Not only was ‘feel good’ film Mamma Mia a box office huge success, but it has also contributed to an increase in the tourism industry in Greece.
After the crowds had seen the movie- which was released last summer- a lot of people became interested in buying property in Greece. According to The Move Channel the number of potential buyers has skyrocketed by 120 per cent following the release of the movie !
The movie was shot in a beautiful and virtually unknown island- Greek island of Skopelos where there is not even an airport !
Since the release of the movie more and more internet users have been looking for property investment opportunities in Greece. There has also been a dramatic increase in the number tourists who are looking for a low cost holiday destination, where the sun is often shining and the temperature is warm.
Greece takes advantage of a pleasant climate and a very low cost of living- two very important factors which is attracting many tourists and potential buyers.
The potential buyers can get a very profitable property investment because property prices are relatively low-cost. In addition dynamic tourist industry means that, you can rent out your property during the long season- from April to October- and get a high return of your investment.
According to Paul Simmons, Easyjet UK General Manager, the low cost of living and the affordable property prices will encourage you to invest in Greece, even if the world economy is in a recession.
April 6th, 2010
posted in Property Investment
Until recently gold prices have been on a tear. After decades of going nowhere, gold has had a year of steadily rising prices, that is until two weeks ago. It appears the hedge fund investors who bid the price up, have decided to take their profits. Gold prices plunged and many financial analysts have proclaimed that the bull market in gold is over. Is it?
Price charts are one way to look at the situation, however we need to dig deeper into the fundamentals to see what the prospects are.
As the hedge fund investors have dumped gold, there is evidence new hands are coming into the market. As some investors leave, and new ones replace them, the volatility in gold prices will remain high. What we need to ask is are these new investors speculators or is there some fundamental reason new investors are coming into the market?
Lets start by looking at the retail investors. One important component of the price of gold is the retail investors in India, China and West Asia. Traditionally these investors have bought gold in the form of jewelry. Jewelry demand in these countries does have an impact on gold prices. The significant point here is investors in these countries are now accumulating gold in forms other then jewelry. In 2005 the investment demand for gold in these countries has risen from between 20% and 34%. The strong demand continues into the first quarter of 2006. During this same period of time, demand for gold related Exchange Traded Funds has risen 23%.
India is the largest buyer of gold in the world. Indian investors will soon be able to buy gold ETFs on Indian Exchanges. There is also a strong demand for investing in gold coins in India.
China has not had a strong interest in investing in gold for anything but jewelry. That may be about to change. The government is easing regulations that may encourage more investment in gold products.
Interest in gold investments is also increasing in Thailand. Demand for gold investments in that country has been hovering around 10%-15% until 2005. In the past year investment demand in Thailand has risen to 35% for gold.
The supply of gold remains tight. The demand across Asia is increasing. It is likely we will see supplies tighten even more which will again begin to drive up prices. The next wave up will look different. After having seen prices plunge, investors are likely to take profits much quicker this time around. Prices will begin to go up again, however there will be significant pullbacks as investors take profits.
Gold investments will also continue to be fueled by Energy price increases, increased inflation in the US and world tensions. Federal Reserve Chairman Ben Bernanke said that growth in the inflation rate could be worse than expected. After that remarkstocks in US markets dropped. This could bring investors back into gold.
Several financial experts in India are looking for gold to go to $770- $800 by the end of 2006 or beginning of 2007. Currently the price is around $635 an ounce. It is not clear if we are at the bottom prices yet. Prices will rise, but this ride will not be for those with weak stomachs.
April 6th, 2010
posted in Gold Investment
Most people, at least, in the West, know that art can have value. After all, they have been reading about Van Gogh, Picasso, or Klimt paintings selling for millions of dollars for decades. However, most people do not know that you do not have to be a millionaire to invest in and make money from art. Art is simply another investment asset class that savvy investors include in their arsenal. Therein lays the key to understanding.
The sad truth is, also, that most people who invest in the more common investment assets, like stocks and bonds, do not understand investment in those more common investments. I always hear people talking about “playing the market”, yet, as any professional investor will tell you (it just so happens that there are so few that odds are that you never met one), although it is a game, it is not a game for novices.
The first person to formalize a mathematical framework for economics and finance was John VonNeumann, a mathematical physicist, who invented game theory as the basis for studying those fields, in the early part of the twentieth century. Indeed, until the 1980′s, most of economics and finance sprang from this basis, and the focus was to assume, just like in playing dice with perfectly symmetrical cubes or flipping a so-called fair coin, that investment was a fair game: there was equal probability of gain or loss and the distribution of outcomes was the bell-shaped curve.
Since the 1980′s the behavioral school has gained ground, in the theoretical realm, by assuming that since people are not perfectly rational, we should examine the actual behavior of people in business and investment situations. Of course, that is something that investment professionals have been doing for centuries. Dow and Jones, in the 1880′s, said, for example, that at market tops the professionals are already well out of the market. After a crash, which will always happen because emotional human beings are markets, professionals quietly begin to buy. Their buying, eventually excites technical market analysts’ technical market indicators, which are somewhat based on supply and demand analysis, in real markets, and technicians begin to buy and recommend buying. Eventually, the general public catches onto this news, which is really very old news, and they jump onto the band wagon. Everyone tells everyone how smart they are and how much money they made yester day trading on-line. Meanwhile the professionals have begun to quietly exit the market. A peak comes; a crash comes. Then, all of those self-proclaimed investment mavens console each other and support each other in their ecstasy turned agony. Some run to the authorities and claim that they were duped because they did not understand the complex nature of the mini-bonds that they bought: translation – they were so greedy when they were told that they could make unbelievable returns, and they did not want to hear about the risks. Another lesson that the theoreticians finally came to admit after the stock market crash of 1987, which, statistically, should not have happened in the whole history of the solar system, was that the distribution of returns is skewed with a longer tail on the down side.
It will be beneficial to understand the basic framework of a market, investing, and basic economics. Economics assumes that people are self-interested. Its only fault is that it assumes that people follow enlightened self-interest: no greed, lying, or cheating. Finance says that there is a difference between price and value: value is what someone thinks that something is worth, while price is the amount that someone actually paid for something. People make markets. A market is not, necessarily a place, like the New York Stock Exchange. Indeed, many people do not even realize that the NASDAQ market is not like the NYSE, it is simply a network of dealers, connected by computers, who maintain bid and ask prices for NASDAQ stocks. This is referred to as a dealer market or an over-the-counter market (OTC), as opposed to the NYSE, which is one physical exchange through which all orders to buy and sell are funneled. In fact, many people do not even know that the NYSE is a very special exchange, in that all of the stocks on the exchange are assigned to specialists who are the only one that you can buy a particular stock from. The specialist maintains an order book of bids and offers, and he has the ultimate in information about supply and demand for his stocks at any moment in time. As part of his job as a specialist, he can invest his own capital, in his stocks. All the other layers of the business that deal with the investing public, after that, are in marketing. A stock broker, for example, is just trying to make commissions when he calls you with a hot tip. Even at the level of institutional sales, salesmen, analysts and block traders are just trying to get commission dollars. None of them risk their own capital. There are also investment bankers who help companies raise capital by issuing new stocks and bonds, and there is a large market effort accompanying that. An underwriter might risk his capital by agreeing to underwrite the deal at a price for leftovers and may support the stock, in the secondary markets, by buying for a month or so.
So, let’s look at the art market. A market is where supply and demand sort out price and volume. Art buyers, collectors and investors make up the demand side. Retail investors are smaller buyers of art, while high-net-worth individuals, trusts, corporations and museums fulfill the role of institutional investor. Art dealers act as brokers, dealers, and investment bankers for art. They act as brokers by taking consignments for sale or request to buy from customers. They buy and sell art for their own account as dealers. By taking on new, undiscovered artists, by having shows for artists at galleries (much like the road show investment bankers do for IPO’s of stock), and by acting as agent or dealer for an artist, they fulfill a role, much like investment banker. Ultimately, supply is limited, depending on the artist. Once an artist is dead, supply is fixed.
Value begins, as in all of economics, with scarcity. It is the same principle that drives the precious metals market, the crude oil market, and the art markets. As with anything else, quality also plays a role in determining an appropriate price. However, also, like with many other things, including any type of investment, marketing plays a major role. Galleries, dealers, and art critics try to tell people what is good and what is bad art. Sometimes, I wonder about their opinions. Other times I have benefited, as in the sale of a table made of roots onto which birds were carved, and as one of only two found examples by this unknown folk artist from the 1800′s. Sale of the table brought over $4,000, back in the mid-1990′s. These art market analysts play the same role as securities analysts, in the stock and bond markets. They might even make buy and sell recommendations, and they might estimate values of artworks. Since art is supposed to make you feel good, your basic starting point should be to look to buy things that you, personally, like, then, check out the price.
In the securities markets, smart investors value things on a comparative basis. Instead of trying to figure out what prices or returns should be, stock analysts use comparative P/E ratio analysis, comparing one company to other companies, in the same industry, and comparing P/E’s of stocks and industries to those of the general market. In bonds, the yield-to-maturity (YTM) of a bond is compared to current market YTM’s of bonds of the same company and to general bonds with similar maturity, coupon rate, and risk. In the same manner, the value of works by an artist can be compared to one another and to those of other artists. Normalization, in the context of paintings, involves an artifice: converting prices to price per square meter or per square inch. One might make similar size normalizations for, e.g., teapot art and sculpture. However, price per unit of size might vary over an artist’s work with larger ones, perhaps, trading for lower price per unit of size, and their more famous works trading at higher price per unit of size.
Having built a comparative pricing system for art, one can compare the prices of one artist to another and the average prices of one artist over, a school, a movement or a period by construction single artist or composite price indexes and looking at their evolution over time. That also allows you to calculate returns since return is defined as the percentage change in price over time. You can compare prices from galleries, which is the retail market. The next layer of the market, much like in other investment markets, is an inter-dealer market. The final layer is the auction market, which in some respects is like the exchanges, in the securities markets, but it is a stop-out market: a market of last resort for sellers. The auction markets are more fragmented than the auction markets, in securities; they are not open every day, either, unlike their counterparts in securities. Price information of one sort can also be garnered from the auction markets for artists for whom there are auction records. There are also research and information services, in the art markets, mirroring similar services in securities and commodities markets.
I bought my first piece by a famous artist, Joan Miro, in the mid-1980′s. I was surprised to find that the price was only several thousand dollars. By the time that I bought my third Miro, I had learned about and used information from the auction record to pay the proper price. In succeeding years I bought art by many famous artists. Although the art that makes the headlines makes it seem that all art is out of reach of the man on the street, you will be surprised to find out that art by many known artists, past and present, is not that expensive. Another little known fact is the good returns that can be made in art, especially when one approaches the market with the tools and techniques as one would in any other investment asset market. During my decades of trading art, in the U.S., I cannot recall a time when I lost money, and returns have always been exceptionally good, especially when compared to returns of other investment assets. I can even recall times that I have continued to earn a profit, in art, even during downturns in securities and real estate markets.
Now, we are investing in and have set up a dealer in Chinese art. I moved to China four years ago to teach finance and economics at South China Normal University. I have been immersed in the Chinese social and economic scene, and I have concluded that the best current market in China, today, is the not the export market or the stock market or real estate, but, instead, the art market. Returns, in art, in China, have been above twenty percent per year over the last decade, in local currency, and the continued undervaluation of the Yuan versus foreign currencies, coupled with other socio-economic factors, make investment, in this market, appear to offer good opportunities over the next several years, especially for foreign investors.
Up through the 1970′s and early-1980′s, investment in stocks and bonds seemed outside the reach of the man on the street. By the 1990′s everyone and their brother was trading stocks on-line through discount brokers. Now that we are in the twenty-first century, the next time you think about art, remember that it is just like any other investment asset, like stocks, bonds, and commodities, it is not outside the realm of investment possibilities for the average investor. Think of the analogies that we have laid out between art and securities investing and markets. You can also find out more information about investment, art, China, and investment in art in China on various parts of our website.
February 24, 2009 Craig Mattoli, CEO, Red Hill Capital, owner of Leona Craig Art, Guangzhou, China
April 6th, 2010
posted in Investment News
Gold has always had its place in many investor portfolios seen as a sef bet carrying intrinsic value. But the precious metal frequently returns to the spotlight in times of financial turmoil. In our latest BizChina 360 series, we look at gold China, its fledgling market, its production, and investment.
Our first installment, we look at dramatic developments over the last 8 years.
In 2007 China became the largest gold production country in the world-toppling South Africa from a position it had heldfor over a hundred years.
It’s an exciting new century for China’s gold market. That’s because in 2007, China became the largest gold production country in the world-toppling South Africa from a position it had held for over a hundred years. China’s gold consumption also grew multifold, and now ranks 2nd globally. And experts such as precious metals consultancy GFMS limited are confident, that the positive trend will only continue.
Philip Klapwijk, Executive Chairman of GFMS Ltd. said “The China market in 2008 will probably be the world’s largest physical gold market, supply, demand, consumption. China will be the world’s largest gold market in 2008; that tells you the significance of the China market.”What may be even more startling is the fact that it has taken less than a decade for the country to get here. Previously, gold was managed under the old system of “unified purchase and allocation”, and was strictly controlled by the central government. The development of the gold market was stagnant, at best.
But 2000 proved to be a pivotal year. Everyone in the gold industry hailed the Chinese government’s move to include opening up the country’s gold market in its 10th five year plan. The basic goal was to gradually loosen control of the market by establishing a new system for gold production, circulation and healthy consumption through market dynamics.
Gu Wenshuo, General Manager of General Office of Shanghai Gold Exchange said “The reform of the gold market was very critical. That’s because gold represented not only a commodity, but also a financial function. It was also related to the country’s gold reserve, and many other issues. As a result, China focused on reforming its gold management system. Under those circumstances, we did thorough investigation of the market conditions, and learned from the experience of other countries. On such basis, the State Council ratified the People’s Bank of China to establish a gold market to adjust gold resources.”So at the turn of the millennium over 20 years after China began to shift towards a market economy, the country finally launched its market reform for the gold industry.
The first step was establishing the Shanghai Gold Exchange, which formally opened for trade in October 2002. For the first time in China’s modern history, the country’s gold price was fully determined by the open market.
Enterprises were no longer confined with limited volume. They were free to buy or sell gold through the exchange, and at a price that was determined by the supply and demand of the precious metal.
The opening up of the market injected vigor into China’s gold industry, and significantly boosted development of mining, manufacturing and investment, and many other aspects. But there was a catch. In the early days, the Shanghai Gold Exchange was offering only spot transactions. As a result, most of the market players were gold miners, jewelry merchants, and other entities engaged in the gold industry. Gold investments such as gold future products were not available. In contrast, 97 percent of the worldwide gold trade was gold futures. So-that led to more development. “But it was not until 2004 before the country came out with more clear guidelines to develop the gold market. Speaking at an international gold summit that year, China’s central bank governor Zhou Xiaochuan spelt out 3 targets for the sector, applauded by many industry insiders.
Liu Yuning, Senior Vice President of Jingyi Gold Co., Ltd. said “The central bank governor Zhou Xiaochuan said the yellow medal should evolve from a solely consumable to investment product, while its trading should change from spot transactions to gold derivatives and move from domestic markets to overseas. From 2003 to 2008, we can see gold transforming into an investment product. When we talk about gold, many will now not only think about gold jewelry, but paper gold and gold trading at the exchange.”For the second target, there have been a lot of changes undertaken through years. After research and preparation, the Shanghai Gold Exchange first launched T+D products in 2004, (which allow investors to bid first but delay the spot transaction of real gold), as a stop-gap to gold futures. The breakthrough came in January 2008, when the Chinese Securities Regulatory Commission ratified the Shanghai Futures Exchange to launch gold futures products.
Li Wenfeng, Trader of Huaxia Bank said “The move has significant meaning. China ranks among top gold producers, but has little impact on gold prices. The launch of gold future is an important complement to China’s financial system. If we further relax controls on gold import and export, we will have more say in pricing the precious metal. Gold future is a good start. For individual and corporate investors, it is a new alternative.”Another important step has been combining the domestic market with the global gold market. The People’s Bank of China gave the Shanghai Stock Exchange the go-ahead to include 5 locally incorporated foreign banks in its membership this June. The Standard Chartered made a Chinese-style debut on August 8th by trading 88 kilogram gold at the Shanghai stock exchange. It hoped the 4 “8″s will bring luck to its future development in China’s commodity markets.
And with current economic climate in such a turmoil, gold has never looked better.
Wang Lixin, GM of World Gold Council of Greater China said “With the increased income level of the population, with more mature of the gold market, with more products availability in the market place, in terms of the unstable financial market and a weaker US dollar, maybe some concerns about the global currency. We believe consumer will have the interest to buy gold.”"I am now at the People’s Bank of China, which serves as the only management of China’s gold system. However, it has now taken off from here to evolve into a very robust market. Many would say recent developments in China’s gold market has been staggering. People may ask how has this happened so quickly? Many credit the country’s macro-economic environment: China’s opening-up policy. The question now is, can it be sustained? Even though experts are bullish about the country’s future gold industry, China’s increased integration with the global economy does make it vulnerable to its highs-and its lows. But the fact that more and more people are turning to gold as an investment channel could spell an even brighter future for China’s gold industry. ”
April 5th, 2010
posted in Gold Investment
Buying real estate overseas is a rather difficult thing accompanied by many organizational details. If you have not purchased any real estate overseas so far, you should know that there are some specific tips you can use in order to not get in the hands of swindlers and in order to make your overseas property investment safe and easy to handle. You can of course apply for the help of local realtors and real estate agents. There you will find the most up to date information and the most profitable offers. Try to escape the offers, which can lead to a perilous investment and negative consequences for your business.
First, you have to invest in real estate only if you want to and to purchase what you want to purchase. Question yourself, why do I want to buy that property? This decision is one of the most important because it is crucial to how much you expect to get from your investment. Do you invest in order to have short term capital gain? Or you invest only to obtain a long term stabile returns? Do you buy the property in order to use it for your own personal purposes such as holiday home or a place for living with your family? What ever might be the answer to this questions, you should manage your funds very carefully and to make the money work for you and for your future. The cost of overseas property investment can vary, from less expensive to extremely expensive. Plus, taking into account some more facts you will make the right choice.
Avoid the hard sell. Do not get trapped by the offers of real estate agents. There are many dedicated overseas property investment exhibitions which display usually the best and the most expensive properties. You should stay constantly focused if you have your original idea. If you want to increase your capital appreciation you better make a purchase in an up-and-coming area. If you made up your mind for overseas property investment, you should take into account where to buy it. For example, such countries like France, Italy and Spain offer many fashionable estates, but of course, the prices are higher than in other parts of the world or even Europe. So you should take into account that the prices for the real estate in that part might not climb rather high, so you might be disappointed by the returns you get. Purchasing in a less-fashionable area of Spain, France, or Italy or in the up-and-coming real estate markets of Croatia, Turkey, Bulgaria and some other countries, where prices are rather low, but the chances these prices to increase are very high, and if the real estate in that region will increase it will increase with a very good rate. Do not hunt hotspots, or fashionable areas, because you could be disappointed by the final returns.
April 5th, 2010
posted in Property Investment
Europe’s largest country by area, Ukraine combines the advantages of the longest border with the EU, some of the richest agricultural lands in the world, large and growing domestic market, as well as skilled workforce with labour rates of one tenth of the European average. The location of Lviv oblast on the crossroad of trade routes from Europe to Asia as well as from Scandinavia to South lands provides the access to 100-million consumer markets of Ukraine, Russia and other CIS countries.
Attractiveness of Lviv oblast is ensured by:- dynamically developing market,- highly educated and skilled labour force that easily adapts oneself to market requirements (150 thousand students graduate from 62 higher educational establishments located on the territory of Lviv oblast annually),- significant share of modern industries in the economy of the oblast, increase in the amount of innovation enterprises, wide network of research institutions,- developed telecommunication infrastructure,- modern market of financial services,- low-expense production base and rich recourses,- International airport “Lviv” as well as transport corridors that run through the oblast’s territory,- unique charm of Lviv city, which is included in UNESCO World Heritage List, and lots of recreation opportunities,- ancient traditions of trade with Russia and countries of CIS,- implementation of a number of international development programs in the oblast.
The priority task of the regional state authorities and local self-governments of all levels is to increase investment inflows to Lviv oblast. The Investment Program Welcoming Investors was adopted in the region. The regional Investment Program will provide achievement of the four following goals of the Strategy of Lviv Oblast Development 2015:
1. Lviv oblast is a region of sustainable economic and entrepreneurial development.2. Lviv oblast is a gateway of Ukraine into the EU.3. Lviv oblast is a region of highly qualified people, innovation potential and technologically advanced companies.4. Lviv oblast is a region of clean and attractive natural environment, culture, tourism and recreation.
The investment policy will be based on the well-defined partnership of the state and private sectors and realized taking into account the following principles:- providing investors with the equal rights and terms for investment activity,- providing investors with guarantees against non-commercial risks (deterioration of investment terms, caused by the actions of state officials or local regulatory documents),- matching potential investors’ interests and tasks of strategic economic development of the oblast,- improving investment infrastructure,- promoting Lviv oblast on the investment markets.
Preparation for Euro 2012 Final Tournament and creation of the possibilities for the implementation of wide-scale and small investment projects are the primary tasks of the Investment Program.The information for investors including propositions of land lots, unfinished construction and other investment projects is available at the official Internet Portal of Lviv oblast. www.invest.lviv.ua
Priority Investment Projects1) Reconstruction of International airport “Lviv”International airport “Lviv” is an air junction in Western Ukraine that provides air transportation between the city of Lviv and regions of Ukraine as well as the whole world. 100 thousand passengers and approximately 40 tons of high value cargo run through the airport annually. The airport is included in 2nd geographical zone of the world air space. The Austrian company Airport Consulting Vienna worked out the concept of International airport “Lviv” development. Modernization of Lviv airport was also included in the State Program of Preparation for the Final Tournament of Euro 2012 Football Championship. The project cost USD 166.1 million, including investor’s contribution of USD 97.2 million.
2) Construction of a stadium in LvivA brand new stadium is planned to be constructed in Lviv within the preparations for Euro 2012. The new stadium will be favourably located 12 km from the city centre, near the hugest residential area within the transport corridor # 5. 25 hectare land plot has been opted for the construction of the stadium, its infrastructure together with car parking. According to the project plan, the stadium will be able to host 40 thousand people and that will allow to play quarter-final games. The project of the stadium was developed by the German company HOCHTIEF. The construction of the stadium and its infrastructure requires USD 290 million investments.
3) Construction and maintenance of Lubelska Mine.Lviv oblast is rich in coke. The project foresees extraction of coal with the help of highly effective innovative technologies. The coal from Lubelska Mine is eligible for carbonization and belongs to the most valuable sorts of “K” mark. Its reserves are reported to be estimated at 86 million tonnes. After the completion of mine construction there will be partly national deficiency for cock coal reduced. General need for investment is USD 400 million.
State and Dynamics of Investment Processes
The trend of stable investment inflows to the oblast’s economy is observed: – for the 9 months of 2007 foreign investors invested USD 164.7 million and that is 2.2 times more than for the corresponding period of 2006.- the total investments in Lviv oblast made up USD 653.2 million. By the volume of investment inflows in Ukraine Lviv oblast belongs to the 10 most attractive investment regions holding 8th position, among the western regions it is ranked as the most attractive investment area.Currently 61 countries successfully invest in Lviv oblast. The most significant investments come from Poland, Germany, Denmark and Hungary. Foreign investments were attracted in 1206 companies of Lviv oblast. By the number of the companies that received foreign investments, Lviv oblast holds the 2nd place after the capital of Ukraine Kyiv. The largest investment inflows were directed to the basic branches of the oblast’s economy as well as its banking sector.
The following cities and rayons of the oblast were the most active in attracting investments:- the city of Lviv – USD 425.1 million or 65.2% of the total volume of investments (Laura Ltd. (Italy) – clothing manufacture, Subsidiary Gangso Ukrayina (Denmark) – furniture production, Merkuriy Ukrayina Ltd. (the USA) – transportation services);- Stryy Rayon – USD 52.3 million or 8.0% of the total volume of investments (Leoni Waering Systems UA GmbH (Germany) – automobile wire systems production, Halychyna Zakhid Ltd. (Germany) – pig farming);- Yavoriv Rayon – USD 35.9 million or 5.5% of the total volume of investments (Provimi Ltd. (Poland) – production of fodder, Yevroshpon Ltd. (Spain) – wood processing).
The highest rates of investment resources increase are expected in the following areas: production of details for machine-building industry, production of packaging materials and plastic items, agriculture sector, cargo and passenger transportation industry. Significant investments are expected in the development of the construction sector and production of modern construction materials. In 2008 the financial and banking industries will be developing as well.
April 5th, 2010
posted in Investment News
Investors today want to know: “Where can I find a legitimate high yield investment with low risk for my money?”
Many people have seen their retirement savings wither in the current global financial calamity. And, as a result, we are seeing an exodus of investors out of the stock markets and into the safest money investments they can find to shelter what’s left of their lifetime savings until the economy stabilizes.
We’re seeing many investors now moving their money into investments such as Certificates of Deposit and U.S. Treasury Securities whose returns likely won’t keep up with the rate of inflation because of their very low yields. But, people are settling for these low returns versus the risk of losing more in the stock markets or elsewhere. They’re scared and many don’t know where else to turn.
The truth is that investors today don’t have to settle for these sub-inflation or break-even investments. They can still find legitimate high yield investment opportunities with very low risk to principal if they just knew where to look.
So, here’s the problem: most people don’t know where to look to find legitimate high yield investment opportunities. They are so ‘shell-shocked’ from their portfolio and stock market declines that they’re scared, cynical and skeptical when presented with opportunities that claim to be “high yield investments”. And, they turn a deaf ear to investments that they might have welcomed in better times.
But who can blame them? We’re seeing a resurgance of Ponzi schemes and other scams, identify theft, etc.
Fact #1: You can still find legitimate high yield investment opportunities today with low risk to your principal.
Fact #2: Many of the richest people in the world today, made their fortunes when the economies hit rock bottom. These investors chose to look for opportunities when the masses focused on despair. They recognized how stock markets and economies are cyclical by nature and they looked to the future.
So, let’s see if we can’t look to the future and spot a legitimate high yield investment opportunity staring at us right now:
Two realities that are public knowledge in America today are:
1) There is a limited amount of undeveloped, raw land available in the U.S.
2) The U.S. population is projected to grow +29% between 2000-2030.
In other words: “We’re making more people, but we can’t make any more land.”
What does this information tell us?
i) We will have approximately 82,000,0000 more people living in the United States by the year 2030. (According to the U.S. Census Bureau.)
ii) These new people will need new homes, new schools, new shopping, new businesses and new communities to support them.
So, what legitimate high yield investment opportunites does this present?
Let’s talk about “Raw Land Development”. Ever heard of it? If not, you should seriously consider learning about it right now.
This situation, of limited supply (limited amount of raw land) and growing demand (population growth) is a fundamental economic illustration of what happens when demand for a product is greater than its supply. By definition, the product becomes more valuable. Yes?
Well, the products, in this situation, would be the new homes, new schools, new shopping, new businesses and new communities needed to support the growing demand created by population growth.
This poses a tremendous opportunity for what legitimate high yield investment? How about “Raw Land Development”, the essential ‘building blocks’ of new community construction.
In December of 2004, the highly acclaimed Washington DC think-tank, Brookings Institution commissioned a research study conducted by Virginia Tech University. This study was titled “Toward a New Metropolis: The Opportunity To Rebuild America.”
According to the study, to accomodate the projected population growth, America’s future raw land development and construction needs require approximately 209 BILLION square feet of new land development between 2000 – 2030.
Estimated cost? $25 TRILLION. And, the bulk of this massive raw land development and construction expansion will be spent in 10 major metropolitan regions, which the Brookings study calls ” Megapolitans”. Plus, the study tells us exactly where these 10 Megapolitans are located.
By the way, this is happening right now!
How can investors profit from this legitimate high yield investment opportunity?
1st) By educating themselves asap about Raw Land Development
2nd) By researching the Brookings Institution study findings.
3rd) By investing in the companies that will be driving this new raw land development growth.
Raw Land Development Investment Benefits:
A) Legitimate High Yield Investment:
A proven investment option is to invest as a ‘silent investor partner’ with a professional raw land development company. The key is finding seasoned, reputable companies in this field.
Professional raw land development companies or ‘land developers’ often seek outside investors as silent partners to raise capital for their raw land development projects. Silent partners have no involvement in the day-to-day management activities of the business, but they share in the net profits of the project. In addition to profit sharing, some professional raw land developers also will pay high yield interest to their silent partners for the use of their money until the principal is returned.
B) Legitimate Low Risk Investments:
It is regular practice for professional raw land development companies to back their silent investor partners’ principal investments with project assets (e.g. the value of the land itself). This means that in the event of a developer default (heaven forbid), the project assets can be sold and the silent investors can recoup some or all of their principal plus any net profits.
In addition, for added security, silent investor partners are commonly placed in First Position for the raw land development project’s assets and revenue. This means that in the event of a developer default, if the project’s assets must be sold, the silent partners will be the first in line to be paid. (Similar to when a bank holds the mortgage or first deed on a home.)
IMPORTANT NOTES:
I. Per industry averages, a professionally managed raw land development project will increase the value of raw land by 2-5 times its original cost. In other words, a professional land developer will typically sell a completed raw land development project for 200-500% more than they paid for it originally as undeveloped, raw land.
II. It is widely held that real estate investment has created more riches than any other form of investments. Taking that one step further: Raw Land Development is the most profitable form of real estate.
III. For these reasons, professionally managed raw land development investment has been the cornerstone for many of the world’s wealthiest investors’ investment portfolios for generations.
Until recently, participation in raw land development projects was restricted to the very rich due to the exorbitant minimum investments required (often $1 Million +).
However, this has changed in the past several years, with some professional land developers dramatically reducing their minimum investment rquirements to allow smaller-scale investors to now participate in these legitimate high yield investments.
April 4th, 2010
posted in Investment News
Gold bullion is the purest gold in the world. It is refined to make the entire bar nearly 100% solid gold. Investing in gold bullion is an extremely smart move. It is a tangible asset that you can trade on the open market extremely quickly. Gold bullion has been a trusted measure of wealth by the United States, Great Britain and many other world powers.When you considering investing in gold bullion, you must be committed to spending a fairly decent amount of money. Gold is one of the highest valued precious metals on the market today. There are many different sources that you can purchase your gold bullion from. Everyone from banks to exchange companies to a precious metals dealer usually has gold bullion that they are willing to sell. Investing in gold bullion bars is affordable for a wide range of investors. This is because gold bullion bars are available in 19 different sizes. These consist of the one gram bar to the enormous London Good Delivery Bar which weighs in at 400 troy ounces. The different sized bars also help you when it comes to selling off your investment. You can sell one bar while still keeping another larger one to generate higher returns on your income.Unlike stocks where a broker can charge extremely high transaction and commission fees, selling gold bullion bars is simple and exceedingly inexpensive. If your bar of gold bullion bears the mark of a recognized refiner you can easily sell it on the open market. Polished gold bullion bars and those bearing marks of select refiners can further increase the price of your gold bullion above that of market values. While gold bullion bars are a wonderful investment, you can also invest in gold bullion coins. The gold bullion coins are very simple to invest in. They almost always come in one troy ounce. They are pure gold, which means that you can check their value by reading your local newspaper’s business section and looking for the gold value. Gold bullion coins do have a downside, they are traded at a premium of approximately 7%. However, this can often be recovered during a resale. Gold bullion coins are small, easily stored and come in a standard weight that is easy to keep track of. Investing in gold bullion coins or gold bullion bars can diversify your portfolio and bring you a large sum of money.
April 4th, 2010
posted in Gold Investment
Investing in property in Dubai is the smart and obvious choice, especially following on from the passing of Law Number 7 that allows for the ‘foreign freehold ownership of property’ in certain designated areas in Dubai.
However, there still remains an underlying factor which may seriously reduce the allure of Dubai: the rate at which inflation continues to grow and the cost of living ever on the increase.
An example of this inconsistency in inflation rates and sheer immense expense of cost of living in Dubai is apparent when one takes a look a the cost of privately educating a child – in the UK it’ll set you back upwards of GBP 46,000 annually but in Dubai you can almost double that figure which inadvertently makes it even more expensive to live in Dubai than in London! A fact which quite honestly baffles the mind.
When looked at in a positive light, inflation can be regarded as a sign that the economy in Dubai is strong enough and healthy enough to cope with price increases which may directly affect the property market, leaving many experts with the assumption that Dubai’s property sector will indeed be able to withstand a further boom in price increases.
The negative spin on inflation however, is that by reducing the amount of disposable income inhabitants of Dubai have monthly, proportionately, this affects the amount people can and will be able to afford to pay for accommodation and eroding the tax free living attraction of the emirate altogether.
With so much uncertainty and acute division of view in Dubai’s real estate sector, there is a definite clouding surrounding the property investment market in Dubai.
The question remains, is Dubai’s real estate market on the brink of a notable rise in fortunes or is Dubai precariously on the threshold of a monumental collapse?
On the one spectrum is the viewpoint that the passing of Law Number 7 by His Highness Sheikh Mohammad Bin Rashid Al Maktoum will result in an upsurge in Dubai’s property market profit margins.
On closer inspection of the desirability of Dubai’s property market, one can easily determine whether or not Dubai’s intrigue to international investors has faded, or not.
Dubai remains a tax free country, in which there is an overabundance of employment opportunities available to qualified international professionals.
Due to the fact that so many varying employment opportunities abound, salary packages and incentives on offer are usually very impressive, such that an expatriate can reside in Dubai and legitimately avoid having to pay the local government any personal taxes. This factor contributes to many internationals relocating to Dubai, as it remains a desirable place to live. Accordingly, this fact alone means that there is a constant demand for property in Dubai to buy and rent.
According to developers situated in Dubai, “There remains intense demand for completed property in Dubai which is why rental rate increases have been capped by the government. Previously the only way those moving to Dubai could find immediate housing solutions was to rent, and those investors with completed investment properties available for letting were increasing rents to astronomical heights which resulted in the government’s intervention.”
Dubai need to now develop and maintain a vigorous resale market, as those individuals that relocate to live and work in Dubai should have the ability to purchase property, or at least have the choice between renting and buying a completed home, which if implemented effectively should remove the need to cap rental rate increases thus bringing in more economic flow to the real estate market in Dubai.
As a direct result of the fact that many investors who bought off plan properties in Dubai are expected to take up residence in their completed units upon completion, there will be less demand for either rental accommodation or even resale property.
Could this then be the fuel behind the recent upsurge of developers now offering incredible incentives to those who agree to purchase unsold off plan properties?
There have been reports of some developers offering potential purchasers luxury cars and other incentives if they commit to purchasing new waves of off plan properties that can have up to a 3 year build period…is this because they are finding it hard to shift their stock, or is this because the desire to own property in Dubai has only increased in insurmountable proportions. Seems like only time will tell, but one thing is for sure: International interest Dubai has certainly NOT diminished.
April 4th, 2010
posted in Property Investment
If you are considering your first attempt at property investment and unfamiliar with the options open to you as to which type of mortgage to choose for your buy to let property, there are specific mortgages for property investment – i.e. to rent out rather than live in – you will need a buy-to-let mortgage.
Buy to Let mortgages are unique and quite different from the usual residential mortgages as, instead of assessing the amount you can borrow from a lender, based on your total income, the loan is calculated on the rent you could get for the property.
Previously, mortgage lenders wanted a rental coverage that was over that of the mortgage amount, for example one hundred and fifteen per cent of the monthly repayments. But at present the rules have become less stringent and you can acquire a mortgage with rental coverage of 100 per cent in some cases. The credit crunch currently being experienced by the western world does seem to work in favour of the property investor compared to the standard residential mortgage.
With this in mind, it is still commonplace to have to raise a deposit of ten per cent or more, but more recently the number of No Money Down deals have appeared on the market. Traditionally only a small number of specialist lenders offered buy to let mortgages but more recently we have seen high street banks start to lend to landlords.
Buy To Let mortgages can normally be either repayment or interest-only loans. Interest-only mortgages mean cheaper monthly payments but the property will not be yours at the end of the term, you will still need to repay the capital amount or sell the property. Repayment mortgages ensure that you repay a bit of the capital and a bit of the interest each month and at the end of the term the debt is fully paid off.
A majority of inexperienced property investors buy a property and consider the increase in equity as the goal. This is a long term investment. What some amateurs do not realise is that a monthly profit can be achieved if the right kind of property is purchased. The worst kind of property to start with in the buy to let arena is a flat or appartment where the cost of ground rent and maintenance has to be taken into consideration. This is often overlooked.
Anyone looking to become involved with the property investment market has a steep learning curve to endure. Property investment training is necessary and should be overlooked as a little knowledge can be a dangerous thing
April 3rd, 2010
posted in Property Investment
People have often asked me how I always pick stocks that end up with 20% gains in a couple of months or triple-digit gains in a year. They ask me is it luck? Maybe with a couple of stocks it may have been luck, but luck doesn’t play a role in buying ten or more stocks in the same year that earn more than 80% returns. The key is not to follow the herd, stop listening to the investment talking heads, and to learn an investment system and then be unwaveringly courageous in applying your system. There have been times family and friends have asked me for advice, and I have told them, “Buy this stock. I guarantee you, you will not lose money.”
Now I know that there are no guarantees in the stock market, but if you follow certain strategies, you can be 90% sure that the stock will appreciate. With this particular agricultural stock, it was almost the perfect stock, and I was 99.9% sure that the stock would produce monumental gains. Sure enough, the stock exploded almost 130% higher in about a year. And this stock was not some risky penny stock trading at less than a dollar a share. This stock was trading at about $70 a share at the time I advised my friends to buy it. So below are the 10 surefire rules I employ to build enormous gains in investment portfolios.
(1)Buy When Fear is Rampant, Sell When Mania is the Greatest
Every investing course should be accompanied by a psychology course as well. The most difficult thing to do in investing is to buy more when fear and panic is rampant and to sell when mania is the highest. Stock markets and asset classes cycle in peaks and troughs. Most people will not buy stocks until after stocks are plastered all over the news and after they have just risen by 30%, 40%, 50% or more, believing that they will rise higher forever. Buying at the troughs when nobody is talking about a stock or during steep corrections provides a low-risk, \high-reward setup for your portfolio.
(2)Learn What Your Neighbor is Doing, Watch Investment Shows on MSNBC and Bloomberg on TV, Listen to the Recommendations of Your Financial Consultant – Then Make Sure that You Don’t Have a Single Thing in Common With Their Strategies
If you are one of the thundering sheep herd and perpetually follow the mindless actions of others, you are virtually guaranteed to lose money or forever relegate your portfolio to average to below-average returns. The surest way to build an investment fortune is to buy asset classes and stocks when nobody is discussing them and to sell them when everyone is talking about them. This requires a nose for market timing. Is market timing impossible as all the global investment firms always tell you? Hardly. Learning what asset classes and individual stocks are poised to skyrocket every year just takes a little bit of time, but is really not that difficult. Since time is a commodity that Private Wealth Mangers and Financial Consultants employed by large commercial investment houses lack, they tell you that market timing is impossible merely because they don’t have the time to perform the necessary research.
However, purchasing stocks that are likely close to cyclical bottoms instead of believing that market timing is impossible and indiscriminately buying stocks will easily add another 10% in returns to your portfolio per year. Do you really believe that you can make a fortune by buying any stock that is advertised on a TV program watched by millions of investors worldwide? Ultimately, if you own the same stocks as your neighbor to the right, your neighbor to the left, the talking head on TV, and the talking head at your commercial investment firm, then are doing something the proper things to build an investment fortune.
If you don’t seek out stocks and asset classes at times when nobody is considering them, you will never make serious money in investing. You may make 10% a year or maybe even 15% a year but if you want to enter the world of the big boys and earn 25% or more in annual returns, you have to dig a lot deeper than your investment peers. Just a couple of months ago (June 25, 2007) this email landed in my inbox from a big investment newsletter publisher. “Over the past week, I’ve crisscrossed northwestern Canada looking for the next great investment. I’m up here to find out what everyone’s invested in. And after attending an investment conference in Vancouver last week, I can tell you absolutely that no one is interested in gold…Base and minor metals will continue to be the best place to have your money over the next few years. Gold, as a virtually useless metal that has few industrial uses, appears to have hit its peak and could be running sideways for years like it has many times in the past.”
Then, in August, when the HUI (the major AMEX gold index) took a sharp hit in response to global market corrections, everyone proclaimed that gold was no longer a safe haven and that gold was “done”. Now, just a one-month later, on September 26, 2007, a lot of people are talking about gold’s strong rapid surge. So was the newsletter that ended up in my mailbox that proclaimed gold as dead in June right in June but terribly wrong in September? The answer is neither. The only person that is wrong is you if you blindly listen to talking heads that end up in your inbox or that you watch on TV. The fact is that little-discussed asset classes and stocks are ignored because perhaps 1 out of 1000 investors truly understand them, and even the ones that parade as experts on TV have been more terribly wrong about their calls than right. So it’s up to you to get off your proverbial bum and learn how to invest for yourself. Chasing stocks higher and buying when everyone else is speaking about them is a sure way to lose money. And so is listening to talking heads. Learn a system that teaches you to buy assets when everyone is ignoring them and you’ll outperform everyone else.
(3)Concentrate, Don’t Diversify
If you’ve read the paragraph above, you already realize that Private Wealth Managers and Financial Consultants are in short supply of time as they partake in the race to gather as many assets as possible for their respective firms. Thus, this is the reason they employ the rule of diversification for your portfolio. U.S. Navy SEALs will tell you that during an operation exfil exercise, the easiest way out is rarely the safest way out. The same holds true in investing, yet diversification is by far and away, the easiest investment strategy that anyone could possibly teach to tens of thousands of financial consultants. Certainly, diversification cannot be a complex strategy if tens of thousand consultants from varied backgrounds and industries can all efficiently apply this concept to their clients’ portfolios with very little training. Diversification is the biggest cop-out investment strategy of all time. It screams of incompetence and lack of skill – “I have no idea what asset classes are going to perform well this year so I’m going to invest you in everything under the sun.”
Assume everyday, a NBA coach looked at his active roster of 12 players and said, “I have no idea who are the best players. Because I don’t know, and don’t care to take the time to figure it out, I’m going to ensure that all 12 players share equal time every game.” This coach is unlikely to win many games versus the coach that takes the time in training camp to assess who his best 5 players are and then consequently plays these 5 players the majority of minutes during every game. This is the difference between diversification and concentration. The coach that diversifies may win some games based upon pure luck because maybe he has a couple great players that can make up for the deficiencies of the poor players he puts on the court every night. Still, most nights, the deficiencies of the poor players will drag down the performance of the excellent players.
However, the coach that concentrates and puts his best players on the court every night will be able to field a team every night that has an excellent chance of winning. This is why we concentrate in investing. To give us the best possible chance of winning. Diversification will never achieve this.Study the best investors in the world. The best investors in the world always manage their own money and they concentrate their portfolios in the best asset classes every year. Don’t believe the hype about diversification – diversification stinks, it doesn’t protect your portfolio, and it certainly will never make you wealthy.
(4)Learn Everything You Can About the Relationship Between Politics and Stocks
On September 18, 2007, the U.S. Federal Reserve cut the Federal Funds Rate (the rates banks borrow from each other and the rates the rates banks loan to customers) by 50 basis points. The U.S. stock markets soared that day, followed by strong surges in Asian markets the following morning. The interest rate cut undoubtedly was not just motivated by a desire to manufacture stability and confidence in the U.S. economy, but also motivated by politics. If you don’t \understand what I mean by this, then you have homework to do.
Governments and corporations in every major global economy in the world have formed relationships that have since been coined as “corporatocracies”. Politics has a major hand in all of the following: interest rate cuts, interest rate increases, the price of oil, the price of gold, the valuation of the Euro, the valuation of the dollar, the valuation of the Pound Sterling, permits to mine uranium in Australia, defense spending for national security, decisions to go to war, and contracts awarded to corporations. If you don’t understand politics, you cannot possibly understand global macro-economic trends and what asset classes and stocks offer the best low-risk, high-reward opportunities year after year. The lack of understanding of politics is what causes Chief Investment Officers of major commercial investment houses to make poor calls in the direction of commodity prices and the direction of global economies. Understand politics and your investment returns should increase tremendously.
(5)Learn Everything You Can About Gold as an Investment.
Gold, as an investment, is perhaps the most misunderstood and poorest understood asset class in the world. Some people believe that the physical commodity is the only way to invest in this asset, and as such, only put money into the paper gold ETFs. Other people that invest in gold stocks don’t understand the differences in price behavior between the juniors and majors; explorers, developers, and producers; hedged and unhedged companies; and the political risk of operating in different countries. Therefore, they never understand the risk-reward quotient of their gold portfolio, sell out during steep corrections, always lose money, and think that gold investments are speculative and stink. Furthermore, they don’t understand that short-term manipulation of prices of the underlying commodity and stocks can’t change the long-term outlook and performance. However, learn how to buy and sell this asset class properly and you will be rewarded as no other asset class can reward you
Article continued under same title, part II. To read the rest of the article, merely perform a search for “10 Surefire Ways to Make an Investment Fortune, Part II) or visit us at http://www.theundergroundinvestor.com
April 3rd, 2010
posted in Gold Investment
The stock market has been fairly flat since the beginning of December, and that means its a good time to assess your relationship with your investments.This is a good time to look at your entire relationship with the market. It doesn’t matter whether you trade stocks, options, commodities, or even Forex. It’s a good time for a little self reflection.
The first thing to do is determine what your actual motivation for trading is. What is the reason behind your specific strategy? Maybe your strategy is to hand your money to a major broker like Smith Barney, AG Edwards, Fidelity, or any of the others. Does that mean that your main strategy is to not deal with investing… to just give your money to someone else and let them hopefully make money for you. Maybe your strategy is to put your money with a company like Scottrade, eTrade, or Ameritrade and actually make the trades yourself. Are you doing that for the thrill of winning and losing kind of like Las Vegas? Maybe you do it to have something to impress your friends and co-workers with. It’s importantthat you understand your underlying motivations. The ones beyond the automatic response of wanting to make riches.
With that bit of self analysis under your belt, it’s an excellent time to ensure that your trading mode is in order because the market will not stay flat forever. Now is the time to put together a winning trading methodology. Here are some ideas to help you be ready for the up swing in the market.
No matter why you trade, you’ve got to divorce your emotions from your investing. If you get excited when you win and sink into the pits of depression when you lose, then you will find out that you lose and lose and lose. Really, this emotion-based trading is a lot like a compulsive gambler. So act like an android and get your emotions out of the picture.
Now that you are clear about your motivations and have your emotions out of the picture, decide on your goals for trading. There are a few basic things to think about. How much time are you ready to spend on your investments? How much ROI are you looking for? How much risk will you assume on the money you invest… in other words, how much are you willing to lose? How much are you willing to spend on learning to invest? Come up with a statement of objectives in the form, “I am ready to invest ____ dollars and I am looking for a ____ percent annual return on my investment where I spend ____ hours per week/month managing my investments after spending _____ dollars and ______ hours learning how to invest.”
Next you need to do some reality checking on your goals. If you are looking for a risk free investment returning 100% annually, that is not likely to be found. This is also a great time to see how effective the investment techniques you have been using really worked.
Next, come up with your overall investment strategy for moving forward. Are you going to put your money in a bank? Are you going to put some money into guaranteed municipal bonds and some into mutual funds? Get specific about how you intend to reach your objectives.
Before you actually invest a dime, you’ve got to have an investment plan. The investment plan defines when you will actually put your money into an investment and when you will take your money out of an investment. If you are investing in a stock, then this plan will tell you when you should invest in the stock. What value should it be at? What should it’s recent history look like? Does the performance of the stock meet certain technical analysis criteria? Does the company meet some fundamental analysis criteria? Your plan should also tell you when to sell the stock. That tells you the risk you are taking. If you purchase 100 shares of a stock for $50 and are only willing to risk 100 dollars, then you must exit if the stock drops by $1. That’s not a very good plan, but it gets the idea across.
Many people don’t think they need a plan for things like mutual funds or 401K plans with their company. Frankly, those are the people that lost the most between June and December 2008. The plan that you make should get you the results that you seek in terms of ROI and risk. That’s why it’s called a plan.
Successful traders follow their investment plans to the letter… and this is where the android mind comes in. If you prepared your plan correctly, then if you follow it to the letter you will get the results that you seek. It’s really strange though, that most people stop following their plan. The winning technique consists of three steps. Follow the plan, follow the plan, and follow the plan.
After you exit the investment, then you need to do a de-briefing in your own mind. Take a look at what happened, how your plan served your objectives, and what you could have done better. With this simple analytical approach to investing you will be much more successful no matter what your overall investment strategy.
April 3rd, 2010
posted in Investment News
Benefits and Cons on Bulgarian Property Investment
With residential property in the UK having reached a peak for the current future, investors have been desperately looking around for alternative locations with investment potential, and Bulgaria is tops on everyone’s list. Many investors have already noticed that Bulgaria offers very good value for any money that is spent and it also has letting potential as a holiday destination.
The best investment opportunities in Bulgaria right now include the ski resort of Bansko and the Black Sea resorts of Varna and Bourgas. The capital Sofia is developing rapidly as a commercial Mecca as well, signalling that capital appreciation and rental yields should be very strong in the foreseeable future. Bulgaria saw property price increases of 35% in 2004 however the average yields on rental properties are still 8% to 12% thanks to the fact that most investors are buying in the Black Sea coastal resorts and 15% in ski areas. Some of them are investing in new developments instead.
For example, studio apartments in the Black Sea resort of Sunny Beach can cost the investor as little as £16,850. There are good opportunities out there for both city-centre buy-to-let properties and vacation homes that are also offering letting potential. Let it be known though, that despite promising returns, investors have to be wise to the risks that are potentially involved in buying in an emerging economy like this one.
Low prices attract the buyers who are looking for a quick-fix solution to pension problems, but as many agents as you can find will admit there is no guaranteed resale market in Bulgaria (or anywhere else for that matter) and little existing benchmark for measuring price increases other than more and more investors paying higher prices on a monthly basis. That is why long-term investment is recommended over instant returns.
There is, however a genuine demand for quality rental properties but written contracts with holiday companies are absolutely needed as a means of ensuring the buyer a guaranteed yield. Travel agents and tour agents who are no longer enjoying big mark-ups in Spain are looking for higher profit margins in Bulgaria and this does cause problems in the long-term future. High street travel agents and tour operators do have an amazing number of sun and ski holidays available in Bulgaria today and they are selling well, which goes well for future returns for quality locations and developments.
If you are really wondering what the benefits are to investing in Bulgarian Property; it is definitely the cost. The cons of course is that nothing in property investment is completely fail safe and therefore you need a regent in Bulgaria to act on your behalf and help you find a piece of property that will do exactly what you need it to.
April 2nd, 2010
posted in Property Investment
With the gold prices rising steadily over the past few years, more and more smart investors are turning to investing in gold against the declining US economy. After all, no other investment has the wealth preserving power as gold does. As a result, gold Bullion such as American gold Buffalo coins are considered as a safe investment. So here are 4 reasons why you should invest in gold Buffalo coins now. First, as stated previously, gold is one of the safest and most effective investment to preserve personal wealth during times of financial uncertainties and depressions. With the recent economy turmoil and foreclosures are at an all-time high, seasoned investors have turned to gold as a safer investment alternative. Secondly, for average Americans, the easiest way to physically own gold is to buy gold Bullion coins in order to protect their hard-earned money during recession. gold Bullion such as Buffalo coins are easier to store and trade than standard gold Bullion bars, because of their smaller denominations and sizes. In addition , gold coin is classified as a collectible, which means that profits are not taxed as capital gains but as ordinary income. Long-term capital gains are taxed at a 15% rate for those in the 15% bracket, but gold investments can be taxed at rates of up to 39.6%. Those considering putting their money into gold coins should consider what these rates might do to their returns. Thirdly, American gold Buffalo coins are the first 24-karat pure gold bullion coin offered to the public by the US Mint. Before gold Buffalo coins issued in 2006, investors only had the option to purchase 22-karat gold coinages, because 24-karat gold is technically “softer” than 22-karat ones, and is harder to hold up to the rigors of circulation. US investors end up buying foreign 24-karat gold bullion such as the Canadian gold Maple leaf. So the US Mint released America’s first 24-karat gold Bullion coin, 2006 gold Buffalo coin, on June 22, 2006. Last but not the least, each gold Buffalo coin’s gold content and purity are guaranteed by the U.S. government. Gold Buffalo coins must contain one troy ounce of 24 Karat gold (0.9999 fineness), making them not only recognized as America’s official investment-grade gold bullion, but widely accepted and traded all over the world. This allows you to sell gold Buffalo coins for cash easily should the need arise. As one of the highest quality, purest gold coins, gold Buffalo coins are the ideal coin to add to your investment portfolio. To sum up, now is the time to invest in gold. American gold Buffalo coins offer a safe, yet effective way to protect your assets against the falling US dollar. Get in now, before gold prices get too high! I recommend you checking out American Gold Buffalo Coins. It is a specialized Buffalo Gold Coin for Sale site, offering a great selection of American gold Buffalo coins, silver Buffalo and Buffalo Nickels for sale. This website makes finding your dream American Buffalo Coin a million times easier. Be sure to try this website before you buy.
April 2nd, 2010
posted in Gold Investment
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April 2nd, 2010
posted in Investment News
Much attention has been given to the rise in the price of gold in recent weeks, leading investors to wonder, what are the current factors driving gold? The easy answer to that question is –fear. We have already witnessed an eight year bull run in gold, but many believe that it’s bull run is far from over. What is gold’s role in the credit crisis? Is buying the metal a better investment than investing in gold mining companies? Is it too late to cash in on the growth?Before we can answer these questions, let us first review what role a gold investment might play in your portfolio. Investors buy gold for a number of reasons, including:
Falling under the precious metals asset class, gold is a monetary metal whose price is determined by various factors. Among these factors are: inflation, fluctuations in the dollar and U.S. stocks, currency-related crises, interest rate volatility, global geopolitical tensions and increases or decreases in the prices of other commodities.In the credit crunch of deflation, gold and currencies are hoarded and the purchasing power of both rises. But, gold also thrives in inflationary environments. That is because of gold’s unique property with a dual role as both money and a commodity. Think of gold as money, and money is hoarded in deflation so gold naturally tends to go up. The point here is that gold does well during extreme economic environments. Let’s dissect some of the benefits of owning gold in the paragraphs that follow.InflationAs inflation goes up, the price of gold goes up. Since the end of World War II, the five years in which U.S. Inflation was at its highest were 1946, 1974, 1975, 1979, and 1980. During those five years, the average real return on stocks, as measured by the Dow, was -12.33%; the average real return on gold was 130.4%. The environment in the 1970′s was not unlike the environment today. The common denominators in both periods are huge budget deficits, loose monetary policy, soaring oil prices (2008) and the open-ended costs of war (Vietnam vs. Iraq/Afghanistan).Store of ValueAccording to the World Gold Council, gold has maintained its value in terms of real purchasing power in the very long run in the US, Britain, France, Germany and Japan. Despite price fluctuations gold has consistently reverted to its historic purchasing power parity with other commodities and intermediate products. Gold is tangible, it’s a physical asset that brings a sense of comfort when intangible assets, like stocks, are evaporating. But, while they do maintain a store of value, it is worth noting that gold, like stocks and other investments, is also subject to price fluctuations.Safe HavenMany investors are diversifying away from traditional equities and into gold because of the continued uncertainty surrounding the financial markets. Gold has long been considered a safe haven, or “crisis commodity”. Of course, as investors flock to safety investors the price of gold is pushed even higher. Historically, as people begin to distrust their paper assets (ie. Currency), this positively influences the price of gold too, as we’ll discuss in the next paragraph. Currency HedgeNot all citizens have full faith in their local currency, at times, this might even include the U.S. Dollar. So, what do they do? They buy hard assets like gold (a tangible and physical item or object of worth). Although it’s no secret that U.S. Dollar is world’s reserve currency and the main medium for global trade, the U.S. Dollar, like the Euro, Yen or other global currency, is really nothing more than paper, or fiat money. Fiat money is money that is intrinsically useless and is used only as a medium of exchange. There is no physical asset that backs the U.S. Dollar today (or other global currencies for that matter) since its gold backing was stripped in 1971. But since gold is purchased using your local currency, in this case the dollar, then any decline in the value of the dollar causes the price of gold to rise.DiversificationWhile all the other rationales for owning gold are viable, perhaps the most important reason to consider gold in your portfolio is for its diversification benefits. Gold, like many other commodities, typically has an inverse relationship to the market. Assets with perfect negative correlation to other assets in a portfolio help investors hedge away their risks, in effect they reduce volatility while enhancing performance. Gold and other tangible assets have historically had a very low correlation to stocks and bonds. Because the price of gold increases in response to events that erode the value of traditional paper investments like stocks and bonds, it’s worth considering a fair allocation to this asset as part of a diversified plan. The “right” allocation will depend upon your specific circumstances and risk tolerance, but a good gauge might be between 3% to 8%.Owning GoldThe gold market is highly liquid and there are many ways that investors can own gold. The most traditional way of owning gold is via gold bullion like gold bars and coins. When buying the physical asset, many people buy gold coins, considering the potentially higher storage costs or risks associated with owning gold bars. Gold coins can be easily purchased directly from the U.S. Mint or from authorized dealers and precious metals firms. Depending on where you purchase the coins and the current demand levels, you may have to pay a premium (above the current spot price of gold) to acquire the coins. Another way to access gold is through futures contracts or products like gold ETF’s (ie. Ticker: GLD) which offer investors a relatively cost efficient and secure way to access the gold market. A Gold ETF is an exchange traded fund with gold being the principle and only commodity being traded. Gold ETFs are listed and traded on the stock exchange and investors get units for their holding in the gold ETF. The returns on gold ETFs are more or less same as that of the spot price of physical gold. It’s worth noting that the IRS treats gold as a collectible for long-term capital gains tax purposes, therefore, gains recognized by individuals from the sale of gold ETF’s are subject to a capital gains rate of 28% if held for more than a year. Finally, investors can also consider having gold exposure through gold mining stocks and funds. Some argue that this is more tax and cost effective, in that, there are no storage fees, theft concerns and gold mining stocks also benefit from lower capital gains rates. On the flip side, owning stocks in a mining company is really not the same as owning the actual gold. In closing, gold’s recent rise is really no surprise given the recent financial uncertainty in the global markets. As fear and investor trepidation permeate the markets, investors look to physical assets to help them preserve their wealth. Times of crisis help fuel the demand for gold and, arguably, the easy access allotted by gold funds or ETF’s has further pushed up gold’s price in recent years. To a certain extent, the demand for gold, mostly by investment funds, is feeding on itself.
While some analysts suggest that the price of gold is being inflated by a flood of new investment money (implying it might be overvalued), others predict even further price growth down the road. Either way, the argument can be made that gold offers sufficient benefits (inflation protection, currency hedge, portfolio diversifier) to warrant at least some representation in your collection of assets.
April 1st, 2010
posted in Gold Investment
If you want to invest in property then there are several methods of cheap property investment that are low risk and can offer high rewards and here we will look at one of these methods. Let’s look at this proven method of cheap property investment in more detail
A Paradise and a Profit
Rather than buy property in North America or Europe where property is expensive and gains un certain, its time to look at booming emerging countries with a track record.
Here we are going to look at one that offers a track record of fantastic returns, low risk, cheap property and a secure investment market and its just a two hour direct flight from the USA:
The country is Costa Rica.
Consider this:
A house bought just 15 years ago near the popular resort of Jaco for $30,000 is worth in excess of $750,000 today and this has been achieved with little downside risk. Not only could you have made great capital gains, you could have made a valuable rental income, or had a holiday home to enjoy as well.
In excess of 100,000 foreign investors have bought property in Costa Rica and buying remains strong and will continue to do so.
Why?
Because, it offers beach front property at affordable prices – at up to 70% less than in Texas or Florida.
This demand looks likely to remain strong as baby boomers continue to look for holiday homes and retirement properties.
Other advantages.
Costa Rica is a safe, stable democracy, that offers the same buying rights to overseas investors as residents. Furthermore, the buying process is easy, tax efficient and property taxes are low.
As a country it’s beautiful with pristine beaches, rainforest, volcanoes and all the shopping and comforts of home and an affordable standard of living – you can live well on $2,500 a month.
Costa Rica therefore offers an affordable slice of paradise.
Of course there are other destinations to look at but many are merging and don’t have the track record of gains Costa Rica does. As a general rule, property booms last for decades or longer and money attracts money as confidence in an investment grows and the expat population expands.
The Risk to Return is Great!
If you are looking at cheap property investment, you want a market that is growing, will continue to grow, that’s safe and stable and Costa Rica ticks all the boxes.
Discover property investment in Costa Rica and you can enjoy long term capital growth, low risk great rental income and a holiday home in paradise.
Look at the potential of Costa Rica and you may be glad you did.
April 1st, 2010
posted in Property Investment
Invest is the word to express act of investing or laying out funds or capital in an activity with the belief of profit. Investment is the assurance of something additional than money, time, energy or effort, a plan with the prospect of some valuable result, this job calls for the investment of some hard thinking.Investment is the assurance of something additional than money, time, energy or effort, a plan with the prospect of some valuable result, this job calls for the investment of some hard thinking. Investors contain be rushing to purchase gold as the financial disaster carry on to bite as a revenue of providing a safe continuing asset as other markets deteriorate. Gold actual value is not that it provided a rapid rough fix but that it obtainable a sure and stable means of caring wealth through investing. Gold is an attractive investment that should form an important part of one’s investment portfolio. Gold will certainly continue to remain popular as its investment qualities are highly valued. You are satisfied to let them produce within your range, reinvesting payments to purchase more shares, if your goal is setting up to hold the stocks for several years. A classic approach employs making normal purchases. You are not very worried with everyday variations but maintain a close eye on the basics of the company for adjust that could affect continuing growth.This is not reality that investment policy engages a lot of effort, almost everyone remains thinking that. Investment strategy is about investing your money in varied investment so that you can get to your financial goals within a preset period of time. Each type of investment has separate investments. It is fairly easy to get confused with all the person investments that are available when conducting a research on the different types of investments. Instance, if you think about investing in stocks of electronic companies. Though your investment strategy as to be such so that you can benefit to the highest while taking into account your investment manner and risk tolerance. It is fairly easy to get confused with all the person investments that are available when conducting a research on the different types of investments. Though your investment strategy as to be such so that you can benefit to the highest while taking into account your investment manner and risk tolerance. Risk tolerance refers to the amount of capital you might be ready to invest without feeling the touch. Investment method is about either being conformist or aggressive. If you are conformist, you will select for mutual funds, and if aggressive investor for shares of companies. When someone who you be supposed turn to when you have any question or doubts about your investments. Make sure you have a sound financial goal, in order to work successfully with your financial planner. Your strategy for investing will be developed based on your ambitions.
April 1st, 2010
posted in Investment News
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