Investing Guide

In the short term bonds and deflation are on a tear going up in price as people flee to safety. So, interest rates go down temporarily. Then watch out! Higher interest rates mean bonds lose value. BIG TIME CAPITAL LOSES – especially in junk bonds.

Recently, bond buyer Bill Gross of the five billion dollar Pimco Fund could have had gross capital gains on his bonds and higher interest income too (later on when interest rates rise) if he would have stayed with the trade. Bonds have recently been gaining value as interest rates dropped. Gross got faked out by the inflation scare. Forget about inflation!

Gross and 99% of the world got some socialist smoke blown in their eyes about the resurgence of financial repression and inflation in the medium (5 + years) term. Robert Prechter says it is not going to happen. Robert Prechter of Elliott Wave International says interest rates will ramp up even in the deflation as people scurry around borrowing to stay afloat at any rate of interest. DEFLATION DEAD AHEAD! Continue reading ‘Bonds and Deflation’ »

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Why Investing?

There are so many people out there talking about investment, best way to generate passive income and to increase earning. Even there are so many experts and analysts out there providing tips and information to support investors in making good investment decision. We used to see rich people are still investing although they are already wealthy. But what are the reasons that made the rich people keep investing?

1. Money to work for you

Most of us are working for money and only get paid if we have performed our job well. Due to the high living standard, our pay might not be able to sustain our current living standard. How can we acquire additional income for ourselves? Continue reading ‘Three Reasons to Invest Your Money’ »

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The one principle that everybody who is investing in stocks should learn and practice is diversification. Diversifying stocks means that you buy shares in different kinds of companies in order to reduce the risks and increase potential gains.

The trick to diversifying is to find the package of stocks that will give you the level of returns you want at the level of risk you are willing to take. This can take time but most people can do it. Something to remember is that there is no such thing as the perfect portfolio.

The Level of Risk

The first thing that you need to take into mind when you are diversifying is the level of risk that you want to take. This means both the risk you are willing to live with and that you can live with. If you are investing for short term income you might want to invest in slightly more volatile stocks that will give you a higher return. If you are investing for long term income or retirement you might want to concentrate on stable stocks that are more likely to be around in the future. Continue reading ‘How To Diversify Your Stocks’ »

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Scroll down the comments of any financial article published on Yahoo Finance and you will read predictions of impending economic disaster. These comments can be downright scary for anyone reading them no matter what their depth of economic knowledge is. I have to admit, after a comment reading session on Yahoo Finance I’m ready to sell every stock I own to invest my money in canned goods and ammunition. Not really! but… It does make me think! So instead of just taking a stand based on what I’ve heard or read, I decided to do just that… I decided to think!

One of the most discussed issues relating to the economy is the ever increasing money supply. Economist like Ron Paul and Peter Schiff make the argument that by increasing the money supply we the people are being indirectly taxed by the government. This argument makes a lot of sense. The first lesson taught in any economics class is that as the supply of something increases, the value decreases. This is one of the reasons why the value of the US dollar has decreased so much over the past decade. I remember back in 2002 when I was stationed in Okinawa, I could purchase 120 yen for $1.00. Today $1 will only purchase 74 yen. Now, there are other factors such as inflation that need to be taken into consideration in order to find the real exchange rate, but right now I’m sitting at a bar on the beach in Destin, FL. so I’m not about to break out my calculator and start drawing up charts. Continue reading ‘The Money Supply, The Gold Standard and the Impending Doom’ »

In this article I am going to demonstrate and explain how owning physical gold and silver is the best strategy to protect your wealth, hedge against inflation, and an excellent vehicle to develop a significant income stream during these turbulent economic times.

Wealth Insurance: Using Gold For Asset Protection Strategies In This Turbulent Global Economy

Well Standard and Poor’s sure gave everyone some news to talk about on Friday night…For the first time in history, the United States credit rating has been downgraded. That means they have a lack of confidence in the worthiness of our treasury bonds. Continue reading ‘Wealth Insurance: Using Gold For Asset Protection Strategies In This Turbulent Global Economy’ »

Investing when you expect inflation or during inflation can be challenging, but modifying your investing to account for inflation is crucial to your financial success. Inflation is the hidden tax, and you must consider the effects of inflation or deflation on your investments. When you consider the effects of inflation, you then must evaluate the time-horizon for your investments. Whenever you are evaluating an investment, you must consider the rate of current and projected inflation, the time-horizon of the investment, and your exit strategies for the investment.

According to Wikipedia “inflation is a rise in the general level of prices of goods and services in an economy over a period of time.” Also, “Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.” In the U.S. the money supply increases when the government prints more money, and is also how the government can pay its own debt with cheaper dollars. When the currency was based on gold, this was not possible, because you couldn’t create gold out of thin air, like the government does by printing Federal Reserve Notes when needed. This leads to the first strategy for investing during inflation: that is, investing in gold. This strategy may be considered more of “insurance” against inflation, rather than investing. I consider this a more longer term strategy. The same strategy can be applied to silver, a more volatile commodity. In the April 27, 2011 post on my blog “US Dollar, Silver, Inflation and More”, you can see the S&P measured in the value of silver. Continue reading ‘What to Invest in During Inflation’ »

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The silver investing outlook is bullish for the first decade of the 21stcentury. That bullish outlook is based primarily on the expectation of high inflation in the U.S. The high inflation is the result of the sharp increase in the number of U.S. dollars in circulation. The U.S. money supply increased over 300% in three years, late 2008 to late 2010. This sharp increase was required to fund deficit spending by the federal government, and to keep the U.S. debt market from collapsing (QE2) so that the deficit spending can continue. If the federal government reigns in deficit spending and decreases the money supply, inflation can be tamed and catastrophe averted. With inflation in control, the outlook for silver investing turns bearish. Continue reading ‘Silver Investing – Is the US Government Another Silver Lining?’ »

Commodities prices are affected by four main factors:

• Supply and demand
• Inventories and stocks
• Foreign exchange rates
• Inflation

Supply and demand of commodities

Supply and demand is a simple concept – if supply of a commodity is lower than demand, prices rise, and if demand for a commodity is lower than supply, prices fall. However, as the price of commodities are usually set in futures markets, the price is not impacted by today’s supply and demand, but the expected supply and demand at a future date. Continue reading ‘Determinants of Commodity Prices’ »