Office forecasts that by 2013 “the government is likely to be spending more to pay interest on the debt than on all domestic appropriations put together.” Any wonder the price of gold topped $500?

It appears unlikely that the problem of deficit spending will be addressed any time soon in Washington. Sadly, our lawmakers do not yet even see it as a problem. While it is true that Democrats never miss an opportunity to carp about Bush’s refusal to “roll back” his tax break for “rich Americans,” the Democrats would be as quiet as church mice if the deficit spending were for welfare programs. Either way, the results would be the same: continued deficit spending.

The way gold topped $500 was a big deal because the price of gold is the thermometer for the health of a nation’s currency. A rising price for gold suggests a fever is building. However, the reporting suggests that few reporters understand the United States is infected with a deadly virus, not a common cold.

Tags: , , , , , , , , , , , , , , , , , , ,

Related posts

March 11th, 2010

How To Start An Investment Club

If you would like to get into the world of investing but have limited funds or limited knowledge of what it takes to make successful trades, then maybe the best thing that you could do is to start an investment club. An investment club is a perfect way to begin trading on the stock market and limit your risk at the same time.

When you begin an investment club, you will share the risk with all of the members instead of bearing all the risk yourself. This means also that you will have to put less cash up front, so that if the club makes a bad trade, then you do not lose as much cash as you would if you were investing on your own.

One of the first steps to creating an investment club is to find people who would be interested in joining. You should start by asking your friends and family members if they would be interested in joining your investment club. Before you begin however, be sure you pick your fellow investors wisely, and only ask those whom you can trust and get along with readily. Your ideal candidates will be people who are interested in watching the stock market and have a little bit of cash they can out into the club on a monthly basis.

After you have chosen your recruits you will need to be certain that everyone has the same goals for the investment club. Some individuals will be more focused and serious about the club while others may try to look at it as a social or educational experience. Find out where everyone stands on what the goals of the investment club are going to be, and write down the goals put forth. Once a goal has been agreed upon, it is time to talk about the monthly financial dues.

Once you have the membership issue settled and a clear goal agreed upon and written down, it is time to decide upon the financial contributions that each member will be required to make on a monthly basis. You must make sure that the agreed upon amount of the monthly investment will be substantial enough to buy stock, but also be affordable to all involved.

Depending on the size of the investment club, you could make the decision in $25 amount increments. Each person would agree to provide the monthly funds on a timely basis on an agreed upon date. Larger clubs of more than 10 can make dues smaller and still make decent trades. It has been suggested that $50 be the number for ten members and under. Whatever you decide, make sure everyone can afford to put this money forward with no ill consequences.

After you have squared all of the above away, it is now time to create an Operating Agreement which covers how the club business will be conducted. When you set up the bank account for the club, the bank will require that you furnish your incorporation papers or partnership agreement.

Setting up your own investment club can be a very rewarding experience in more than just the monetary gain that you may make. It also serves as an education into how a business works, as well as the stock market.

Tags: , , , , , , , , , , , , , , , ,

Related posts

March 10th, 2010

How To Select The Right High Yield Investment

Profit, this is the key to winning the game in the entrepreneurial world. This is also the same key to being successful. Without profits, the business efforts would be rendered futile and meaningless.

Just look at the business endeavors. People invest their time, money and effort to make a company or organization function and run. At the same time, the investments provided must, after some time, give returns to the investor.

Of course, a prudent investor is not just all about having some returns. The goal should be to get high returns or high yields in the investments. In this light, investors should at least double the amount of their money after some period. Thus, if the performance is good enough, the profits can be really high.

As such, there are people who venture into the high yield investment programs. Such programs are known for having high risks. At the same time, the expected profits can also be very high. Just what most of them would say, take the risk to take the reward.

This high yield investment programs have become more known recently because of the online businesses. Today, however, there are many people who are playing this game. Thus, if everybody wants to win, everybody also must be doing everything to do so.

How to Select the Right High Yield Investment

Given the scenario above, it becomes imperative now for a prudent investor to know the ways of getting high yield investments.

The investor must know the right choices to make in the field. He or she must manage the investments well. It is just a matter of knowing the factors that shall affect the investment and make it grow for more profits.

Here are some ways to know how to select the right high yield investment -

1. Research

Before ever venturing into this field, make sure that your entry point, either a company or another investor, make sure that it is reliable and trustworthy.

There are many scams that have fooled people into making them believe that they will make profits with the company. They convince their victims to invest right away their money. In the end, people give up money without getting anything in return because they invested on a non-existing entity.

Big amounts of money are involved in investments. Thus, do not let go of the money easily. Do a research first on a particular program or company. Know the history and performance and then decide.

2. Performance

Study how the investment performs in a particular period. Ideally, this should cover three to five years.

During this time, see how the management or company performs. There are instances when strong trends characterize the market. This is just like good luck, thus, high performance is to be expected.

The more crucial point to look at is how the management will work on other market conditions, especially when the trend in the trade is not that strong.

It is also a good thing to investigate the previous accounts held by a management being considered. Oftentimes, they put their best foot forward when presenting themselves. It is best to see their overall performance as against the good ones only.

3. Conflict of Interest

As much as possible, choose a management who does not get commission for their dealings. This is to avoid a conflict of interest. One cannot expect a manager to work for the interest of their clients if they get commissions too from the other end of the deal.

4. Way of Trading

See how the assets and funds are being traded. Learn about the methods being used. In aiming for high yield investments, this is a crucial aspect. A particular approach can help ensure that you will be able to get the returns, especially in the long term.

5. Drawdown and Profit

It is also good to look at the drawdown and profits of a particular investment. See how it performs in this aspect as the two may balance or offset each other.

For example a profit of 70% definitely sounds good. Of course, if it comes with a 65% drawdown, it would not sound good at all. Compare this to a profit of 35% with a drawdown of only 10%. The latter example is definitely the better deal.

Conclusion

Knowing how to select the right high yield investment as given by the points above can definitely help you in your endeavors. These can definitely increase the likelihood of getting big profits and being a success.

Tags: , , , , , , , , , , , , , , , , , ,

Related posts

March 10th, 2010

Gold is Golden

Now is the Time to Invest in something Real to Assure a Good Life Tomorrow.

Gold surpasses $500. an ounce after a long slumber and it is still one of the worlds greatest bargains. Every day it is becoming more evident that stocks, bonds, and property in America and most of the Anglo-Saxon world are propped up on borrowed money and borrowed time.

In the last half of 2005 alone, U.S. households spent well over $500 billion more than their after-tax earnings. How is this possible? By borrowing of course. About half of that money came from equity extraction. The present home owner generation is living off the perceived increase value of their houses. These poor householders are starting to get a clue. They thought they really could get rich by buying and selling each others houses at inflated prices and then borrowing against it. Well, putting on the dog and out doing the Jones’ was fun while it lasted. However, if you can still find a greater fool, now is the time to sell and find a nice inexpensive rental accommodation, or buy one of the rapidly growing heavily depreciated repos now on the market, and invest the rest in gold.

You need to protect yourself NOW from the biggest one year loss of wealth in the history of the world. Does this statement get your attention? Many western economies have participated in this gigantic fraud of escalating house evaluations as evidence of economic growth, relying on greed and bogus money supply to stoke the fires of the greater fool theory and thus give the illusion of prosperity. As a result house sticker prices kept going up and up in most cities, while in reality the true value has actually been going down. Skeptical huh. What is true value you say?

Remember, world economies have been off the gold standard now for over 35 years, ever since tricky Dick Nixon unpegged the US dollar from gold as a means of surreptitiously stimulating a sagging economy of the time. Adhering to the Gold Standard, the medium of exchange backed by gold, forced politicians and bankers to be accountable.

Money today is not based on anything tangible or of intrinsic value. It has only a perceived fungible value at whatever level skittish traders and speculators say it is. Politicians and central bankers since Nixon have been free to print fiat money (a piece of paper with numbers on it) at their whim without control or restraint to keep their game afoot. These currencies have since been played off each other as in a worldly game of monopoly. One clue of impending doom is the fact that every fool with greed in his heart can now trade currencies online.

As the unmasking of the great deception accelerates, countries with manageable debt and natural resources will see their currencies decline slower in relation to the US dollar, but all currencies will decline in relation to, you guessed it, Gold.

Like any expanding bubble, there comes a point where it can expand no more, and the subsequent resizing is shockingly fast. These is no new economic model in play that now guarantees perpetual prosperity or even status quo, despite what vested interests and their spin doctors would have you believe. When push comes to shove, paper and electronic blips won’t cut it. As the saying goes, BS walks, and the age old measure of real value called Gold, will be what talks.

If you played this oneupmanship real estate game with your friends and countrymen, your house is worth far less than you know. In fact, your house is losing value daily as you may now realize. When it becomes front page headlines, it will be too late. All the greater fools will have already been fooled with no one left to bail you out. Unfortunately, it will not be just the nouveau rich who will feel the pain. Their shortsighted greed, encouraged by unscrupulous appraisers lenders and politicos, will bring down the rest of the economy as well, precipitating the demise of many types of paper assets.

Americans in particular now owe far more money to far more people than can ever be paid back. They have bigger houses, newer cars, more electronic gadgets and a smug attitude to go with it. But they also have more bills to pay and no more money to pay them with. Much the same scenario as their government that purports to lead.

The U.S. government has borrowed more money from foreigners in the last eight years than all previous administrations since the time of George Washington. During the current US administration, the feds have borrowed more than $1.05 trillion from foreign governments and banks. This is more than all the rest of the nations administrations put together from 1776 to 2000. Oh, the costs of empire building and the waging of patriotic wars to free people so they can be more like us.

Consider the fact, that despite a flat or even negative earnings picture in overall stocks in recent years, bonuses paid to managers on Wall Street and high salaries throughout corporate America including G.M., are obscene. This is but more evidence that we have reached a late, degenerate stage of an imperial economy. The sun has not set yet, but its final glow is about to descend beyond the horizon.

The companies that make the most money these days are those that shuffle money – not those that make things people want to buy. And throughout the entire society, everyone participates in what has become an orgy of swindle and delusion. The practitioners of this prevarication call it salesmanship. At best it is entertainment. Not value or substance, but mindless triviality, delusion or false expectations. At worst, psychological manipulation to create frivolous desire, leaving the weak minded and undisciplined open to unbridled theft. Just add up how much interest you are paying on your car, your house, your credit cards and everything else you have been induced to believe is necessary for a successful life. The barbarians are at your door and benefiting mightily from your labors. The rich have indeed been getting richer while the consumer blindly signs on the dotted line.

The mantra of the private sector through its advertising is get it while you can despite the fact that this attitude is crushing the hopes and aspirations of the next generation. Previous generations attempted to leave the world a better place then they found it for their offspring. Now, the young and the unborn are saddled with an insurmountable mountain of debt and who cares. I’ve got mine you say…but do you really, when the charade unravels? What are you going to do…who are you going to call? Be prepared for painful dislocation and introspection.

It will be the minority of savvy and erudite investors who pause to take notice that the emperor has no clothes. It will be the astute who shed themselves of the attractive burdens they have accumulated and put at least some of what is still marketable into gold. It will be the shrewd and brave who have the resources in the form of universally accepted coin, gold, to live reasonably well during the shakeout and to pick up the bargains for literally pennies on the dollar when the storm finally passes.

The fact is, most people no matter how well meaning or educated, fail to learn from the lessons of History. They go through life with blinders on content with petty self-interest. Nero fiddles while Rome burns. These are among the reasons why gold is going to go up more, no doubt, a whole lot more. Owning gold bullion or gold coins is decidedly a happy thought.

Tags: , , , , , , , , , , , , , , , , , , ,

Related posts

March 10th, 2010

How To Select An Investment Strategy

There are several critical factors that need to be considered in selecting the right trading system for you. Investors are always looking for a trading edge to exploit. Finding such an edge is akin to the quest for the Holy Grail and many would be traders spend their time bouncing from one system to another, constantly looking for the perfect system. If this sounds like you, let me suggest that you change your ways, quit searching, and start making money.

First, realize that every system will have loosing trades and there will be a series of such trades. The draw down is always a challenging time. You have to be prepared mentally and financially to ride out the draw downs. The way to prepare is to check the historical performance. The historical performance period should be appropriate for the number of trades and the rules in the system. What this means is that a system with many rules will need more trades to prove its validity. I like at least 50 trades per rule and be very conservative on the number of rules. For example, if the system is:

Go long when the current price is greater than the 20 period moving average. Close when the price drops below the 20 period average.

There are two rules in the above. One for the entry and one for the exit, which means Id want to see a historical performance of at least 100 trades.

Another consideration is the average holding period and frequency for trading. Both these need to match your preferences or you will be soon looking for some other trading system. Some investors want a set and forget type of trading plan where they enter their trades and just make updates on a weekly, monthly or annual basis. For others this approach would be far too boring.

The major consideration is return on investment. There is no one answer as to what a reasonable number might be. It depends on several factors. First is the leverage used in the investment vehicle. For example, the least use of leverage would be to pay cash for shares of stock and own them outright. More leverage would be to purchase the stocks on margin or buy options on the stocks.

Even greater leverage would be commodities or currency trading. As the leverage goes up, returns should be greater to offset the increased risk.

Another consideration for acceptable returns is the frequency of trading. One would expect day trading to produce higher returns than a long term buy and hold approach, for example.

Lets say that youve found the right combination of risk and reward. A strategy with trading frequency that suits your personality. What next? Paper trade! Always start by paper trading the strategy. The length of time to paper trade isnt as important as the number of trades. Refer back to the previous section on number of trades to validate. The more the better, but at some point you just need to leap in. Ideally Id like to see 25% or more of the total trades as calculated above.

Tags: , , , , , , , , , , , , , , , , ,

Related posts

March 10th, 2010

Gold – How to make a profit by going against

Gold – How to make a profit by going against the herd

Humans have been fascinated by gold for thousands of years, by the way it never tarnishes and by its unique color.

Sadly, gold is useless in engineering terms, except for plating electrical contacts, to ensure they never tarnish and lose their conductivity. You will find gold plated contacts on good quality hi-fi components.
The metal is too soft, with too low a tensile strength to be used for much besides necklaces and rings.

As an investment though, gold is a different story altogether.

Gold prices fall and rise, according largely to the degree of fear that people have about the future. When war is imminent, gold prices soar, as more people buy gold.

They are buying gold for several reasons. The gold will be there regardless of what happens to the currency and because war tends to lead to high inflation, paper money becomes worth less and less. People outside the war zone buy gold because they see the price going up and have they think it will keep going up and they will be able to sell at the top of the market and realize their profits. also buy gold because

When economic conditions are good, inflation low and employment rate high gold prices fall. Gold prices fall because it has no intrinsic value, only the value attached to it by peoples fear. In calmer times, it is possible to invest in shares and gain from the rising share prices that usually accompany economic growth.

Conclusion: Go against the trend – buy gold when everyone is saying to invest in the stock market. Sell gold when things are looking grim and there are many buyers out there.

Until recently, many countries made it illegal for individuals to hold gold bars or bullion. Individuals could buy gold coins and other items however. The South African Krugerrand was minted to exploit this opportunity and to earn much needed foreign exchange for that country during the years of economic sanctions. Nowadays you can buy gold, silver and platinum coins in many denominations, including Canadian and US dollars, sterling crowns and sovereigns.

Tags: , , , , , , , , , , , , , , , , , , ,

Related posts

March 9th, 2010

How To Make More Money Using Options In Online Investment

How To Make More Money Using Options In Online Investment

Learn how to make more money using options in online investment techniques. After all for years savvy investors have been using option trading strategies to increase their portfolio profits. Options are the key to financial freedom so you should learn how to trade them for yourself.

Up until the 1990s options was a game for the rich who loved the large profit potential. Today electronic option trading is offered at very affordable rates and you need to learn make more money using options in online investment techniques. The game that once belonged to the rich is now open to anyone.

Your personal wealth is tied to how well you are educated in investments which are the key to that wealth. So learning make more money using options in online investment techniques is critical. Stock options are simply an option to buy or sell stocks at a future date for specific price. These investments can be complicated and a little bit risky but you can make more money using options in online investment techniques.

Each stock option will list the name of the stock, strike price, premium paid for the option, and the expiration date. Calls and Puts are the two types that are most popular. Calls allow you to purchase the stock at the strike price at any point before the option expires but there is no obligation to do so. After an option expires it is worthless. Puts are the exact image of the call except instead of purchasing you are selling. You will want to learn make more money using options in online investment techniques.

The object is not to exercise the option and buy or sell the security. Instead if you originally wrote a put you would buy back the option or if you originally bought a call you would sell the option. Doing this saves all the commissions and added expenses. Leaning how to make more money using options in online investment techniques will show you how to exercise this option.

There is no question that options are risky but they can also be very profitable. A good way to get involved in options is to start by taking an options course and learn make more money using options in online investment techniques. Begin by writing covered call options for stocks that are currently trading below the options strike price. Its time to make more money using options in online investment techniques. Are you ready?

Tags: , , , , , , , , , , , , , , , , , , ,

Related posts

March 9th, 2010

Gold: A Solid Investment

Make no mistake, the currency crisis is coming.

Rather than sitting back and letting it happen, protect yourself and profit from an economic upset that could basically render your dollars about as worthless as the paper they’re printed on.

We saw a preview of this kind of debacle quite recently. In early 2006 a currency plunge triggered an avalanche of sell orders in emerging markets from Brazil to Indonesia. The Icelandic krona plunged nearly 10 percent in only two days, dragging down Icelandic stocks and bonds with it and subsequently spread to Brazil, Mexico, Poland and Turkey.

A precursor to this was the Asian Currency Crash of 1997, which sent stocks south like ducks in winter. Banks, insurance companies, real estate and bonds also fled the scene. The only viable option left was gold.

In the event of another such decline in currency values, gold will be worth at least 10 times its current value.

How is this possible?

Simple: Since gold cannot be made or printed at the whim of greedy politicos, it can’t be devalued as quickly as the paper money that is printed whenever need arises.

When a currency is backed by gold, $1 in paper money has to be backed by approximately one dollar’s worth of gold. Once a currency is no longer backed by gold, governments can print as much as needed. Naturally, most world governments have gone off the gold standard and that is why paper money has no intrinsic value.

As a result, most major institutions only speculate short term between those currencies and associated local values, such as stocks or bonds, and then they convert their profit into gold.

This is where we at Forex Super King excel. We specialize in global trading and diversification.

Our money is made in both currency trading, where we average 1,000 pips (price interest points) per month, and U.S. small stocks that recently acquired dual listings with the European exchange.

As a result, our clients can experience a short-term windfall from 50 percent to 400 percent by tapping into the heavy buying power of European investors with holding time from a day to a month. We then convert half of our profit every month into gold.

We’ll show you how to get set up so that you can hold your funds in several currencies, even if you only have $500 to start.

We can also show you how to not only diversify internationally but how to trade the international markets as well as currency markets to realize substantial profit, short term.

Tags: , , , , , , , , , , , , , , , , , , ,

Related posts

March 8th, 2010

How To Make Money With An Investment Property Company

1. property investment companies

The following is an explanation of investment property companies. Well, as the name says, this is a type of specialized company, that takes care of property investments. And when I say property investments, I mean, they invest in properties, but they invest your money. This type of company gleans you profit via investing in properties.

2. Benefit of investment property company

It is best for people to use an investment property company when during property investments. The first of the many advantages would be the fact that you deal better with the tax bills. Why is that? Well, you save some money because a company pays less money as taxes than a regular person. We are talking of course about percentages.

3. Money and taxes

Investors are usually more likely to find ways of reducing the taxation bills. One of the easiest ways for an investment property company to save some taxation money is to sponsor different events or charity actions. What is the advantage in that you might say? Well, when a company is sponsoring, they are deducted some percentages from the taxation money. If the company has a high capital, they will pay less money as taxes.

Many investments carry significant risk that the investor will lose some or all of the invested capital. For example, investments in company stock shares put capital at risk.

A stock share is partial ownership of a company, and the value of the stock depends on many factors, including the likelihood that the company will pay a dividend (a distribution of profit to shareholders). When stock shares are first offered for sale, the company receives the capital from the stock purchaser and uses the capital to operate its business. Once stock shares are sold to investors, the investors can sell the shares to other investors. Publicly-traded companies stock shares are bought and sold (traded) on the stock markets.

The value of a stock share depends on what someone is willing to pay for it at a certain point in time. Unlike capital invested in a savings account, the capital value (price) of a stock share constantly changes. If the price is relatively stable, the stock is said to have low volatility. If the price often changes a great deal, the stock has high volatility. All stock shares have some volatility, and the change in price directly effects ROI for stock investments.

4. Saving money through things like strategies and inside secrets

There are many options. There are a lot of strategies and inside secrets that an investment property company uses to save money. And this is not the only advantage that such a company offers. When you give them a certain amount of money to invest in properties, you will be sure that, in case they fail, you will still get the money back. You will not lose money using this method.

Tags: , , , , , , , , , , , , , , , , , , ,

Related posts

March 8th, 2010

Global Investment from Home

Because we live in a day and age when it is easy to instantly connect to other parts of the globe, our economy and financial world has become much more global in scope and significance. When investment abroad looks attractive, there are also numerous ways to participate in foreign investments, without having to leave the comfort of home.

Here are four examples of international investment tools, for those who are looking to diversify by putting their homegrown money to work overseas.

1)Stock Mutual Funds

Many mutual funds which are bundles of stocks managed by professionals and available in share form to mutual fund shareholders invest specifically in foreign companies. You can invest in a particular regions, such as Latin America or Asia, or you can invest in several regions at the same time.

2)Foreign currency

Because most nations have their own currency, and because it is valued according to the assets of that particular country, you can invest through buying and selling foreign money. You might, for example, buy the Japanese Yen if you think that the Japanese economy and its currency are going to outperform your own USA dollars. Some people buy and sell currency several times each day, in fact, to take advantage of the rapid fluctuations in this rather volatile kind of investment.

Others do it in a way that is much more time, when planning their vacations. If you are going to Europe next summer, for instance, you might want to buy Euros (European dollars) now, in anticipation that they will be cheaper than they are going to be next year.

3)Overseas property

If you like to invest in real estate but want to diversify to foreign holdings, you can buy property in other places. And you can even combine business with pleasure, by buying property in another country and then using it as your own vacation destination. Or you can buy overseas and let a professional manage your property for you, without ever leaving your own home.

Tags: , , , , , , , , , , , , , , , , , , ,

Related posts

« Older Entries