Interest rates are too low – and they’ll be low for a long time to come.
Low rates are good news for borrowers.
But low rates are not good news for savers. Allow us to take a look at five ways you can increase the yields you receive for saving and investing your money.
We’re living in tough times right now, what with so many people being unemployed and the economy not showing any signs of picking up soon. It’s not just you who’s struggling to make ends meet – pretty much everyone these days is having difficulty making sure their bills are paid on time, paying the rent or mortgage, and any other expenses that crop up. After all of our bills have been paid, were often left with little but spare change, meaning we never have enough to actually buy something for ourselves.
Read more…
Investors and drivers rejoice – it looks like there might be life in the American automotive industry.
This week, Ford Motor Company won an award for the best engine of 2012. The engine was tiny – 999 cubic centimeters.
But the prize is not so tiny. Ford intends to ship 999cc engines in the popular Ford Focus in the European markets. The engine is expected to come to the United States in 2014 on the new Fiesta line-up. Consumers should rightfully flock to a car that promises up to 35 miles per gallon in combined highway and city driving.
From a slowing automotive market to a financial crisis that nearly sent the firm into bankruptcy, Ford has faced plenty of challenges.
Today, however, Ford is back to recovery. Just weeks ago, Fitch upgraded Ford to investment grade citing improvements in automotive manufacturing and sales. The lift helped Ford’s bonds, which rallied tremendously on the news of the upgrade.
Today, however, it was Moody’s that gave Ford another bump to investment grade. The company noted improvements in car sales, and that it thought the company’s improvement would be long-lasting and continued.
Investors often discuss the role of an economic moat as a valuable attribute of a common stock. So what is an economic moat?
How are moats created?
And what can you do to find businesses that have the benefit of a moat?
We’ll dig deeper to explain everything you need to know.
Patents seem to be the new asset class when it comes to corporate balance sheets. Recently, Microsoft agreed to purchase a portfolio of patents from AOL for $1 billion.
Microsoft announced the sale of 625 patents – all of which came from AOL – to Facebook for $550 million. Facebook will also receive licensing agreements to the remaining 325 patents, and Microsoft will receive cash alongside additional licenses from Facebook’s already existing patent portfolio.
Another even-numbered year rolls around, and this time it’s presidential election season. As it stands, it appears that either Barack Obama will be elected for a second term, or a Republican challenger, likely Mitt Romney, will be the next president of the United States.
So how will either outcome of the 2012 presidential race affect the stock market?
Groupon GRPN shares tanked on the Monday open as investors started losing love for the company earlier in the year named as the fastest growing company ever. Groupon seems to have more than its fair share of problems, many of which may be deeply rooted in accounting technique and tax law.
Individual investors can increase their returns by building their own stock portfolio, ideally one that is diversified into several businesses and industries.
The thing about diversification is that there isn’t much need for extreme diversification. A portfolio of 8-15 stocks is often just as good, and even better, than a portfolio of 500 stocks. Having fewer stocks make up a larger part of your portfolio allows you to invest only in the best 8-20 opportunities, giving you the best possible returns.
Read more…
Stock options are a derivative that have become very popular with traders. Traders and investors can use options to place a trade on a specific security without actually owning that security. Instead of purchasing 100 shares of Walmart, for example, an investor could simply purchase 100 options, which allows the investor to make money just as he would if he were to buy Walmart stock shares.
One of the hardest parts of investing is valuing a company. Valuing a company requires that you know a lot about the business – you have to know enough to know the future income potential, risks, and the expected return you want from your investments.
This is only made more complicated when it comes time to value a dot com company – an online company. Recently, Yelp.com had an IPO and was valued at $1.3 billion, even though the company has never made money itself.
The price to book ratio is one of the better valuation numbers for finding stocks with a margin of safety. Stocks with a low price to book ratio often have very good upside, as well as the protection of a large loss due to assets held by the firm.
Mastercard is one hot stock. After an IPO at $50 per share in 2006, the company has rewarded shareholders with a return of nearly 700% as the stock hovers around $400 per share.
The company is certainly successful. Mastercard’s “priceless” advertising spree made it one of the best known payment processors in the business. It’s diversification away from credit card issuance helped it avoid an otherwise awful credit crunch.
Gold has certainly made a mark in the investment world. More people are now considering investing in gold stocks, a small part of the total stock market.
There are a few things investors should know about before they take the plunge, however. We’ve outlined some things that make gold investing different from other investments.
Coinstar (CSTR), the parent company of video rental service Redbox, announced a new joint venture with Verizon (VZ) to bring a streaming solution to more devices.
The joint venture will involve both Redbox’s offline distribution service, as well as a new service geared toward other devices through the online streaming business. The companies plan to offer a subscription service that, I’m guessing, will be very similar to Netflix’s current offerings.
How long can the Federal Reserve continue to keep US interest rates at record lows?
This is the million dollar question.
Potential home buyers are waiting to see if they can wait just a little longer to score a cheaper interest rate. The mortgage industry is loving all the refinances, especially now that some people have refinanced once or even twice at low interest rates compared to previous home loans.
Investing isn’t something that can be learned in a day, week, or even a single year. Finance is a study which many people dedicate four to eight years of their lives studying in college.
But beginners have to start somewhere, and the stock market is a great place to get started in the world of investing. Let’s look at a few methods that beginners can use to buy and sell stock as an investment.
Cost of Goods Sold is a ratio-level financial indicator. The Cost of Goods Sold is used to determine how much of a company’s revenues are used to cover the basic costs of the products the company sells to customers.
Amazon had a COGS ratio of 77.45% of revenues in 2010. Thus, for every $1 in product Amazon sold to customers, the company had to spend 77.45 cents on the goods. The remaining amount could be used to pay for the operating expenses of the company.
After that item (usually known as SG&A) all amounts left over are pre-tax profits.
Active investing is a form of investment methodology where the investor takes an active stance in their individual investments.
Generally, active investors invest in the stock and bond markets, like most passive investors, but their investments are actively-managed. That is, active investors take a direct role in allocating their investment capital and finding new investment opportunities.
Active investing is most often contrasted to passive investing, or buy and hold investing strategies. A passive investor usually relies on market indices, such as the S&P500 index, to track the returns of the market. Due to lower expenses, passive investors get perhaps one of the best returns relative to their time investment.
Passive investors are more likely to favor routine monthly income investments, which provide regular cash flow back to investors.
Investors now have access to all the financial markets they could ever want.
Even individual investors can now buy exchange-traded funds and other investments that allow them to move money from one nation to another within a matter of minutes. This opportunity allows individual investors to go overseas to chase investment yields that may be higher than they can find in the US, but such opportunities require you to know the importance of interest rate parity in an investment.
Investing in copper is becoming a very popular trend for those looking to diversify into new metals other than precious metals.
There are a multitude of reasons one might chose to begin investing in copper, so we’ll break down the pros, cons, and the methods for buying copper as an investment.
Modern investment theory supports the idea of asset allocation in building a winning portfolio. Most investors, however, still have a common question: what is asset allocation?
Asset allocation is a careful study of picking investments based on their risk-profile. By combining many different investments into one, all-inclusive allocation strategy, an investor can reduce risks, increase returns, and generate a better annual return relative to the total risk.
Despite the turmoil and political unrest, more investors are looking to Africa as the new frontier market.
A frontier market is a market which hasn’t yet reached emerging market condition. Investing in Africa would certainly fit along the guidelines of a frontier market investment.
I don’t know of any IPO that had as much coverage this year as the daily deal leader Groupon. Many investors see opportunity in the Groupon IPO, noting that it’s a market leading company.
Others, however, see the nonprofitable firm as just another tech boom sure to go bust. What I do know is that no matter your opinion on the company, it’s likely that you lean one way or another, but not right down the middle.
For Financial Planners, the Certified Financial Planner Designation, or CFP for short, is one of the most important designations a financial planner can earn.
The CFP designation is well known, and also presents an opportunity for financial planners to stand out from the crowd.
But what does it mean for a financial planner’s customers? Should you work with a CFP just because they have the Certified Financial Planner designation?
