Day Trading Futures

Charts of the Week for stocks, bonds and investment securities by ProActInvest.net for February 6th, 2012 is a video that reviews the moves of the stock market from a technical analysis perspective, tracking key movements in the stock market by technology stocks (QQQ), semiconductor stocks (SMH), midcap stocks (MDY) and smallcap stocks (IWM) and reviews which fixed income ETFs look especially interesting. We also review forex charts of the USD and discuss the Federal Reserve’s monetary policy and its impact on the real estate market and the financial markets. The video also touches on current events and developments in the Middle East and in Europe.
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Investments can take two basic forms. First, an investment can be the purchase of goods, supplies, tools, or equipment to use in the production of increasing profits. For example, a businessperson who produces shoes may purchase a machine that automatically stitches leather in the hopes that the time saved will allow for the production of more shoes and increased sales.

The second basic form an investment can take is what most of us think of when we say we are investing our money. That is, we use the money we have for the specific purpose of making more money from it.

There are several different ways of investing money in the hopes of gaining a profit. Stocks and bonds, exchanging currencies in the Forex market, annuities, certificates of deposit, mutual funds, buying real estate to sell at a profit later (Flip That House!), IRA’s, even simple savings accounts, are all methods of investing.

Even loaning your brother-in-law a few bucks (at a reasonable interest rate) to start a business is an investment.

Generally speaking, the riskier the venture is, the more opportunity there is to make a higher profit; the less risky, the lower the proceeds. The FDIC guarantees savings accounts and therefore, putting your money in a savings account with the idea that you will get a fantastic return on your money is not very realistic.

A savings account has little to no risk whatsoever; therefore, the return on investment is weak. Of course, it’s always a good idea to have liquid assets, and a savings account is one way to do so. Most middle-class Americans should have enough in their regular savings account to tide them over in the event of an emergency or job loss.

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*Quiz: Does putting your money in a coffee can and burying it in the backyard qualify as an investment? (see answer at end of article)

Purchasing stock in a company makes you part owner of that company. The two ways to make money from owning stock are to secure dividends and/or sell the stock for a higher price than what you paid for it. Sounds simple, right? Well, the basic concept is quite simple; it’s the day-to-day reality of the stock market that makes this type of investment a bit more complicated. There is no guarantee whatsoever that the stock you choose will make a profit. In fact, you can easily lose your entire investment. The potential for a tremendous profit exists, however, if the stock (company) hits the big time.

. **Quiz: Which is riskier? Loaning money to your brother-in-law or buying stocks by closing your eyes and pointing? (see answer at end of article)

When you are deciding how to invest your money, the two major considerations are how much of a return on your investment you want to see and how much risk you are comfortable with. Once those two questions are answered, it is time for you to seek out an investment professional and start making yourself some money.

. No, sorry Jed Clampett. The coffee can qualifies as hiding or saving, but not investing.

. ** It depends on your sister’s taste in men.

Learn more about profitable Stock Trading at our website!

If you’re serious about breaking into the real estate scene, you’re going to have to educate yourself about the basics of being a landlord. Even if you hire a topnotch property management firm to handle the day-to-day necessities for you, it pays to have an inkling about what needs to be done. Rental bonds are something that any skilled property investor should know about; you can learn a few basics about them below.

What is the Purpose of a Rental Bond?

Some people believe that rental bonds are strictly designed to protect landlords. In reality, though, they work to protect the interests of both parties. In the event of damages to the rented property or in cases of unpaid rents, landlords can always fall back on the rental bonds that they have collected. Tenants can protect themselves financially by providing a rental bond, which is protected under law.

These bonds are usually paid at the beginning of a new leasing period.

Do Landlords Hold Rental Bonds?

Another popular misconception is that landlords collect rental bonds and keep them for their tenants. Since that scenario opens up far too many opportunities for abuse, such bonds are actually handed over to Renting Services (a part of the NSW Office of Fair Trading), for safekeeping. Renting Services must receive the bonds within 7 days of a lease signing. On top of that, a bond lodgment must be filled out and signed by the tenant; it has to be submitted to Renting Services, too.

Are Rental Bonds Always Returned?

Most of the time, rental bonds are returned, in full, to tenants. That’s because damages beyond regular wear and tear, along with missed rent payments, aren’t terribly common.

If a landlord has a case for damages, though, or if the tenant hasn’t paid rent as agreed, a rental bond may not be returned to the tenant. Basically, the bond helps to hold tenants accountable for the property that they are renting. In order to get back the amount paid for the bond, tenants will need to take great care of the property and to regularly pay due rent.

How Much is the Typical Rental Bond?

Rental bond amounts can vary from one situation to the next. The maximum bond of an unfurnished property is equivalent to 4 weeks rent, while that of a furnished property can amount to 6 weeks rent. Confer with an experienced property manager to get a clear idea about the correct bond amount and its lodgment.

Trust, care and everlasting love, those are the three main ingredients that provides the foundation to a relationship that can never be broken, which is family. What is the meaning of family? To some family would bring a significance which is seen as only a blood connection, whereas to some individuals their family means the world to them.

As you age in life, the meaning of the word ‘family’ would tend to be more significant as they provide the love and support that you need when times are tough. Even if you are being left out of your friends or have been going through a rough period, most of the time your family member especially your parents would be right their beside you as a place to confide and seek security. At an age where money would mean the world to some people, family is one such relationship that none can buy.

Ever wondered why this blood bond has always lit up our lives even when there are moments where you have hurt our loved ones? The reason lies in the love that is settled in each and every one of the family members to one another.

Most parents have unconditional love for their children and always seek the best for even tough they themselves need to sacrifice some of their needs.

Although, at times there are also arguments that split a family apart, the love that lives in one another’s hearts will never be lost.

We should always respect love and care for each and everyone of our family member especially our parents. This is because you may never know what may happen the next day and there is a possibility you may lose someone some day. In view of this, treasure your family till it lasts.

HONESTLY THIS IS SOMETHING I CAN SAY IS REALLY DIFFERENT. the YEE album is coming very very soon!
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“How can the average person invest today and make good returns? I’m not looking for a fly-by-night investment scheme; I want a legitimate opportunity that I can place my hard-earned money and receive a worthwhile profit.”

Over the three years of writing this column I have seen an increase in the numbers of people enquiring about investment options. They have a genuine desire to find out how their money can work for them. Gone are the days when the investment arena was occupied only by jargon-speaking financial traders and the super-rich!

While persons may have heard about the benefits of investing in the money market and the stock market, many people have never examined the possibility of earning big in the market for bond investments.

A bond is a medium-to long-term debt instrument, and it is used by governments and large corporations to finance their long-term capital needs.

It’s basically an official IOU that has terms outlining when the investor will be repaid the principal invested, how much, and how often interest payments will be made.

Types of Government of Jamaica bonds

In Jamaica, there are a variety of bonds for the average person to invest in. The Ministry of Finance periodically issues new bonds to the general public in the primary market, which can be accessed through brokerages and securities dealers. Debentures are the most common types of Jamaican dollar bonds bought by individual investors, as they can bring a fixed interest rate with usually quarterly interest payments.

Some bonds can offer foreign currency benefits. US$ Indexed bonds are denominated in United States currency, but investors pay for the bond with Jamaican dollars at a specified exchange rate.

The interest and principal payments are made in the equivalent Jamaican dollars, based on the exchange rate at the time of payment. This type of bond can provide investors with a hedge against depreciation, without them actually having to buy the foreign currency.

Eurobonds or global bonds are issued by the government outside of the country in a foreign currency such as US or Euro dollars. These bonds are usually underwritten by large brokers and then re-sold immediately to international clients. Many local institutions, investment funds and individuals buy and sell these Jamaican global bonds.

Earning more with bonds

The length of a bond can be anywhere from two years to thirty years or more, so these debt instruments carry more risk than money market debt investments which only last for a maximum of one year. Who knows what the economic climate will be in ten years’ time. This is one of the reasons why bonds typically offer investors higher interest rates.

However, the interest rate attached to the bond is only one of the ways that investors can maximise their investment returns. After the bond is originally issued, regular trading activity in the secondary market can present profit-making opportunities. Bonds have prices that can fluctuate according to supply and demand, economic conditions and interest rate changes.

So an investor could buy a bond when it is originally issued, collect the regular interest payments, hold it until it matures, then get back the principal invested. Or the investor could buy the bond with the specific intention of selling it back at a higher price to make a gain on the original amount invested.

The prevailing economic conditions aren’t all bad, there are some positive spin-offs for savvy investors looking for deals. Jamaican government global bonds offer attractive interest rates on $ US or euros of up to 11.75 per cent per annum. The prices of these bonds have been falling due to decreased demand and negative speculation; they can now be bought at low rates, some with almost a 40 per cent discount. Consequently, they offer investors the possibility of buying low now and selling at higher prices when the market rebounds.

Risks of bond investments

Like any other investments, bonds carry risks that should be evaluated by potential investors. There is a default risk that the issuer of the bond, the entity that is borrowing the money, may not be able to pay back the interest or principal. There is also a liquidity risk that the investor may not be able to sell the bond quickly to get back cash.

Bonds are also sensitive to changes in interest rates and other economic developments. These can lead to fluctuations in the prices of the bonds which can negatively affect their value. Therefore, if the investor is forced to sell the bond, he or she may have to take a loss in principal.

Despite the risks inherent in bonds, they still can be a viable investment option for individuals. You can buy bonds with as little as US00 at some securities brokers, so check around. Speak to a licensed investment advisor to get more information on investing in bonds.

Copyright © 2009 Cherryl Hanson Simpson

When you are in desperate need of cash, you tend to weigh all your options and sources of income, dig out your savings, seek help from family and friends or opt for personal loans, loan against property from bank. Availing a loan against your National Savings Certificate (NSC) is one such option which benefits you in a number of ways.

What NSCs are:

National Savings Certificate is a bond issued by the Department of Post, Government of India across the country to anyone who wishes to invest in a long term savings scheme (6 years). It increases your invested amount and also exempts you from paying tax on the amount of the bond. Since there is no lid on the amount you can invest in NSC, you can buy them for any amount you want starting with Rs100.

Loan process:

These NSCs come handy as a security deposit when you require a loan according to your requirement for example personal loans.

All nationalized banks, some private banks, and financiers support this form of loan. To start with the process, you need to go to the same post office that granted you the NSCs and pick up relevant forms based on the number of NSCs you plan to pledge. On approaching a bank, you need to fill the form with details about your NSCs. The bank manager will verify the details and sign indicating his approval. You need to again go back to the post office and pay a processing fee of Rs5/- per NSC bond that you pledge. The post office will check and confirm the pledging by stamping a seal on the bonds with the name of your bank giving you the loan.  Submit the NSC bonds to the bank manager and fill up a loan application form similar to the regular loan request processes. The sanctioned loan amount will be transferred to your bank account within 2 working days time. The loan amounts sanctioned is usually calculated as 75% of the face value of your bonds (it is similar to that of loan against property, here the property is your bond) and the interest amount accrued from the bonds till the date of loan application. The banks may charge you a small fee as processing charges too.

Eligibility:

The only eligibility for availing a loan against your NSC bonds is that the bonds should be in your name, if you are the applicant. The loan amount and tenure also depends on the number of years that the bond has left to reach maturity.

Benefits of loans against NSC bonds:

The process of availing loans against NSC bonds is fairly simple and fast thus ensuring you receive the loan amount in no time as compared to the formalities for availing other loans like personal loans. There is no extensive paperwork involved and interest rates are not very high. This type of loan especially works as a boon for rural citizens as they face hardships to avail loans such as personal loans, home loans or business loans from banks without much property to show for or have their property already pledged with the local financier. The NSC bonds can be unfledged once you clear the loan amount.

Loans against NSCs help the system because they make good use of the invested money and helps in revenue generation.

Introduction

Continuing economic and financial volatility has cemented in investors’ minds the importance of diversification across asset classes. As interest rates have been driven down, and government gilt yields have fallen, investors seeking income or a higher rate of interest are increasingly turning to corporate bonds.

What is the bond market?

The bond market, also known as the debt, credit, or fixed income market, is a financial market where

participants buy and sell debt, usually in the form of bonds (1). As of 2006, the size of the global bond market was an estimated trillion with Corporate bonds accounting for trillion in issue (source: Merrill Lynch Bond Index Almanac). Since the mid-1990s, corporate bond markets have become an increasingly important source of financing for companies, even more so with the recent credit and liquidity crunches (2) which have caused banks to reduce their lending.

What is a Corporate Bond?

A ‘corporate bond’ is an ‘IOU’ issued by a company (corporation) rather than a government, typically with a maturity of greater than one year; anything less than that is often referred to as commercial paper (3).

They are a way to raise money for projects and investment and are also known as credit. The issuance of a bond will often provide low cost finance, especially the case in recent years with low inflation, interest rates and good corporate stability. The low cost of the interest or coupon payments can be further reduced by the fact the payments are generally tax deductible. By issuing bonds, rather than equity, a company will also avoid diluting the equity in the company.

A company seeking to raise money issues corporate bonds.

These will typically be bought by investors at what is known as “par”, usually for 100p. Like equities, bonds can be bought and sold until maturity and values can fluctuate depending on supply and demand. Other external factors, such as interest rates, can also impact the price. The company commits to pay a coupon or rate of interest to the investor. This will generally be a fixed amount and is paid annually or semi-annually. After a defined period, set at outset, the bond is repaid by the company. Bonds will typically redeem at par or 100p irrespective of how the market price has fluctuated before maturity.

How are Corporate Bonds rated and by whom?

Independent ratings agencies are responsible for researching companies and supplying ‘grades’ or ‘ratings’ to companies’ debt (bond issues). The most readily recognized ratings agencies are Standard & Poor’s, Moody’s and Fitch Ratings.

There are two main subdivisions of corporate bonds depending on their ‘credit rating’, which indicates to investors the level of risk associated with the bond.

Investment Grade Bonds – With investment grade bonds it is assumed that the chance of non-repayment or default is low due to the issuing company having a comparatively stable financial position. As a result of the increased stability, the income or coupons offered are usually lower than those from sub or non-investment grade.

Sub-Investment Grade Bonds – High yielding, sub-investment grade bonds are higher risk investments. They are sometimes referred to as junk bonds. These tend to be issued by less financially secure companies or those without a proven track record. The default rate of these bonds is expected to be higher than investment grade corporate bonds.

What are the ratings?

The ratings depend on how the credit rating agencies view the financial standing of the company issuing the bond, its ability to continue to make payments to its bond holders in the future and what protection the bondholder has should the company face financial difficulties.

How are returns measured?

The income generated from a bond is referred to as the yield. There are typically two yields to indicate the return the bond provides to an investor (4);

Income Yield – also called the interest yield or running yield, is a simple measure of how much annual income a bond will provide to the investor. The diagram below shows the relationship between yield and the price of a bond.

In this example, the bond yields 4.00% based on its par value of 100p, i.e. 4p. If the market value of the bond drops to 90p it still pays out 4p. This means any purchaser at this price will receive a yield of 4.44%. If the price of the bond drops further the yield will increase. Conversely, as the price of a bond increases the yield decreases.

Redemption Yield – takes account of both the income received until maturity and the capital gain or loss when the bond is redeemed. If a bond has been purchased at a market price higher than the par value at redemption then there will be a capital loss. This would mean the redemption yield will be less than the income yield. Depending on market conditions, there can be a substantial difference between the redemption yield and the income yield.

What impacts bond valuations?

Interest rates – the relationship between interest rates and corporate bond prices is usually negative, i.e. corporate bond prices fall when interest rates rise. A rising interest rate makes the present value of the future coupon payments less attractive in comparison and investors may sell bonds, in order to move their monies. Any new issues of bonds must raise their yields in order to attract investors so older issues with lower yields become less popular. Conversely, declining interest rates cause investors to seek higher yields from bonds, increasing the price.

Inflation – Similar to interest rates, the relationship between inflation and corporate bond prices is usually negative. A high rate of inflation reduces the value of future coupons or redemption value causing investors to seek alternative investments. Inflation and interest rates are often linked; predominantly because interest rates are commonly used by central banks as a way of moderating inflation.

Like all asset classes, valuations can be impacted by a wide range of factors, both general economic and financial, as well as specific to the issuing company. The performance of other asset classes can also impact valuations as they attract investors away from or to bonds.

What are yield curves and spreads?

A yield curve illustrates the ‘yield to maturity’ of a range of similarly rated bonds with different periods to maturity. In the yield curve chart below bonds issued with longer maturity will typically offer higher yields to compensate for the additional risk of time.

The illustrated yield curves also demonstrate that credit spreads (yield on the type of bond illustrated

minus the yield on government gilts of an equivalent maturity) are typically higher for riskier debt.

Why do investors buy Corporate Bonds?

Companies typically offer higher yields than comparable maturity government bonds, bearing in mind the higher level of risk. Since corporate bonds can be bought and sold, supply and demand can also generate capital appreciation in addition to income payments.

Similar to equities corporate bonds provide the opportunity to choose from a variety of sectors, structures and credit-quality characteristics to meet investment objectives. At the same time should an investor need to sell a bond before it reaches maturity, in most instances it can be easily and quickly sold because of the size and liquidity of the market. Most importantly for those seeking an income coupon payments and final redemption payments are usually fixed; this means there is a certainty about both the amount and timing of the income an investor will receive.

Market Outlook October 2010: Strathclyde Associates Government Bonds Part1
The major government bond markets have made further significant gains over the past month, despite the massive fiscal deficits around the world, and the renewed concerns about the possibility of sovereign debt defaults in Europe.

They have continued to receive support from the slow pace of economic recovery in the developed world, and the low level of short-term interest rates; but they have also acquired an enhanced safe haven status and as a result 10-year yields have fallen to 2.5% in the US, 2.2% in Germany, below 3% in the UK, and below1% in Japan.

Strathclyde Associates Korea article: This continuing fall in yield levels has surprised most commentators, and has led on the one hand to suggestions that these markets are anticipating a move towards a Japanese-type situation of an extended period of slow growth and the threat of deflation, and on the other hand to warnings that a bond bubble is being created that will quickly burst if the gloom about global economic prospects proves to be overdone.

The outlook for the markets has also been complicated by the further evidence of conflicting attitudes amongst central bankers about the correct response to the current problems, with the Fed primarily concerned to maintain the momentum of the US economy, and the European Central bank, and to a lesser extent also the Bank of England, anxious to reduce the level of fiscal deficits.

Market Outlook October 2010: Strathclyde Associates Government Bonds Part1Although we have also been surprised by the strength of the markets so far, our position remains basically unchanged. Slow economic growth and low short term interest rates will continue to provide support to the markets we do not expect a move to a doubledip recession in the developed countries, and we do expect China and other developing countries to continue to provide considerable support to the global economy.

We therefore feel that the gloom about economic prospects is overdone, and that sentiment will eventually change.

In the meantime the markets have to cope with massive fiscal deficits and the possibility of sovereign debt defaults in Europe. There us therefore a serious risk that a bond bubble is developing.

The latest available evidence on the performance of the US economy has obviously provided considerable support for the US bond market, and for bond markets elsewhere.

Market Outlook October 2010: Strathclyde Associates Government Bonds Part1Consumer spending is holding up fairly well, helped by considerable discounting by retailers; but the labour market and the housing markets remain depressed, manufacturing activity appears to be declining, and the latest trade statistics do not suggest that exports will offset any weakness in domestic demand.

Growth in the second half of the year is therefore expected to be well below the level achieved in the first six months.

There was therefore considerable speculation ahead of the latest meeting of the Feds Open Market Committee that further quantitative easing measures would be introduced to boost the economy; but although the bank conceded that the pace of the recovery in output and employment has slowed in recent months, its only response has been to reinvest the proceeds of maturing mortgage-backed and agency securities into Treasury securities to ensure that it did not tighten its easy monetary policy.

The wording of Japan’s pledge to buy eurozone stability fund debt shows that Japan sees what eurozone leaders are blind to. Whilst Japan says buying the jointly issued bonds “[is] appropriate to boost confidence in the EFSF (European Financial Stability Fund) and makes a contribution as a major country”, core eurozone leaders remain steadfastly opposed to any sort of “E-bond” or common bond. “Common bonds would make governments less responsible”, French President Sarkozy said last month (10th December). But, in this steadfast opposition – based on ideological grounds regarding fiscal union – France and Germany are blind to the potential of common bonds as a vehicle that investors, and particularly Asian sovereigns, would be keen to invest in on the basis of deep liquidity, strong credit standing and also strategic grounds.

Combined, FX reserves in China and Japan are just over 40% of the world total, China alone accounting for nearly 30%. Anecdotally and otherwise, we know of their desire to diversify their reserves away from dollars. It’s easy to buy euros, but investing in eurozone bonds is another matter, given the plethora of countries, bond markets and varying levels of liquidity. There are obvious attractions, from a reserve manager’s perspective, of aligning euro currency exposure with debt exposure (based on eurozone wide revenues, rules and institutions), rather than single country exposure. Pre-2007, when intra-eurozone bond markets were not really differentiating credit risk, that was not such an issue. Now, it’s a major one. Japan’s comments hint at the attraction of investing in vehicles that are more eurozone and less country specific.

So far, there have been scant signs that European leaders have opened their eyes to this potentially sizable benefit. Yes, there are huge hurdles to surpass before common bonds become a reality. However, if structured correctly (countries able to fund only some proportion of debt under this means), then increased liquidity and lower credit risk would serve to push down funding costs, not raise them, as Germany fears. Japan offered eurozone leaders an insight into this potential. Ironically, it’s Asia that is on board with the benefits on common bonds, not Europe.