Investors Have Seen a Marked Increase In The Value Of Silver For Over Two Years.

Silver started catching the attention of investors over the past two and half years ever since it started showing a meteoric rise as an asset. It plummeted to 10 per ounce in 2008, rebounded to about $31 at the close of 2010, and has maintained it's upswing in the first quarter by reaching $39. June futures 1 per ounce. At a time when tension in muddle east and other geo-political issues have lead to depreciation in the value of US dollar, this has caught the attention of investors. It fails to match the appreciation and shine shown by silver over the past two and a half years, but the other bullion-gold continues to move upward. On that note, what are some of the silver price estimates for this year? To study both sides of the investments, let's look at both sides of the freshly minted coin.

Listed here are those things that have not only affected the demand and supply in the market but also crucially played in the increased demand for silver during the last few years.

1.      Industrial Applications.

Silver is widely used - it's in mobile phones, netbooks and even systems designed for filtering water. This has a huge impact in the Current silver prices. From 2000 to 2008 industrial use of silver rose close to 20%. Almost half of all silver demand was industrial by 2008. The precious metal is largely consumed and almost never returned to the market for sale again. This is why the use of silver always creates strong demand. Technological demand for silver is increasing, in effect.

2.      Investors.

From nearly six million ounces in 2003, "The Silver Institute" claims that investor demand has climbed to 140 million ounces in just seven years. New silver ETF's along with silver investors are buying bullion for their vaults (exchange-traded funds) the silver market is booming.

3.      Production Costs.

The cost of mining goes up as input costs such as oil increases while companies are trying to increase production and start up new mines, this is knows a productions costs. Silver is no longer found in abundance. Maintaining higher prices is the added cost of mining.

4.      Gold vs Silver equation.

Historically, the prices of gold and silver have correlated and experts in bullion analysis says this shows that prices could rise further. The ratio is currently around 37 if you divide the price of gold by the price of silver. The price of silver could rise to as much as $100 per ounce.. 150% from its current levels is where the possibility for the price of silver is at.

5.      Rise in demand.

The demand is still increasing. As many dollars of silver as dollars of gold were minted by the US Mint in the months of January and February. The Chinese import of silver has increased to 112 million ounces from 100 million ounces, which is a shift of almost 20% in a market where the total demand is 800 million ounces.

6.      More circulation of Money.

As the US Federal Reserve and central banks around the world continue to deal with fiscal issues through monetary means, more and more paper currency hits the global marketplace. With silver being one of those goods as a result more money is chasing fewer goods. The US dollar has lost 95% of its value over the last 100 years, since the Federal Reserve was established. Investors will have to seek out investments that won't lose value, unlike the US dollar which is depreciating and will continue to do so as part of a 100 year long-term trend, caused by the Fed's policies that remain unchanged since the twentieth century. A safer alternative would be precious metals such as gold or silver.

7.      Crisis.

The high cost of precious metals is due in large part to the rise of the economy. This is not always the case, however is it at the time of 1990? The price of gold and silver barley moved at the period where inflation was anywhere from 1% to 6% annually. The investor demand was simply not there. During the 90 may be one of the reasons for this? A period of boom was experienced by the US. Sentiment changed in favor of safe assets like gold and silver after the technology crash and September 11th. Precious metals rise as boom times gave way to a recession. Passing more restrictive laws on everything from personal liberty to capital investment, mainly in the US they continued to rise as governments. The governments inability to deal with the ongoing crisis will be a driving force behind the rise of bullion, while inflation may play a part in the rise of precious metals.

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Creating a Combined Portfolio

 Creating a Combined Portfolio

Here is a retrospective of posts from a few weeks back (Re-travelling a Random Walk into a safe investing). A concept materialized: Perhaps one of the explanations the hit-or-miss option exerted itself so agreeably was due to a genuinely multifarious registry?  Therefore, we should make an investigation.

Here you will see a chart that provides a summary of the distribution of stocks industry by industry in a portfolio of stocks that have been selected at random.

Count Sectors

5 Consumer Goods

3 Oil and Gas 

2 Agro businesses

2 Metals & Mining

2 Pharmaceuticals and Biotechnology

2 Tobacco

1 (This is multiplied by fourteen)  (Everything in its entirety including – Systems Software, Conveyance, and so forth).

You will easily observe that no industry accounts for more than 17% of the portfolio.  The sample includes most of the companies split into groups for clothing, cars, electronics, home improvement and mega departmental stores even for retails.

Therefore, what is the impact of this varied distribution of asset allocations?

Tend to have stocks in your portfolio that tend to counterbalance each other, my experience says.  When you see an increase in the value of energy stock, you can observe that transportation stocks will lose value. For example.  Although externally this will appear bothersome, the reality is that what's transpiring may be a specific measure of unintended circumventing

 (Or deliberate - if this were the manner in which I had expected things to go).  There is less risk overall — but this means that while you won't be in danger of losing much, you also won't make as much as you might with other less secure investments.   One of the consequences of using this method of risk reduction can be a slower market track by one's portfolio.  Of course, this increases its effectiveness if you build your portfolio to closely follow the broader market.

Naturally, this suggests that once the commodities exchange descends, then you're, in all probability, destined to undertake an exact circumstance.

However, investment in a growing economy would definitely result in a growth in one' portfolio.

Like with so many modern-day situations, our grandmothers' advice still rings true - "don't put all your eggs in one basket. “Diversifying your portfolio solidifies your long term gains.  Our country has been through some very difficult times financially — if you believe in the power of positive thinking as I do, investing is a perfect way to show your faith that one day our economy will be not only recovering, but thriving!

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All about how to invest in real estate

All about how to invest in real estate

Are you considering investing in real estate? For a long time real estate was thought by many to be a sure winner – that is until the collapse and ongoing problems in the housing market. But if you had been paying attention, you probably would have known that investing in real estate is not a sure thing – and you might have been among those who foresaw the crash.

If you look back over time, you can quickly find other periods when prices for homes (or other classes of real estate) were inflated, and people lost money when they ended up selling (by choice, or otherwise). Of course, one thing different this time from many of the recent bubbles is that this was a national crisis, not localized as many of the problems typically are. This is part of what made the problem so severe, as many of the mortgage-based investments were constructed by creating bundles of mortgages from properties from diverse areas in order to reduce risk – the thinking being that bubbles tend to be restricted to specific localities, or at worst, regions. But this time, the problem was occurring almost everywhere in varying degrees, so the diversification ceased to work.

In spite of all of this, you still want to try your hand at this. After all, prices are down, so there must be opportunities. So how do you avoid a train wreck? First – just as you would do with other investments, do the research. And it doesn’t matter whether you are talking about commercial real estate or homes. In what kind of neighborhood is the property located? What are other similar properties selling for? What kind of condition is the property in? If it is a home, how well rated are the local schools? How does the cost per square foot compare with normal rates in the same general area? And so on.

But – here’s the rub. You could be looking at an area where there is a widespread bubble. So how do you deal with that? You have to look at some fundamentals. If it is a home, is it affordable for the average family that would be expected to live in this home? If not, then there is a possibility that the home is overpriced. Same thing for businesses – for example, if there is a glut of office space not too far away, then there may be an adjustment coming up. But, hey, if we had a perfect crystal ball … well, we don’t.

So at some point you have to use your judgment to determine whether your prospective purchase makes good business sense. Bottom line: if you are feeling overextended, then it might not be the best choice.

One other comment though – if the home you are looking at is for your own personal use, then you need to consider that, no matter where you live, you are going to have to pay something (unless you are living for free with friends or relatives). So then part of the equation is looking at whether you will come out ahead over time compared against your current expenses against what you might gain in equity over time. Again, if it doesn’t feel right – take a closer look.  But, sometimes it is better to lease than to buy – do the math and then decide.

One alternative for investors who want to get involved with real estate but are uncertain about how to go about this is to invest in a real estate investment trust or similar security. To be honest, my own experience with these over the years has been that some have done well, and some have not done so well. But you can start with smaller chunks of your money – thousands instead of hundreds of thousands. So you can limit your exposure to a level with which you are comfortable until you have a better feel for this. One more caution – real estate investments can be complex when it comes to taxes, so keep this in mind when you are comparing alternative places to invest your money.

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President Bush takes an insult like a man

There may have been some people that didn’t like President Bush while he was in office, but there is something to be said for a guy that who could make money talking about the current President and refuses to.

Former President Bush recently talked with C-SPAN about his lack of interest in embarking on the money trail to talk about politics, the current President or presidential candidates, as a fundraising option.  This was news to many because it means that Bush is leaving a lot of money out there.  There are many opportunities available for him to give his political opinion, and to return the favor of those who have spoken negatively about his presidential term. 

By Bush choosing to turn the other cheek and not go out on the trail speaking out and being paid to share his thoughts he is just showing once again that he is a class act. He is above the chatter and criticizing, which is a good thing. This conservative former President is serving once again that he has more class than most of those in Washington.

In addition, Bush stated that he believes it is not in the best interests of the nation to have a former President criticizing the present one. This illustrates yet again that the e country's interests are his chief concern.

President Obama may take the same route when he leaves political office, or he may be eager to be paid for giving his opinion. It still remains to be seen! But if the next president is a Republican, Obama will probably be more likely to seek out the media and speak publicly about his successor.

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You Will Always Choose Your Friends, But Is Not Easy To Pick Your Stocks.

You Will Always Choose Your Friends, But Is Not Easy To Pick Your Stocks.

Since you are going to go ahead and try to pick your own portfolio of stocks, I see that you decided to not take my advice. I also do not possess everything in index funds. The challenge and the thrill are in the handful of stocks that increased several hundred percent or more. I can put a new wing on my house (trailer?), after just one or two more of those. I understand that, Warren Buffett probably didn't become a billionaire by investing in index funds.

While we are on the subject of Mr. Buffett, you should know that he as a Master’s Degree from the Columbia Business School, majoring in business and economics. Benjamin Graham and David Dodd who were leaders in value investing, were the two prominent securities analysts of the time that he studied, while there. Buffet, went on to carry this style of investing to new heights. And becoming a billionaire by the 1900's,

Beware!

The work about to be written by me is not a tutorial on value investing or any other topic; if anyone is interested in gaining in-depth knowledge, both the philosophy and techniques, about value investing, then referring to the works of Graham, the Fishers, and others is highly recommended

I'm going to share with you what I believe precipitated my own great achievements and monumental downfalls.

I'm going to go through the ones that didn't make it first, which include an e commerce company as well as a set of sports bar franchises. I lost nine-tenths of my first investment and lost everything on my second and third investments. What make me decide on these losers and the events that followed? I made a purchase of two thousand shares based on a tip from someone at work, their information about a recent contract for the hotel chain convinced me the ten cent share price was a worthwhile investment. This investment languished for years until they picked up a new CEO, who I happened to know from experience was a corporate raider and company killer, who finally pulled the life support by sucking the remaining money from the dying corpse.

When the e-commerce enterprise announced a major long-term contract with the U.S. government. That was the day when I bought it.  After being hit by cash flow problems that they couldn't overcome they declared bankruptcy in less than one year following my investment. When the announced plans to build a new electric car, I bought stock in the automaker's company. Even though the company continued to go on and made a substantial profit last year, they asked for a government bailout several months later and my stock became worthless.

I made a bad decision at some point, but what was it?  Each and every time I used news stories and positive sentiment to help me decide on what to buy. Except for the automaker company, I did not do extensive research on the decision I made when it came down to buying those Stocks!

A computer maker, an oil company and a bank were my winners, which were just the opposite. I bought the computer maker at $40 a share - it split twice and I sold for a profit for eight times my original investment, The oil company I bought at $4 a share and sold somewhere around $45 a share (What a mistake to break my own rule, I lost money there it is now at $110).The bank didn't do so well. I only made about sixty percent on that one.

How did I get this to work out? In every case I did extensive analysis bought company that had higher values then perceived by the market. For instance, the situation of the oil company was such that the value of the stock was lower than the current oil they already had pumped out of the ground and were holding for sale-crazy.

So remember to always do your homework no matter what your friends suggest or what you read in the news. Otherwise, if you just want to gamble, I know of several nice casinos where they serve free drinks while you unload you money, if you just want to gamble.

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It's time to move Social Security and Medicare into the private sector so that our retirement doesn't go down the drain!

Looking at possible deficits in Social Security and Medicare, and the eventual virtual bankruptcy of both of these programs, means that we must reconsider all that we have assumed. (As Abraham Lincoln said of another national crisis, "... we must think anew, and act anew. We must disenthrall ourselves...".) The American government, especially the Congress, really has not shown great responsibility as stewards of the trust funds.

In order for us to take greater control of our money, we need to raise the limits on individual retirement investments, such as IRAs, and we need to encourage use of health savings accounts. Individuals and businesses would contribute to these accounts instead of paying taxes directly to the government. Social Security and Medicare would be phased out, and their funds would be returned to taxpayers over a period of a few years.

Further research is needed before deciding whether an additional fund should be established to support the destitute, especially those that have spent a lifetime in the work force. If established, these funds should be placed in a non-governmental account where it will not be tampered with for other causes.

To make this work, we would need a strategy involving stopgap measures, which might be very difficult to put in place. Such a strategy would involve transference of trust funds to private banks via direct deposit to recipients. The difficulty arises due to the U.S. government's not being in possession of said funds, which would be lent to us from such funds order to cover the costs of other programs. Thus, a stopgap phase would mean locating funding entities that we would repay. However, it is best to deal with the problem sooner rather than later. By using a long-term strategy, regardless of our track record for dealing with such problems in the past, we can begin to correct our course.

So what does this mean for you? Independent of the outcome of the entitlement debate, you don't want to be a victim of poor planning and diminished political will. You have to be in control of your own retirement and use your own long term plan, instead of the government's short term fix. I, myself, have always planned for my retirement as if there would be no Social Security available to me. I have done everything in my power to put the maximum allowable amount into my IRA, employment 401(k) plans and other tax-advantage savings vehicles. The earlier you start doing this; the better off you will be in the long run. If you are eligible for the Roth IRA, then become a part of this program. Again, letting go of the short term gain of present tax reduction means reaping long term benefits. A caveat: no two people's financial situation is identical. So, do your research before you make a final decision. Your tax consequences might vary from mine.

Regardless of your decision, remember that Social Security has never been, and probably will never be, the ultimate retirement solutions. PREPARE YOURSELF!

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Green Energy Is Front And Center On This.

President Barak Obama recently made green energy a priority due to his firm belief in its future. Should you invest in green energy for this reason? It might not be a bad idea to invest in green technology, but you need to remember a few things first.

Never forget these important items when you are planning to invest into green energy.

• Green energy technology is still in development; investors should expect it to be a long-term investment. It's still years away from being a main energy source. If you're going to invest, you'll need quite a bit of patience.

• It would still be wise to keep some of your funds invested in traditional energy companies, as they will continue to be the primary source of energy for quite some time. In addition, those energy companies are most likely to be at the forefront in making green options available.

• If you're currently looking for an investor advisor, be sure to find one that has worked with green investing in the past. This will ensure that your money will be used most effectively.

Feel free to invest in green if you feel the need, but consider these things beforehand. This will ensure that you set realistic expectations as you watch your energy become the future. You, at least, will have more realistic expectations than Barack Obama.

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