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Showing posts from November, 2009

Investing in Better Research

A few days ago, a reporter asked me if I was losing money in real estate. My reply was, "No, I'm making money."


Confused, he asked, "How can you be making money during the subprime disaster?" I explained that since the real estate market took a downturn, there were more people renting rather than buying, which is great for my apartment business. I also informed him that I'm raising rents since demand for affordable apartments is so high. When someone moves out, I increase the rent and new tenants line up, which means my cash flow is increasing.




He then asked, "Are you looking for new investments?"




A shocked look came over his face when I said, "I've been investing heavily in the stock market since August 2007. I've moved several million dollars into the market."




"The stock market?" he stammered. "Stocks are crashing. Why are you in the stock market? Besides, I thought you were a real estate investor?"




Ignorance Isn…

Avoid These Three Investment Mistakes

By Christopher Davis

Whether it's the Dutch tulip craze of the 17th century, the dot-com mania of the late 1990s, or the most recent rush into real estate, there's no shortage of examples of investors behaving irrationally.

In the world of traditional economists and finance professors, though, that's not supposed to happen. If investors are rational decision-makers, then emotion-driven bubbles shouldn't be possible. Yet human weaknesses can limit our ability to think clearly. Many studies of investor behavior have shown that investors are too willing to extrapolate recent trends far into the future, too confident in their abilities, and too quick (or not quick enough) to react to new information. These tendencies often lead investors to make decisions that run counter to their own best interests.

The idea that investor psychology can result in poor investment decisions is a key insight of an increasingly influential field of study called behavioral finance. Behavioral-fi…

5 ways to make extra money and boost your income

By Alexis Jeffries and Donna Rosato, Money Magazine

Wish you had a little more money in your wallet these days? Who doesn't?

While the Great Recession is over by most accounts, the Great Income Squeeze lingers on. You're more likely to have had a pay freeze than a pay raise over the past year; and the average bump up for 2010 is expected to be pretty paltry. Meanwhile, your portfolio may still be off its pre-crisis highs, even after the market's rally, and the bank won't pay you spit to hold your cash.

But you don't have to accept the status quo when it comes to bringing in the dough. Whether you're still on the job or retired from the grind, the action plans that follow can help boost your income.

The strategies require human or financial capital (and sometimes both). But those that involve work don't demand extra training, and should leave you leisure time to spare. Bonus: These moneymakers may satisfy your entrepreneurial spirit, get your creative juices fl…

You Might Be Richer Than You Think

by Laura Rowley

As this column appears on Thanksgiving Day in the U.S., I thought it would be a good opportunity to look at wealth in a holistic way -- and from a global perspective.

The media typically frames wealth in terms of the list of richest moguls, or features on the world's most expensive homes -- a kind of status fixation that's guaranteed to inspire envy and skew one's perspective.

Researchers have long suggested that the green stuff alone doesn't buy happiness, and most Americans enjoy prosperity in ways we take for granted. Here's a quiz for the holiday to remind yourself of the abundance you enjoy. If you answer "yes" to more than half of these questions, you're among the global well-to-do, and you have plenty to be grateful for this Thanksgiving.

1. Are you planning a sumptuous dinner today? More than 1 billion people -- nearly a sixth of the world's population -- are faced with chronic hunger.

2. Did you spend more than $2.50 on the ing…

Famous Scams: The South Sea Bubble

The South Sea Bubble was one of the earliest British stock market bubbles. But it was more than just a bubble, like the dot com bubble of recent years -- it was an example of a scam of massive proportions, with the snouts of businessmen, management, and government firmly in the trough.
The South Sea Company

With the rise of British Imperial power in the early eighteenth century, the huge wealth generated by its vast overseas businesses was creating a growing wealthy middle class. But it was well nigh impossible for anyone new to invest directly in the companies controlling the trade. For example, the East India Company, which enjoyed a monopoly on trade with India, had fewer than 500 shareholders to whom its handsome (and tax-free) dividends were distributed.

Enter the South Sea Company. Following the War of Spanish Succession, Britain was left with a national debt of around £10m (which was a considerable sum at the time). The South Sea Company was established in 1711 and raised capital …

Transcript: How To Spot An Investment Scam

This is a transcript of David Kuo's recent podcast with Jonathan Phelan of the FSA. Here they talk about common investment scams and how to avoid them.

David:

This is Money Talk, the weekly podcast from the Motley Fool. I'm David Kuo, and today I'm joined by Jonathan Phelan, Head of Retail Enforcement at the Financial Services Authority, and today we'll be having a look at scams. Welcome to the Money Talk podcast, Jonathan.

Jonathan:

Hi David.

David:

Right, as obvious as it may seem to a lot of people, what exactly is a 'scam', and is money always involved in a scam?

Jonathan:

Ultimately money is involved, but really a scam starts with the con, and con doesn't stand for con, con stands for confidence, and they gain your confidence by sweet talking you, taking an interest in you, your family, your wife, your kids, your car, your job, that sort of thing, and you could have many many conversations or a few emails before they even ask you to part with money, but ul…

Crisis fallout still in 'first half': forum

DUBAI (AFP) - – The impact of the global financial crisis is still in its "first half," but there is only a brief opportunity to bring tough reforms, the World Economic Forum warned on Friday.

"It is still too early for people to pat themselves on the back and say that we've managed to get through the crisis," WEF managing director Richard Samans, told AFP.

"I think we're still in the first half of the aftermath of this crisis," Samans said on the sidelines of the forum's second summit on the global agenda in Dubai.

Other forum participants agreed, saying the recovery was threatened by a wide range of problems thrown up by the US-rooted global financial crisis.

"The truth is that we did our best, but (the world is) still going through the storm," Mohammed Alabbar, head of a committee tasked with helping Dubai counter the impact of the crisis, told the conference.

"The world... is in trouble, because government debts are out of contro…

How to Escape the Rat Race

by Brett Arends

provided by The Wall Street Journal

How much money do you actually need to take this job and shove it?

Go on, admit it: You've thought about it. Maybe you've imagined quitting your job and easing into early or semi-retirement -- or starting your own business.

It's a perennial topic, but it's especially timely now. Millions are either unemployed or working part-time. Millions more fear their job could be next.

Obviously there are a legion of complicating factors involved in anyone's decision. Sherrill St. Germain, a financial planner in Hollis, N.H. with a lot experience in the field, says the big issue for many clients is losing group health insurance. "That's the thing that keeps them stuck," she says. "That's the deal-breaker." Say what you will about healthcare reform: The present system is a huge drag on economic mobility and entrepreneurship.

But even if you can surmount all the other complications involved in escaping you…

usnews How to Navigate a Slow-Growth Economy

By Rob Silverblatt

After the dust clears from the furious rally in stock prices, what will happen next? It's the question in the back of every investor's mind, and the answer could be far from encouraging. The way many economists see it, the market is headed for a sustained period of slow growth as the tepid borrowing environment and sluggish employment prospects balance out the recent rash of enthusiasm.

For investors, this turning point in the market provides ample reasons for tempered expectations. But even amid a slowdown, there are a number of opportunities for solid returns. Here are some tips for navigating a slow-growth economy.

Pay attention to dividends. Under normal market conditions, investors can expect a healthy balance of dividend payments and companies' earnings growth to anchor their returns. But if corporate earnings falter in a slow-growth climate, dividends will take on mounting importance.

On its surface, this is a troubling proposition, mostly because th…

Weighing The Facts: Will The Next Leg Be Up or Down?

By Simon Maierhofer

When was the last time you put together a real pros and cons list? Was it back in your dating days, when you purchased your last car, or when you thought about gifts for your mother in law? Regardless of how long it may have been, it's time for another pros and cons list.

Here's why: The stock market has been moving up relentlessly for eight months. Over the same period of time, 3 million jobs have been lost and about one bank a day had to close its doors since the beginning of the year.

Aficionados of technical analysis will find it interesting that the recent 15-day rise came on volume (NYSE total market volume) that was 27% lower than the average volume since March 1st. If you're thinking, stocks are up, all is well; now's the time to snap out of it and face the music.

The implications of this pros and cons analysis will be disturbing, so let's start out with the good news and ease into the subject.

Leading indicators - leading what?

On Thursday (…

Make Money in 2010: Your Job

Donna Rosato

Raises should make a comeback, but keep an updated resume handy.

Despite all the talk about economic recovery, you're probably still anxious about next year's job market -- worried not necessarily about your position but maybe your spouse's or your adult kids' or your best pal's.

Your concern is understandable. According to the consensus estimate from the Blue Chip Economic Indicators, the jobless rate will steady in the first half of 2010, before dipping to 9.6% by year-end.

Continued high unemployment after a slump has become more common in recent years; after the last two recessions, it took two to three years for the jobless rate to return to pre-recession levels.

What's different now: Economists say the severity of this downturn means that it could take even longer for unemployment to drop below 5% as it was in 2007, if it ever does. Structural changes in industries from manufacturing to media, coupled with strong gains in productivity, are enablin…

How to live well

By James Oh

In my previous article, I have given you the true meaning and the methods of creating wealth.

In this article, I am going to lay down some of the useful steps you can adopt to create your wealth so that you can live well.

1. SPEND LESS THAN YOU EARN.

This is the most crucial step to take so as to create wealth. However, this is more often than not being overlooked. People tend to have a misconception of saving and tend to believe that it is a matter of reducing their standard of living. The truth is that it can make a huge difference in their wealth creation. Just imagine every dollar you saved will be invested so as to create more wealth. If you choose to spend the money, both the money and its future benefits will be wasted.

2. QUIT BUYING CRAP

To avoid buying craps, you should always make sure that the items you buy are necessities and not luxuries. You should do away those want lists that are not essential. They are not only to give you a better feeling, but worse still may …

As China’s Economy Grows, So Do the Skeptics

Josh Lipton

A growing pack of bears is now clawing away at China.

Much of the world might have bought into the miracle of China, but there's a significant platoon of heavyweight investment strategists and market pros who think this story of red hot growth in China is a fairy tale that ends in a nightmare.

Yes, our brothers in Beijing are enjoying an economy that continues to smoke, no doubt.

The latest numbers -- as rounded up for us this morning by Dr. Ed Yardeni of Yardeni Research -- speak to the fast-paced growth.

Total retail sales rose 16.2% year-over-year in October, up from 15.5% during September; sales of motor vehicles rose 43.6%; sales of household appliances, music, and video equipment increased 35.4%; clothing sales rose 22.7%; grain and oil sales rose 20.7%.

Still not convinced?

Here's some more data to choke on: Chinese industrial production increased 16.1% year-over-year in October, rising from a 13.9% gain in September; coal production rose 21.1%, while electricity…

The Global Oil Scam: 50 Times Bigger than Madoff

$2.5 Trillion - That’s the size of the global oil scam.

It’s a number so large that, to put it in perspective, we will now begin measuring the damage done to the global economy in "Madoff Units" ($50Bn rip-offs). That’s right - $2.5Tn is 50 TIMES the amount of money that Bernie Madoff scammed from investors in his lifetime, yet it is also LESS than the MONTHLY EXCESS price the global population is being manipulated into paying for a barrel of oil.
Where is the outrage? Where are the investigations?

Goldman Sachs (GS), Morgan Stanley (MS), BP (BP), Total (TOT), Shell (RDS.A), Deutsche Bank (DB) and Societe Generale (SCGLY.PK) founded the Intercontinental Exchange (ICE) in 2000. ICE is an online commodities and futures marketplace. It is outside the US and operates free from the constraints of US laws. The exchange was set up to facilitate "dark pool" trading in the commodities markets. Billions of dollars are being placed on oil futures contracts at the ICE and the bea…