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Do You Need to Know Financial Trends to Plan for Retirement?
By Tim McMahon, editor
When planning for retirement, most financial planners make a lot of assumptions about financial trends and how much money you will spend per year. They estimate the average inflation rate, the average return on your investments etc. all in order to estimate how much you will need in order to retire. The problem is that they are all guesses… and it is hard enough to guess what the inflation rate will be next year let alone five, ten or even fifty years from now. Continue reading
The Sector Where Individuals Can Still Beat The Big Boys
Wouldn’t it be great if there were a sector where you have the edge over the Goldman Sachs of the world?
A market where small players can outmaneuver the big guys – and where having knowledge of that market gives you a distinct advantage over day traders?
Such a market exists – biotechnology. Small and mid-cap biotech firms don’t get a lot of close coverage by analysts, so with the right expertise it’s possible to beat the masses to the early profits.
Our colleague, Alex Daley, the chief technology strategist for Casey Research and senior editor for Casey’s Extraordinary Technology, recently sat down with The Daily Crux to reveal valuable insights on investing in this explosive sector:
- Why biotech is offering hope to millions of chronically ill people – and serious profits for bold investors
- Why nine out of 10 biotech therapies are destined for the trash heap – and how to improve your odds of investing in the winners
- Key factors you need to know when evaluating biotech stocks
- …and much more.
When Alex talks technology, smart investors listen – he’s worked with Microsoft, Facebook, MySpace and many other household-name tech firms, as well as renowned research universities like MIT and Harvard.
He’s also been a featured guest on CNN, CNBC, BBC and other major media.
So grab a cup of coffee and discover some of Alex’s strategies for uncovering profitable biotech stocks. Continue reading
Trends in the U.S. Dollar, Stocks and Gold
Today we have Chris Vermeulen “The Gold and Oil Guy” to tell us a bit about where the massive deficits will take the Dollar, Stocks and Gold. ~editor
Gold and Stocks Heading Higher with GDP Crashing
As most investors and traders are aware, the U.S. Federal government has run up significant deficits and the long term debt burden is becoming a drain on Gross Domestic Product. That being said, most economists are discussing the possibility of a major decline in the value of the U.S. Dollar going forward as inflationary monetary policy begins to strangle growth. While that view point may prove right over the long haul, in the short run most traders are not likely expecting the U.S. Dollar to rally.
The U.S. Dollar is expected to reach a multi-year cycle low in the near future. From the cyclical low, I expect the U.S. Dollar to regain a strong footing and work higher against the crowd. This is not to say that the U.S. Dollar will not eventually decline, but financial markets do not work that easily. Shorting the U.S. Dollar is a crowded trade and Mr. Market punishes crowded trades quite often by pushing prices the opposite of what the herd is expecting. Should the U.S. Dollar find a strong underlying bid, precious metals and domestic equities would feel the brunt force of such a move. While it remains to be seen if the U.S. Dollar rallies, if it does it will catch many traders and economists by surprise and the unwinding of the short dollar trade could unleash a wave of buying that we have not seen for quite some time.
Let’s take a look inside the market…
Major Disaster Developing For Bond Holders
Long-term U.S. Treasury bonds have fallen 7% in value since November 1 and municipal bonds have fallen 6%. “Safe” investments like Treasury’s and Munis are not supposed to crash they are the mainstay of widows and orphans. So What’s happening?
For most of the last century, the whole world has believed the obligations of the U.S. government – and the obligations of thousands of states, cities, towns, and other municipalities in the U.S. – were the safest investments in the world. These “safe” investments aren’t supposed to crash. The following article by Elliottwave Internations shows why Bonds are no longer safe. Tim McMahon~ editor
Why Bonds Do Not Provide Shelter From The Storm
December 23, 2010
By Elliott Wave International
TREASURIES — the very name conveys a thing that is secure, protected, and will appreciate over time. Otherwise, it’d be called something like “TRASHeries” or “Mattress Stuffers.” Then, there’s the official seal of the US Department of Treasury: its image of a scale and a key symbolize “balance” and “trust.”
And, finally, there’s the mainstream economic experts who have it on good authority that long-term bonds increase in value during financial instability and uncertainty.
On this, the following news items from November-December 2010 reflect the enduring faith in fixed-income assets as the ultimate safe-havens:
- “Bonds Tumble On Signs of Economic Recovery” (Reuters)
- “US Treasury Prices Rise as traders positioned for negative headlines….” (Associated Press)
- “Treasury’s rise as investors sought shelter in safe haven assets amid rising fears about sovereign debt woes in the eurozone. The slow motion train wreck is likely to play out over year end as each country plays musical chairs with solvency. The market’s concern here is ‘What is next?’ The 10-year Treasury yield will fall if the problems get worse from here.” (Wall Street Journal)
There’s just one problem with this notion: namely, bonds (of any denomination) do NOT have a built-in disaster premium. This is the myth-busting revelation of the latest, free report from Elliott Wave International. The resource titled “The Next Major Disaster Developing For Bond Holders” includes a thoughtful selection of various EWI publications that expose the very real vulnerability of bond markets to economic downturns.
The premier study on the subject comes from Chapter 15 of EWI President Robert Prechter’s book Conquer The Crash by way of this memorable excerpt:
“If there is one bit of conventional wisdom that we hear repeatedly with respect to investing, it is that long-term bonds are the best possible investment [in downturns]. This assertion is wrong. Any bond issued by a borrower who can’t pay goes to zero in a depression. Understand that in a [major contraction], no one knows its depth and almost everyone becomes afraid. That makes investors sell bonds of any issuers that they fear could default. Even when people trust the bonds they own, they are sometimes forced to sell them to raise cash to live on. For this reason, even the safest bonds can go down, at least temporarily, as AAA bonds did in 1931 and 1932.
The first chart (see below) shows what happened to bonds of various grades in the deflationary crash. And the second chart (see below) shows what happened to the Dow Jones 40-bond average, which lost 30% of its value in four years. Observe that the collapse of the early 1930s brought these bonds’ prices below — and their interest rates above — where they were in 1920 near the peak in the intense inflation of the ‘Teens.”
That’s just the tip of the iceberg in this myth-busting report.
“The Next Major Disaster” uncovers flaws in other widely-accepted bond lore as well.
Get your free Copy of the full 10-page report Here.
This article was syndicated by Elliott Wave International and was originally published under the headline Long-Term Bonds: The Best Possible Investment? Think Again. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
China: Gaga for Gaming
By Doug Hornig, Editor, Casey’s Extraordinary Technology
Developing nations are playing technological leapfrog.
In the developed world, when we think of technology, the roots of much of what we do today were born decades, or even a century, ago. While the evolution has been fast paced, the progression from there through today is a straight line from the technologies that preceded them. A television program is still a television program. A phone call is still a phone call. The devices might look different and certainly do more, but the lineage is obvious.
But what happens when your starting point isn’t the invention of the phone or the first personal desktop computer? What happens when you start from today?
In many parts of the world, most of the people still have never had a telephone conversation. Phones are coming, inevitably, as cheap technology leads to more widespread access and as global prosperity increases. But in these places, utilities don’t bother to string wire from poles to every single home on a block. It simply isn’t cost effective given today’s technology. Instead, they’re putting up wireless towers. The first and only phones their citizens will ever have are cells. Essentially, they’ve just vaulted over all the intervening technology, and their idea of what a phone call is doesn’t involve party lines, rotary dialing, or switchboard operators. Continue reading
The Next Investment Disaster
By Susan C. Walker
When money market funds, mutual funds and CDs yield next to nothing, the old itch to find higher yields kicks in. That may be why Bloomberg has had a field day reporting on the latest attempts to find higher yields. For example, from an October 7 story: Private-equity firms are taking advantage of record demand for high-risk, high-yield debt to pay themselves dividends, saddling their companies with additional loans and bonds. … Shareholder payouts funded with bond and loan issuance climbed to $24.2 billion this year, more than triple the amount for all of 2009 and the most since the Standard & Poor’s 500 Index peaked in October 2007, according to S&P’s Leveraged Commentary and Data. (Bloomberg, 10/7/10) The yield may be high today, but Robert Prechter warns that it’s a dangerous game to play. He sees it as tomorrow’s next investment disaster. Read more
Do You Know Your Currency Pairs?
When I thought about some of the first things I learned before trading the Forex market, fundamental analysis came to mind. Fundamental analysis refers to factors that affect the price of a currency pair.
(Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. While Technical analysis seeks to identify price patterns and trends in financial markets and attempt to exploit those patterns based primarily on price and volume. Technicians use various methods and tools based primarily on the belief that price charts include all know information about a market because this information is already factored into the price. ~editor).
It is important not only to perform technical analysis based on your charts and indicators, but to also be aware of the macroeconomic events that can affect a currency pair. What helped me in my forex education was learning each currency’s characteristics. Whichever pair or pairs you choose to trade, knowing each of their characteristics is extremely valuable because it aids in the accuracy of any trade you perform. Continue reading
Trend Reversal And Trend Continuation Profitable Candlestick Patterns
Trend is your friend. You will repeat this saying again and again. There is no doubt that trend trading is one of the most profitable trading strategies that has helped a lot of traders make a fortune. But to tell you the truth, trend has to be befriended. You will have to observe the trend closely. Monitor it and ride it when it is the best time and get out before it is too late. Otherwize, trend riding can give you a huge loss . How to know when it is the best time to ride the trend and when it is the best time to get out of a trend? Candlestick charting and candlestick patterns can help you in this regard. There are a number of highly profitable candlestick patterns that you can use to predict when the trend is about to reverse itself and when it is going to continue. One such candlestick pattern is the Bullish Necklines. This is a highly profitable trend continuation pattern . There are types of Necklines Patterns; one is the In Neck and the other is the Out Neck Pattern. Master Candlestick Charting with this 82 page PDF FREE Candlestick Guide . Learn this powerful Fibonacci Retracement method FREE that pulls 500+ pips per trade! Download this 1 Minute Forex Trading System that makes money instantly anytime you want! This system is very simple to use and can be used even by those who have never traded forex before, so give it a try, you will like it! Continue reading
Risk Management In Trending Markets Part 2
By Chris Ciovacco
To Make Money Find Trending Investments
Based on the charts of most stock markets above, the trends will have to change before long-term investors can again make money. If a trend has to be in your favor to make money, then you should overweight investments which are doing just that. The inverse Financial ETF above fits the bill. Let’s see what other markets are in clearly defined trends. Continue reading
