Self-Help
Developing a Budget: The first step toward taking control of your financial situation is to do a realistic assessment of how much money you take in and how much money you spend. Start by listing your income from all sources. Then, list your "fixed" expenses — those that are the same each month — like mortgage payments or rent, car payments, and insurance premiums. Next, list the expenses that vary — like entertainment, recreation, and clothing. Writing down all your expenses, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary expenses, and prioritize the rest. The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education.
Your public library and bookstores have information about budgeting and money management techniques. In addition, computer software programs can be useful tools for developing and maintaining a budget, balancing your checkbook, and creating plans to save money and pay down your debt.
Contacting Your Creditors: Contact your creditors immediately if you're having trouble making ends meet. Tell them why it's difficult for you, and try to work out a modified payment plan that reduces your payments to a more manageable level. Don't wait until your accounts have been turned over to a debt collector. At that point, your creditors have given up on you.
Dealing with Debt Collectors: The Fair Debt Collection Practices Act is the federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or while you're at work if the collector knows that your employer doesn't approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must honor a written request from you to stop further contact.
Managing Your Auto and Home Loans: Your debts can be unsecured or secured. Secured debts usually are tied to an asset, like your car for a car loan, or your house for a mortgage. If you stop making payments, lenders can repossess your car or foreclose on your house. Unsecured debts are not tied to any asset, and include most credit card debt, bills for medical care, signature loans, and debts for other types of services.
Most automobile financing agreements allow a creditor to repossess your car any time you're in default. No notice is required. If your car is repossessed, you may have to pay the balance due on the loan, as well as towing and storage costs, to get it back. If you can't do this, the creditor may sell the car. If you see default approaching, you may be better off selling the car yourself and paying off the debt: You'll avoid the added costs of repossession and a negative entry on your credit report.
If you fall behind on your mortgage, contact your lender immediately to avoid foreclosure. Most lenders are willing to work with you if they believe you're acting in good faith and the situation is temporary. Some lenders may reduce or suspend your payments for a short time. When you resume regular payments, though, you may have to pay an additional amount toward the past due total. Other lenders may agree to change the terms of the mortgage by extending the repayment period to reduce the monthly debt. Ask whether additional fees would be assessed for these changes, and calculate how much they total in the long term.
If you and your lender cannot work out a plan, contact a housing counseling agency. Some agencies limit their counseling services to homeowners with FHA mortgages, but many offer free help to any homeowner who's having trouble making mortgage payments. Call the local office of the Department of Housing and Urban Development or the housing authority in your state, city, or county for help in finding a legitimate housing counseling agency near you.
Wednesday, June 22, 2005
money fun facts
* Approximately 55 million people own savings bonds.
* Savings bonds are a popular gift for newborns because "one size fits all" and the gift "grows" in value as the child grows.
* If your dog eats your savings bond, it (the bond) can be replaced. If your dog eats your homework, you may be in trouble!
* Savings bonds have been awarded to people who bought cars, appliances, and even cemetery plots!
* President Franklin D. Roosevelt placed the first order for a $500 Series E Savings Bond in a radio broadcast on April 30, 1941.
* To commemorate the Bicentennial in July 1976, many banks sold the $25.00 savings bond for $17.76 instead of the usual $18.75.
* Savings bonds can earn interest tax-free for your college education (if you meet certain requirements).
* Savings bonds are a popular gift for newborns because "one size fits all" and the gift "grows" in value as the child grows.
* If your dog eats your savings bond, it (the bond) can be replaced. If your dog eats your homework, you may be in trouble!
* Savings bonds have been awarded to people who bought cars, appliances, and even cemetery plots!
* President Franklin D. Roosevelt placed the first order for a $500 Series E Savings Bond in a radio broadcast on April 30, 1941.
* To commemorate the Bicentennial in July 1976, many banks sold the $25.00 savings bond for $17.76 instead of the usual $18.75.
* Savings bonds can earn interest tax-free for your college education (if you meet certain requirements).
Friday, June 17, 2005
Online Trading - The Stock Market is Booming But Be Warned
I had the pleasure of being invited on a friend’s yacht to sail in a race on Sydney Harbour yesterday. On board, as one of our motley crew, I met a top ranking corporate executive from one of Australia’s largest banks, who we’ll call ‘Phil’ here for the purpose of this article.
After the race ended and after being told of my trading experience, he told me he has a large stock portfolio, many of which are speculative resources stocks. He said that he’s excited by all the money he’s making and wondering how long this has been going on?
As would be expected, ‘Phil’ also asked me for some “hot tips” for more stocks to buy. He was surprised with my reply when I told him Daryl Guppy’s standard response of “Tips are for waiters” and that I thought he was asking the wrong questions. (Daryl Guppy is a well known Stock Trader and International bestselling author - see www.guppytraders.com)
Rather, I explained he should be asking:
* How much longer will this last?
* When it finishes how will I know & what will I do?
* How do I find out about Technical Analysis and Money & Risk Management?
* What’s a Trading Plan and how do I put one together and follow it?
* How and when do I add to the stocks I already own?
* How should I structure my portfolio regarding individual stock risk, sector risk and total portfolio risk?
* What’s my exit strategy for each stock I own?
* What’s my exit strategy for my whole portfolio?
* How do I keep accurate records and monitor my performance?
* What am I going to do to learn more about myself and my own psychological weaknesses (many of which I may not even realise I have) that can make all the difference as to whether I win or lose long term?
‘Phil’ was genuinely surprised that I had taken the wind out of his sails – luckily it was after our sailing race together, but hopefully before he loses his own financial race.
In January at http://www.prweb.com/releases/2005/1/prweb193459.htm I issued a worldwide press release to caution unprepared novice investors and traders of the potential pitfalls ahead in the market. My wife Angela and I lost our waterfront home on Sydney Harbour in the 'Tech wreck' of 2000, so we speak from hard personal experience.
As complete novices in the market in 1999, we doubled on paper a large stock portfolio in only six months.
Then in less than a year we suffered catastrophic losses in the tech stock crash of 2000 and beyond:
* We were set back more than 15 years financially and emotionally
* We were forced to sell our waterfront home – the very same house we had set as a goal soon after arriving in Australia as new and penniless immigrants in 1979. We began renting what I called a ‘dog box’ - as the housing market then rocketed.
* Angela was working as a retail assistant
I have a First Class Honors Degree in Civil Engineering that didn’t help. In fact I have since come to understand that it actually helped to work against me. With our experience of riding some of the largest waves (up and down) in the market and having lost hundreds of thousands of dollars in the process, we know more than most stock traders in the world of the pitfalls that await unsuspecting novice traders and investors.
We have since greatly appreciated being exposed to the successful methods taught by expert traders Alan Hull, Daryl Guppy, Jim Berg, Dr Van Tharp and others to trade profitably and with better risk control.
The forum for serious investors www.stockmeetingplace.com is the only chatroom where you will find Daryl Guppy. We recently received the following response from a fellow Australian trader Nathan Unger on that site (see below):
“...thank you for sharing. Your comments on this subject are very insightful, and rightfully so considering your near trading death experience, per se. Failure is always such a difficult moniker to be branded with, for it involves us having to acknowledge that we were wrong. Of course, acknowledging our mistakes means that we must swallow our pride – an admittedly difficult feat for many traders. Grappling with our own motives amidst the psychological matrix that is the stock market is, to say the least, a bewildering struggle.
In an almost paradoxical fashion the stock market can create whelps out of us through both our losses as well as our victories. We are unnerved when we lose and must somehow muster the courage to tentatively re-enter the markets. Yet, potentially even more dangerous are the unbridled successes that often distort a trader’s perception about their ability to regulate further success – successes that work to chide the future admission of failure.
Who would have thought that winning could actually become a setup for losing – a conundrum of the worst kind? I know of no other occupation that has the ability to masquerade as both friend and foe and then make you think that you can tell the difference.
Your experience is, I believe, a treasure worth perhaps more than the sum of your losses. It reminds me of how the most seaworthy vessels have typically been known to be the ones that have weathered the most devastating storms. Yours is a stellar effort, my friend. I will most certainly be purchasing your book.
Thanks also to Daryl and Alan for their assistance and encouragement in helping to mould John’s encounter into the best trading tool of all – practical experience...”
During 2001, not long after losing our home, we made contact with Daryl and I take this opportunity here to acknowledge and thank him once again for his wisdom and support since that time and also to Alan Hull and Dr Van Tharp since then.
Daryl subsequently invited me to write a short article for his regular weekly newsletter (Tutorials in Applied Technical Analysis) which became the first of many articles as my wife Angela and I began our search for education.
He made a strong point that by concentrating on the research needed to write the articles we would pick up good habits and through sharing with others, we ourselves would be more inclined to stick with the discipline involved in the subject being covered.
We have recently collated the articles I have written for his newsletter and they are now available as ‘The Atkinson - Guppy Articles - Stock & Share Market Educational Options for Investing Online & Online Trading - Opportunity for a Home Based Business’.
Most of these articles deal with concepts and trading skills which are still relevant to readers today and include the following:
* CONDITIONAL STOP LOSS ORDERS: A real life comparison between using two brokers for monitoring stop loss orders - the true cost of slippage
* DIRECTORS DEALINGS: A snapshot study of the Australian share market to determine, if by monitoring the purchases and sales of company directors with their own shares, whether it is possible to obtain an insight into the future direction of the share price and hitch a ride in the right direction - or jump ship with them.
* EXPECTANCY - the net profit or loss that you can expect over a large number of single unit trades. A series of articles with thanks to the work of Dr Van Tharp, author of 'Trade Your Way to Financial Freedom'
* TAKE-OVERS: A brief overview of some of the strategies traders apply to take-overs.
* AVALANCHE SELLING and KANGAROO TAILS: A series of articles on the recent phenomenon in the Australian share market caused by computerised automated conditional stop loss brokers savagely cascading sell orders into the market, with prices often rebounding several percent within minutes.
Angela and I also recently launched our new web site www.sharetradingeducation.com which is designed to be a handy and dynamic reference site for online traders and investors around the world to keep coming back to as a marked ‘favorite’.
It features Jim Berg’s Home Study Course of his own profitable Trading Strategies with Metastock; as well as our own Home Study Courses based on the work of Jim Berg, Daryl Guppy, Alan Hull , Simon Sherwood and our own experience.
In addition, it also contains a growing and helpful list of links to Valued Partners’ sites including brokers, traders' forums, newsletters, books, data, software, Self Managed Superfunds & more to come.
All visitors are invited to register to gain access to free downloads, upcoming Seminars & more for investing and trading online.
Through my writing articles and through our site, my wife, Angela and I now aim to provide a ‘Road Map of Discovery to the Stock Market' to help new and existing online investors and traders find the trading education information they need to initially survive the pitfalls ahead, then thrive in the market.
We wish you every success in 2005 and beyond and trust that if you haven’t done so already, you will be seeking out the answers to the questions I offered to my sailing team member ‘Phil’.
About the Author
John Atkinson‘s E-book Atkinson-Guppy Articles now available with special savings of 30%. A free sample chapter may be downloaded at http://www.sharetradingeducation.com &
• Portfolio Management tools for planning, optimising and managing your portfolio
• Investing Online Newsletter and Online Trading Report - by expert trader Jim Berg & team to help investors and traders survive the pitfalls and profit in the stock market.
After the race ended and after being told of my trading experience, he told me he has a large stock portfolio, many of which are speculative resources stocks. He said that he’s excited by all the money he’s making and wondering how long this has been going on?
As would be expected, ‘Phil’ also asked me for some “hot tips” for more stocks to buy. He was surprised with my reply when I told him Daryl Guppy’s standard response of “Tips are for waiters” and that I thought he was asking the wrong questions. (Daryl Guppy is a well known Stock Trader and International bestselling author - see www.guppytraders.com)
Rather, I explained he should be asking:
* How much longer will this last?
* When it finishes how will I know & what will I do?
* How do I find out about Technical Analysis and Money & Risk Management?
* What’s a Trading Plan and how do I put one together and follow it?
* How and when do I add to the stocks I already own?
* How should I structure my portfolio regarding individual stock risk, sector risk and total portfolio risk?
* What’s my exit strategy for each stock I own?
* What’s my exit strategy for my whole portfolio?
* How do I keep accurate records and monitor my performance?
* What am I going to do to learn more about myself and my own psychological weaknesses (many of which I may not even realise I have) that can make all the difference as to whether I win or lose long term?
‘Phil’ was genuinely surprised that I had taken the wind out of his sails – luckily it was after our sailing race together, but hopefully before he loses his own financial race.
In January at http://www.prweb.com/releases/2005/1/prweb193459.htm I issued a worldwide press release to caution unprepared novice investors and traders of the potential pitfalls ahead in the market. My wife Angela and I lost our waterfront home on Sydney Harbour in the 'Tech wreck' of 2000, so we speak from hard personal experience.
As complete novices in the market in 1999, we doubled on paper a large stock portfolio in only six months.
Then in less than a year we suffered catastrophic losses in the tech stock crash of 2000 and beyond:
* We were set back more than 15 years financially and emotionally
* We were forced to sell our waterfront home – the very same house we had set as a goal soon after arriving in Australia as new and penniless immigrants in 1979. We began renting what I called a ‘dog box’ - as the housing market then rocketed.
* Angela was working as a retail assistant
I have a First Class Honors Degree in Civil Engineering that didn’t help. In fact I have since come to understand that it actually helped to work against me. With our experience of riding some of the largest waves (up and down) in the market and having lost hundreds of thousands of dollars in the process, we know more than most stock traders in the world of the pitfalls that await unsuspecting novice traders and investors.
We have since greatly appreciated being exposed to the successful methods taught by expert traders Alan Hull, Daryl Guppy, Jim Berg, Dr Van Tharp and others to trade profitably and with better risk control.
The forum for serious investors www.stockmeetingplace.com is the only chatroom where you will find Daryl Guppy. We recently received the following response from a fellow Australian trader Nathan Unger on that site (see below):
“...thank you for sharing. Your comments on this subject are very insightful, and rightfully so considering your near trading death experience, per se. Failure is always such a difficult moniker to be branded with, for it involves us having to acknowledge that we were wrong. Of course, acknowledging our mistakes means that we must swallow our pride – an admittedly difficult feat for many traders. Grappling with our own motives amidst the psychological matrix that is the stock market is, to say the least, a bewildering struggle.
In an almost paradoxical fashion the stock market can create whelps out of us through both our losses as well as our victories. We are unnerved when we lose and must somehow muster the courage to tentatively re-enter the markets. Yet, potentially even more dangerous are the unbridled successes that often distort a trader’s perception about their ability to regulate further success – successes that work to chide the future admission of failure.
Who would have thought that winning could actually become a setup for losing – a conundrum of the worst kind? I know of no other occupation that has the ability to masquerade as both friend and foe and then make you think that you can tell the difference.
Your experience is, I believe, a treasure worth perhaps more than the sum of your losses. It reminds me of how the most seaworthy vessels have typically been known to be the ones that have weathered the most devastating storms. Yours is a stellar effort, my friend. I will most certainly be purchasing your book.
Thanks also to Daryl and Alan for their assistance and encouragement in helping to mould John’s encounter into the best trading tool of all – practical experience...”
During 2001, not long after losing our home, we made contact with Daryl and I take this opportunity here to acknowledge and thank him once again for his wisdom and support since that time and also to Alan Hull and Dr Van Tharp since then.
Daryl subsequently invited me to write a short article for his regular weekly newsletter (Tutorials in Applied Technical Analysis) which became the first of many articles as my wife Angela and I began our search for education.
He made a strong point that by concentrating on the research needed to write the articles we would pick up good habits and through sharing with others, we ourselves would be more inclined to stick with the discipline involved in the subject being covered.
We have recently collated the articles I have written for his newsletter and they are now available as ‘The Atkinson - Guppy Articles - Stock & Share Market Educational Options for Investing Online & Online Trading - Opportunity for a Home Based Business’.
Most of these articles deal with concepts and trading skills which are still relevant to readers today and include the following:
* CONDITIONAL STOP LOSS ORDERS: A real life comparison between using two brokers for monitoring stop loss orders - the true cost of slippage
* DIRECTORS DEALINGS: A snapshot study of the Australian share market to determine, if by monitoring the purchases and sales of company directors with their own shares, whether it is possible to obtain an insight into the future direction of the share price and hitch a ride in the right direction - or jump ship with them.
* EXPECTANCY - the net profit or loss that you can expect over a large number of single unit trades. A series of articles with thanks to the work of Dr Van Tharp, author of 'Trade Your Way to Financial Freedom'
* TAKE-OVERS: A brief overview of some of the strategies traders apply to take-overs.
* AVALANCHE SELLING and KANGAROO TAILS: A series of articles on the recent phenomenon in the Australian share market caused by computerised automated conditional stop loss brokers savagely cascading sell orders into the market, with prices often rebounding several percent within minutes.
Angela and I also recently launched our new web site www.sharetradingeducation.com which is designed to be a handy and dynamic reference site for online traders and investors around the world to keep coming back to as a marked ‘favorite’.
It features Jim Berg’s Home Study Course of his own profitable Trading Strategies with Metastock; as well as our own Home Study Courses based on the work of Jim Berg, Daryl Guppy, Alan Hull , Simon Sherwood and our own experience.
In addition, it also contains a growing and helpful list of links to Valued Partners’ sites including brokers, traders' forums, newsletters, books, data, software, Self Managed Superfunds & more to come.
All visitors are invited to register to gain access to free downloads, upcoming Seminars & more for investing and trading online.
Through my writing articles and through our site, my wife, Angela and I now aim to provide a ‘Road Map of Discovery to the Stock Market' to help new and existing online investors and traders find the trading education information they need to initially survive the pitfalls ahead, then thrive in the market.
We wish you every success in 2005 and beyond and trust that if you haven’t done so already, you will be seeking out the answers to the questions I offered to my sailing team member ‘Phil’.
About the Author
John Atkinson‘s E-book Atkinson-Guppy Articles now available with special savings of 30%. A free sample chapter may be downloaded at http://www.sharetradingeducation.com &
• Portfolio Management tools for planning, optimising and managing your portfolio
• Investing Online Newsletter and Online Trading Report - by expert trader Jim Berg & team to help investors and traders survive the pitfalls and profit in the stock market.
Thursday, June 16, 2005
What is a short sale?
A short sale is generally the sale of a stock you do not own (or that you will borrow for delivery).1 Short sellers believe the price of the stock will fall, or are seeking to hedge against potential price volatility in securities that they own.
If the price of the stock drops, short sellers buy the stock at the lower price and make a profit. If the price of the stock rises, short sellers will incur a loss. Short selling is used for many purposes, including to profit from an expected downward price movement, to provide liquidity in response to unanticipated buyer demand, or to hedge the risk of a long position in the same security or a related security.
If the price of the stock drops, short sellers buy the stock at the lower price and make a profit. If the price of the stock rises, short sellers will incur a loss. Short selling is used for many purposes, including to profit from an expected downward price movement, to provide liquidity in response to unanticipated buyer demand, or to hedge the risk of a long position in the same security or a related security.
Wednesday, June 15, 2005
GRDI Select, L.P.
GRDI is launching its newest hedge fund, the GRDI Select, L.P. By law, hedge funds are largely unregulated by U.S. security laws and are strictly prohibited from advertising. As a result, the GRDI Select, L.P. hedge fund is offered as a private investment partnership. We can only extend this offer to fewer than 100 lucky investors who meet certain important qualifications. GRDI Select, L.P. will diversify between a number of different investment styles, strategies and managers to completely control all risk.
According to The Stock ReportTM, GRDI Select, L.P. is positioned for a 22% return during the first quarter after launch. Thereafter, returns can be expected to grow at an average rate no less than 32%, based upon similar returns from funds run by the experienced investment team at GRDI using similar strategies and the latest technology.
GRDI Select, L.P. is a private, unregistered investment pool that is unencumbered by disclosure and filing requirements imposed by the Securities and Exchange Commission. This massively reduces our administrative costs. In addition, the tax implications are superior for the individual investor because all monies will be safely held in off-shore tax havens. Unlike traditional investments, GRDI Select, L.P. will not track recognized indexes. GRDI Select, L.P. will seek out unconventional investment strategies, which will guarantee much higher returns.
According to The Stock ReportTM, GRDI Select, L.P. is positioned for a 22% return during the first quarter after launch. Thereafter, returns can be expected to grow at an average rate no less than 32%, based upon similar returns from funds run by the experienced investment team at GRDI using similar strategies and the latest technology.
GRDI Select, L.P. is a private, unregistered investment pool that is unencumbered by disclosure and filing requirements imposed by the Securities and Exchange Commission. This massively reduces our administrative costs. In addition, the tax implications are superior for the individual investor because all monies will be safely held in off-shore tax havens. Unlike traditional investments, GRDI Select, L.P. will not track recognized indexes. GRDI Select, L.P. will seek out unconventional investment strategies, which will guarantee much higher returns.
What protections do I have if I purchase a hedge fund?
Hedge fund investors do not receive all of the federal and state law protections that commonly apply to most registered investments. For example, you won't get the same level of disclosures from a hedge fund that you'll get from registered investments. Without the disclosures that the securities laws require for most registered investments, it can be quite difficult to verify representations you may receive from a hedge fund. You should also be aware that, while the SEC may conduct examinations of any hedge fund manager that is registered as an investment adviser under the Investment Advisers Act, the SEC and other securities regulators generally have limited ability to check routinely on hedge fund activities.
The SEC can take action against a hedge fund that defrauds investors, and we have brought a number of fraud cases involving hedge funds. Commonly in these cases, hedge fund advisers misrepresented their experience and the fund's track record. Other cases were classic "Ponzi schemes," where early investors were paid off to make the scheme look legitimate. In some of the cases we have brought, the hedge funds sent phony account statements to investors to camouflage the fact that their money had been stolen. That's why it is extremely important to thoroughly check out every aspect of any hedge fund you might consider as an investment. If you'd like to see an example of hedge fund fraud, click here.
The SEC can take action against a hedge fund that defrauds investors, and we have brought a number of fraud cases involving hedge funds. Commonly in these cases, hedge fund advisers misrepresented their experience and the fund's track record. Other cases were classic "Ponzi schemes," where early investors were paid off to make the scheme look legitimate. In some of the cases we have brought, the hedge funds sent phony account statements to investors to camouflage the fact that their money had been stolen. That's why it is extremely important to thoroughly check out every aspect of any hedge fund you might consider as an investment. If you'd like to see an example of hedge fund fraud, click here.
What information should I seek if I am considering investing in a hedge fund or a fund of hedge funds?
What information should I seek if I am considering investing in a hedge fund or a fund of hedge funds?
* Read a fund's prospectus or offering memorandum and related materials. Make sure you understand the level of risk involved in the fund's investment strategies and ensure that they are suitable to your personal investing goals, time horizons, and risk tolerance. As with any investment, the higher the potential returns, the higher the risks you must assume.
* Understand how a fund's assets are valued. Funds of hedge funds and hedge funds may invest in highly illiquid securities that may be difficult to value. Moreover, many hedge funds give themselves significant discretion in valuing securities. You should understand a fund's valuation process and know the extent to which a fund's securities are valued by independent sources.
* Ask questions about fees. Fees impact your return on investment. Hedge funds typically charge an asset management fee of 1-2% of assets, plus a "performance fee" of 20% of a hedge fund's profits. A performance fee could motivate a hedge fund manager to take greater risks in the hope of generating a larger return. Funds of hedge funds typically charge a fee for managing your assets, and some may also include a performance fee based on profits. These fees are charged in addition to any fees paid to the underlying hedge funds.
Tip: If you invest in hedge funds through a fund of hedge funds, you will pay two layers of fees: the fees of the fund of hedge funds and the fees charged by the underlying hedge funds.
* Understand any limitations on your right to redeem your shares. Hedge funds typically limit opportunities to redeem, or cash in, your shares (e.g., to four times a year), and often impose a "lock-up" period of one year or more, during which you cannot cash in your shares.
* Research the backgrounds of hedge fund managers. Know with whom you are investing. Make sure hedge fund managers are qualified to manage your money, and find out whether they have a disciplinary history within the securities industry. You can get this information (and more) by reviewing the adviser’s Form ADV. You can search for and view a firm’s Form ADV using the SEC’s Investment Adviser Public Disclosure (IAPD) website. You also can get copies of Form ADV for individual advisers and firms from the investment adviser, the SEC’s Public Reference Room, or (for advisers with less than $25 million in assets under management) the state securities regulator where the adviser's principal place of business is located. If you don’t find the investment adviser firm in the SEC’s IAPD database, be sure to call your state securities regulator or search the NASD's BrokerCheck database for any information they may have.
* Don't be afraid to ask questions. You are entrusting your money to someone else. You should know where your money is going, who is managing it, how it is being invested, how you can get it back, what protections are placed on your investment and what your rights are as an investor. In addition, you may wish to read NASD’s investor alert, which describes some of the high costs and risks of investing in funds of hedge funds.
* Read a fund's prospectus or offering memorandum and related materials. Make sure you understand the level of risk involved in the fund's investment strategies and ensure that they are suitable to your personal investing goals, time horizons, and risk tolerance. As with any investment, the higher the potential returns, the higher the risks you must assume.
* Understand how a fund's assets are valued. Funds of hedge funds and hedge funds may invest in highly illiquid securities that may be difficult to value. Moreover, many hedge funds give themselves significant discretion in valuing securities. You should understand a fund's valuation process and know the extent to which a fund's securities are valued by independent sources.
* Ask questions about fees. Fees impact your return on investment. Hedge funds typically charge an asset management fee of 1-2% of assets, plus a "performance fee" of 20% of a hedge fund's profits. A performance fee could motivate a hedge fund manager to take greater risks in the hope of generating a larger return. Funds of hedge funds typically charge a fee for managing your assets, and some may also include a performance fee based on profits. These fees are charged in addition to any fees paid to the underlying hedge funds.
Tip: If you invest in hedge funds through a fund of hedge funds, you will pay two layers of fees: the fees of the fund of hedge funds and the fees charged by the underlying hedge funds.
* Understand any limitations on your right to redeem your shares. Hedge funds typically limit opportunities to redeem, or cash in, your shares (e.g., to four times a year), and often impose a "lock-up" period of one year or more, during which you cannot cash in your shares.
* Research the backgrounds of hedge fund managers. Know with whom you are investing. Make sure hedge fund managers are qualified to manage your money, and find out whether they have a disciplinary history within the securities industry. You can get this information (and more) by reviewing the adviser’s Form ADV. You can search for and view a firm’s Form ADV using the SEC’s Investment Adviser Public Disclosure (IAPD) website. You also can get copies of Form ADV for individual advisers and firms from the investment adviser, the SEC’s Public Reference Room, or (for advisers with less than $25 million in assets under management) the state securities regulator where the adviser's principal place of business is located. If you don’t find the investment adviser firm in the SEC’s IAPD database, be sure to call your state securities regulator or search the NASD's BrokerCheck database for any information they may have.
* Don't be afraid to ask questions. You are entrusting your money to someone else. You should know where your money is going, who is managing it, how it is being invested, how you can get it back, what protections are placed on your investment and what your rights are as an investor. In addition, you may wish to read NASD’s investor alert, which describes some of the high costs and risks of investing in funds of hedge funds.
Monday, June 13, 2005
CLOSE first, THEN optimize the financing
In today’s white-hot real estate market, it’s like the shootout at the OK Corral. Move first and faster than the next guy, or you’re dust.
As the Manager of a Private Mortgage Fund which makes Bridge and Mezzanine loans on commercial and investment real estate, I continually come in contact with individuals (in some cases potential borrowers, and in other cases potential Fund Investors) who are SHOCKED that anyone would EVER borrow at rates of 12% or 14%! It’s an interesting initial visceral reaction that usually dissipates when the individual “does the numbers” and quickly realizes that there is a huge difference between borrowing at a hefty rate for only 10 or 12 months vs., say, five or ten years. Further comprehension usually follows as the individual ponders the various factors that typically motivate Borrowers to seek a Bridge Loan such as an upcoming time-of–the–essence closing where a bank has yet to produce a commitment letter for one reason or another yet the deal MUST close within, say, 10 days. Another typical reason is an individual having an opportunity to buy a property at a time when the individual’s liquidity is limited, their cash flow is weak, or their credit scores are less than perfect, but they see a compelling upside strategy and have a clear plan and budget outlined to achieve it. We often provide Private Money for situations that, once stabilized, will easily qualify for bank financing.
Use the right tool at the right time:
Bridge loans are NOT intended to be utilized for a long period of time, and, of course, no one uses them as long-term permanent financing. The Bridge lender must be smart, nimble and FAST. The staff, legal counsel and appraisers of a private lender need to operate like a SWAT team; analyzing, underwriting, drafting loan documents and closing the loan in very short order. The underlying quid pro quo for Private Money MUST be: “we’re expensive but we’re fast and dependable”. Expensive for a few months is also entirely different than expensive for 10 years. The fact is, that in today’s fast-moving real estate world, speed and certainty of execution are priority #1. It’s hard enough to find a property worth buying. Many sellers will not permit a mortgage contingency, and of course, the market is swimming with 1031 tax-free exchange buyers who can buy all-cash or put down a significant down payment. Clearly, an all-cash buyer or a buyer armed with a financing commitment will usually be chosen over a buyer who insists on a conventional mortgage contingency. Often the strategy must be: Find a worthwhile asset, tie it up, CLOSE on the asset with temporary, fast, dependable financing, and THEN put the perfect, low-rate financing in place once you control the asset and have the luxury of time to get it just right.
First hit the target, then worry about getting a Bull’s Eye:
We sometimes see perfectionist buyers determined to “win” on buying an asset, fiddling around with various LIBOR-based, low-rate bank financing alternatives, wondering which will save them more money, while their competition is either paying all cash or has a Bridge loan lined up so they can go to contract without a financing contingency (two metaphors that come to mind are: “winning the battle but losing the war”, and “playing the violin while Rome is burning”). Sometimes these “low-rate obsessed” buyers end up with a beautiful commitment for a nice low rate and nothing to buy with it. It’s obviously important to know when the urgency to have a FAST and FIRM loan commitment outweighs anything else.
In a hot, competitive seller’s market, cash is the very best thing – the NEXT best thing is a lightning fast Bridge loan commitment, which can allow you to bid without needing a financing contingency.
There is a long list of possible reasons to obtain a bridge loan ranging from the need to close ASAP because a bank is simply taking too long and your time-of-the-essence closing date cannot be moved even by one day, the need or desire to buy out a partner, the desire to recapture equity (often “trapped” by the prepayment penalties on long term fixed rate mortgages on assets like shopping centers, multifamily and office buildings) for a compelling business or buying opportunity, the need to settle up with the IRS, or the need to fund emergency repairs…the list goes on and on.
Special mezzanine loan program for new construction:
In life in general, the question often is: “what tool do I need right now to accomplish the job at hand?” Within the specialized world of high-yield, short-term real estate lenders, W Financial Mortgage Fund sets itself apart by offering multiple tools, and in many cases, a complete capital solution. More often these days, it’s not an either/or proposition (i.e., private money OR bank money). We routinely arrange smoothly integrated mezzanine or subordinate debt packaged with low-rate first mortgage debt. The ideal financing solution can sometimes be a combination of the two.
For example, we have a special construction loan program where a first mortgage construction lender will provide from 75% to 80% of the development cost, and our Fund will provide another 10% - 15% as a mezzanine loan, requiring that the Developer contribute at least 10% of the equity. There is an intercreditor agreement already in place between W Financial Mortgage Fund (www.w-fund.com) and various construction lenders, allowing the process to proceed seamlessly and to provide higher leverage than would ordinarily be possible.
To conclude, Private Money is one more tool in your toolbox. It may be of strategic benefit to you and your team to learn about the current “state of the art” of how deploying Bridge or Mezz money at the right moment can help your money-making strategy.
Gregg Winter
President
Winter & Company Commercial Real Estate Finance
www.winterandcompany.com
As the Manager of a Private Mortgage Fund which makes Bridge and Mezzanine loans on commercial and investment real estate, I continually come in contact with individuals (in some cases potential borrowers, and in other cases potential Fund Investors) who are SHOCKED that anyone would EVER borrow at rates of 12% or 14%! It’s an interesting initial visceral reaction that usually dissipates when the individual “does the numbers” and quickly realizes that there is a huge difference between borrowing at a hefty rate for only 10 or 12 months vs., say, five or ten years. Further comprehension usually follows as the individual ponders the various factors that typically motivate Borrowers to seek a Bridge Loan such as an upcoming time-of–the–essence closing where a bank has yet to produce a commitment letter for one reason or another yet the deal MUST close within, say, 10 days. Another typical reason is an individual having an opportunity to buy a property at a time when the individual’s liquidity is limited, their cash flow is weak, or their credit scores are less than perfect, but they see a compelling upside strategy and have a clear plan and budget outlined to achieve it. We often provide Private Money for situations that, once stabilized, will easily qualify for bank financing.
Use the right tool at the right time:
Bridge loans are NOT intended to be utilized for a long period of time, and, of course, no one uses them as long-term permanent financing. The Bridge lender must be smart, nimble and FAST. The staff, legal counsel and appraisers of a private lender need to operate like a SWAT team; analyzing, underwriting, drafting loan documents and closing the loan in very short order. The underlying quid pro quo for Private Money MUST be: “we’re expensive but we’re fast and dependable”. Expensive for a few months is also entirely different than expensive for 10 years. The fact is, that in today’s fast-moving real estate world, speed and certainty of execution are priority #1. It’s hard enough to find a property worth buying. Many sellers will not permit a mortgage contingency, and of course, the market is swimming with 1031 tax-free exchange buyers who can buy all-cash or put down a significant down payment. Clearly, an all-cash buyer or a buyer armed with a financing commitment will usually be chosen over a buyer who insists on a conventional mortgage contingency. Often the strategy must be: Find a worthwhile asset, tie it up, CLOSE on the asset with temporary, fast, dependable financing, and THEN put the perfect, low-rate financing in place once you control the asset and have the luxury of time to get it just right.
First hit the target, then worry about getting a Bull’s Eye:
We sometimes see perfectionist buyers determined to “win” on buying an asset, fiddling around with various LIBOR-based, low-rate bank financing alternatives, wondering which will save them more money, while their competition is either paying all cash or has a Bridge loan lined up so they can go to contract without a financing contingency (two metaphors that come to mind are: “winning the battle but losing the war”, and “playing the violin while Rome is burning”). Sometimes these “low-rate obsessed” buyers end up with a beautiful commitment for a nice low rate and nothing to buy with it. It’s obviously important to know when the urgency to have a FAST and FIRM loan commitment outweighs anything else.
In a hot, competitive seller’s market, cash is the very best thing – the NEXT best thing is a lightning fast Bridge loan commitment, which can allow you to bid without needing a financing contingency.
There is a long list of possible reasons to obtain a bridge loan ranging from the need to close ASAP because a bank is simply taking too long and your time-of-the-essence closing date cannot be moved even by one day, the need or desire to buy out a partner, the desire to recapture equity (often “trapped” by the prepayment penalties on long term fixed rate mortgages on assets like shopping centers, multifamily and office buildings) for a compelling business or buying opportunity, the need to settle up with the IRS, or the need to fund emergency repairs…the list goes on and on.
Special mezzanine loan program for new construction:
In life in general, the question often is: “what tool do I need right now to accomplish the job at hand?” Within the specialized world of high-yield, short-term real estate lenders, W Financial Mortgage Fund sets itself apart by offering multiple tools, and in many cases, a complete capital solution. More often these days, it’s not an either/or proposition (i.e., private money OR bank money). We routinely arrange smoothly integrated mezzanine or subordinate debt packaged with low-rate first mortgage debt. The ideal financing solution can sometimes be a combination of the two.
For example, we have a special construction loan program where a first mortgage construction lender will provide from 75% to 80% of the development cost, and our Fund will provide another 10% - 15% as a mezzanine loan, requiring that the Developer contribute at least 10% of the equity. There is an intercreditor agreement already in place between W Financial Mortgage Fund (www.w-fund.com) and various construction lenders, allowing the process to proceed seamlessly and to provide higher leverage than would ordinarily be possible.
To conclude, Private Money is one more tool in your toolbox. It may be of strategic benefit to you and your team to learn about the current “state of the art” of how deploying Bridge or Mezz money at the right moment can help your money-making strategy.
Gregg Winter
President
Winter & Company Commercial Real Estate Finance
www.winterandcompany.com
Saturday, June 11, 2005
Investing in Commodity Futures
"The economic rationale for these returns is the reward that investors in commodity futures receive for providing price insurance to commodity producers."
Imagine an asset class whose returns are the same as those on the stock market but less volatile, and which are negatively correlated with stock-and-bond returns and positively correlated with inflation. That asset class is an investment in commodity futures. And, despite being a very old asset class, commodity futures are not widely appreciated.
In Facts and Fantasies About Commodity Futures (NBER Working Paper No. 10595), co-authors Gary Gorton and Geert Rouwenhorst show that over a 45-year period a diversified investment in collateralized commodity futures has earned historical returns that are comparable to stocks. That reward, rather than foreseeable trends in commodity prices, is the key to the returns that a futures investor can expect. Individual commodities can be very volatile, but much of this volatility can be avoided by investing in a diversified index of commodities.
Futures contracts are agreements to buy or sell a commodity at a future date, at a price that is agreed upon today. Except for collateral requirements, futures contracts do not require a cash outlay for either buyers or sellers. On average, the buyer of a futures contract is compensated by the seller of futures if the futures price is set below the expected spot price at the time of the expiration of the futures contract. The opposite is true when the futures price is set above the expected future spot price. In 1930, John Maynard Keynes postulated that sellers of futures (hedgers) would compensate the buyers of futures (speculators), a situation he referred to as "normal backwardation." By examining the returns to futures over long periods, Gorton and Rouwenhorst indirectly test this Keynesian prediction.
They construct a dataset of returns on individual commodity futures going back as far as 1959. The dataset combines information about individual commodity futures prices obtained from the Commodity Research Bureau (covering, among other exchanges, the CBOT and CME) and the London Metals Exchange. Investment returns are computed by "rolling" positions in individual futures contracts forward over time. Commodities are combined into an equally weighted index; much of the paper is concerned with the behavior of this index.
Historically, the average return on the equally weighted index of commodity futures has exceeded the return on T-Bills by about 5 percent per annum. This is about the same as the historical risk premium on stocks (the equity premium) over the 1959-2004 period, but the commodity index has slightly lower standard deviation than the S&P 500. The relatively low volatility of the commodity index stems from the fact that the pair-wise correlations between individual commodities are relatively low.
Commodities are also less risky by other standards. First, the distribution of commodity returns is skewed right, whereas equity return distributions are skewed left. In other words, relative to a normal "bell-shape" curve, equities experience proportionally more crashes, whereas the "crashes" in commodities occur most often on the upside, leading to positive returns to investors. Further, Gorton and Rouwenhorst show that commodities have the ability to diversify portfolios of stocks and bonds. The sources of the diversification benefits are the ability of commodities to provide a () hedge against inflation - stocks and bonds are poor hedges by comparison - and to ly offset the cyclical variation in the returns of stocks and bonds.
Imagine an asset class whose returns are the same as those on the stock market but less volatile, and which are negatively correlated with stock-and-bond returns and positively correlated with inflation. That asset class is an investment in commodity futures. And, despite being a very old asset class, commodity futures are not widely appreciated.
In Facts and Fantasies About Commodity Futures (NBER Working Paper No. 10595), co-authors Gary Gorton and Geert Rouwenhorst show that over a 45-year period a diversified investment in collateralized commodity futures has earned historical returns that are comparable to stocks. That reward, rather than foreseeable trends in commodity prices, is the key to the returns that a futures investor can expect. Individual commodities can be very volatile, but much of this volatility can be avoided by investing in a diversified index of commodities.
Futures contracts are agreements to buy or sell a commodity at a future date, at a price that is agreed upon today. Except for collateral requirements, futures contracts do not require a cash outlay for either buyers or sellers. On average, the buyer of a futures contract is compensated by the seller of futures if the futures price is set below the expected spot price at the time of the expiration of the futures contract. The opposite is true when the futures price is set above the expected future spot price. In 1930, John Maynard Keynes postulated that sellers of futures (hedgers) would compensate the buyers of futures (speculators), a situation he referred to as "normal backwardation." By examining the returns to futures over long periods, Gorton and Rouwenhorst indirectly test this Keynesian prediction.
They construct a dataset of returns on individual commodity futures going back as far as 1959. The dataset combines information about individual commodity futures prices obtained from the Commodity Research Bureau (covering, among other exchanges, the CBOT and CME) and the London Metals Exchange. Investment returns are computed by "rolling" positions in individual futures contracts forward over time. Commodities are combined into an equally weighted index; much of the paper is concerned with the behavior of this index.
Historically, the average return on the equally weighted index of commodity futures has exceeded the return on T-Bills by about 5 percent per annum. This is about the same as the historical risk premium on stocks (the equity premium) over the 1959-2004 period, but the commodity index has slightly lower standard deviation than the S&P 500. The relatively low volatility of the commodity index stems from the fact that the pair-wise correlations between individual commodities are relatively low.
Commodities are also less risky by other standards. First, the distribution of commodity returns is skewed right, whereas equity return distributions are skewed left. In other words, relative to a normal "bell-shape" curve, equities experience proportionally more crashes, whereas the "crashes" in commodities occur most often on the upside, leading to positive returns to investors. Further, Gorton and Rouwenhorst show that commodities have the ability to diversify portfolios of stocks and bonds. The sources of the diversification benefits are the ability of commodities to provide a () hedge against inflation - stocks and bonds are poor hedges by comparison - and to ly offset the cyclical variation in the returns of stocks and bonds.
Thursday, June 09, 2005
Internet Investing, easy money, make money on the internet, make money now!
Internet Investing
.(The following is a DFI Your money Matters program brochure reproduction)
It used to be that "hot tips" about the stock market came from your barber or your Uncle Louie. If you wanted to buy or sell stocks, you went to the big Wall Street brokerage firm office downtown. If you wanted financial information about a company, you asked your broker or you pored over back issues of The Wall Street Journal or other publications at your local library. But not anymore! As more and more people acquire computers, they also gain access to the Internet. The limits of information obtainable through the World Wide Web have yet to be defined.
But what kind of information is out there in cyberspace and how can an investor sort the good from the bad? Here are some answers that may help you navigate through the investment quadrant of cyberspace. This brochure will not attempt to explain the workings of the Web or web browsers. Rather, it will give you an overview of some types of information available relating to securities and some things to watch out for.
.(The following is a DFI Your money Matters program brochure reproduction)
It used to be that "hot tips" about the stock market came from your barber or your Uncle Louie. If you wanted to buy or sell stocks, you went to the big Wall Street brokerage firm office downtown. If you wanted financial information about a company, you asked your broker or you pored over back issues of The Wall Street Journal or other publications at your local library. But not anymore! As more and more people acquire computers, they also gain access to the Internet. The limits of information obtainable through the World Wide Web have yet to be defined.
But what kind of information is out there in cyberspace and how can an investor sort the good from the bad? Here are some answers that may help you navigate through the investment quadrant of cyberspace. This brochure will not attempt to explain the workings of the Web or web browsers. Rather, it will give you an overview of some types of information available relating to securities and some things to watch out for.
Motivating Employees with Stock and Involvement
Motivating Employees with Stock and Involvement
"An understanding of how and when employee ownership works successfully requires a three-pronged analysis of: 1) the incentives that ownership gives; 2) the participative mechanisms available to workers to act on those incentives; and 3) the corporate culture that battles against tendencies to free ride."
For decades now, American firms have engaged in a capitalist experiment, helping their employees to become partial owners of their companies in the expectation that this will encourage them to work harder. Currently, more than one-fifth of U.S. private-sector employees -- 24 million workers -- own stock in their own companies; eight million participate in Employee Stock Ownership Plans (ESOPs).
The growth of ESOPs over the past 25 years is part of a general trend in compensation arrangements linking worker pay to company performance. These techniques include profit sharing, gain-sharing, and broad-based stock options in addition to the various methods of employee ownership. Some research shows that firms with employee ownership tend on average to match or exceed the performance of other similar firms. There may be an average 4 to 5 percent gain in productivity with introduction of an ESOP, but with a wide band of outcomes around that average. Several studies find higher satisfaction, commitment, and motivation among employee-owners. Other studies find no significant differences in these factors between worker owners and non-owners, or before and after an employee buyout of a firm.
For example, employee ownership of United Airlines failed to prevent its bankruptcy, while multiple forms of employee ownership and profit sharing at Science Applications International Corp., a Fortune 500 company engaged in research and engineering, have led to its continued success.
One common problem for employee ownership firms is "free riders" - workers who slack off but, as owners, still receive the rewards of hard work by their colleagues. Especially as a firm grows and the number of workers increases, the link between an individual's performance and financial payoff becomes weaker. In Motivating Employee-Owners in ESOP Firms: Human Resource Policies and Company Performance (NBER Working Paper No. 10177), authors Douglas Kruse, Richard Freeman, Joseph Blasi, Robert Buchele, Adria Scharf, Loren Rodgers, and Chris Mackin explore what companies can do to overcome this problem of how to motivate employee slackers and thereby improve firm performance.
For their study, the authors use data from: a survey of employees and managers in 11 relatively small ESOP companies over the period 1996-2002; three firms surveyed by the NBER's Shared Capitalism Research Project in 2001 and 2002; and a national survey of workers. These new data, the authors find, tend to support the need to combine the incentive of ownership with the involvement of participation.
At the 11 surveyed firms, employees were asked whether they work hard, care about meeting customer needs, are willing to make sacrifices to help co-workers, and are very committed to the company and its future. They also were asked whether company performance is important as long as jobs are secure, and whether employees work less when supervisors are not watching. The authors then devised an index of human resource policies, asking whether they increased employee involvement in job-level decisions with quality circle; autonomous work groups, or employee task forces; if employees had any involvement in new hires; and whether employees were represented on the board of directors. The survey also asked about nine methods of sharing information with employees, including new employee orientations and regular meetings with workers at the department or work group level, and whether the company had a formal grievance procedure, a suggestion system, or a cash profit sharing or bonus system.
The results show that a higher human resource index number at a firm results in greater worker-reported work effort and better company performance. However, the size of the stake of all employees in an ESOP company had no impact on performance. "This supports the idea that it is not ownership per se, but the cooperative culture that can be fostered by employee ownership, that drives better workplace performance in ESOP firms," the authors write. Performance improves, they add, if workers perceive they are being treated fairly, have good supervision, and have input and influence in the firm.
Some of the data indicate that workers on employee involvement committees, or who are otherwise involved in setting goals for their work group, are more likely to exert peer pressure on shirking co-workers, talking directly with them about their performance, and are less likely to do nothing. "We conclude," the authors write, "that an understanding of how and when employee ownership works successfully requires a three-pronged analysis of: 1) the incentives that ownership gives; 2) the participative mechanisms available to workers to act on those incentives; and 3) the corporate culture that battles against tendencies to free ride."
"An understanding of how and when employee ownership works successfully requires a three-pronged analysis of: 1) the incentives that ownership gives; 2) the participative mechanisms available to workers to act on those incentives; and 3) the corporate culture that battles against tendencies to free ride."
For decades now, American firms have engaged in a capitalist experiment, helping their employees to become partial owners of their companies in the expectation that this will encourage them to work harder. Currently, more than one-fifth of U.S. private-sector employees -- 24 million workers -- own stock in their own companies; eight million participate in Employee Stock Ownership Plans (ESOPs).
The growth of ESOPs over the past 25 years is part of a general trend in compensation arrangements linking worker pay to company performance. These techniques include profit sharing, gain-sharing, and broad-based stock options in addition to the various methods of employee ownership. Some research shows that firms with employee ownership tend on average to match or exceed the performance of other similar firms. There may be an average 4 to 5 percent gain in productivity with introduction of an ESOP, but with a wide band of outcomes around that average. Several studies find higher satisfaction, commitment, and motivation among employee-owners. Other studies find no significant differences in these factors between worker owners and non-owners, or before and after an employee buyout of a firm.
For example, employee ownership of United Airlines failed to prevent its bankruptcy, while multiple forms of employee ownership and profit sharing at Science Applications International Corp., a Fortune 500 company engaged in research and engineering, have led to its continued success.
One common problem for employee ownership firms is "free riders" - workers who slack off but, as owners, still receive the rewards of hard work by their colleagues. Especially as a firm grows and the number of workers increases, the link between an individual's performance and financial payoff becomes weaker. In Motivating Employee-Owners in ESOP Firms: Human Resource Policies and Company Performance (NBER Working Paper No. 10177), authors Douglas Kruse, Richard Freeman, Joseph Blasi, Robert Buchele, Adria Scharf, Loren Rodgers, and Chris Mackin explore what companies can do to overcome this problem of how to motivate employee slackers and thereby improve firm performance.
For their study, the authors use data from: a survey of employees and managers in 11 relatively small ESOP companies over the period 1996-2002; three firms surveyed by the NBER's Shared Capitalism Research Project in 2001 and 2002; and a national survey of workers. These new data, the authors find, tend to support the need to combine the incentive of ownership with the involvement of participation.
At the 11 surveyed firms, employees were asked whether they work hard, care about meeting customer needs, are willing to make sacrifices to help co-workers, and are very committed to the company and its future. They also were asked whether company performance is important as long as jobs are secure, and whether employees work less when supervisors are not watching. The authors then devised an index of human resource policies, asking whether they increased employee involvement in job-level decisions with quality circle; autonomous work groups, or employee task forces; if employees had any involvement in new hires; and whether employees were represented on the board of directors. The survey also asked about nine methods of sharing information with employees, including new employee orientations and regular meetings with workers at the department or work group level, and whether the company had a formal grievance procedure, a suggestion system, or a cash profit sharing or bonus system.
The results show that a higher human resource index number at a firm results in greater worker-reported work effort and better company performance. However, the size of the stake of all employees in an ESOP company had no impact on performance. "This supports the idea that it is not ownership per se, but the cooperative culture that can be fostered by employee ownership, that drives better workplace performance in ESOP firms," the authors write. Performance improves, they add, if workers perceive they are being treated fairly, have good supervision, and have input and influence in the firm.
Some of the data indicate that workers on employee involvement committees, or who are otherwise involved in setting goals for their work group, are more likely to exert peer pressure on shirking co-workers, talking directly with them about their performance, and are less likely to do nothing. "We conclude," the authors write, "that an understanding of how and when employee ownership works successfully requires a three-pronged analysis of: 1) the incentives that ownership gives; 2) the participative mechanisms available to workers to act on those incentives; and 3) the corporate culture that battles against tendencies to free ride."
Monday, June 06, 2005
Trends in Dividends
During the last ten years, the composition of returns on common stock has changed
significantly, shifting away from dividends toward capital gains. From the end of World War II to 1994, the real return on equities averaged 7.6 percent, with the dividend yield, which averaged 4.1 percent, accounting for approximately three‐fifths of this return (Table 1).
Subsequently, the dividend yield averaged only 1.7 percent, accounting for approximately one‐fifth of the 8.4 percent real return on equity. Before the mid 1990s, equities tended to appreciate at 7.5 percent annually, a rate that essentially matched the average growth rate of companies’ earnings per share and of nominal GDP. Afterward, equities appreciated by 9.3 percent annually, almost twice the growth rates of earnings and GDP. This drop in the dividend yield on equities is mainly due to the substantial increase in stock prices that occurred after the mid 1990s. Before 1995, the prices of stocks in the S&P 500 index averaged about 14 times reported earnings. During the last ten years, this average nearly doubled. This increase in stock prices relative to earnings would have halved the dividend yield, depressing it to 2.1 percent, if companies had held constant the share of their earnings
paid as dividends. Instead, in 2003, dividends’ share of earnings was about a third lower than its prevailing value between 1947 and 1995.
The more rapid appreciation of equity not only depressed the dividend yield, but also
provided shareholders the additional return to compensate for the drop in the dividend yield. Should shareholders continue to expect a total real return of near 7 percent from equities, stock prices would have to continue to appreciate at a rate more than 5 percentage points above the rate of inflation unless dividend yields rise substantially. In other words, at current dividend yields, the rate of growth of real stock prices must exceed that of potential GDP by approximately 2 percentage points.
As was the case in the 1990s, shareholders might expect companies to achieve this
growth by accumulating new assets at a rapid pace, thereby boosting the growth of earnings and dividends in the future. The prospect of substantially greater dividends warrants paying a higher price per dollar of current dividends. Eventually, however, the real growth rate of companies’ domestic assets must approach that of potential GDP; otherwise, diminishing returns will depress their return on assets and their earnings per dollar of equity.1 When the rapid accumulation of assets becomes uneconomical, companies can divert more of their earnings from making new investments to paying dividends. At that time, the composition of the real return on equity will shift once again, moving back toward a lower rate of appreciation and a higher dividend yield.
When opportunities for rapid growth ebb, companies can adopt a strategy that rewards
shareholders with synthetic growth.2 Instead of acquiring new assets, companies can purchase their shares in public markets, thereby increasing their assets, earnings, and dividends per share of stock at rates exceeding the growth of their total assets and earnings. In these cases, the 1 Although expanding abroad can extend the limits to growth, very rapid expansion for very long over a sufficiently wide area can strain the capacity of companies’ managers. 2 Without sufficiently profitable opportunities, companies cannot achieve higher rates of growth simply by retaining earnings to make new investments – lower dividends do not necessarily entail higher growth composition of real returns on corporations’ outstanding equity does not shift so greatly, if it shifts at all, toward a higher dividend yield. Taken to the extreme, companies could cease paying dividends altogether, thereby compensating shareholders entirely through capital gains.
Financial theory has long suggested that corporations should purchase their shares
instead of paying dividends when shareholders’ tax rates on dividends exceed those on capital gains. In these circumstances, the strategy of purchasing shares makes equity more valuable to shareholders and consequently reduces companies’ cost of capital.3 The drop in dividend yields and the generally low dividend payout rates during the 1990s suggest that corporations may have shifted their financial policies away from paying dividends toward purchasing their own shares. Today, three‐quarters of the companies constituting the S&P 500 pay dividends; more than nine tenths did so in 1980.
significantly, shifting away from dividends toward capital gains. From the end of World War II to 1994, the real return on equities averaged 7.6 percent, with the dividend yield, which averaged 4.1 percent, accounting for approximately three‐fifths of this return (Table 1).
Subsequently, the dividend yield averaged only 1.7 percent, accounting for approximately one‐fifth of the 8.4 percent real return on equity. Before the mid 1990s, equities tended to appreciate at 7.5 percent annually, a rate that essentially matched the average growth rate of companies’ earnings per share and of nominal GDP. Afterward, equities appreciated by 9.3 percent annually, almost twice the growth rates of earnings and GDP. This drop in the dividend yield on equities is mainly due to the substantial increase in stock prices that occurred after the mid 1990s. Before 1995, the prices of stocks in the S&P 500 index averaged about 14 times reported earnings. During the last ten years, this average nearly doubled. This increase in stock prices relative to earnings would have halved the dividend yield, depressing it to 2.1 percent, if companies had held constant the share of their earnings
paid as dividends. Instead, in 2003, dividends’ share of earnings was about a third lower than its prevailing value between 1947 and 1995.
The more rapid appreciation of equity not only depressed the dividend yield, but also
provided shareholders the additional return to compensate for the drop in the dividend yield. Should shareholders continue to expect a total real return of near 7 percent from equities, stock prices would have to continue to appreciate at a rate more than 5 percentage points above the rate of inflation unless dividend yields rise substantially. In other words, at current dividend yields, the rate of growth of real stock prices must exceed that of potential GDP by approximately 2 percentage points.
As was the case in the 1990s, shareholders might expect companies to achieve this
growth by accumulating new assets at a rapid pace, thereby boosting the growth of earnings and dividends in the future. The prospect of substantially greater dividends warrants paying a higher price per dollar of current dividends. Eventually, however, the real growth rate of companies’ domestic assets must approach that of potential GDP; otherwise, diminishing returns will depress their return on assets and their earnings per dollar of equity.1 When the rapid accumulation of assets becomes uneconomical, companies can divert more of their earnings from making new investments to paying dividends. At that time, the composition of the real return on equity will shift once again, moving back toward a lower rate of appreciation and a higher dividend yield.
When opportunities for rapid growth ebb, companies can adopt a strategy that rewards
shareholders with synthetic growth.2 Instead of acquiring new assets, companies can purchase their shares in public markets, thereby increasing their assets, earnings, and dividends per share of stock at rates exceeding the growth of their total assets and earnings. In these cases, the 1 Although expanding abroad can extend the limits to growth, very rapid expansion for very long over a sufficiently wide area can strain the capacity of companies’ managers. 2 Without sufficiently profitable opportunities, companies cannot achieve higher rates of growth simply by retaining earnings to make new investments – lower dividends do not necessarily entail higher growth composition of real returns on corporations’ outstanding equity does not shift so greatly, if it shifts at all, toward a higher dividend yield. Taken to the extreme, companies could cease paying dividends altogether, thereby compensating shareholders entirely through capital gains.
Financial theory has long suggested that corporations should purchase their shares
instead of paying dividends when shareholders’ tax rates on dividends exceed those on capital gains. In these circumstances, the strategy of purchasing shares makes equity more valuable to shareholders and consequently reduces companies’ cost of capital.3 The drop in dividend yields and the generally low dividend payout rates during the 1990s suggest that corporations may have shifted their financial policies away from paying dividends toward purchasing their own shares. Today, three‐quarters of the companies constituting the S&P 500 pay dividends; more than nine tenths did so in 1980.
Saturday, June 04, 2005
Money Safety Tips
Money Safety Tips
Credit card and debit card safety
· Report lost or stolen cards immediately to the company that issued you the
card.
· Sign your card on the signature panel as soon as you receive it.
· Protect your cards as if they were cash – never let them out of your sight.
· Don’t leave your credit cards in your car’s glove compartment. A high
percentage of credit card thefts are from car glove compartments.
· Don’t lend your card to anyone. You are responsible for its use. Don’t let your
credit cards be used by others, even family and friends.
· Never write down your personal identification number (PIN) – memorize it.
· Never tell anyone your PIN. No one from a financial institution, the police, or a
merchant should ask for your PIN. You are the only person who needs to
know it.
· When selecting a PIN, avoid picking a number that is easy for others to guess
– for example, your name, telephone number, date of birth, or any simple
combination of these.
· Be sure that you get your card back after every purchase.
· Always make sure that sales vouchers are for the correct purchase amount
before you sign them.
· Always keep copies of your sales vouchers, credit card, and Automated Teller
Machine (ATM) receipts.
· Always check your billing statement to make sure the purchase amounts are
correct. Immediately dispute any charges that you did not make by notifying
your credit card provider.
· Always put disputes in writing immediately when you learn of the disputed
item; otherwise you may be held legally responsible for the entire amount of
the disputed item.
Hands on BankingSM – The Library
· Make a complete list of all your cards and their numbers and store it in a safe
place. Never carry this list with you.
· Don’t volunteer any personal information when you use your credit card, other
than by displaying personal identification as requested by a merchant.
ATM safety
· Think about your personal safety when using an ATM. Because most ATMs
give out cash and many accept deposits, it makes sense to be alert and
aware of your surroundings no matter where or when you use an ATM.
· Memorize your personal identification number. Don’t write down your account
number and PIN and carry it with you. If your wallet or purse is stolen,
someone else could have access to your money.
· When typing in your PIN at the ATM, cover the number pad so no one near
you can see your PIN.
· Always keep your ATM receipts.
· When you’re by yourself, avoid using an ATM in out-of-the-way or deserted
areas. Use ATMs located inside banks or supermarkets where other people
are around.
· Be aware of your surroundings. Is the area well-lit?
· Try to use ATMs that have cameras or other security devices nearby.
· Put your money and ATM card away before you leave the ATM. Always avoid
showing your cash.
· Keep your ATM card away from things with magnets, which can erase the
information stored on the card.
· If your ATM card is lost or stolen, contact your bank immediately.
Mail, telephone, and online safety
· Be cautious when you receive offers to buy over the telephone, by mail or on
the Internet. Be especially careful about deals that sound too good to be true.
Some of these offers may be illegal “scams” designed to cheat you.
· Beware of high-pressure sales people, especially if they tell you the sale must
be made now.
· If you’re on the phone, ask questions. The fewer questions a telephone
salesperson (or “telemarketer”) can answer, the less likely that it’s a legitimate
business. Write down the name, address, and phone number of the
businesses or organizations that contact you. Ask for the names of other
customers who can tell you about their experience with the business or
organization.
· Do not give your account number over the phone unless you initiated the call.
· When in doubt, consult the Better Business Bureau or the U.S. Postal
Inspection Service.
· Notify the post office immediately if you change your address.
· Make sure your mailbox is secure, and promptly remove your mail.
· If you are not receiving mail, call the post office immediately. Some criminals
are able to forge your signature and have your mail forwarded elsewhere for
the purpose of obtaining information that will allow them to apply for credit in
your name. This is known as identity theft.
· If you are told of a forwarding order placed on your mail without your
knowledge, go to the post office to check the signature and cancel the order.
Ask the post office to track down the forwarded mail – it can remain in the
postal system for up to 14 days, so it may not yet have landed in the
criminal’s hands.
· Select one credit card with a low credit limit to use for all your online
purchases. Tell your credit card provider that you do not want them to raise
the limit on this card without your prior written permission.
· When you purchase by phone, for maximum security, use a corded, rather
than cordless phone.
We invite you to contact Wells Fargo for further information and assistance. Visit
our Web site at wellsfargo.com or any Wells Fargo store.
Credit card and debit card safety
· Report lost or stolen cards immediately to the company that issued you the
card.
· Sign your card on the signature panel as soon as you receive it.
· Protect your cards as if they were cash – never let them out of your sight.
· Don’t leave your credit cards in your car’s glove compartment. A high
percentage of credit card thefts are from car glove compartments.
· Don’t lend your card to anyone. You are responsible for its use. Don’t let your
credit cards be used by others, even family and friends.
· Never write down your personal identification number (PIN) – memorize it.
· Never tell anyone your PIN. No one from a financial institution, the police, or a
merchant should ask for your PIN. You are the only person who needs to
know it.
· When selecting a PIN, avoid picking a number that is easy for others to guess
– for example, your name, telephone number, date of birth, or any simple
combination of these.
· Be sure that you get your card back after every purchase.
· Always make sure that sales vouchers are for the correct purchase amount
before you sign them.
· Always keep copies of your sales vouchers, credit card, and Automated Teller
Machine (ATM) receipts.
· Always check your billing statement to make sure the purchase amounts are
correct. Immediately dispute any charges that you did not make by notifying
your credit card provider.
· Always put disputes in writing immediately when you learn of the disputed
item; otherwise you may be held legally responsible for the entire amount of
the disputed item.
Hands on BankingSM – The Library
· Make a complete list of all your cards and their numbers and store it in a safe
place. Never carry this list with you.
· Don’t volunteer any personal information when you use your credit card, other
than by displaying personal identification as requested by a merchant.
ATM safety
· Think about your personal safety when using an ATM. Because most ATMs
give out cash and many accept deposits, it makes sense to be alert and
aware of your surroundings no matter where or when you use an ATM.
· Memorize your personal identification number. Don’t write down your account
number and PIN and carry it with you. If your wallet or purse is stolen,
someone else could have access to your money.
· When typing in your PIN at the ATM, cover the number pad so no one near
you can see your PIN.
· Always keep your ATM receipts.
· When you’re by yourself, avoid using an ATM in out-of-the-way or deserted
areas. Use ATMs located inside banks or supermarkets where other people
are around.
· Be aware of your surroundings. Is the area well-lit?
· Try to use ATMs that have cameras or other security devices nearby.
· Put your money and ATM card away before you leave the ATM. Always avoid
showing your cash.
· Keep your ATM card away from things with magnets, which can erase the
information stored on the card.
· If your ATM card is lost or stolen, contact your bank immediately.
Mail, telephone, and online safety
· Be cautious when you receive offers to buy over the telephone, by mail or on
the Internet. Be especially careful about deals that sound too good to be true.
Some of these offers may be illegal “scams” designed to cheat you.
· Beware of high-pressure sales people, especially if they tell you the sale must
be made now.
· If you’re on the phone, ask questions. The fewer questions a telephone
salesperson (or “telemarketer”) can answer, the less likely that it’s a legitimate
business. Write down the name, address, and phone number of the
businesses or organizations that contact you. Ask for the names of other
customers who can tell you about their experience with the business or
organization.
· Do not give your account number over the phone unless you initiated the call.
· When in doubt, consult the Better Business Bureau or the U.S. Postal
Inspection Service.
· Notify the post office immediately if you change your address.
· Make sure your mailbox is secure, and promptly remove your mail.
· If you are not receiving mail, call the post office immediately. Some criminals
are able to forge your signature and have your mail forwarded elsewhere for
the purpose of obtaining information that will allow them to apply for credit in
your name. This is known as identity theft.
· If you are told of a forwarding order placed on your mail without your
knowledge, go to the post office to check the signature and cancel the order.
Ask the post office to track down the forwarded mail – it can remain in the
postal system for up to 14 days, so it may not yet have landed in the
criminal’s hands.
· Select one credit card with a low credit limit to use for all your online
purchases. Tell your credit card provider that you do not want them to raise
the limit on this card without your prior written permission.
· When you purchase by phone, for maximum security, use a corded, rather
than cordless phone.
We invite you to contact Wells Fargo for further information and assistance. Visit
our Web site at wellsfargo.com or any Wells Fargo store.
Thursday, June 02, 2005
investing today thoughts before you invest your money today
Investors today have a wide range of choices: stocks, bonds, mutual funds, Treasury securities (including savings bonds), options, commodities, commodity futures, real estate investment trusts (REITs), variable annuities and many more. You must investigate before you invest—and remember that every investment involves some degree of risk. These securities are not insured by the federal government if they fail—even if you purchase them through a bank or credit union that offers federally-insured savings accounts. Make sure you have answers to all of these questions before you invest.
* How—and how quickly—can you get your money back? Stocks, bonds, and shares in mutual funds can usually be sold at any time, but there is no guarantee you will get back all that you paid for them. Other investments such as limited partnerships, often restrict your ability to cash out your holdings.
* What can you expect to earn on your money? While bonds generally promise a fixed return, earnings on most other securities go up and down with market changes. Also keep in mind that just because an investment has done well in the past there is no guarantee it will do well in the future.
* What type of earnings can you expect? Will you get income in the form of interest, dividends or rent? Some investments, such as stocks and real estate, have the potential for earnings and growth in value. What is the potential for earnings over time?
* How much risk is involved? With any investment, there is always the risk that you won’t get your money back or the earnings promised. There is usually a trade-off between risk and reward—the higher the potential return, the greater the risk. The federal government insures bank savings accounts (see FDIC) and backs up U.S. Treasury securities (including savings bonds). Other investment options are not protected.
* Are your investments diversified? Some investments perform better than others in certain situations. For example, when interest rates go up, bond prices tend to go down. One industry may struggle while another prospers. Putting your money in a variety of investment options can help to reduce your risk.
* Are there any tax advantages to a particular investment? U.S. Savings Bonds are exempt from state and local taxes. Municipal bonds are exempt from federal income tax and, sometimes, state income tax as well. For special goals, such as paying for college and retirement, tax-deferred investments are available that let you postpone or even eliminate payment of income taxes.
The following companies rate the financial condition of corporations and municipalities issuing bonds. Their ratings are available online and at many public libraries.
* Standard & Poor’s (www.standardandpoors.com)
* Moody’s Investors Services (www.moodys.com)
* Weiss Ratings (www.weissratings.com)
For ratings of mutual funds, consult magazines such as Kiplinger’s Personal Finance, Money, Consumer Reports, Smart Money, and Worth.
For stocks, get a prospectus from the company that describes the investment and provides a history of performance over a period of years. The Securities and Exchange Commission requires public companies to disclose financial and other information to help you make sound decisions. You can find the text of these files at www.sec.gov/edgar.shtml.
* How—and how quickly—can you get your money back? Stocks, bonds, and shares in mutual funds can usually be sold at any time, but there is no guarantee you will get back all that you paid for them. Other investments such as limited partnerships, often restrict your ability to cash out your holdings.
* What can you expect to earn on your money? While bonds generally promise a fixed return, earnings on most other securities go up and down with market changes. Also keep in mind that just because an investment has done well in the past there is no guarantee it will do well in the future.
* What type of earnings can you expect? Will you get income in the form of interest, dividends or rent? Some investments, such as stocks and real estate, have the potential for earnings and growth in value. What is the potential for earnings over time?
* How much risk is involved? With any investment, there is always the risk that you won’t get your money back or the earnings promised. There is usually a trade-off between risk and reward—the higher the potential return, the greater the risk. The federal government insures bank savings accounts (see FDIC) and backs up U.S. Treasury securities (including savings bonds). Other investment options are not protected.
* Are your investments diversified? Some investments perform better than others in certain situations. For example, when interest rates go up, bond prices tend to go down. One industry may struggle while another prospers. Putting your money in a variety of investment options can help to reduce your risk.
* Are there any tax advantages to a particular investment? U.S. Savings Bonds are exempt from state and local taxes. Municipal bonds are exempt from federal income tax and, sometimes, state income tax as well. For special goals, such as paying for college and retirement, tax-deferred investments are available that let you postpone or even eliminate payment of income taxes.
The following companies rate the financial condition of corporations and municipalities issuing bonds. Their ratings are available online and at many public libraries.
* Standard & Poor’s (www.standardandpoors.com)
* Moody’s Investors Services (www.moodys.com)
* Weiss Ratings (www.weissratings.com)
For ratings of mutual funds, consult magazines such as Kiplinger’s Personal Finance, Money, Consumer Reports, Smart Money, and Worth.
For stocks, get a prospectus from the company that describes the investment and provides a history of performance over a period of years. The Securities and Exchange Commission requires public companies to disclose financial and other information to help you make sound decisions. You can find the text of these files at www.sec.gov/edgar.shtml.
Wednesday, June 01, 2005
feet in stocks tickling
feet in stocks tickling
The real measure of your wealth is how much you'd be worth if you lost all your money. ~Author Unknown
great information about feet in stock tickling:
feet in stocks tickling Open this result in new window
A full list of resources for feet in stocks tickling... Home | Futures Trading System. feet in stocks tickling ... BEST Feet in Stocks Tickling. Contains many Feet in Stocks Tickling resources ...
best-futures-trader.com/.../feet-in-stocks-tickling.html - More from this site
EarthLink Search: "bare foot tickling" Open this result in new window
... ... leg lesbian feet licking, Feet Gallery Free womens feet, Feet in Stocks Tickling. ...
search.earthlink.net/search?q=bare+foot+tickling&area=earthlink-ws&... - More from this site
stocks Open this result in new window
Everything to do with feet in stocks tickling. stocks , full of feet in stocks tickling newsletters, articles, links and other feet in stocks tickling resources - ALL FREE - in one easy to navigate site to save time and money.
lookup-now.com/sites/stocks/feet_in_stocks_tickling.html - More from this site
Tickle celebrity tickling feet tickling worship Open this result in new window
... I am going to put myself tickling feet in stocks tickling videos out on a limb and just tell you that I think tickling ...
www.teeniepictures.info/1105/0220/q= - More from this site
Tickling feet mpegs pictures Open this result in new window
... feet with feathers making my way toward his two story, quaint, stocking tickling feet in stocks tickling suburban house ...
www.teeniepictures.info/1105/0622/q= - More from this site
stocks Open this result in new window
Everything to do with 50 hottest stocks. stocks , full of 50 hottest stocks newsletters, articles, links and other 50 hottest stocks resources - ALL FREE - in one easy to navigate site to save time and money.
find-24.com/sites/stocks/50_hottest_stocks.html - More from this site
Stock_Market Index 1 Open this result in new window
... stock screener. feet in stocks tickling. free stock photography ...
all-things-investments.com/Stock_Market/1 - More from this site
Great Investment Resource - Business Investor Open this result in new window
Great Investment Resource -
investmentmaniac.com/investments/business_investor.html - More from this site
Ebooks and Downloads Index 21 Open this result in new window
... business loan. feet in stocks tickling. funny news ...
bestebooks4u.com/business1/index21.html - 15k - Cached - More from this site
EarthLink Search: "bare boy foot young" Open this result in new window
... athlete's foot. Feet in Stocks Tickling Male Feet. women legs, ...
search.earthlink.net/search?q=bare+boy+foot+young&... - More from this site
The real measure of your wealth is how much you'd be worth if you lost all your money. ~Author Unknown
great information about feet in stock tickling:
feet in stocks tickling Open this result in new window
A full list of resources for feet in stocks tickling... Home | Futures Trading System. feet in stocks tickling ... BEST Feet in Stocks Tickling. Contains many Feet in Stocks Tickling resources ...
best-futures-trader.com/.../feet-in-stocks-tickling.html - More from this site
EarthLink Search: "bare foot tickling" Open this result in new window
... ... leg lesbian feet licking, Feet Gallery Free womens feet, Feet in Stocks Tickling. ...
search.earthlink.net/search?q=bare+foot+tickling&area=earthlink-ws&... - More from this site
stocks Open this result in new window
Everything to do with feet in stocks tickling. stocks , full of feet in stocks tickling newsletters, articles, links and other feet in stocks tickling resources - ALL FREE - in one easy to navigate site to save time and money.
lookup-now.com/sites/stocks/feet_in_stocks_tickling.html - More from this site
Tickle celebrity tickling feet tickling worship Open this result in new window
... I am going to put myself tickling feet in stocks tickling videos out on a limb and just tell you that I think tickling ...
www.teeniepictures.info/1105/0220/q= - More from this site
Tickling feet mpegs pictures Open this result in new window
... feet with feathers making my way toward his two story, quaint, stocking tickling feet in stocks tickling suburban house ...
www.teeniepictures.info/1105/0622/q= - More from this site
stocks Open this result in new window
Everything to do with 50 hottest stocks. stocks , full of 50 hottest stocks newsletters, articles, links and other 50 hottest stocks resources - ALL FREE - in one easy to navigate site to save time and money.
find-24.com/sites/stocks/50_hottest_stocks.html - More from this site
Stock_Market Index 1 Open this result in new window
... stock screener. feet in stocks tickling. free stock photography ...
all-things-investments.com/Stock_Market/1 - More from this site
Great Investment Resource - Business Investor Open this result in new window
Great Investment Resource -
investmentmaniac.com/investments/business_investor.html - More from this site
Ebooks and Downloads Index 21 Open this result in new window
... business loan. feet in stocks tickling. funny news ...
bestebooks4u.com/business1/index21.html - 15k - Cached - More from this site
EarthLink Search: "bare boy foot young" Open this result in new window
... athlete's foot. Feet in Stocks Tickling Male Feet. women legs, ...
search.earthlink.net/search?q=bare+boy+foot+young&... - More from this site
Hedge Fund 101 - Make Money with Hedge Funds
Hedge Fund 101 - Make Money with Hedge Funds
Investors are always looking for the best investments that will yield the most profit. Any investor who can afford the extra cost should consider investing in Hedge Funds. Hedge Funds were started in 1949 by Alfred Winslow Jones, who pioneered non-traditional investment strategies. Jones innovated this new investment strategy by selling short stocks, while buying other stocks (long stocks). Hedge Funds are very similar to Mutual Funds, except that there are fewer regulations on Hedge Funds. As a result, Hedge Funds usually require a much larger investment.
What Are Hedge Funds?
Hedge Funds can help investors make more money with higher-risk investments. Other techniques used in Hedge Funds include “leverage,” which is borrowed money to trade in addition to the capital provided one’s investors. The usage of Hedge Funds also requires an incentive fee. An incentive fee is a fee based on a portion of the client’s profits as opposed to a fixed percentage of assets. This fee is then invested and ideally will gain the investor more money.
Generally, companies are the owners of Hedge Funds because most people do not have enough money to meet the minimum investment required to have a Hedge Fund. In 2004, Hedge Fund investments passed the $1 trillion dollar mark. In mid-2004 about 39 companies shared the total Hedge Fund values of 1.1 trillion dollars.
Common Techniques for Investing
There are also other techniques for investing with Hedge Funds. One way is to invest in a company just before a major merger. If one gains knowledge of a merger, and buys large amounts of share in a company that is about to merge, the shares go up greatly once the merger occurs. This is, unfortunately, a very high-risk investment strategy because some mergers may not occur.
Other techniques include selling short, which is where one invests in seemingly undervalued securities, trading commodity and FX contracts, and taking advantage of the separation between the current market price and the highest purchase price in events such as mergers.
Why are Hedge Funds Beneficial?
Hedge Funds are also beneficial because of their high level of security. Hedge Funds are private, between individuals, and do not have to be made known to the government or other companies. Currently, Hedge Funds do not need to be registered with the SEC. Hedge Funds are also based in places with less regulations (I.E. The Cayman Islands, The Virgin Islands, etc). However, one drawback of Hedge Fund security is the fact that it looks suspicious to have secretive investments. For this reason, many companies and investors are criticized for being involved with Hedge Funds.
Conclusion
Hedge Funds are a very risky investment, with a large payoff. In order to invest in Hedge Funds, one must be prepared to make a very large investment. Hedge Funds are similar to Mutual Funds, except there are less regulations on Hedge Funds. Less regulations lead many people to be suspicious of investors who invest in Hedge Funds. However, if one is willing to take the risk, Hedge Funds can certainly pay off!
info on Author:
Scott Hillsworth enjoys writing about financial topics. Learn more at Hedge Funds Blog, a weblog with daily hedge funds research and news.
Investors are always looking for the best investments that will yield the most profit. Any investor who can afford the extra cost should consider investing in Hedge Funds. Hedge Funds were started in 1949 by Alfred Winslow Jones, who pioneered non-traditional investment strategies. Jones innovated this new investment strategy by selling short stocks, while buying other stocks (long stocks). Hedge Funds are very similar to Mutual Funds, except that there are fewer regulations on Hedge Funds. As a result, Hedge Funds usually require a much larger investment.
What Are Hedge Funds?
Hedge Funds can help investors make more money with higher-risk investments. Other techniques used in Hedge Funds include “leverage,” which is borrowed money to trade in addition to the capital provided one’s investors. The usage of Hedge Funds also requires an incentive fee. An incentive fee is a fee based on a portion of the client’s profits as opposed to a fixed percentage of assets. This fee is then invested and ideally will gain the investor more money.
Generally, companies are the owners of Hedge Funds because most people do not have enough money to meet the minimum investment required to have a Hedge Fund. In 2004, Hedge Fund investments passed the $1 trillion dollar mark. In mid-2004 about 39 companies shared the total Hedge Fund values of 1.1 trillion dollars.
Common Techniques for Investing
There are also other techniques for investing with Hedge Funds. One way is to invest in a company just before a major merger. If one gains knowledge of a merger, and buys large amounts of share in a company that is about to merge, the shares go up greatly once the merger occurs. This is, unfortunately, a very high-risk investment strategy because some mergers may not occur.
Other techniques include selling short, which is where one invests in seemingly undervalued securities, trading commodity and FX contracts, and taking advantage of the separation between the current market price and the highest purchase price in events such as mergers.
Why are Hedge Funds Beneficial?
Hedge Funds are also beneficial because of their high level of security. Hedge Funds are private, between individuals, and do not have to be made known to the government or other companies. Currently, Hedge Funds do not need to be registered with the SEC. Hedge Funds are also based in places with less regulations (I.E. The Cayman Islands, The Virgin Islands, etc). However, one drawback of Hedge Fund security is the fact that it looks suspicious to have secretive investments. For this reason, many companies and investors are criticized for being involved with Hedge Funds.
Conclusion
Hedge Funds are a very risky investment, with a large payoff. In order to invest in Hedge Funds, one must be prepared to make a very large investment. Hedge Funds are similar to Mutual Funds, except there are less regulations on Hedge Funds. Less regulations lead many people to be suspicious of investors who invest in Hedge Funds. However, if one is willing to take the risk, Hedge Funds can certainly pay off!
info on Author:
Scott Hillsworth enjoys writing about financial topics. Learn more at Hedge Funds Blog, a weblog with daily hedge funds research and news.
Subscribe to:
Posts (Atom)