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Should worldwide banking restrictions be eased?

Banking restrictions

Over the last few months we have seen the US government and the UK government coming under intense pressure to ease banking restrictions. These restrictions were dramatically increased in light of the 2007/8 economic downturn which brought down the worldwide economy. While there is no doubt they have assisted in stabilising worldwide money markets, is now the right time to ease these restrictions?

Greater deposits required

One restriction which has had a significant impact is the need to put down a greater deposit when acquiring a home. Gone are the days of 100% mortgages which were so popular in the UK amongst companies such as the failed Northern Rock. There is now a need in many case to put down a minimum deposit of 20% which makes sense because it gives banks headroom between a property value and the financial liability attached to it. However, there are serious concerns that this level of deposit is far too restrictive and having a major impact upon the first-time buyer market. Continue reading “Should worldwide banking restrictions be eased?”

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World of investment, if it aint broke dont fix it

Donald Trump introduces more Chinese trade tariffs

Those who enter the world of investment will know there are temptations aplenty and sometimes you can get a little bored. Maybe your shares aren’t moving like you expected, others are banking greater profits than you or you are just looking for the next challenge. In the world of investment it may surprise many people to learn that boredom can sometimes be the greatest challenge.

If it ain’t broke, don’t fix it

If you have a portfolio which is doing well, plodding along and at least keeping up with the market, then why make any changes? Making change for the sake of change is a recipe for disaster because at some point you will make a mistake, end up chasing your tail and perhaps buyback your previous investments at a higher price. Always take a long-term view when looking at investing in a share or any other type of asset and if a short-term profit arises then count this as a bonus. Continue reading “World of investment, if it aint broke dont fix it”

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Oversold high yield investments

Have you ever tried catching a falling knife?

Whether you are looking for capital appreciation, high yields, rental properties or any other type of asset, there are more than enough to choose from in the world of investment. One interesting strategy which has worked for many people is that of buying oversold assets which offer a high yield. The idea is that the short-term fluctuations in share prices or asset prices can lead to high yielding entry points. This not only offers a degree of backbone for your investments but also the potential for long-term capital appreciation as we will explain.

Oversold positions

Whether due to specific issues, sector issues or general market considerations, shares and assets can become oversold on a regular basis. If example you set yourself a target of acquiring assets with a yield in excess of 5%, bearing in mind the current interest rate environment, this will offer a good backbone while any short-term issues are resolved. It is different if there is a material change in the company’s ability to pay dividends or a property’s ability to attract high yielding tenants, but if all remains positive in the long-term you can not only build up a considerable income stream but also a strong backbone for your portfolio. Continue reading “Oversold high yield investments”

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Does Elon Musk spread himself too thinly?

Tesla shares surge

It seems there is hardly a day goes by without Tesla CEO Elon Musk hitting the news headlines. Whether he is discussing the next electric vehicle, innovative modes of transport, artificial intelligence or the space race, he seems to have views about everything and more often than not a financial investment. While there is no doubt that the man himself is a workaholic, having initially built up PayPal and sold it for a multi-million-dollar payday, is he starting to spread himself too thinly amongst his business interests?

An extremely intelligent man

Those who know Elon Musk often wax lyrical about his workaholic lifestyle and the fact that he would not ask others to do something he would not be willing to do himself. He goes the extra mile, publicises his investments to the masses and is the first person to stand up and take the flak when problems occur. He made a fortune from electronic payment systems before they were trusted, fell into the Tesla CEO position and blossomed and then put aside billions of dollars to invest in innovative modes of transport and the space race. He finds himself educating the general public and businesses about his new technologies because he is often ahead of the game. Continue reading “Does Elon Musk spread himself too thinly?”

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Does hacking offer a golden investment opportunity?

The pros and cons of low liquidity stocks

In the aftermath of yet more damaging revelations about systems being hacked and e-mails and private customer information falling into the wrong hands, are companies doing enough to protect confidential customer information? In public at least, companies would appear to be spending billions of dollars on airtight computer systems but in reality nothing is ever 100% secure, either online or off-line. Hacking is becoming a major problem for online companies and there are suspicions that only a fraction of the security issues occurring are ever made public.

Is your information safe?

Private and confidential information has been stolen on a regular basis right across the online arena. We have governments, regulators, leading companies and even hospitals under attack from the hackers. The main problem is that so many people now feel comfortable acquiring products online that they are happy to hand over their confidential bank details. While much of this information is often encrypted, making it more difficult for the hackers to obtain meaningful data, not all companies are at the same level of security. Continue reading “Does hacking offer a golden investment opportunity?”

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Life still left in the old Apple iPhone!

Common stock market sayings

Research firm IDC has issued a very positive review of the prospects for Apple and the new iPhone during 2018 and beyond. As we await the expected launch of the iPhone 8, iPhone 7 and iPhone 7+ in September there is no doubt that interest continues to grow. Only a few weeks ago some analysts were predicting a slowdown in iPhone sales while IDC appears to think the exact opposite. So, what do the next few weeks hold for the iPhone and Apple share price?

Increased shipments

IPhone shipments fell by 7% in 2016 and while expected to increase by 1.5% in 2017, IDC believes there will be a 9.1% increase in 2018. While mobile phone companies continue to encourage consumers to sign up to contracts with device upgrades included it seems that many are simply happy to upgrade their phone roughly every two years. You might think this strange, because whether consumers buy via their mobile phone company or directly, they are still upgrading their phone. However, it all comes down to margin because there is significantly greater margin selling by the retail route. Continue reading “Life still left in the old Apple iPhone!”

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Do you ever consider protection for your investment portfolio?

Should you strip emotion out of your investment decisions?

There is no doubt that the Dow Jones industrial average index is at something of a crossroads after a period in which the bulls have certainly had the upper hand. While some still believe we are in the middle of a bull market with at least a couple of years to run, some investors are a little concerned about outside factors such as North Korea, political strife in America and the chaos in the European Union. On this basis, have you ever considered protection for your investment portfolio?

Traded options

If the Dow Jones industrial average index was to take a bath then to a varying extent all shares would follow suit. As a consequence, many people look towards the traded options market as a means of protecting the overall value of their investment portfolios. The idea is that you buy a “put” option which gives you the option but not the obligation to sell an array of different investment assets at a predetermined level during a specific time frame – including the Dow Jones industrial average index itself. If the market falls then in theory the value of your “put” option should increase and at least make up some of the fall in the value of your investment portfolio. To what extent the option would cover the fall will depend upon the structure of your portfolio but as your portfolio value went down the put option would go up. Continue reading “Do you ever consider protection for your investment portfolio?”

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Is it time for high yielding investments?

Invest your money and then walk away

In times of trouble there are various investments such as gold and to a lesser extent real estate which are seen as “safe havens”. Despite the fact there is still much enthusiasm for the US stock market a number of investors are becoming concerned about the short to medium term outlook. In many ways the situation has been masked by relatively low base rates which in theory offer relatively low finance to businesses and consumers. How much of this finance is actually available is debatable but could an era in which low-cost finance has supported investment markets be coming to an end?

Real estate

Real estate yields will vary from state to state and in theory there should be an array of properties offering relatively high rental yields even if capital appreciation opportunities may be limited. Is there really anything wrong in acquiring an asset which may attract a double-digit yield especially in these troubled times? Continue reading “Is it time for high yielding investments?”

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Donald Trump rebuked by Fed over Dodd-Frank reforms

A Guide to Lending Opportunities

US central bank chief Janet Yellen has publicly rebuked Pres Donald Trump over his plans to scrap some banking regulations and tinker with the Dodd-Frank reforms. Those who follow the markets will be well aware that the Dodd-Frank reforms emerged after the financial crisis. In simple terms the Dodd-Frank reforms resulted in tighter consumer lending rules and a requirement for banks to hold larger capital reserves. While there is no doubt these reforms did have a significant impact upon the safety and reputation of the US banking system post 2008, is it time to loosen the regulations?

Finding a balance

As Janet Yellen commented, many regulators, politicians and investors seem to have relatively short memories. The 2008 US led mortgage crash had a massive impact on the worldwide economy which many are still feeling today. In some ways the historically low interest rates we see around the world at the moment have funded markets and businesses with relatively low cost finance. However, Donald Trump wants to reduce the powers of the consumer watchdog and take away some of the sway held by the Federal Reserve with regards to large financial institutions and mortgage lending. Continue reading “Donald Trump rebuked by Fed over Dodd-Frank reforms”

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Twitter shares under pressure as advertising revenues disappoint

Twitter

Investment house Jeffries has downgraded Twitter shares from a buy to hold suggesting there are “better social plays elsewhere”. In effect analysts believe that Twitter is falling behind the likes of Facebook and Google in attracting new and constant advertising revenue. This is not the first time the company has fallen foul of the disappointing revenue outlook as the shares fell back sharply in late July after second-quarter figures were released. So, what are the prospects for Twitter and why is advertising revenue proving so elusive?

All is not lost

Despite the fact that Jefferies believes Facebook and Google offer a better quality of exposure to the social media world, all is not yet lost for Twitter. The company believes that management changes made over the last two years are starting to have an impact. This should see an improvement in the recent decline of average revenues per user although whether advertisers will switch a significant portion of the proceeds from elsewhere to Twitter remains to be seen. Continue reading “Twitter shares under pressure as advertising revenues disappoint”