Guest Contributor
Moving Averages: Determining Trend and Avoiding Whipsaws
The moving average is a simple tool designed to help you easily determine the underlying financial trend of a stock, bond, commodity, mutual fund, or any other financial instrument. According to Wikipedia a moving average is “commonly used with time series data to smooth out short-term fluctuations and highlight longer-term trends or cycles. The threshold between short-term and long-term depends on the application, and the parameters of the moving average will be set accordingly. For example, it is often used in technical analysis of financial data, like stock prices, returns or trading volumes.”
Moving Average
The moving average is often the first tool that budding forex traders encounter. Put simply, it is the average of an instrument’s price plotted over time. You will almost always find the moving average plotted alongside the price itself on a chart. You may find it useful for determining if the price is in a trend.
The first thing that you’re likely to notice about the price’s relation to the moving average is that it is always either above or below it. At first glance, this may seem incidental. However, you should not overlook it. If the price is above the moving average, then you know immediately that the price has been rising more than falling.
Conversely, if the price is below the moving average, it follows that the price has been falling more than rising. This alone does not tell you whether the price is in a trend, because it has a tendency to run flat at times. Still, you can use this relative position to immediately get a feel for price direction over the last several periods.
What are Company Bonds?
Company Bonds
Company bonds have been a hot topic in many financial publications including the Wall Street Journal lately, though you might not be familiar with the term. Allow me to offer a brief primer on the topic.
Company bonds (aka corporate bonds) are a type of debt security issued by companies to raise capital. A related form of debt is a “debenture.” Debentures are corporate bonds that are NOT secured by any assets or line of income. Companies of varying sizes and states of profitability will issue bonds as a means to generate funds for any number of reasons pertaining to long term growth and investment. For instance, investors might buy bonds from a start-up company with a solid business model but little capital so as to help grow the business. Company bonds are a critical source of funding for all companies from those in their infancy trying to finance projects, pay employees, or invest in long term plans for expansion, to well established corporations interested in updating a multimillion dollar plant or enter a new global market. Let’s take a closer look at the mechanics of company bonds and how they function within the greater financial market. Continue reading
Is it a Good Time to Buy REITS?
Buy Rental Property or a REIT?
Although many individuals prefer rental units as additional income, one of the last things you probably want to do in your retirement is to find renters and deal with the drama that comes from having them rent for you. You have to find tenants with reliable income, continue to provide maintenance and other support for them, and worry about potential problems with non-payment or other issues.
Buy REITS?
Traditionally, one of the best retirement investment options is a real estate investment trust (REIT). According to Wikipedia:
A REIT or “real estate investment trust” is a tax designation for a corporate entity investing in real estate. The purpose of this designation is to reduce or eliminate corporate tax. In return, REITs are required to distribute 90% of their taxable income into the hands of investors. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.
As opposed to buying rental homes or properties, REITs offer a lot of diversification and are very liquid. It’s easy to sell REIT shares on the stock market and they are usually very stable. On the other hand, houses can be difficult to liquidate and people are finicky, leaving landlords with a lot of potential risk. Continue reading
Investing in a Mutual Fund
Mutual Funds
Even in the wake of the Great Recession, the mutual fund has proven itself a worthy investment for the average person. In fact, many people are actually looking towards mutual funds as their hedged bet into the world of variable investments.
In order to fully understand how to invest in a mutual fund, you must first understand exactly what a mutual fund is.
What Is A Mutual Fund?
A mutual fund is a basket of investments that is chosen by a management team for the profitability of the investors. This is why many financial investors actually say that when you are investing in a mutual fund, you are investing in the reputation of the managers as well as the reputation of the underlying businesses.
Mutual funds usually have some kind of theme that combines the investments in the basket. For instance, all of the investments may be related to the precious metals market. In this case, the title of the mutual fund would be something like “Bank X Precious Metals Growth Fund.” Although the title of the mutual fund can give insight as to the underlying investments, they may only represent the top percentage of holdings. We recommend that you check into the actual underlying investments that are currently being held in the mutual fund to be sure that it is actually investing in what you think it is.
How Mutual Funds Work
The main idea behind a mutual fund is to allow an investor to instantly diversify their investments with a single purchase. The managers will spread out the total money collected from the investors into companies that are related to the theme of the mutual fund. Because of this, mutual funds are usually thought of as a relatively safe investment that is made for those of a lower risk tolerance. However, the rewards that accompany a mutual fund are usually not comparable to those of individual securities and short-term. They may be in the long-term depending on many variables.
Mutual funds have a scale of risk that is associated with a general view of the mutual fund market. If a mutual fund is marked as a “growth fund,” this means that investors should invest in this fund with the hopes of growing their investments over a certain time period. However, Continue reading
Water Trends in Asia
In desert regions water has been a critical commodity ever since Abraham’s herdsmen fought with Abimilech’s herdsmen over a well in Genesis 21:25. But in many places water has been abundant. Although, with the vast majority of water being either salt water, frozen in ice caps or polluted, the potable water world wide is only a small percentage of the total water supply and so world-wide water is becoming a more critical and scarce commodity. And so as often happens, when a commodity is scarce tensions begin to rise. ~Tim McMahon, editor
Is a Water War between India and Pakistan Imminent?
A peaceful and stable Pakistan is integral to western efforts to pacify Afghanistan, but Islamabad’s obsessions with its giant eastern neighbor may render such issues moot. Since partition in 1947, Pakistan and India have fought four armed conflicts, in 1947, 1965, 1971 (which led to the establishment of Bangladesh, formerly East Pakistan) and the 1999 Kargil clash.
Water Wars
With the exception of the 1971 conflict, which involved rising tensions in East Pakistan, the others have all involved issues arising from control of Kashmir. But now a rising new element of discord threatens to precipitate a new armed clash between southern Asia’s two nuclear powers – water. Lahore’s “The Nation’ newspaper on Sunday published an editorial entitled, “War with India inevitable: Nizami,” the newspaper’s Editor-in-Chief and Nazaria-i-Pakistan Trust Chairman, Majid Nizami, asked his fellow citizens to prepare for a war with India over water issues. Continue reading
Mounting Debt and Lower Salaries – A Persisting Trend for Grads
College education is costly and a majority of students have had to compromise on the college they choose to attend simply because they can’t afford the fees. Even at less expensive colleges, most students finish college with massive amounts of education debt. Often these debts need to be paid off just months after leaving college. This overhanging debt can have a negative effect on many areas of life, from your credit ratings to where you live after college.
Although the official economic depression is now history, extending from December 2007 to June 2009, the economy is only recovering gradually and the impact of the great recession can still be felt in America and around the globe. The country has not yet recuperated fully from the economic depression. Due to the recession, millions of people went jobless. Despite the slight economic revival, the job market is still pathetic. Plus… the cost of education and the cost of living are on the rise. Thus, making student loan payments is turning out to be one of the chief problem areas. And, it’s taking a toll on the fresh grads in light of the small number of jobs available to them. Continue reading
Using a Student Loan Calculator
Student loan calculator – Comprehending the benefits and the variables needed to use it
By Sidney Terrell
The currentt recession that we’re going through has taken a toll on the life of many Americans… and students are perhaps the worst hit. We need a college education to shine in life (See: The Difference a Degree Makes in Unemployment Levels) but with the present rise in college education costs, most of us can’t afford to pay for college with our own funds. Often we take out student loans or borrow from family members in order to fulfill your dreams of attaining sufficient education. Presently the tuition fees are so high in the United States that the majority of students graduate with their degree and a considerable amount of debt. (See: Sky Rocketing College Costs )
However taking out too many student loans can make you drown in the cycle of high interest debt.
There are a variety of financial calculators that can ease the stress of making manual calculations, you can use the student loan payment calculator in order to make calculations easier. Continue reading
How to Invest for Safety
Safety First – What 25 Years in the Markets Have Taught Me
When things get really bad in the market, I like to look back at the almost 19 years I have spent carving a living out of it. It helps me ignore the panic.
There was a time when people talked about something other than the stock market. The market was considered taboo for most. Too risky. Too foreign. The generation of the Great Depression put their money in the bank. Some still kept it in cans buried under the front porch.
In the early eighties something totally new appeared on the investing horizon: the IRA. Life has never been the same.
It seems impossible that they have been around for less than 25 years. But, there was a time when people didn’t invest in mutual funds, stocks or options. IRA’s changed all that. Continue reading
China to Put 3 Million Americans Back to Work
The “Currency Manipulator” That’s About to Put 3 Million Americans Back to Work
By Martin Hutchinson, Global Investing Strategist, Money MorningWell, boy has the Boston Consulting Group (BCG) got news for you.
The United States’ No. 1 strategic consultancy’s latest study shows 2 million to 3 million manufacturing jobs and about $100 billion in output can be expected to return to the United States from China by 2020.
That’s right. China, so often the scapegoat for U.S. joblessness – and an alleged “currency manipulator” – actually is becoming our best ally in the fight against high unemployment.
Continue reading
Dubai Real Estate Market Trends
Dubai: The Good and the Bad of 2011
The great slump of 2008 jolted Dubai real estate, so much so that even after three full years, it has still not returned to its former glory. Despite the efforts of the government and the private sector, properties in Dubai have faced a continuous decline in prices for several years.
The start of year 2011 was no different as the property market continued to be a disappointment for local realtors. Despite that, many believe that the recovery of Dubai real estate is just around the corner. According to many experts and analysts, the property market has touched rock bottom and will soon start improving.
The U.S and European economies have also played a major role in destabilizing the prices of properties in Dubai. The office market in Dubai was primarily occupied by U.S and European based companies but with economic turmoil, many companies relocated, abandoning their offices. The global economic crisis also affected the Dubai property market since it heavily depended on foreign investment. The oversupply and recession combined to double the effect on the real estate market, thus making it highly unstable. Because of the fall in sales and rental prices, the Dubai real estate market has now become quite tenant friendly. Continue reading
