Posts Tagged ‘investing’
Sector Selection or Country Selection
Wednesday, January 5th, 2011
Yesterday we had a pre-planning conference call for the Inside ETFs Conference next month in Hollywood, Florida. The panel I'm participating in is on sector ETFs. I'm a believer in building
John Hussman and Jimmy Buffett?
Tuesday, January 4th, 2011
Parrotheads, aka Jimmy Buffett fans, will know the lyric from the song Fruicakes that goes mea culpa, mea culpa, mea maxima culpa which is what John Hussman appears to have been saying in
It Can Be Simple
Monday, January 3rd, 2011
All of the football this weekend afforded a lot of time to look at all sorts stats and explore various portfolio concepts. One idea was about simple, very simple, diversification. The chart
Sunday Morning Coffee
Sunday, January 2nd, 2011
This week's Barron's interview was with Ben Inker who is the head of asset allocation at GMO. Part of his job is to run the GMO Benchmark-Free Allocation Fund (GBMFX), an open ended fund
The Big Picture For The Week of January 2, 2011
Saturday, January 1st, 2011
So put another year in the books, it went by quickly didn't it? Don't they all? The S&P 500 had a good year going up almost 13% plus its dividend. No matter what is going on or what the
Why Should You Invest to Secure Your Financial Future
Tuesday, February 16th, 2010In these testing economic times, a lot of people want insure their futures since they realize that if they are depending on Social Security Benefits and in a lot of cases retirement plans, they might be in for a surprise. It will be quite impracticable nowadays for individuals to rely on salary for their entire lives hence, having an investment in stocks or mutual funds will help to weather future financial troubles.
For sometime you might have been putting money in a low interest savings bank account however at this time you desire to see that money multiply at a a lot faster pace so, investing is the answer. This is the how we plan for the shorter term to obtain things that require planning for in the immediate to near future and this shapes where the funds will be invested for the best financial return.
It is as well inherent once money is needed immediately to invest it in areas that are considered higher risk, but large sums could be accumulated in a short amount of time this way. This is not the type of investment area that you would want to gamble your retirement on though so a safer, longer term approach is needed.
To generate wealth and security are the overall reason for investing, over a period of time in addition it is also important to take into account that you will not always be in a position to earn an salary and will in the end want to stop working. You as well would not rely on the Social Security system to do what you be expecting it to do and because we have seen with Enron, you cannot necessarily rely on your company’s retirement benefit also so investing is the solution to guarantee your own financial future, but you have to make smart investments!
That is not to declare that investment is without danger either and is considered to be a game by man, one you will not know whether you have won or not until the very end. Similar to any game, it is the way you compete that will make the difference between winning and losing and investment needs a game plan. If you could tell just how much funds you will require once you stop working, it is simply a matter of planning where to invest to meet that need.
Anyone looking to do this, can be guaranteed that flexibility is the keynote of long term financial speculation with each fund set up to meet the desires of the person. The most well-known of these areas is the stock market with factually hundreds of thousands of companies on hand to speculate savings in. This is not an area that should be rushed just similar to a game there are regulations and if you do not understand them you will not play credibly and the prospects of success reduced, consequently study what you could before involving in it. The financial methods you apply might suggest that your future will be guarantee but ensure that your immediate financial requirements are healthy prior to you begin.
To learn more about investing opportunities, head to my blog to learn more about investing in mutual funds, what is mutual funds, and why mutual funds investing is a great option to consider
Uncertainty In Investing Is the Enemy
Tuesday, February 9th, 2010I have noticed that when many Kiwis join the world of investing in bonds and shares, their aim is to achieve a return that ‘beats the bank’. Using bank deposits as your performance yardstick in this way arguably misses the whole point of investing. The bank is not the enemy, uncertainty is.
People who invest their capital in a wide range of assets that together form a diversified portfolio do so for one reason, and its not to ‘beat the bank’.
The goal is to protect themselves against uncertainty and risk. Nobody knows when or where the next financial crisis or dramatic shift in markets or economic fortunes will happen. The vast weight of research to date shows that investing a portfolio across a diversified range of assets is the best way to mitigate risk, generate an income and to protect and grow capital over the longer term.
One stark lesson I have seen over the 20 years I have been in the investment sector is that uncertainty and risk can come from anywhere. Even investments that ‘look safe’ can get caught out.
The dramatic impact that the sharp decline in interest rates this year has had on short-term deposits is a classic example. Deposits are a low risk investment for sure, but for anyone that had all their capital invested in short-term deposits when interest rates fell from over 8% to just over 2% suffered a 75% decline in income, in a matter of months.If that’s not disastrous enough, over the past six months they have seen consumer price inflation rise 2% (goodbye interest return!) and house and shares prices inflate by 25% or more. In other words, this cash just lost 25% of its spending power in the housing and equity market.
Certainly, when you have money invested in shares and bonds there will be times when your portfolio underperforms bank deposits, market volatility is part of investing. If you don’t want volatility that’s fine, buy bank deposits, but you need to recognise this is not as safe as it seems – see the previous two paragraphs.
Certainly, investing involves risk. As soon as you invest into financial and asset markets such as bonds, shares and property, you are exposed to risk.For example, from October 2007 to March 2009 the New Zealand equity market fell 41% in the wake of the recession and global financial crisis.
If you held a portfolio of New Zealand shares it probably fell by a similar margin, perhaps a bit less if it was made up of blue chips, or a bit more if it was mainly smaller or riskier stocks. The point is; if the market falls, your portfolio will fall with it. Over this period, 94% of NZ stocks fell in value. That’s a very strong tide to swim against.
Being diversified into other markets didn’t help either with over 90% of global share markets fell in value over this period. The very few exceptions included ‘heavy-weight’ markets like Ghana, Tunisia, Jordan and Bangladesh.
It is clear then that during this tumultuous 17-month period, if you were invested in shares, there simply was nowhere to hide.
But since March 2009 the reverse has happened. Our market has rebounded by 30% and most other markets around the world have risen by a similar, or larger, amount. Almost every investor in shares should have seen their portfolios rise by 15% to 20% or more over this period as they hitched a ride with the market. In the bad times we can blame the market, in the good times it’s hats off to the market.
As the past couple of years have shown, investing is challenging. This is precisely why most people take a balanced approach to their portfolios; combining some low risk investments with some higher risk shares and property.
When it comes to investing it is very important to keep up with the Joneses, and the Joneses are not bank deposits, but the real world of food, wine, travel, education, healthcare, housing, movies and power bills. The cost of living is a far better benchmark than ‘beating the bank’.
This is a modified article from Cam Watson. 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. Craigs Investment Partners is 100% owned by certain staff and close business associates.
Article Source: Uncertainty In Investing Is the Enemy – Not the Bank
Top Precious Metals Funds by RJ Camposagrado
Wednesday, January 20th, 2010Featuring top performing Precious Metals funds, because precious metals offer better protection against inflation, which cannot be said of almost all other reasonably liquid assets. These funds primarily invest in equity securities of companies that are involved in mining and processing of gold and other precious metals.
Investors can get such precious metals funds by checking out the entire list of the Zacks #1 Rank Precious Metals Equity Funds.
5 fantastic Examples of Precious Metals
US Global Investors World Precious Minerals (UNWPX) seeks long-term capital appreciation. It also aims to provide protection against inflation and monetary instability. It was incepted in November 1985.
Instead of directly investing in precious metals fund invests a greater part of its assets, at least 80%, in firms principally engaged in the exploration, mining and processing of these metals. This precious metals fund focuses on selecting junior and intermediate exploration companies from around the globe.
Shareholders have to make a minimum initial investment of $5,000 to enter this Zacks #1 Rank (“Strong Buy”) fund. The precious metals fund has an expense ratio of 1.50% against a category average of 1.47%.
Frank E. Holmes has been lead manager of the fund since June 1999. Holmes was formerly President of the Toronto Society of the Investment Dealers Association and is CEO and Chief Investment Officer of U.S. Global Investors, Inc.
Franklin Gold & Precious Metals A (FKRCX) seeks long-term capital appreciation. It was incepted in May 1969.
At least 80% of the net assets of this precious metals fund are invested in gold and precious metals operation companies. This precious metals fund also aims to produce current income from dividends or interest received from its investments.
This precious metals fund has an expense ratio of 1.01 % against a category average of 1.47%. As of July 2009, it has a portfolio turnover of 17%.
Steve Land has been lead manager of this precious metals fund since April 1999. Land is a Chartered Financial Analyst and has been with Franklin Templeton Investments since 1997.
Van Eck International Investors Gold A (INIVX) seeks long-term capital appreciation by investing in common stocks of gold mining companies. The fund may take current income into consideration in picking investments. It was incepted in January 1956.
This precious metals fund does not directly invest in gold or bullion, but invests in securities of companies principally engaged in gold-related activities, as well as in instruments that derive their value from gold. A company must derive at least 50% of its revenues from gold-related activities to be considered for investment purposes.
The precious metals fund has an expense ratio of 1.44% against a category average of 1.47%. As of June 2009, it has a portfolio turnover of 14%.
Joseph M. Foster has been lead manager of the fund since July 1998. Foster joined Van Eck Associates Corporation in 1996 and is a portfolio manager with the firm.
USAA Precious Metals and Minerals (USAGX) seeks to achieve long-term capital appreciation and provide protection of the invested capital against inflation. Providing current income to investors is a secondary objective. It was incepted in August 1984.
This precious metals fund doesn’t invest in gold directly, but in gold mining and other precious metals and mineral mining companies, with at least 80% of its assets invested in such firms. With the right mix of companies, the fund can benefit disproportionately when underlying commodity prices rise, while avoid the worst losses of commodity-price downturns.
Shareholders have to make a minimum initial investment of $3,000 to enter this Zacks #1 Rank (“Strong Buy”) fund. It has an expense ratio of 2.50% against a category average of 1.47%.
Mark W. Johnson has been lead manager of this precious metals fund since January 1994. Johnson is a Chartered Financial Analyst and is executive director of equity investments with USAA Investment Management Company.
Midas Fund (MIDSX) was incepted in January 1986. The precious metals fund seeks capital appreciation and protection against inflation and, secondarily, current income.
This precious metals fund invests at least 65% of its assets in companies which are directly or indirectly involved in the business of mining, and processing precious metals such as gold, silver and platinum. It may invest up to 35% of its assets in selected growth companies.
The precious metals fund has an expense ratio of 2.43% against a category average of 1.47%. As of September 2009, it has a portfolio turnover of 62%.
Thomas B. Winmill has been lead manager of the fund since January 2002. Winmill has been president of Midas funds since 1995 and the distributor since 1991.
Discover Many More Funds
Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our mutual funds section. This part of Zacks.com offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward.
Top Precious Metals Equity Funds
Mumbai Stock Market Growth Outperforms Shanghai Over Past Decade
Tuesday, January 19th, 2010Mumbai may be on the way to overtaking Shanghai as a financial hub in the coming years based on data revealed by the Financial Times which shows that the Bombay Stock Exchange’s main index significantly outperformed the Shanghai Stock Exchange’s main index in terms of growth in the past decade.
The Bombay Stock Exchange (BSE) Sensex grew by 249 percent over the last 10 years, while the Shanghai Stock Exchange (SSE) Composite Index managed 140 percent growth. This is more remarkable given the Shanghai market has the advantage of a fixed population access; Chinese nationals can only invest in the Shanghai or Shenzhen exchanges and require special permission to acquire stocks from overseas. Indians meanwhile are free to invest where they choose, however increasing amounts of foreign capital and returning Indian investment are now flowing back to India (the Shanghai Stock Exchange places limitations on foreign investment with a only 79 foreign institutions currently able to buy and sell A (locally priced) shares).
Another influence to the Chinese market has been increases often caused by government liquidity due to the stimulus plan. Speculations on bubbles are rampant when it comes to China’s indexes, again a feature India’s exchange does not tend to have. Government interference in the Mumbai market is far more limited.
The BSE traces its roots back to 1830, with its primary trading index, the Sensex, being first compiled in 1986 with a base level of 100. The BSE is now the largest exchange in South Asia and the 12th largest globally with an estimated market capitalization of US$1.03 trillion in June 2009. There are are over 4,00 listed companies on the exchange. In contrast, the SSE was only reformed in 1990 and lists some 900 companies. It is the sixth largest exchange in the world with a market capitalization of US$2.07 trillion, but is dominated by government-owned companies and is not fully open to foreign investors. Shanghai’s primary index, the SSE Composite IX was formed in 1991 with a base value of 100.
This article was written for the Asia business news site, 2point6billion.com, by the business experts at Dezan Shira & Associates, an India and China consulting company helping foreign companies do business in China and India.
They also contribute to the India business news website, India-Briefing.com.