The last thing on anyones mind right now is the word "Inflation." While most people are sitting at home or work thinking about how low their 401k plan has gone, how likely they are to lose their job, or if they will be able to afford their mortgage payment next month, inflation is simmering getting ready to boil out of it's pot. Many experts who are rather respected in the field of economics are predicting that inflation could rise to levels not seen since the oil embargo of the 1970's.
Because of the huge influx of money the world governments have injected into the system, we could face inflation rivaling the double digit numbers we saw 30-40 years ago. Although I don't think it will be quite that bad, there are steps one should take in order to protect their assets from inflation, and possibly make money in the process. Here are three quick ways invest your money to protect yourself if inflation does sky rocket.
#1 Gold
In times of economic uncertainty and inflation, Gold is a sure bet. As inflation rises, the dollar weakens, thus taking more green backs to purchase an ounce of gold. Many experts think that Gold could go as high as $2000 an ounce within the next two years. Although I am not as bullish, I do feel that both inflation and the rebound in the economy will likely lead gold to new highs.
#2 Stock Funds that are Inverse Treasuries
I like both (RYJUX) and (TIP). (RYJUX) invests in instruments that have an inverse relationship to treasury prices. As inflation rises, treasuries drop in price, (RYJUX) will go in the opposite direction. (TIP) is an ETF that does almost the same thing.
#3 A Home
Now is the perfect time to buy a home, even without the threat of inflation. Mortage rates are at all time lows, and home prices have fallen through the floor over the last 2 years. As inflation rises, a homes value increases, and there is no better asset then one that you can use. With mortgage rates at 5%, and inflation possibly headed to double digits, a mortgage is the way to go even if you could afford a home with an all cash payment.
Tuesday, June 30, 2009
Monday, June 29, 2009
Forex Binary Option Broker Makes Simple Forex Investments Pay Big For Day Traders By Steve B Wise
Forex Binary Option Broker Makes Simple Forex Investments Pay Big For Day Traders
By Steve B Wise
A low cost Forex binary option broker has the ability to open the world of high yielding returns to day traders with lower capital than you would have to come up with to trade standard options.
Foreign exchange is an extremely fast paced investment market, in which daily investor transactions are expected to top $110 billion dollars per day on the open exchanges. One would think the vast amounts of individual currency changing hands can at times create imbalances in the market however the retail (as it is called) market is dwarfed by the daily volume of the amounts of institutional trades that pass through the Bank of International Settlements (BIS).
It is the institutional traders trading mostly on behalf of hedge funds or for their own accounts that account for an estimated 80% of the daily volume of currency trades. This makes trading directly on foreign currency movements a dicey proposition for retail day traders like you and I. This is why another type of trading has emerged as the leading investment of choice for individuals wanting to participate in the foreign currency market: Binary Options.
Forex binary option broker / dealers offer small trade makers the opportunity to buy put and call positions on the major cross rates such as Yen/Dollar, Dollar/Euro, Dollar/Pound, Euro/Yen, even Dollar/Swiss Franc is open for trade on the binaries exchange. This market offers the average trader the chance for a fixed high yield return with a payout either hourly or at the end of the day. Trading is fairly simple - as the transactions are denominated in dollars by your forex binary option broker, and simple call or put orders are made with the click of the mouse.
By Steve B Wise
A low cost Forex binary option broker has the ability to open the world of high yielding returns to day traders with lower capital than you would have to come up with to trade standard options.
Foreign exchange is an extremely fast paced investment market, in which daily investor transactions are expected to top $110 billion dollars per day on the open exchanges. One would think the vast amounts of individual currency changing hands can at times create imbalances in the market however the retail (as it is called) market is dwarfed by the daily volume of the amounts of institutional trades that pass through the Bank of International Settlements (BIS).
It is the institutional traders trading mostly on behalf of hedge funds or for their own accounts that account for an estimated 80% of the daily volume of currency trades. This makes trading directly on foreign currency movements a dicey proposition for retail day traders like you and I. This is why another type of trading has emerged as the leading investment of choice for individuals wanting to participate in the foreign currency market: Binary Options.
Forex binary option broker / dealers offer small trade makers the opportunity to buy put and call positions on the major cross rates such as Yen/Dollar, Dollar/Euro, Dollar/Pound, Euro/Yen, even Dollar/Swiss Franc is open for trade on the binaries exchange. This market offers the average trader the chance for a fixed high yield return with a payout either hourly or at the end of the day. Trading is fairly simple - as the transactions are denominated in dollars by your forex binary option broker, and simple call or put orders are made with the click of the mouse.
SMSF Investment Strategy #3 - Gold and Other Commodities As Alternative Investments By Christina Bong.
As any financial planner would tell you, we should diversify our portfolio into different asset classes to manage our risk. The most common asset classes for retail investors are properties, shares and cash but there are other lesser known ones as well such as gold and other commodities.
For smaller Self Managed Super Funds (SMSFs) like ours, property was not really an option because we did not have enough funds to buy property. Although it is now possible for SMSFs to borrow money to buy property, I personally do not think it is a good idea because most of us already have a large exposure to property outside of super. For most people, the biggest part of their wealth other than super, is in their own home.
As negative gearing is a popular tax minimization strategy in Australia, many Australians (ourselves included) also own investment properties as well. Investing our super into properties would be putting all our eggs into one basket so we prefer to invest our super funds in other asset classes.
At the start of 2008 our super portfolio was mainly in cash. With all the volatility in shares, we did not want to have much exposure to shares in our portfolio. With governments printing money freely while aggressively slashing interest rates, cash was not a much better option as we were really not sure what that would do to the value of the dollar and how much yield we can get.
One asset class we definitely wanted some exposure to was commodities, especially the kind that was of a non-renewable nature like precious metals or oil. My rationale for having some of these assets is simply that commodities are real assets and there is only so much of this stuff available so it will always have an intrinsic value.
However, we did not want to have to deal with the physical commodity so we decided to buy Exchange Traded Funds (ETFs) that closely track the price of the physical commodities. ETFs are traded on the stock exchange just like stocks.
In June 2008 we put 10% of our portfolio in gold and 10% in silver by buying units in GLD and SLV which are popular ETFs that track the price of Gold and Silver. GLD and SLV are priced in USD and are traded on the US stock exchange. I did not know at that time that there is an ETF for gold that is traded on the ASX under the code GOLD.
There are also commodity ETFs such as USO which tracks the price of crude oil for those interested in investing in oil, and DBA and MOO for those interested in agricultural commodities.
Our investments in gold and silver were badly hit when commodity prices crashed from July to November 2008. However, in AUD terms, our gold and silver investments still showed positive returns because the Aussie dollar also dropped against the USD. The positive return is attributed purely to luck and not skill as we were actually bearish on the US dollar.
Although these investments have not generated stellar returns, I am still happy to hold on to them as alternative investments to stock and cash, just as a diversification for our investment portfolio.
For smaller Self Managed Super Funds (SMSFs) like ours, property was not really an option because we did not have enough funds to buy property. Although it is now possible for SMSFs to borrow money to buy property, I personally do not think it is a good idea because most of us already have a large exposure to property outside of super. For most people, the biggest part of their wealth other than super, is in their own home.
As negative gearing is a popular tax minimization strategy in Australia, many Australians (ourselves included) also own investment properties as well. Investing our super into properties would be putting all our eggs into one basket so we prefer to invest our super funds in other asset classes.
At the start of 2008 our super portfolio was mainly in cash. With all the volatility in shares, we did not want to have much exposure to shares in our portfolio. With governments printing money freely while aggressively slashing interest rates, cash was not a much better option as we were really not sure what that would do to the value of the dollar and how much yield we can get.
One asset class we definitely wanted some exposure to was commodities, especially the kind that was of a non-renewable nature like precious metals or oil. My rationale for having some of these assets is simply that commodities are real assets and there is only so much of this stuff available so it will always have an intrinsic value.
However, we did not want to have to deal with the physical commodity so we decided to buy Exchange Traded Funds (ETFs) that closely track the price of the physical commodities. ETFs are traded on the stock exchange just like stocks.
In June 2008 we put 10% of our portfolio in gold and 10% in silver by buying units in GLD and SLV which are popular ETFs that track the price of Gold and Silver. GLD and SLV are priced in USD and are traded on the US stock exchange. I did not know at that time that there is an ETF for gold that is traded on the ASX under the code GOLD.
There are also commodity ETFs such as USO which tracks the price of crude oil for those interested in investing in oil, and DBA and MOO for those interested in agricultural commodities.
Our investments in gold and silver were badly hit when commodity prices crashed from July to November 2008. However, in AUD terms, our gold and silver investments still showed positive returns because the Aussie dollar also dropped against the USD. The positive return is attributed purely to luck and not skill as we were actually bearish on the US dollar.
Although these investments have not generated stellar returns, I am still happy to hold on to them as alternative investments to stock and cash, just as a diversification for our investment portfolio.
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