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…

Paper Money Vs Hard Assets - Should You Have Owned Buffaloes Instead?

The limit prices for purchasing 5 stocks were set almost a month ago ranging from 15% to 50% down, which seemed almost impossible to reach at the time. It shows the level of my willingness to buy these stocks at that time, but today, I am not so sure if I am willing to buy them with the set prices. When I finally had a chance to open up my brokerage account, it was too late. It was almost scary to see what has happened. 3 out of 5 stocks on my buying list automatically went from "open" to "complete". Should I hold off or drop price on the 2 left? I immediately thought. My confidence level in investing in these stocks has dropped since, but why? I am mostly a long term investor, and these are mainly solid companies with a solid balance sheet. The companies on my wish list are what I always want to buy - the more, the better, and I have just been waiting for the right moment like a ferocious tiger. On a day like today, my hunger is somewhat replaced by fear.

The stock market has experienced a roller coaster ride in the last ten days. DJIA dived to a new low of 16,058 on the 1st day of September, after plunging another 469.68 points or 2.84% since its significant fall on Aug 20, 2015 to 16,991 after plummeting 358.04 points or 2.06% on that day. You may argue your stocks or paper money (they are not even on paper at this digital age) are backed by hard assets of those companies. On a day like today, you may feel you need something tangible that you can see and touch.

Ted Turner, the founder of the Cable News Network (CNN), the first 24-hour cable news channel, and a pioneer and visionary in TV broadcasting, is one of the largest private landowners in the United States. His land is mostly used for ranches to re-popularize bison meat for his Ted's Montana Grill chain, amassing the world's largest herd. Turner Broadcasting System, Inc. merged with Time Warner, Inc. on October 10, 1996, and on January 11, 2001, Time Warner was purchased by AOL to become AOL Time Warner. The burst of the dotcom bubble hurt the growth and profitability of AOL, which in turn dragged down the combined company's performance and stock price, where he lost his operational role as well. It is estimated that, as Time Warner's biggest individual shareholder at the time, he lost approximately $7 billion when the stock collapsed in the wake of the merger. It was reported that, when asked about buying back his former assets, he replied that he "can't afford them now". Maybe he will if he manages to raise a few more buffaloes on his accumulated land.

You may wonder if you should have owned buffaloes instead. Let's not forget Warren Buffett, one of the richest men on earth, who has made his marks through the financial system that we live in today. When you think of him, it almost makes owning the land and cows absolutely obsolete and totally 17th century. He does own a 400-acre farm outside Omaha and a commercial building in Manhattan, but they play no significant roles in his holdings. Let's also not forget that shareholders of Enron almost lost everything, and even shareholders of companies like AT&T once lost a significant amount that they had never expected. The financial guru's advice to his trustee is to put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund, and he suggests Vanguard's. A close friend of mine, who does not eat red meat except bison, happens to be also a believer in diversification via mutual funds. The concept of diversification still stands, at least for some of us, and you just need to find your own comfort zone of investing. A stock owner may also consider owning a few patches of land and raising a few cows among others including mutual funds.

writer and blogger, founder of investings .

جديد قسم : Assets

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