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Rising Tensions, What Does It Mean for Investors?

Unfortunately, our forecast over the past couple of years for increased geopolitical tensions is coming true. We have stated a number of times that when ruling governments are in dire financial shape, the politicians realize that they have no solution to solve the financial problems, so they often look for diversions to take the focus away from them.
Certainly Russian President Putin has been a master of these diversions, first invading Ukraine & now with his move in Syria. We are also very suspicious of why Turkey shot down a lone Russian jet. Seriously, there is no way they would have thought that if Russia wanted to attack them, Russia would only send one jet.
Turkey is in horrible shape financially, so we have to wonder if they want to use this incident to unite the people against Russia & divert their attention away from their domestic problems. As more & more countries fall deeper in debt, watch for more of these provocations against other foreign countries.
These polit…

What Is an Investment?

One of the reasons many people fail, even very woefully, in the game of investing is that they play it without understanding the rules that regulate it. It is an obvious truth that you cannot win a game if you violate its rules. However, you must know the rules before you will be able to avoid violating them. Another reason people fail in investing is that they play the game without understanding what it is all about. This is why it is important to unmask the meaning of the term, 'investment'. What is an investment? An investment is an income-generating valuable. It is very important that you take note of every word in the definition because they are important in understanding the real meaning of investment.
From the definition above, there are two key features of an investment. Every possession, belonging or property (of yours) must satisfy both conditions before it can qualify to become (or be called) an investment. Otherwise, it will be something other than an investment. Th…

An Automated Investment Advisor Helps Maintain Investment Goals

The advent of the automated investment advisor has made establishing a long-term financial plan easier and more accessible to a growing number of investors who want to have the ability of setting a program and staying on track. These systems can offer the user tools and advice that can let both the experienced investor and the novice maximize the opportunities that exist both in the short term and for future goals.
Providing professional guidance, sophisticated trading tools, and projections, these computerized systems-often known as "robo-advisors"- can be fully programmable to conduct trades or changes in the portfolio. Some variations allow for the user to "self-execute" trades or to have a human advisor guide the transactions.
How These Systems Function
One question that potential customers ask is: How does an automated investment advisor work? To begin with, these programs utilize mathematical algorithms to help establish a portfolio tailored to meet certain leve…
We've heard wild tales of the future Dow Jones Industrial Average (DOW). In fact, one set of analysts working for Calpers (the largest California Pension Fund - for teachers) had based their ability to keep their pension fully funded on the DOW being at 28,000 by 2009 and by 2099 at 28,000,000 pts (yes, 28 million) which is just tad bit exuberant by any stretch of the imagination. That of course, was just prior to the 2008 Financial Crisis (Cite: Wall Street Journal, article; "Dow 28,000,000: The Unbelievable Expectations of California's Pension System," by David Crane, 5-19-2010).

So, as we approach the final days before we hit DOW 20K, and Christmas 2017, apparently, the stars have aligned. How did this happen so quickly, especially at a time when we were told that if Hillary Clinton didn't win the election, our stock markets would tank, turns out all the major indices are at an all-time high.

Such doom-and-gloom was also perpetuated by the mainstream media in Britain right before Brexit. So what is causing this stock market rally, and the more important question; how long will it last, as we are way overdue for a major correction, actually we've been overdue for well over a year, as many of the major companies are trading a PE ratios (price of stock over expected earnings) which are at or above the Dot Com Bubble highs. The DOW at that time circa 1999 was only 9,000 points.

So, what brings us to this point in time? Many things, here are a few:

- The Trump Bounce
- The Upward Trend
- The Flight to Safety
- Low Interest Rates

There was an interesting article in Reuters on December 20, 2016 titled: "Nasdaq rises to record, Dow bats eyes at 20,000" by Noel Randewich which stated:

"The Dow and Nasdaq Composite rose to record highs on Tuesday in a rally fueled by optimism about U.S. President-elect Donald Trump's policies. U.S. stocks have been on a tear since the Nov. 8 presidential election, with the Dow up 9 percent and the S&P 500 gaining 6 percent on bets that Trump's plans for deregulation and infrastructure spending will boost the economy "The market is focused on the Trump agenda, which is tax cuts, infrastructure spending and deregulation," said Jeff Zipper."

So, the question is: what's next? Well, it appears that Trump's Economic Plan could actually set our GDP inline for a 4% growth rate just as he promised. The FED is worried about inflation, and have already decided to step in and raise rates.

Let's face it lowering the corporate tax rate will spur growth, and with growth comes small business startups and expansion. Things are about to get interesting, and we will have some jitters and fluctuations in the market as the New Normal takes hold. Please consider all this and think on it.

spankosha
writer and blogger, founder of investings .

جديد قسم : Automation

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