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You’ve heard about them in the news, you’ve heard they’re easy to trade, but what exactly are index products?

First, let’s define an index. Simply put, an index represents a “basket” or portfolio of stocks or commodities, grouped in a particular way (e.g., the S&P 500 Index is made up of large-capitalization stocks; the Russell 2000® Index is based on small-capitalization stocks). How a particular stock or commodity index tracks the market depends on its composition – the stocks or commodities included in the index, the percentage weight of each component, and the method of calculating each index. The index comprising these stocks or commodities is typically called the “underlying” or “cash.”

Index futures and options closely follow the price movement of these underlying indexes. Index futures are a type of forward contract, which means they are agreements to buy or sell their underlying product at a specific price on a specific date in the future.

For Example:
E-mini S&P 500 and E-mini Nasdaq-100 stock index futures are electronically traded, smaller versions of the stock index futures contracts used by the big financial institutions. (The “E” stands for electronic, and the “mini” refers to the smaller size of these investment tools.) At one-fifth the size of their institutional counterparts (also traded at CME), they can be easily used by individual investors. They provide a highly liquid way to trade stock indexes.

From a practical standpoint, they trade similarly to stocks. You can go long (buy) and then close out your trade by selling. It’s also just as easy for an individual investor to sell first then buy back at a hopefully lower price.  That’s called shorting and it is important that you know that by buying your losses can go no lower than zero, but if you are shorting your downside is unlimited.   You can  buy an E-mini stock index contract – an advantage over trading stocks. As futures contracts on stock indexes, these E-minis trade at a price that is closely related to the underlying stock market index on a day-to-day basis. Like other futures, these products are a type of forward contract. This means they are agreements to buy or sell their underlying product at a specific price on a specific date in the future.

When you trade these products, you are trading on the future direction of the underlying stock indexes. E-mini stock index prices fluctuate as the stock markets move – almost constantly. As a result, these contracts offer virtually endless trading opportunities. Similar to the stock market, you execute these trades via a registered broker over the phone or with electronic order management software on your PC.

Rare Metals Bonanza

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It’s a small chunk of land, about half the size of Rhode Island, located in a part of the world most people know nothing about.

Today, the heads of Toyota, Honda, and the Pentagon all share a common interest.

But they’re not the only ones watching. Venture capitalists, hedge fund managers, and resource companies from all over the globe are also watching and waiting. . . ready to pour billions into Greenland once they get the green light.
Why?
This coming January, when the Kingdom of Denmark relinquishes sovereign control over Greenland’s natural resources, the world’s biggest deposit of Rare Earth Metals (or REEs), will fall into private hands. . . for the first time ever.

This single site boasts deposits valued at an estimated $1.3 trillion. . . and yet, REEs are worth more than just money.

Which is why the world’s leading manufacturers of hybrid cars, wind turbines, batteries, and yes — even the guidance systems to our most sophisticated air and ground defense missiles systems, are watching the events in Greenland unfold with baited breath.

The elements that fall into the category of Rare Earths include:

  • Lanthanum – essential in the production of electric car batteries;
  • Terbium – without this element, high-strength magnets would not exist;
  • Erbium – makes possible a wide range of light-weight, high-strength metal alloys;
  • Thulium – makes high-frequency lasers a reality.
  • And once Greenland takes control of its mineral wealth, this land — totaling barely 800 square miles — is projected to supply 25% of the world’s entire REE market. . . for half a century.

To companies like Toyota and Honda, that have virtually staked their futures on the rapidly expanding hybrid/plug-in car market, and to our own defense industry, which cannot perform even the simplest task without highly-involved electronic assistance, this news could not have come at a better time.

Because for the last decade and a half, our greatest and most populous modern rival has been hard at work to corner the market on these vital elements.

And on April 17 of this year, with the signing of a single contract, the Chinese reached a record 96.7% global market share.

China’s “Dragon Metals”

…..read more HERE.

 

To subscribe to the FREE Wealth Daily Newsletter go HERE.

 

Brian Hicks is the managing editor and chief investment analyst of the $20 Trillion Report, a weekly investment advisory that covers the energy sector. Since its inception in 2004, the $20 Trillion Report (TTR) portfolio has returned an average gain of 37% per annum.

In addition to running the TTR, Brian also contributes to Wealth Daily and Energy & Capital, two investment dailies that are free to the public.

Rare Metals Bonanza

20091104_rareearthoxidesjpg

It’s a small chunk of land, about half the size of Rhode Island, located in a part of the world most people know nothing about.

Today, the heads of Toyota, Honda, and the Pentagon all share a common interest.

But they’re not the only ones watching. Venture capitalists, hedge fund managers, and resource companies from all over the globe are also watching and waiting. . . ready to pour billions into Greenland once they get the green light.
Why?
This coming January, when the Kingdom of Denmark relinquishes sovereign control over Greenland’s natural resources, the world’s biggest deposit of Rare Earth Metals (or REEs), will fall into private hands. . . for the first time ever.

This single site boasts deposits valued at an estimated $1.3 trillion. . . and yet, REEs are worth more than just money.

Which is why the world’s leading manufacturers of hybrid cars, wind turbines, batteries, and yes — even the guidance systems to our most sophisticated air and ground defense missiles systems, are watching the events in Greenland unfold with baited breath.

The elements that fall into the category of Rare Earths include:

  • Lanthanum – essential in the production of electric car batteries;
  • Terbium – without this element, high-strength magnets would not exist;
  • Erbium – makes possible a wide range of light-weight, high-strength metal alloys;
  • Thulium – makes high-frequency lasers a reality.
  • And once Greenland takes control of its mineral wealth, this land — totaling barely 800 square miles — is projected to supply 25% of the world’s entire REE market. . . for half a century.

To companies like Toyota and Honda, that have virtually staked their futures on the rapidly expanding hybrid/plug-in car market, and to our own defense industry, which cannot perform even the simplest task without highly-involved electronic assistance, this news could not have come at a better time.

Because for the last decade and a half, our greatest and most populous modern rival has been hard at work to corner the market on these vital elements.

And on April 17 of this year, with the signing of a single contract, the Chinese reached a record 96.7% global market share.

China’s “Dragon Metals”

…..read more HERE.

 

To subscribe to the FREE Wealth Daily Newsletter go HERE.

 

Brian Hicks is the managing editor and chief investment analyst of the $20 Trillion Report, a weekly investment advisory that covers the energy sector. Since its inception in 2004, the $20 Trillion Report (TTR) portfolio has returned an average gain of 37% per annum.

In addition to running the TTR, Brian also contributes to Wealth Daily and Energy & Capital, two investment dailies that are free to the public.

Reap what you sow

Real estate is heavily scewed to work UPFRONT: educate yourself, find the area, find the micro-location in a city, find a property, negotiate a deal, find a decent mortgage broker, find a decent lawyer, find an accountant, get the mortgage, find a property manager, do the right initial improvements, find JV partners .. MOST WORK IS UPFRONT (90% or so) .. but then it is downhill form there !

Similar to an airplane: 90% of the fuel is burned on the first few kilometers to get it to 30,000 ft .. then soaring / gliding for the next 1000 km .. then a bit more work / fuel for landing !

Some properties provide thousands of dollars per month cash-flow plus mortgage paydown plus at least some inflationary appreciation .. with perhaps 1-2h / month now .. but most of the heavy lifting happened 4-6 years ago !!

You reap what you sow !!

So, sow away big time now .. and reap lots later !!!

The article above courtesy of Prestigious Properties President Thomas Beyer.

 

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Five ways to make money

There are really only five ways to generate your own cash for a real estate transaction .. and you can do all five in time .. but you have to take them all seriously !

1) You work

This is the most common way to start. You work, i.e. you exchange your time for money. The more time you give, the more money you get. A pretty linear relationship. Proven though through centuries !

Many people fail at that stage already. They don’t take it seriously. They show up late. They chat with friends online. They do personal business on the side. They don’t understand the business they’re in. They don’t give 110%. Maybe 50% or 85% .. or 35%.

Yes, you can hide for a few days or a few weeks. Most employers realize after a while who is an excellent performer and who isn’t. If you work hard at your job, you get ahead. Give the extra 10% or the extra 4-5 hours every week. Read up on your industry. Go to industry conferences. Seek a mentor. You get promoted. You get more $s per hour. If you have more skills, you get more $s. So, yes, formal and informal education helps. If you work hard, and get more $s than you spend, you can save some $s. Hence:

2) You invest your own $s.

You buy real estate or mutual funds or stocks or GICs or bonds or whatever seems to fit your risk tolerance, skills and timeline. Like 1) it takes time to find out what a good investment looks like. Take it seriously. This investment could be more passive (say a stock or mutual fund) or more active (say real estate or active stock trading)

3) You invest other people’s money.

Once you’ve mastered 2) you have the right to ask for OPM (other people’s money) such as JV partners or money partners or mortgages or lines-of-credit to invest, for example in real estate: Usually a combination of your own time, your own money and OPM (mortgage, LOC, JV money or all 3). You borrow money at, say 6%, and invest it for 12% to 150% ! This assume a modest degree of risk as you must pay the rate your agreed with OPM but invest at a more uncertain, yet frequently much higher rate. This assume 1) and 2) is in ship-shape ! If you invest other people’s money you take a fee or a percentage of the profit – upfront, as you go along and/or at the end of the venture.

4) You use other people’s time / employ other people

You have a small or large business where you pay people a wage/salary/hourly wage and then use their time to make money for yourself. This works usually only if you’re good at 1) 2) and 3) as usually your have to work hard too to lead by example and have some (of your own or other folks’) money at risk.

5) You have Intellectual property (IP)

Intellectual property or royalties make money for you once you have created them: maybe you have written a book. Maybe you have written lyrics or songs or music. Maybe you have painted a picture and it is copied widely for a fee. Maybe you have invented a name and copyrighted it. Maybe you have a patent or a system that can be used for a fee. Elton John makes money in his sleep today – but he was very good at 1) in the beginning of his career.

So, there you have it in a nut shell: 5 ways to make money. Are you aiming to fire on 5 cylinders ? Or is it only 1/2 ? Try harder .. or try different ways .. but usually they go in that order of: 1, 2, 3, 4 5 ..

 

The article above courtesy of Prestigious Properties President Thomas Beyer.

 

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