[ad_1]

When talking about beginner investing, you need to be very careful when comparing equity funds to bond funds, as most beginner equity funds are unfamiliar with bond funds. When I think about it, most of the people who invested money with me when I was a financial planner didn’t understand their bond funds, especially not. In 2014 and beyond, this could be expensive.

Stock funds are a great investment option for beginners looking to invest money in stocks. Most people understand the concept and understand the risks involved. Pension funds are a different story. The majority of the people who invest money in them tend to find these funds very investor friendly. After all, over the past 30 years they have outperformed equity funds (equity funds). In addition, they have rarely had a bad year while equity funds have had some very difficult times.

For the past year or so, a handful of my readers took offense at my warnings about bond funds versus equity funds for 2014, 2015, and beyond. Let me explain and make investing easier for beginners because this is a topic that matters to all investors. After all, to have a balanced portfolio, you must own both types of funds; and this should be one of the goals of every investor.

Issuing equity funds vs. bond funds is really a question of risk vs. potential returns. People understand that the former can be risky, but they accept it because they know it can be very rewarding too. Equity funds, for example, achieved returns of around 30% in 2013. They rose by around 150% from their lows in 2009. For such returns, it pays to take risks. That’s investing for beginners 101. The higher the potential returns, the higher the risk.

On the flip side, few average investors today understand the risk vs. potential return issue in bond funds for 2014 and beyond. In fact, many have committed to these funds. After all, they have been steady performers since the early 1980s and have paid attractive returns (dividends) over safe investments like bank CDs. At the same time, the share price (value) has risen. The problem is, most investors don’t understand the risk involved; and few understand WHY these funds were such good investments.

What I emphasize about Investing for Beginners 101 is that there are few things in the world of investing that you can rely on. For example, you can bet that there will always be uncertainty. And there is one more rule of thumb that you can rely on. When interest rates fall, bond prices (and bond fund values) rise; and when rates go up, they go down. When I was a financial planner, I explained this to every client I sold these funds to. It was seldom an issue, with interest rates peaking in 1981 and essentially falling for over 30 years.

The average investor today has never experienced an extreme economic environment with rising interest rates. In the late 1970s and early 1980s, interest rates rose to historically high levels. Some investors found themselves in their bond funds with losses of almost 50% in 1981. These investments are not safe and higher rates are expected in 2014 and beyond. With interest rates near record lows, that means you run the risk of receiving a dividend of around 3% per year in longer-term annuity funds. Also, the potential for stock prices (value) to rise is bleak as interest rates can’t really go much lower.

Investing successfully is always a challenge, and investing for beginners can be scary at times. I believe 2014 and beyond could be a scary time for investors. Our government has cut interest rates to EXTREMELY low levels to stimulate the economy. Now those in power are trying to defuse the situation. Interest rates could rise faster than expected.

In the debate on equity funds and bond funds, I see the main problem as the fact that the risk is not cheap compared to the potential returns for bond funds because the potential returns are limited, as has been the case in recent years. If the economy falters and interest rates rise, both can be losers … both pose significant risk in 2014 and beyond. Investment Rule # 1 for Beginners Investing: When interest rates go up, bond prices go down and bond funds go down in value.

Don’t despair, investing for beginners can be a challenge. Remember: the risk-reward potential still makes investing money for higher returns a winner instead of safely giving it away and making peanuts.

[ad_2]

Source by James Leitz

[ad_1]

Although technical factors appear to have triggered the stock market correction, inflation concerns were the main driver behind the stock market slump. We have outlined such an inflation scenario and its impact on real estate investments.

In fact, the difference between current and trend economic growth is close to zero, rising labor demand is putting pressure on wages and salaries, but it is still a long way from a sharp acceleration in inflation rates. The US Department of Commerce’s recommendation in its investigation to restrict aluminum and steel imports for national security reasons, meanwhile, is a reminder that the risk of escalating trade tensions has a significant impact on real estate investments.

We do not assume that the probability of risks has increased significantly in light of these events. However, we argue that higher volatility combined with uncertainties about the uncertain future prospects of US trade policy is not an environment in which we should risk everything for a company, but rather look for returns by seizing opportunities in the real estate market.

It would be more than natural that unjustified price increases would be corrected over time. Some observers believe that rising inflation may have played an important role in the recent sell-off in the equity markets. However, higher inflation suggests the economy is overheating, and rising wages could lower profit margins. Obviously, none of the cases are at this point in time. However, historical evidence shows that periods when inflation starts to rise often lead to volatility in real estate markets and, on average, returns are low. Finally, but more importantly, higher interest rates could hurt property prices if they reflect rising risk. Higher rates are likely to be less relevant if they result from higher growth.

For now, we expect the impact of rising interest rates on the property outlook to be limited. However, a sustained sharp drop in house prices could be linked to slightly slower growth, either because the economy is expecting a slowdown or because the economic downturn itself is dampening growth.

The impact of rising interest rates on growth also depends on the factors that drove interest rates up. The rise in interest rates could be the result of stronger growth momentum, although the economic impact is understandably limited. However, if higher interest rates reflect rising risk, for example, growth may suffer more. The financing conditions remain very loose and the interest rates are relatively low. This should further support economic growth.

We are therefore sticking to our scenario of sustainable economic growth: (1) a higher global economy, (2) rising capital investments, (3) a very gradual adjustment of monetary policy in the USA. We recognize the risks of higher protectionism as recent announcements are a reminder that trade disputes could escalate significantly. At this point it remains to be seen what measures the US will take and how other countries could react.

Since the start of the Great Recession in 2008, most have averted the specter of deflation with conventional and, above all, unconventional monetary policy measures. Inflation in the US averaged around 1.5%, with a spread of -2% in mid-2009 to around 3.8% at the end of 2011. US consumer price inflation is currently 2.1%.

In the US, the government is embarking on a path of fiscal stimulus and more trade tariffs and trade disputes could drive inflation higher. However, several factors are keeping underlying inflationary pressures in check for the time being, including the persistently cautious collective bargaining behavior of households, corporate pricing and changes in the composition of the labor market. Additionally, recent readings have likely overstated current price trends (the surprise inflationary weakness in 2017). Outside the US, wage and price developments have barely changed in recent months.

Against this background, we do not expect any surprises in the course of 2018. The Fed is likely to gradually hike rates with caution, depending on US labor market tension, signs of accelerating wage dynamics and the potential impact of higher financial markets on volatility in economic growth.

In addition, tax policies that promote the competitiveness of American businesses and attract foreign direct investment that increase the potential growth rate of the United States should also support the dollar. At the same time, just as many factors speak for a glorious future for the real estate markets

According to the Federal Reserve Bank of New York, the probability of a recession for the US economy is currently around 4% and will reach around 10% by the end of 2018. In our view, the gradual tightening of monetary policy limits inflation expectations and cautious investment demand will keep real interest rates relatively low. We therefore prefer real estate investments in 2018.

[ad_2]

Source by Eugene Vollucci

[ad_1]

It is necessary for every individual to have a retirement plan and a planner. In today’s world, most of the people are busy in their daily rush or do not have enough time to think about their retirement. No matter how old you are, it’s never too late to start your retirement plan. But also keep in mind that time goes by very quickly, so you need to plan accordingly before you realize your retirement time has come. We all know that one day we will retire. Our future is in our hands so why not perfect as much as possible.

In fact, retirement is one of the most important phases for any individual. Saving today can be helpful tomorrow.

In order to secure your retirement phase, you should know the pension plans and their advantages. Most companies offer their employees retirement plans, but some do not. There are several retirement planners in the industry so make sure you choose the right one. Here are the key elements to discuss with your financial advisor when planning your retirement:

1. Your current age: Age plays a role in many areas and one of the most important things to consider is your age. While there is no age to plan your retirement age, you should start planning at least seven to eight years before you actually retire.

2. Life Expectancy: This is one of the hardest elements to consider. The average life expectancy for a man and a woman is 85 years and you need to factor this into your retirement planning.

3. Your Income: Another important factor to consider is your recent income. You should work on a few things like – What is your annual income? What is your spouse’s annual income? Be sure to only count the earnings you know.

4. Annual raise: How much raise do you think you will get each year? This is hard to figure out, but the average results show that most people increase their annual income by 3 to 4 percent.

5. Desired Income After Retirement: This is the most interesting part of retirement planning. What are your retirement plans? Do you want to travel or something else? Take all of these factors into account to find the perfect retirement plan for you and your spouse.

These are some of the necessary things that every individual needs to consider when planning for retirement.

[ad_2]

Source by Sara Rashid

[ad_1]

Digital currencies like Bitcoin and Ethereum are making headlines every day. The characteristics that make these cryptocurrencies unique are their ability to act as a store of value and lightning-fast transfer speeds, or at least with the advent of the Lightning Network for Bitcoin and Ethereum, Casper Switch to POS and its smart contract features, cryptocurrencies are more than just money. Now everyone is talking about Masternodes coins because of the added incentive to own a percentage of a certain currency.

If you could imagine your good old blue-faced hundred dollar bill on steroids, then you’d be close to imagining a masternodes coin. In the cryptocurrency world, the proof of stake is the transaction hash confirmation method that maintains consensus and keeps all notes on the same page so that certain transactions cannot be duplicated and everything is fine with network consensus . Staking your coins is a way to use the amount of money you have and sync your digital wallet with the network to receive them and in return you will be given an incentive to validate the transactions. In order to operate masternodes, one must have a set number of coins running on a network and follow the masternodes setup instructions for the currency in which you want to invest. The added incentive is amazingly more than just staking your coins, in some cases up to 1500 percent annually. It is these astronomical returns that are really bringing a lot of attention and investment to the masternodes market.

One crypto that is planning to release a Masternodes coin in early 2019 is the Tattoo Allince Token, which is said to be a side chain of the Egem blockchain that will support the tattoo industry by creating a tokenized reward system for both people who want to buy tattoos, as well as for artists who look to create further to apply the artwork in exchange for the token. I believe this is going to be an amazing and refreshing idea, and a great way to create long-term benefits for tattoo artists who have not yet set up a 401k or incentive program. I am optimistic about this crypto as it seeks to generate great rewards and add value to a cash heavy industry. I believe that in addition to the masternodes features, it will also offer staking and a smart contract protocol, as well as decentralized autonomous governance and a membership rewards program. Look for more information on the TAT Masternodes token, which will be available early next year.

[ad_2]

Source by Christopher Cunningham

[ad_1]

The Volume Weighted Average Price (VWAP) of a stock is basically the “average” price of the stock relative to the volume it traded during the day. As the monitoring of the VWAP is stepped up due to algorithms that affect intraday trading activity, you may be surprised that many day trading software companies do not use a standardized calculation of the VWAP! Although both calculations produce similar results, you can contact your day trading software company to ask which VWAP calculation is used if your day trading style warrants monitoring the VWAP. There is a chance that the agent on the other end of the line may not know which calculation is being used. So wait a couple of hours (or even days!) Before you get a response.

The “cumulative” VWAP is considered to be the “most accurate” calculation as it changes with every transaction. The formula is:

The sum of all transactions (volume in shares x traded price) divided by the cumulative volume. For example, let’s say the stock has 5 trades on that day:

• $ 20.05 1000 shares
• $ 20.06 800 shares
• $ 20.04 100 shares
• $ 20.03 2000 shares
• $ 20.03 3000 shares

The VWAP would be:

($ 20.05 x 1000) + ($ 20.06 x 800) + ($ 20.04 x 100) + ($ 20.03 x 2000) + ($ 20.03 x 3000) / (1000 + 800 + 100 + 2000 + 3000)

This means:

(20050 + 16048 + 2004 + 40060 + 60090) / (6900) = 20.0365. Therefore, $ 20.0365 would be the “cumulative VWAP”

The “iterative” VWAP calculation is sometimes used by software companies because it is easier to maintain in the database and prevents the overall software from running slower than the optimal speed. It uses the last value of the VWAP as the basis for calculating the VWAP on the next trade. Use the same example as above:

• 1st iteration: (20.05 x 1000) / 1000 = 20050/1000 = $ 20.05
• 2nd iteration: $ 20.05 + (20.06-25.05) x 800) / (1000 + 800) = 20.0544
• 3rd iteration: 20.0544 + (20.04-20.0544) x 100 / (1800 + 100) = 20.0536
• 4th iteration: 20.0536 + {(20.03-20.0536) x 2000) / (1900 + 2000) = 20.0311
• 5th iteration: 20.0311 + {(20.03-20.0311) x 3000) / (3900 + 3000) = 20.0306

Of course, the more trades (iterations) are carried out, the closer the two VWAP calculations are. Since each symbol has several hundred (or several thousand) transactions every day, this shouldn’t be a big problem for most day traders. If you are monitoring the VWAP for VERY thinly traded symbols – with trades that happen only a few times a day – you should ask your day trading software company what method the VWAP is calculated by. This is just to let you know how to monitor trading activity and then make any necessary adjustments to your trade execution methods.

You can also talk to your day trading software company about other VWAP nuances, such as: B. if you include pre-market trades in the VWAP calculation. Find out if you can plot the VWAP on intraday charts alongside indicators like moving averages. These nuances will give you the best chance of maximizing your day trading software to aid you in your VWAP-related trading.

[ad_2]

Source by Matthew Mc Dermott