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Tracking the Hedgies to Spot Investment Opportunities |
Jul 07, 2009 |
Investing in futures markets is very different than trading stocks. Due to the high degree of leverage in futures, there is much more risk for individuals, and the need to constantly monitor market positions makes these markets the wrong investment choice for the majority of individual investors.
Many hedge funds and large investment firms learned that leverage is a double-edged sword in last year’s financial crisis. While it dramatically increases profits on the upside, it rapidly destroys wealth on the downside and can lead to bankruptcy.
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Don’t Get Squeezed by Commodity Touts |
Jun 30, 2009 |
In recent weeks, investment experts such as Jim Rogers and Marc Faber have predicted bullish moves in commodities. Many other experts agree that commodities like oil, gas, and gold offer profitable opportunities in the future.
Unfortunately, the headlines fail to warn individual investors that commodity investing is much different than stock investing and is truly not something that most people should try at home.
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A Real Green Shoot: Falling Gasoline Prices |
Jun 24, 2009 |
After more than doubling since the start of the year, gasoline prices show signs of topping. This would boost consumer sentiment and could help with the budding economic recovery.
Retail gas prices have been rising steadily, advancing daily for nearly two straight months into late-June. Finally, the AAA Daily Fuel Gauge Report reported a break in the trend on June 22 after the average price of a gallon of gas peaked near $2.70 a gallon.
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Bulls Climb a Wall of Worry — For Now |
Jun 15, 2009 |
Lately, stock prices seem to be ignoring bad news and moving higher and higher. The recent market action is what traders mean when they say that bull markets need a "wall of worry."
All markets discount the future. Discounting is an accounting process where a precise future value is placed on an asset. For example, if the stocks in the S&P 500 index are expected to earn $60 a share next year and the average historic P/E ratio is 15, then the index should be valued near 900.
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Treasury Sell-off An Opportunity for Fixed-Income Investors |
Jun 03, 2009 |
The yield on Treasury bonds has been rising quickly. Since the beginning of 2009, the yield on the 10-year note has risen from 2.14 percent to 3.64 percent, an increase of nearly 80 percent in less than six months.
Treasuries have been rising as the magnitude of the federal deficit becomes clearer to investors. A $1.5 trillion budget shortfall will require the government to issue a lot of bonds. Additional financing will be required to meet the long-term shortfalls in Social Security and Medicare.
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