Why Gold? Why Now?The Case for Investing in Gold TodayNOW IS THE TIME to take your financial future back and keep it safely in your control, the only way to do this is by turning towards gold investment; find out where to buy gold coins.The careful investors of the world know that gold is the only way to stay safe during the difficult crashes because it lasts forever and is always hoarded carefully.If debt had a kryptonite analogue, it would be this great precious metal.Gold doesn’t canker or tarnish, and it’s relatively useless to industry. It’s been about 4,000 years since major gold mining has begun and almost of of it is unused for any major industrial purpose. Preserving wealth is the main purpose for this heavy material.The world’s total store of gold now stands near 160,000 tons. However, since it is so dense, if you melted all that down to a cube it would only span 66 feet on one of its edges. That wouldn’t even cover a ball court!Gold vs. Paper-Money InflationThe world stores are still increasing at a nice pace of 2600 tons/year. That’s a modest increase of 1.6% per year to the above-ground supply. The best part is that the bankers don’t control the amount of gold in this world like they control the value of currency.The carefully controlled Euro is inflating at a whopping rate of 11.5 percent every year.But our friend gold kept it’s buying power all throughout the Carter years. When Reaganomics took over, our little dense friend soared as an asset by increasing 23 times itself.The Great Depression saw gold remaining strong as a purchaser of financial assets.It does not need to be stated as to the condition of our currencies today. Gold has already risen three-fold against the New York stock market since early 2000. It outperforms real estate without even breaking a sweat.Time to Buy Gold?The old boy network’s game of currency has no effect on the metal. Check the stats folks, the real players stay safe with the yellow metal, not with currency.But that doesn’t make gold a “forever” investment. Gold will always lose value during stable periods of strong economic growth. You could hold your breath for that to occur.Before 9-11 and during the happy days of Clinton, gold was very cheap. During that time, you couldn’t get an investor worth his weight to advise their clients in gold.After the tech bubble burst, and Britain dumped its reserves, the prices started to climb.There does not seem to be a glass ceiling on this latest climb. Perspective shows that the current trends are only the beginning. It’s also been limited by Western governments persuading their citizens that “core” inflation in the cost of living is running at just 2% per year or below.The black hat markets of the banker cannot sustain blissful ignorance forever.New Investment in Gold.The smart analysts know that gold will continue to grow.The only way out of the Fed’s treachery, is to hyperinflate the currencies which will have this price driving effect on gold. Trends like these are only stopped when the bankers have choke collars put on them.The Fed raised interest rates in the 80’s which helped usher in that positive growth we once saw in the 90’s.Will that happen again? Anyone in the room think Ben Bernanke gives a crap what happens to our savings and our futures?People who live in such a dream world should not invest with the rest of us then.Stop believing that you can’t get into the gold market, it’s just as open to you as it is to the Rothschilds.You may be saying that you don’t know where to buy gold coins or bullion. Or maybe you know where to buy gold coins but don’t think anyone will use them as money.Click here to find out more about where to buy gold coins.
February 28th, 2010
posted in Gold Investment
Slovenia property investment may not be as popular as many other well known property investment locations, but savvy investors are buying and making great capital gains, in one of the top markets for capital growth in the world.
With prices starting at just $50,000 and capital growth in excess of 30% per annum combined with the potential for significant rental income, it no wonder more investors than ever are looking at Slovenia property investment.
Capital growth potential
Investors in Slovenian property are currently enjoying capital gains of up to 30% per annum and this growth looks set to continue.
In the next decade capital growth was forecast at 278% by property specialist program “A place in the Sun” which has increased interest from property investors around the world.
Why Slovenia is hot
Since attaining independence from Yugoslavia and joining the EU, Slovenia has seen strong economic growth.
Tourism has been the fastest-growing sector of the economy and this has enabled it to produce the highest GDP of the new EU members.
Slovenia has become popular due to its variety of scenery; good infrastructure and a variety of airlines now offer cheap, frequent flights – making it easy and inexpensive to get to.
Natural Beauty
Slovenia is located between Austria, Italy, Hungary and Croatia and while a small country, it is beautiful and has something for everyone.
Slovenia features forests, vineyards, snow capped mountains, a beautiful stretch of Mediterranean coastline and some great baroque architecture.
Slovenia has a beautiful capital – Ljubljana.
The city has been described as a smaller and less crowed Prague and comes with stunning architecture.
A booming economy
Slovenia’s accession to the EU saw big changes in the economy, as Slovenia opened its doors to overseas property buyers.
Strong growth in GDP has been mirrored by growth in Slovenian property prices.
The capital Ljubljana offers the best returns on investment, with prices predicted to continue rising by around 30% per annum for many years to come.
The limited supply of housing and restrictions on land development are the main driving forces behind this growth.
The economic expansion in the capital which will see rentals soar – giving “buy to let” investors significant income, as well as capital growth potential.
Primorska on the Adriatic coast and the mountain district of Gorenjska are the next most expensive places to buy in Slovenia.
If you are interested in Slovenian property and cant afford these areas there are plenty more to choose from, as this is a market in its early stages of development and offers better risk to reward than the more mature markets that surround it.
Slovenia has a wide range of property investments to suit all tastes and budgets.
Property for sale in Slovenia with good capital growth potential can be bought from under $50,000 in many areas.
You can invest in ski apartments in areas such as the Julian Mountains, or in traditional country houses near the vineyards or finally, in the expanding urban areas.
In Conclusion, Slovenia Offers property investors:
A great opportunity to invest in a stable and growing EU member.
Slovenian property investment offers above average capital growth potential combined with significant rental income from “the buy to let” areas and finally, being an emerging market it’s highly affordable.
In part 2 of this article you will find some of the best new emerging destinations to buy in and also an in-depth look at the buying process.
Discover more about Slovenia and Slovenian property investment and see how it could change your financial future.
February 28th, 2010
posted in Property Investment
Investing can be defined as the resources with the expectation of some satisfaction or profit in return by putting forth an effort. By Investing we will invest more into our future, not just as a state but also as a society.
Investing money is different from saving money, as in that money that is invested is committed for a period of time with a sure risk for the purpose of earning a financial return. The concept of saving money merely means to put it aside as a store or reserve.
Your goal in Investing could be to make the greatest return possible resource within the shortest period of time without losing any of the principle amounts you have originally invested.
Many people are afraid in Investing their hard earned money because one of the most leading reasons for this fear is ignorance. People should understand that the more they learn and understand the better equipped they will become to make wise decisions as a money manager for Investing.
Why Investing can be Important?
While Investing one of your key responsibilities is not only to provide for yourself and your family, but resource within the short term but also to trait within the long term. Unlike saving money, Investing will always be associated with a risk factor.
The degree of risk is dependent on the Investing option you choose and is typically proportional to the potential return of the investment. The old saying, “If it sounds too good to be true…” it typically is. Each person has a different tolerance for risk. You would never be Investing in things that make you lose sleep at night.
Mainly due to the negative effects of inflation, it is the opinion of many people that making the choice not to invest is the greatest risk you can most defiantly make with your savings. Inflation is the single greatest threat to your future financial well being in Investing. It results trait within the constant, steady erosion of money’s value.
When to start Investing?
To start Investing, time is your greatest asset element within the accumulation of wealth. You could begin to invest as soon as possible but not until you have built a solid financial foundation for yourself. Investing requires a long-term commitment.
The money you allocate to would not be money that will be required for many years. To trait within the event of a major depressing financial situation, you definitely wouldn’t want to be forced to withdraw money that has been allocated in a long-term investment to meet the requirements of a short term need.
Thus, it is imperative that, no matter what may come, your financial foundation must be strong. As a minimum, you would eliminate all of your consumer debts like the credit cards, student loans, furniture loans, auto payments, etc and build an adequate cash emergency account.
In many cases, for Investing if you or someone that understands and has the expert knowledge to start your investment program while you still have existing consumer debts then it is similar in effect as to borrowing money to make your investments. The greatest risk free return will always be to pay off the existing consumer debts before committing your money to Investing needs.
Where can Investing be done?
Usually, there are an unlimited number of Investing opportunities. The investment selections would include a moderate level of risk in exchange for a reasonable rate of return keeping in mind the maximum degree of diversification. It is most important to understand if you are ready to begin Investing, then your first plan could be one that is qualified by the IRS.
The Qualified savings plans are those that are designed by the IRS (government) with sure tax advantages to encourage citizens to participate in a long-term savings program. The basic qualified plan that is available to all the people that have earned income is the Individual Retirement Arrangement (IRA).
An IRA can consist of many numerous styles of Investing plans. It can either be a mutual fund, a certificate of deposit (CD) at a local bank, or a number of other options. An IRA comes in three different forms:
1. Long-established Deductible IRA
2. Most common Nondeductible IRA
3. Roth IRA
Investing today, has given a wide range of choices like the stocks, bonds, mutual funds, treasury securities which include savings bonds, options, commodities, commodity futures, real estate investment trusts, also known as the REITs, variable annuities and many more.
Those who have thought to invest must investigate before and remember that every single investment involves some degree of risk. These securities are not insured by the federal government if they fail, even in general speaking, if you or someone that understands and has expert knowledge purchase them through a bank or credit union that offers federally insured savings accounts, then make sure you have answers to all of these questions before you actually start Investing.
February 28th, 2010
posted in Investment News
Defined within the realm of the statistical Bell Curve, the long tail would reside in the skinny tail at the borders. The long tail, in regards to goods and services, refers to the evolution away from mainstream offerings towards more niche products and services. With the internet drastically reducing the costs of establishing distribution channels, the ability of entrepreneurs to focus more on the longtail sector to fit their customized needs is gaining increasing appeal.
However, almost no one speaks of the longtail of investing. To me, longtail investment strategies are the strategies that do not heavily rely on fundamental or technical analysis, but exploit other strongly predictive factors to produce not only superior returns to traditional investment strategies but also investment opportunities with far better risk-reward paradigms than those produced by traditional investment strategies. Here are 10 reasons why the longtail of investing is the only way to build wealth.(1)You will never achieve the level of wealth you desire by handing your money over to a large investment firm.
The vast majority of private investors hand their money to large institutions and allow them to invest their money for them. If this were truly the best way to achieve financial freedom, then almost every one you know would be ecstatic with their financial consultant. Think of how many people you know that absolutely rave about their financial consultant.
The fact that 90% of people you know do not rave about their financial consultant should tell you that niche investment strategies, or longtail investment strategies, are far superior. The ones that are happy with the large investment houses already were independently wealthy before they sought out their help. Think about how many people you know that have ever told you, “I wasn’t wealthy before, but thanks to my investment firm, I am wealthy beyond my dreams now.”(2)Thanks to evolving information technology, there are many better and more highly predictive means of making investment decisions than just utilizing fundamental and technical analysis.
Though people have been really slow to grasp this, once they do, longtail investment strategies, like those invented by SmartKnowledgeU, will boom. There is no doubt that the level of top-notch financial, political and corporate information available to the average investor has increased by leaps and bounds within the past decade.
There is a virtual treasure map that was created by the flattening of the world over the past decade to selecting stocks that are poised to explode. However, because the largest, most powerful investment institutions in the world have kept the masses of investors fixated on traditional investment techniques such as value and fundamental analysis, the longtail of investment strategies is currently much further behind in its developmental phases than it should be.
The best analogy I can use when explaining why people have ignored the long tail of investment strategies is to compare it to the incredibly slow adoption of Internet Protocol Version 6 (Ipv6) by the United States. When China started preparing its country for Ipv6 a decade ago, the benefits in increased security and its added value properties in e-commerce were evident even back then. However, people in the U.S. were comfortable with the lesser Ipv4 so did not take any action until the progress and superior internet and business capabilities of China, Korea, Taiwan, and Hong Kong finally embarrassed the U.S. enough to move forward and catch up with Asia.
I see the same thing happening in the educational realm of investing. Everyone is comfortable with the traditional investment strategies that have been propagated for the last several decades so nobody sees a need to move forward even though much better strategies exist today. Just as with Ipv6, the world will eventually realize that the safest and best means of investing money reside in the longtail, and they will eventually adopt these strategies.(3)With so much investor skepticism of corporate integrity sparked by past accounting scandals at Enron, WorldCom, General Motors and the like, and the current, ongoing backdating option scandals, investors will increasingly seek alternate means of making investment decisions other than crunching numbers that they feel are untrustworthy.
Furthermore, technical analysis often yields false positives as well. A chart will show indexes that appear bullish having just broken through a ceiling of resistance only to have the index turn back downward for a prolonged period of time, or a chart will appear bearish having just broken through a floor of resistance only to turn around and begin another bullish ascent.
In fact, you have seen some of these turnaround trends with some of the technical posts that I’ve placed on my blog in previous months. In fact, that is why I always state that I never rely solely on technical indicators to make my decisions. I rely only on technical indicators to confirm or dispel what my long tail investment strategies tell me. Of the three types of analysis, fundamental, technical and long tail, long tail investment strategies yield by far the least amount of false negatives and false positives. That’s why I rely on them so heavily.
This sentiment will lead to an evolution of longtail investment strategies, and the discovery of more efficient and better predictive means of making investment decisions than even those that already exist. Even current longtail investment strategies, such as those utilized at SmartKnowledgeU are constantly evolving as access to reliable information increases every year. Making decisions as if you were a fly on the wall of boardrooms is no longer a fantasy. It is possible, thanks to the evolution of the information landscape.(4)With the growth of blogs and pure information sites on the web, the stranglehold of global investment myths, including the Modern Portfolio Theory of diversification, will soon be exposed for what they are – cleverly disguised sales strategies posing as investment strategies.
Once people realize this, longtail investment strategies will gain wider acceptance, much like acupuncture and herbal medicine eventually gained credibility as healing regimens in the schools of Western medicine.
The new information age has stripped many accepted investment strategies such as diversification of much utility when attempting to build wealth. Furthermore, it has also rendered such beliefs as an inability to time the market and the efficient market model as mere myths. This has been proven time and time again by investment sites such as SmartKnowledgeU that have called for steep market corrections in certain global markets and in asset classes like gold with consistent accuracy.(5)Wider acceptance of alternative, longtail investment strategies that far outperform those utilized by global investment firms will happen as word of successes via these strategies spread throughout the world via the internet.
The internet distribution channel can and will be used to change the mindset of investors.(6)The Do-It-Yourselfers are Growing – With the success of books such as Stephen Covey’s “The Eight Habit” that emphasize personal accountability to achieve excellence versus handing control over to someone else, cultural shifts will happen whereby people will seek to seize control over their own financial future versus just handing their money to a firm to manage.
As this cultural shift happens, multitudes of people will realize that they are shorting their returns significantly every single year by handing their money to global investment houses.(7)The flattening of the world and accessibility to previously inaccessible investment information will undoubtedly yield an increasing amount of investment strategies that reside in the longtail.
People will realize the foolishness of believing in the one investment strategy thrust upon them by global investment houses for the past half of century as “the only viable and safe way to invest.” If the younger generation takes an interest in investing, adding their creativity to the investment arena will result in explosive growth in the longtail of investment strategies. However, since the odds of this occurrence are quite low, a more gradual shift towards niche investment strategies is much more likely.(8)The explosion of social networking sites like YouTube, MySpace, Friendster, Squidoo, Digg, and so forth, will amplify the viral marketing of longtail investment concepts.
Again, ignorance of longtail investment strategies causes fear and hesitancy to use them. Viral marketing of longtail investment concepts will increase millions of investors’ comfort level with these different and unique concepts.(9)People are ultimately interested in returns, no matter how much global investment firms try to separate themselves from their competitors with smoke and mirror service claims.
All the gratitude for luxury box suites at Los Angeles Lakers games, suites at the Four Seasons Hotel, conferences at world-class golf courses and resorts will quickly wither once people realize how much more money they are earning with longtail investment strategies.(10)Again, because people will readily abandon all the perks they get as a preferred client at a large investment firm for far superior returns on their portfolios, longtail investing will eventually reach a critical mass.
Eventually the longtail of investing will migrate towards the center and become the mainstream methods of investing, though this may take several decades to occur.
February 27th, 2010
posted in Investment News
Smart investors know that overseas property investments can yield 25-100 % returns if properly managed. One intelligent measurement to lower risks is to lock in the the value of the investment property with the help of third parties so that if the value goes down you will be able to sell the property to them and not loose a penny.
An example would be buying a international property, if you pay 80K and the market value falls to 50K, having locked it’s value through a third party you can still sell it for the original 80K, now if on the other hand the property appraises at a value much higher than what it was originally purchased for, all you loose is a small lock in payment but made a substantial profit.
This is a different way of investing compared to other markets, as you may be able to deduct the advantage is that you are able to lock in “the risk” at a set level in exchange for a small payment which represents the maximum loss you are willing to take. This way overseas property investors have a high leverage when investing in foreign real estate.
The best way to invest in foreign real estate listings is to select an established or “currently in development” market, as well as making sure that the laws in such places are favorable to foreign investors. Good investment markets which fulfill these conditions are Dubai and Cyprus.
Cyprus property can be obtained after completing a “permission to purchase” application with the Council of Ministers. This is a step every foreign investor must complete, in order to purchase property in Cyprus which is not very restrictive. An investor can purchase up to four thousand square meters of land and an additional house or apartment.
Similarly, buying Dubai property offers many advantages due to the fact that real estate prices keep increasing because of the high demand these properties have. The demand increased radically back in 2002 when the crown Prince made an announcement which allowed foreign investors to purchase property. Due to local tax and business advantages this particular market blossomed and it’s now a great place to develop any business idea.
Real estate investments in foreign countries offer great ROI “if and only if” the investor verifies local laws pertaining to properties and business. Always remember to diversify your investments, even if you are investing in a relatively stable market.
February 25th, 2010
posted in Property Investment
Most people don’t think they can own gold bullion, but they would be wrong. With the tough economy that everyone is facing today, investing in gold seems like a good idea. But how do you get started? Can anyone do it?
The answer is YES! Gold is a great investment when the economy is doing poorly. Gold prices tend to increase when the economy is unstable. Just remember that gold bullion is a long-term investment. Gold has an intrinsic value that most paper currencies cannot compete with over the long run. Currencies are subject to inflation more than gold bullion. The best way to protect your money is to keep money in gold.
Now that you have decided to do some gold investing, you should understand that gold is a physical commodity and unlike paper money has value even if the stock market collapses. You can buy gold bullion coins and/or bars. The bullion usually comes in one oz increments and is usually approaching 100% pure. Many companies on the Internet can help you to choose which type of gold bullion to buy and can do it for you for a very nominal charge.
Different countries offer different gold bullion coins that you can invest in. In the US, the American Gold Eagle coin is very popular. Canada has a Maple Gold Coin, China has the Panda Coin, and other countries offer different choices as well. Some countries have tariffs on the import or export of certain types of gold so be sure to check out the restrictions. Depending on where you live, you may be able to take advantage of certain laws that allow 22 carat or higher gold coins to be Value Added Tax (VAT) free!
Conduct research to ensure you are purchasing gold from a good company. Use common sense and never invest more than you can afford to lose. Gold Bullion is a great investment if you plan for the long-term. Anyone can buy gold bullion, not just the extremely wealthy!
February 25th, 2010
posted in Gold Investment
Property investment in the UK has witnessed massive growth over the last decade.
A house bought 10 years ago, would be worth around 300% more today. If you were to look at house price growth over a longer period, youd be amazed by the results. For example, if you had bought a house in 1952, today it would be worth around 90 times more!
At an average growth of 8% per year, a house bought today for 215,000 pounds would be worth in excess of 1 million pounds in 20 yrs! 10 houses bought today for 215,000 pounds each would be worth an unimaginable amount!
Even today, as the market shows some evidence of slowdown, there are pockets of above average growth in certain towns and villages across the country. Its the job of the property investor to hunt out these areas and milk them for all they are worth.
When looking for property to buy in the UK, it is always advisable to do some research before commencing any viewings. Recent statistics on house values in any one particular area, historical data and local trends can help you to build a clear picture of the suitability of any one location for investment purposes.
A common misconception among novice property investors is that you can only really make money in property when house prices are going up in value. In this scenario, you would buy a property for x amount and resell shortly after for x+growth amount, pocketing the difference in value. If the market was flat, your property would still be worth x several months later, i.e. exactly how much you bought it for. When house prices are going down, your property would be worth less several months later, e.g. x-growth.
However, any experienced investor will tell you that you can make money from property investment regardless of whether house prices are increasing, decreasing or whether the market is flat. By buying well below market value, you would safeguard your investment from any short term economic trends that would normally affect your propertys value. You would also gain immediate equity in your property investment.
When deciding to embark on a career in property investment, as with anything else, you need to educate yourself. You can do this by attending seminars, attending courses and meeting others in the same field. Talk to real estate agents, brokers and lenders to gain a good basic understanding of current and future trends in property investments. Furthermore, take advantage of free online courses and material to learn the ins and outs of property investment.
Property investment is not rocket science. By learning and applying just a handful of basic principles, theres no reason why anyone cant benefit from the UK property investment market.
February 24th, 2010
posted in Property Investment
In the world of investing there are many different investment vehicles and strategies but they can be split into three broad categories. The advantage of thinking from this point of view is that it makes it easier to decide which form of investing or which combination of investing will best suit you.
Let’s have a look at the three broad categories of investing and look at the advantages and disadvantages of each.Passive Investing
Passive investing is when you put the investment decision making into the hands of someone else, ideally an expert investment manager.
The advantages of passive investment are that you are not required to have any investment expertise and you don’t have to invest your time, only your money. The disadvantages are that firstly you have relinquished your control over your money and secondly the returns for these types of investment are usually uninspiring.
Common examples of passive investing are savings accounts, government bonds, property trusts and mutual funds. Most people invest for their retirement under some form of passive investment that usually has special tax concessions which vary from country to country.Active Investing
With active investing you take an active role in managing the investment. This form of investing could have a long term focus such as a buy and hold share portfolio or it could be a short term focus such as futures trading.
To do well in active investing you need to have considerable knowledge of the investment vehicle or vehicles that you are using. You also need to understand the basic principles such as when to collect profits, when to cut losses and how to analyze the market. You also need the emotional strength to apply these strategies as required (this is often the most difficult aspect of active investing).
The advantages of active investing are that you have greater control over your investment than you do with passive investing and the potential for profit is theoretically higher. The disadvantages are that you need to invest time in acquiring knowledge and skills and in managing your investments and also that the potential for loss is also generally far greater than in passive investing.
Common examples of active investments are share, options, futures, and currency trading, buy and hold share portfolio building, buy and hold residential or commercial property, and property trading.Creative Investing
With creative investing you actually change the investment in some way that is designed to manufacture profit. This form of investment requires a lot of skill and experience but if you have that skill and experience then you can create huge profits by being able to visualize what your investment could be once you have applied your imagination to it. For this reason creative investing is often described as turning thought into money.
For example if you are a property developer there is a huge variety of possible developments that you could design and build on a particular piece of land. Amongst that huge set of possibilities there are also a huge range of potential outcomes ranging from high profit to huge loss and including all the points in between.
The advantages of creative investing are that it has the highest profit potential and the highest degree of control and flexibility. The disadvantages are that it requires the highest degree of knowledge, usually involves borrowing large sums of money and also has a huge potential for large losses if you get it wrong.
Common examples of creative investments are property development, property renovation, business renovation and new product development and marketing.
When you are deciding which of these three broad categories best suits you need to consider your knowledge and experience, your strengths and weaknesses, your access to resources, including time and money, and in particular you need to consider your personality including your time management skills, decision making skills, tolerance for risk and your self discipline.
There are of course many expert consultants to help you in each field and many sources of knowledge and experience to tap into.
I hope that this article was useful in helping you see where the various types of investments fit into the scheme of things.
February 23rd, 2010
posted in Investment News
If soaring gold prices makes you feel good and you are thinking of cashing in on this trend in 2010, then read this article to know about another investment that can rocket faster than gold in 2010 and give you 3 times more ROI as compared to gold.
Investing in gold right now can be a good decision but this other investment that also luckily happens to be a metal can be three times more profitable. Guess the name of this metal! Yes, silver, you are right!
What’s so special about gold and silver. Gold has been ingrained in the human psychy as the thing of beauty as the ultimate wealth. Throughout human history, people have been hoarding gold. The same phenomenon has not taken hold of different countries. Dollar has become weak due to the recent financial crisis that the world experienced. Countries like China, Russia and India want to hedge their international currency reserves most of them being in US Dollar. So, they want the ultimate currency, “gold.” This way these countries think they would be safe in case of a major Dollar devaluation that might take place in the unforseen future. Silver is also being bought as both gold and silver have been used to mint coins from times immemorial. This trend of buying huge quantities of gold and silver is driving their prices sky high. Remember the time in 19th century when the world was on the gold standard. Countries would keep gold and silver as international reserves. We might be headed back to that time!You never know. No one knows the future. No one could predict the birth of the present currency markets that took place in 1973. No one knows the future of currency markets! Now, gold and silver respond to almost the same fundamentals. When gold prices go up, silver prices will invariably follow.
Silver or the while metal is experiencing many other forces that can force the prices of this white metal to rocket even faster than gold even beyond those driving megatrends the while metal shares with gold.
Silver is widely used in coin minting, electronics, photography, plastics, soldering (joining two metal pipes), computers particularly notebooks and laptops, refregerators and even dishwashers. So, as you can see, the demand for silver is on a much higher level as compared to gold. Without silver, many industries will come to a grinding halt!
What this shows is the supply of silver is even more limited as compared to gold. The best way to profit from investing in this gold and silver rush that is going to happen in 2010 and beyond is to purchase gold and silver calls or trade gold and silver futures.
Now, if you have never traded futures contracts, you might think about learning how to trade futures contracts especially gold and silver futures contracts. This way, you can profit from the volatility in the gold and silver markets. Futures trading is risky no doubt but for those who don’t want to get good training before they start trading futures. What you need is to open a practice account and start paper trading gold and silver futures. This way, you will be in position when the great gold and silver rush starts again1
Now, as I have said earlier, you can also invest in gold and silver mining companies by buying their stocks. This is exactly what many people did in early 1970s when the last boom in the gold and silver markets took place. Many became rich in a few years. The same gold and silver boom is coming in this decade that started a few days back.
In 1970s, silver went from $1.29 in 1970 to it’s zenith $49.45 in 1980. This was a percentage gain of 3,733%, something astounding! Many of you might be thinking that 1970s is a great story but now distant memory and just a daydream now. The wealth building power of gold and silver might be beyond us.
Now, I give you the example of Lion Mines. You could purchase it’s share for jut 7 cents in 1976. By early 1980s, it was worth a staggering $380 per share. By just purchasing $184 worth of it’s stocks in 1976, you could have easily made a million in just under four and a half years. History is going to repeat again with silver in the new decade!
February 22nd, 2010
posted in Gold Investment
Recently, there was an article on CNNMoney that spoke about the “secrets” of the elite rich in the United States. In turn, several articles were written about this article, including one that stated that the richest of Americans “built their wealth with diversification, wealth preservation and strategic growth.” That is a ridiculous statement in itself because two of those strategies, diversification and preservation don’t help build wealth. Perhaps the richest of Americans use these two strategies to maintain an even keel AFTER they have accumulated great wealth, but certainly they didn’t use them during the accumulation phase. According to this article, a survey of Northern Trust uncovered that the “richest Americans do not heavily rely on high-risk investment vehicles like hedge funds to make money, but are moderate risk takers who put more than half of their asset allocation into U.S. stocks and cash.”
Again, just as former hedge fund manager and multi-millionaire Jim Cramer said that he used certain financial journalists, including ones employed by the Wall Street Journal, as pawns to spread misinformation far and wide to benefit himself, again this is an example of investment institutions using the media as pawns to spread their myths to keep the masses of retail investors ignorant. The CNNMoney article made it appear that the richest of Americans built their wealth by being conservative and slowly growing their money over time. That’s an oxymoron right there. To state that the rich became rich by slowly growing their money over time. Well, if they are slowly growing their money and becoming even richer, then this implies that they were rich to begin with. So how did they accumulate wealth? Surely not by “slowly growing” their money.Sure, some of the “richest Americans do not heavily rely on high-risk investments” because they ARE ALREADY EXTREMELY RICH. The majority of ultra-rich do NOT build their fortunes by speculating on high-risk investments as is commonly believed. Often they build fortunes utilizing volatile assets and investments but that does NOT mean they were engaging in risky behavior. Many times, investing in a hedge fund can be much riskier than investing in some of the assets that your investment firm will tell you is “risky”. But investment firms will gladly place a portion of your money in hedge funds because the fees they earn from hedge funds are so high even as they advise you not to put your money in a much less risky investment with much greater earning potential. And THIS IS THE SECRET that investment firms never tell you.Volatile assets that often can be used to build great wealth are NOT RISKY if they are purchased at entry points that are extremely favorable and provide a low-risk point of entry. 99% of investors don’t understand what high-risk investments truly are because they have been misinformed by their advisors and their firms for the past half of a century. Purchasing volatile assets at low risk-high reward entry points greatly mitigates and neutralizes the great majority of risk of volatile assets. If you don’t understand this concept then you need to.
Many millionaires that are wealthy but that could be extremely wealthy fail to build enormous wealth because investment and financial institutions mislead them about certain investment opportunities and describe them as complex and risky and are able to convince their clients of this belief because they never properly explain risk-reward scenarios to their clients. However, those investors that are extremely wealthy are the rare breed that understand this concept. If investors had a choice between allocating $1,000,000 in a historically volatile Investment A that has a 78% chance of returning a 250% gain versus an Investment B that has a 95% chance of earning 9%, most investors would choose Investment A.
However, because Investment A may exhibit 50% more volatility than Investment B, the great majority of advisors would steer their client away from the former investment into the latter one. In fact, this is exactly what even “prestigious” firms that cater to ultra high net-worth clients do because they allow misinformed, uneducated investors dictate the rules of engagement to them, and they would much rather appease such powerful, important people with slow,minimal gains rather than empower and enlighten them and boost their returns like never before. They would choose to steer them away because they present the investment opportunities incorrectly, merely telling their client that while they could earn 350% from Investment A there was also a very realistic probability that they could lose $300,000, and that shooting for the slow but steady $90,000 a year is much better for them.
If you are thinking to yourself, “That makes absolutely no sense?” Why would firms not earn 20% a year for their clients if they could instead of 8% a year? The answer is because the overwhelming majority of investment firms, no matter how prestigious their brand, are merely highly glorified sales machines. They fail to convince clients to invest in phenomenal investment opportunities that sometimes arise like Investment A because in order for Investment A to be a moderate risk, very high reward investment, it must be entered at a low risk entry point so that the probability of being down $300,000 at any give time would be reduced from perhaps 50% to 20%.
And that even if their timing is not optimal, then a firm must educate the client that as long as they don’t panic when they are down, the odds are still extremely high that they will earn a 250% or better gain. However, the greatest factor that determines why firms will not seek this strategy is time. Engaging in much better strategies such as these for their clients would take massive amounts of time in client education and enough time in research that the amount of assets gathered would take a serious hit.
So because it is not in a firm’s interest to engage in activities that maximize portfolio returns (unless it is their own institutional portfolio), instead, we have Chief Investment Officers at top investment firms making statements like, “”Generally they [the richest of Americans] want to see prudently managed growth without a lot of surprises, which is why we emphasize diversification.” Again, this is a sales & marketing campaign statement, not an aboveboard statement about how to make money for clients.If clients are uncomfortable with strategies that would actually built great wealth for them instead of producing mediocre or subpar returns, their discomfort only originates from the fact that the largest investment firms have been deceiving their clients, just as Jim Cramer had deceived the thundering sheep herd for years, about the realities of building wealth. This discomfort originates solely from the fact that he or she has been kept in the dark for so long. Thus, we have a misinformation-driven cauldron of investors making bad investment decisions that exists today. In 2007, you’ll still find Chief Investment Officers of very well known firms making ridiculous statement that investors need to invest at least 50% of their stock portfolio in U.S. stocks if they wish to grow their portfolios exponentially.
How are they going to grow their portfolios exponentially with more than half of their stocks in a stock market (the U.S.) that has NEVER been the best performing market in the past 25 years (even among developed stock markets)? How will they grow their portfolios exponentially by buying stocks in market that trades in what is quite possibly the worst currency on earth among developed markets (the U.S. dollar)? Yes I know that when the U.S. dollar shows a brief spike in strength as is likely to happen soon (I’m writing this article in April, 2007), that many people will question what I am saying, but this is only again because they are victims to the mass deception mind-games of the investment industry. I suppose if planning to earn better than subpar returns in your stock portfolio is engaging in risky behavior as Chief Investment Officers of various firms claim, then yes, I whole-heartedly endorse engaging in risky behavior.
And because so many people, yes, even those considered quite wealthy, fall victim to the preaching of investment industry demagogues, there is a second mistake that many rich investors will soon make.
Another survey of wealthy U.S. investors uncovered that a large percentage of investors with investment assets of over a million do not employ any type of investment advisor but plan to do so soon giving the increasingly gloomy nature of the U.S. stock markets. To that, this is what I have to say. Making money in difficult markets is ten times more difficult than making money in bull markets. If investors believe that it will be increasingly more difficult to make money in U.S. stock markets, but yet top investment firms in the U.S. continue to preach that more than half of your portfolio should be in U.S. stocks (mostly to cover their respective firm’s inadequate coverage of emerging markets), how is the hiring one of these men possibly going to improve these investors’ future performance outlook?But there is an EXTREMELY important distinction to be made here. What I’ve written above applies to the behavior and mindset of some of the richest people in America, but not THE very richest people in America. The very richest people in America, those you might categorize as the world’s ultra-rich, possess a very different mindset and behavior set than those that are just rich. The ultra-rich have positioned their portfolios extremely differently from how the rich people discussed above have positioned their portfolios. The reason why articles regarding their behavior and investment decisions are virtually non-existent is because they don’t grant interviews and they don’t want people to know what they are doing. But I’ve investigated what they are doing, and trust me, it is nothing remotely similar to the behavior of wealthy investors described by Northern Trust and other investment firms.
If you would like to find out why the ultra-rich always manage their own money or able to find the 1 in a million consultant truly capable of providing them the returns they desire, consult our resource of “101 Reasons Why Managing Your Own Money is the Only Way to Build Wealth.” Even if the ultra-wealthy have someone managing their money for them, the only way they were capable of finding this 1 in a million financial consultant was due to the fact that if they had to, they could manage their own money successfully as well. Only be first fully understanding the most successful investment strategies themselves could they identify an advisor capable of employing such strategies. However, a great majority of ultra-wealthy continue to handle and make their own investment decisions.
February 21st, 2010
posted in Investment News
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