Mar
27
2023

Investing in Commodities – How Managed Futures Can Improve Your Portfolio

When someone wants to look to commodities as an investment, they are often curious as to what types of investment they should pursue. Should they go off and trade on their own? No, because most likely someone who is looking to invest does not have the decades of experience and the technical savvy it takes to become a successful day trader. An obvious choice for these people would be to invest in a managed futures fund.

In case you did not know already, an investment in managed futures acts very similar to a mutual fund. You would simply invest your money in the fund, and a CTA (Commodity Trading Advisor) would trade the account on your behalf. In turn, you would receive monthly statements from your CTA regarding your account balances and open positions, as well as have access to your account information in real-time. This type of program is the optimal investment vehicle for people investing in commodities.

How popular are commodities investments in the investment world? Is investing in commodities for me?

When you are looking for investment ideas to diversify your portfolio, you will hear more and more about futures funds. Over the past 30 years, the funds of people investing in commodities, more specifically commodity funds, have skyrocketed past $130 Billion. The popularity of these funds seems to be rapidly increasing as time goes on.

Yes, there is a reason for the growing popularity of investing in managed futures. For the first time in over 60 years, the stock market has had a 3 year decline in returns, and the market has not achieved its highs from 1999. As a result of the recent poor economic conditions, corporations continue to fail striking fear in the markets, and hence, increasing the volatility of the markets.

Investing in commodities, you are investing in futures and futures options. Futures are generally uncorrelated with the equity markets. Many professionals in the financial industry believe this makes a commodities investment an effective diversification strategy.

When looking to invest in commodities, two managed futures funds come to mind. The first fund, called the Epoch3 Program, was incepted last July of 2009 and has returned +39.59% in the first 11 months.

The second fund, called the Medallion Program, was incepted last February of 2009 and has returned +47.08% in its first 16 months.

Mar
27
2023

Penny Stock Investing Doesn’t Have To Be Scary

If you truly want to get your stock investor friends talking and excited, possibly in a bad way, raise the topic of penny stock investing. At the very least, your conversation won’t be dull. Don’t be surprised if a few disagreements or debates break out. This should not be surprised. After all, penny stock investing is one of the least understood forms of investing in the market. Too many people equate it with shady companies, dead companies, or ‘forgotten’ companies. To many investors, the term ‘penny’ in penny stocks make them think that this particular equities market is not worth their time and bother. Well, that’s their loss… and more potential profit for you and others who bother to understand what penny stock investing is all about and how to make money from it.

Let’s get one thing out of the way-penny stock investing is still stock investing. The only difference is the level of regulation, the size of the market, and the prices of the stock involved. Still, regardless of how you look at it and what point of view you have, penny stock investing is still stock investing. Keep that in mind. The same general principles of equity investment still apply. Those principles never go away even though penny stocks often involve less volumes, lower prices, and very little analyst attention. With that out of the way, another key point also needs to be made: you can make great money through penny stock investing. You just need to know what you’re doing. Keep the following tips in mind so you can get a better idea about stock investing.

Getting away from the shadow of pump and dump scams

The main reason many seasoned investors are scared or skeptical about penny stock investing is the threat of ‘pump and dump’ scams. These scams involve speculators scooping up a huge block of a cheap stock. The scammers then issue press releases or get involved in all sorts of awareness raising schemes that bring more investor attention to the stock. In extreme (and illegal cases), they make all sorts of false or misleading claims regarding the company behind the stock. Due to the fact that the stock is lightly traded, any upward movement in its price makes for eye-popping appreciations. This creates a snowball effect as the speculators publicize the handsome increases in the stock’s price and more investors get in on the action. As a result, the stock’s price continues to spike up. In fact, in many classic pump and dump situations, the short-term gains are nothing short of amazing. Well, this party has an unhappy ending when the stock’s price bursts and crashes down when the speculators dump their holdings. Just like with any stock, when other investors see the downward trend, they unload and this pushes the price even lower. At the end of the process, the speculators make off like bandits and legitimate investors walk away with a loss or hang on to nearly worthless stock. Situations like these make many investors wary of penny stock investing. Thankfully, pump and dump schemes are exceptions and not the rule in stock investing. The good news is that you don’t have to automatically suspect pump and dump schemes when considering penny stock investing. Are they a threat? Sure, but with the right training, you can spot them a mile away and avoid them. Instead, you can focus on genuine penny share opportunities.

It’s all about finding hidden penny stock gems

In many ways, penny investing is not much different from trading in regular stocks. It is all about finding hidden gems. You need to find stocks that have a decent enough upside value that you can trade them over the medium to long-term. The first step in finding hidden gems in penny stock markets is to realize that not all penny stock companies are ‘loser’ companies or worthless companies. There are many reasons why companies trade on the pink sheets or bulletin boards. Each company has its own particular reason. You need to examine these companies on a purely individual basis. Only when you do so, can you realize the fundamental and real value each company brings to the table-if any. You still have to look at financial statements. You still have to look at market positioning. You still have to look at the fundamentals to tell which are diamonds and which are chunks of coal. The good news is that once you identify companies worth investing in, you can easily take a position since the company’s stock price is so low.

Momentum plays in under appreciated markets – time to invest

Believe it or not, there are momentum plays available even in penny stock investing. That’s right-you can make money in high volume, volatile stocks by playing momentum. While many investors think that momentum invest in stocks during momentum to reduce your chance of being scared trading happens only with regular stocks, they are truly leaving money on the table when they overlook penny stocks. The great thing about momentum penny stock investing is that you can buy in cheaply and make money on volume. Of course, you need to buy stocks that have the right level of volatility and trading volume.

Getting in on the next big thing can reduce fear

Another key factor you need to appreciate when considering penny stock investing is that there are genuine stock trends in pink sheet stocks. These are real companies that were down on their luck for a long time and finally are managing to get their corporate acts together. These are more common than you think-and they make for great stock buying opportunities. You literally get to ride a company’s rise to recovery. Once the company full recovers, it might get acquired and your holdings might explode in value.

Make no mistake about it, penny stock investing is not for the faint-heated due to all the negative buzz about there regarding this type of stock investing. Still, from a purely fundamental perspective, there is very little separating penny stock investing from regular stock investing. You need to do your research. You need to spot pump and dump scams from genuine opportunities. And you need to know when to get in when a penny stock is poised for some quick and dramatic upward movement.

Mar
26
2023

Benefits Of Bundling: Packaging Your Car And Home Insurance To Save Money

Insurance should be simple. As long as you pay your premiums on time, you can expect your insurer to extend coverage according to your policy. If you are involved in an at-fault accident, your insurer will pay for damages and medical bills up to your coverage limits. Complicating the matter is the disparity between rates from one insurance company to another. They vary, often dramatically. This means consumers can save a significant amount of money by shopping around and comparing quotes.

There’s another easy method for saving up to 10 percent on your insurance premiums: bundling. By bringing multiple lines of insurance – car, property, life, etc. – under one company’s roof, you’ll typically pay lower aggregate rates. You’ll also enjoy a number of other benefits. We’ll describe them below.

One Bill = Less Time And Less Maintenance

Consider the way you currently manage your insurance coverages. You might have auto insurance with one company, property insurance with another, and life insurance with yet another. You may also have a supplementary health plan. You might maintain coverage for your business. If each policy is underwritten by a different insurer, keeping track of them requires more effort than necessary. Not only must you pay each company, but you’re also forced to maintain relationships with each.

When you consolidate – or bundle – your coverages under one insurer, you can make a single payment. This saves time and minimizes the effort involved.

Less Confusing Coverages For Your Car And Property

Suppose you have both auto and property insurance, but each policy is underwritten by a different company. Further suppose your laptop is in your vehicle when it is stolen. Under these circumstances, most people first call their auto insurer to file a claim for the loss. It is then that they discover their personal property is not covered by their auto policy. So, they call their property insurer.

Occasionally, property insurers balk at having to cover possessions left in stolen vehicles. Unless there are exclusions to that effect on your policy, this is usually a misunderstanding. That said, settling the matter may require time and several phone calls. When both coverages are held by a single company, the matter can usually be resolved with a single call.

Multi-Line Discounts From Insurance Companies

One of the most appealing benefits of bundling multiple lines of insurance is that doing so saves money. Many companies offer a multi-line discount to their policyholders. This means they’ll reduce your rates if you allow them to underwrite multiple coverages.

For example, if you already have auto coverage at your insurer, taking out a property insurance policy with the same company is likely to yield a discount. You might enjoy lower premiums on either line, or both. Depending on the company, such discounts may also be available when you consolidate life, health, and business insurance coverages.

Is Bundling Your Insurance Always Beneficial?

Even though there are distinct advantages to consolidating your coverages under a single company, there are potential drawbacks. For example, suppose you want to switch insurers. You would need to coordinate the transfer of several lines from your current company to the new one. Moreover, because each insurance company operates differently, you may lose some of your discounts following the transfer. Your rates might increase, even if your coverage limits and deductibles stay the same.

Another downside is that underwriting multiple lines of coverage requires more time since the insurer must take into account asset levels, deductibles, and many other factors. By contrast, a standard policy is relatively simple to create. It can often be completed online or over the phone.

One last note: don’t assume that bundling your coverages will save money. While doing so usually produces savings due to multi-line discounts, the only way to know for certain is to compare quotes from several insurers. Evaluate them side by side. It’s the only reliable way to find the coverages you and your family need at the best possible rates.

Mar
26
2023

There Is No Way To Eliminate “Mandatory” Auto Insurance

Where and when did insurance start?

More than two thousand years ago, the first countries to use insurance were China and Babylon. It was also used to gain efficient control over income in that society at that time. There is no doubt that the setup of such a sophisticated insurance system came from a very well-organized society where the leaders were smart enough to collect statistics about their society, most likely using a census of some sort. They realized that there were frequent problems with the traffic of merchandise from one place to another, due to pirate attacks, thieves, accidents, loss of merchandise, etc. Their solution to these problems was to come up with a way for goods to be protected against crimes and losses (the modern-day insurance business).

Finding the best way to get protection from accidents

In 1800 in the United States, the development of the railroad and steamboat facilitated the beginning of a more rapid social development as well. All this development brought a lot of accidents, including work-related accidents from jobs in factories. It was difficult for families to face this new situation because they were poor, and did not have enough money to solve all these new problems. By 1850, the first accident insurance plan was offered by Franklin Health Assurance Co., the first insurance firm in the United States. People realized that it was very difficult to assist any family member in the case of an accident, so they started to look for a way to be protected from these accidents. Insurance companies achieved this by having people pay a small amount of money so that they can collect a larger sum, should they ever need to be involved in an accident. Just 16 years later, there were 60 insurance companies all over the nation.

The first state to declare “mandatory” auto insurance

In 1900 in the United States, the development of the automotive industry sped up, and so did the rate of car accidents as a result. Not many people realized how important it was to have protection of their assets until they were involved in a car accident. At this time, it was not mandatory to have car insurance, but when people realized how valuable it could be, there was a boom in the industry. In 1956, Massachusetts became the first state to require car insurance by law before people even got their driver’s license. A few years later, it was mandatory to have auto insurance all over the nation, and that brought a big change and order to society.

There is no way to eliminate “mandatory” auto Insurance

Developed countries have insurance for everything. “The more, the better” is the philosophy in many of these countries. In the most developed countries, auto insurance has to be mandatory. Every year in the United States, for example, there are millions of car accidents with more than two million injuries and 30,000 deaths per year. Until now, the only way to solve so many problems is with an efficient, mandatory car insurance system. Some people think that the perfect situation would be to make “liability car Insurance” mandatory for everyone, but that would cost too much money and only a small percentage of the population could afford it. If governments would help people pay for it, many problems would be solved immediately.

Chaos would reign without auto insurance

Take a look at any developing country: the insurance services are poor, or they work in a very inefficient way, or insurance simply doesn’t exist. In Cuba, where there are a lot of American cars and most of them are more than 50 years old, owners of those cars do not have any car insurance and face a lot of problems daily. They have to have their own version of “insurance” where they have to put money “under the pillow” just in case they get involved in an accident or the car has any mechanical problem. They have to have money for all types of situations, which can be very stressful and chaotic.

Auto insurance will not always be mandatory

The good news is that in the near future, auto insurance will not be mandatory. With new technology in the auto industry, accidents are going to almost be a thing of the past. In the future, cars are going to be so “smart” that they will process all kinds of information in real time. For example, they will have the exact information about all movement around them, maybe in a two-kilometer radius. For instance, if a big truck is coming at you from the opposite direction, your car will know the situation of the driver of this truck, it will know if the driver is drunk or if he’s tired, or if the truck has any problem with the brakes, and both cars will know these things with enough time to act and avoid an accident.

The bad news…

The bad news is that we don’t know when this “near future” will be here. Well, better sooner than later, and later than never. In the meantime, I would recommend everyone to get a liability car insurance policy.