Even before the great crash of 2008, investors were beginning to see the benefit of investing in the East mainly China and India. These two emerging economies were and still are the future power houses behind the global economy. Whether it is due to huge labor force, or untapped natural resources, these two countries can rely on cheap labor as well as intelligence behind their research and development arena.

Evidence that these two countries as well as smaller ones like Korea and Singapore are poised to take over the role as global economic leaders can be seen in two ways. The first is the stable growth that has occurred after 2008. While the rest of the world and especially the West is still reeling and possibly descending once again into an even greater recession than 2008, the above mentioned countries are growing slowly, but steadily. (more…)

With the economy going through questionable times, everyone is searching for the best place to save and invest. When the market gets volatile, investors want to research their options. I am opposed to jumping ship too soon, but I still encourage educated decisions.

Clients have been asking for more information on exchange-traded funds. Exchange-traded funds (or ETFs) are still relatively new investment products. They were first introduced in 1993, but have been gaining in popularity ever since.

What is an ETF?

The best way to describe an ETF is a mutual fund that trades on the stock market. An ETF owns many different stocks and attempts to mirror an index, such as the S&P 500. There are many different companies and indexes available, so owning ETFs will not impact your ability to properly diversify. There are also ETFs available for fixed income classes, or bonds. (more…)

With many companies struggling to stay afloat in this economy it’s understandable that people are hesitant to invest in assets such as stocks or real estate. With so much financial uncertainty, it makes even more sense today to diversify investments to reduce risk. Given the nature of mutual funds, they are perfect candidates for investments as they allow diversification and professional management.

The benefits include being able to have holdings into multiple companies as your funds will be allocated towards different assets which can range from aggressive to passive. There are literally hundreds of different categories available so you are bound to find one that interests you. In addition, most funds are professionally managed by a board of advisors who will make investment choices for you. (more…)

Few people that have analyzed the current level of federal spending and the entailing deficits that are projected for the foreseeable future, would argue that inflation is a necessary consequence of the ballooning national debt that is being accumulated. Whether this inflationary trend might repeat the gloomy days of the 1970’s is unclear or whether it might even exceed them is unknown. What is certain is that individuals that do not adequately prepare for this could see their savings lose even more value.

While there is no sure fire way to escape every economic scenario, investors have traditionally turned to gold as the primary hedge against inflation. During the last several years in the midst of the stock market unpredictability stemming from the tech bust of the late of 2000, followed by the terrorists’ attacks of 2001, and finally the banking and real estate crisis, stocks have declined astronomically. In turn, gold has rise in value from approximately 300 dollars an ounce to over 1000 dollars at present. Whether this simply reflects inflationary pressure or simply the security that gold represents, the results are impressive. (more…)

With the ups and downs that have been happening with the current economy, investing in the stock market can seem frightening. However, if you have the money to invest, right now is a wonderful time to buy into the stock market because it has prices that are lower than they have been in years. One great idea is to get into a mutual fund.

First, let’s look at exactly what a mutual fund is. Imagine this investment option as a microcosm of everything into which you can put your money: stocks, bonds, real estate, etc. A mutual fund is like a pie, and everyone who invests in the fund gets a slice of this mixed-berry pie. It may have hundreds or thousands or even hundreds of thousands of investors that all buy into the mutual funds, which translates into them investing in whatever the mutual fund has to offer.

Next, we should determine why people choose to buy into this type of investment in the first place. Mutual funds are actually hugely beneficial for a wide variety of people because they offer a great variety of options, leading to a very diverse portfolio. A diverse portfolio means that you have interests in multiple items, like stocks and bonds and property, etc. This is helpful because if one crashes, you still have the other types that can stay valuable.

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A client has recently asked me if I could “explain what short selling is and how hedge funds use them. I have heard they are highly risky and I also know of concerns that exist about some of their ethical standards.”

Unlike the simple buying of shares where an investor buys them hoping that they will rise, short selling is a tactic used to make money when a share price goes down. If the price does fall the person who has shorted them gains and vice versa.

So is there a problem? Well, many hedge funds operate at an ethical value I am sure. Personally I don’t use anything unless it is fully transparent. If I can’t see why an investment will go up or down I don’t make the investment. If I make a decision that later turns out to be wrong, I want to be able to still say that I would still have made that decision at the time I invested. I don’t want to be kicking myself because I believed noise and because I made an investment without knowing the details back to front.

Unlike the investment in shares, shorting is much less regulated. An investor investing in a share wants it to go up and everyone investing in such shares will want it to go up. This is good for the economy and the strongest shares do well but shorting is a negative approach which has a negative outcome.

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