Wednesday, February 23, 2011

Wildcats of Finance

Turning a Wrecking Ball into a Productive Vehicle
for Investors and Other Stakeholders

Wildcat groups such as hedge funds have played a growing role in causing or hiking blowups in the capital markets as well as the banking system. A showcase was the crisis of 2008, which ended up crippling the financial complex along with the real economy. The bombshell obliterated trillions of dollars from each of the major stock markets of the world, destroyed millions of jobs in sizable countries, and nixed trillions of dollars through lost output in the global marketplace.

This guidebook exposes the reality behind the illusion of profits in the hedge fund game. In plain language, the primer explains knotty issues like the following.
  • Why do the hedge funds destroy wealth?
  • How can the operators enrich themselves by delivering worse results to their customers?
  • Why does the true performance of the wildcats remain hidden from view of the investing public?
  • How do the custodians slash returns and hoist risk for their clients as well as the financial community and the entire society?
  • Why will the crash of 2008 and the global recession in its wake show up repeatedly, and cause greater devastation, unless proper safeguards are put in place beforehand?
  • How can public officials protect the stability of the markets?
  • How could the economic liability of hedge funds be turned into a social asset?
  • How can shrewd investors grow rather than wreck their capital?
The main audience for the book consists of active investors and earnest policymakers. Other types of readers include concerned professionals in the financial community as well as thoughtful observers in all walks of life.

Given the carnage to the real economy caused by reckless schemes in the financial sector, the message of this guidebook is in fact relevant to every member of the society at large.

Read more on Wildcats of Finance.

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Tuesday, February 15, 2011

How Forex Affects an ETF for Global Investment

 Showcase of Australia and Korea 

In a global marketplace, the return on investment for an exchange traded fund (ETF) depends in part on the behavior of the foreign exchange (forex) market. Whatever the type of asset, the turnout of the currency in a particular country can have a big impact on the payoff for an international investor. It makes no difference whether the investment involves a financial instrument like a stock or bond, or a tangible object such as land or housing.

Many people have the impression that equities and currencies are independent classes of assets. While that may be true in principle, it’s hardly the case in practice.

For this reason, the global investor has to consider the linkages amongst different types of assets. The forces at work are examined in connection with a couple of stark examples involving Australia and Korea. The case studies happen to involve divergent cultures and distinct time scales, but the crucial patterns crop up regardless.

Read more on How Forex Affects an ETF for Global Investment.

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Tuesday, February 8, 2011

Top 10 ETF List for Growth – Performance, Risk and Cost

In order to pick out a promising exchange traded fund (ETF) in an orderly way, the first task of the investor is to compile a list of the top performers. For this purpose, the crucial factors include the pace of capital gains, the level of price volatility, and the burden of maintenance charges.

In certain cases, additional features may come to the fore. A case in point is the yield due to the dividends thrown off by the ETF.

For the most part, the traits noted above are interlinked rather than independent. As an example, an exchange traded fund on a growth streak is apt to be more volatile than a sluggish one which plods along at a modest pace. Another sample is the cost structure; whatever the performance in the past, an index fund with a heavy load is more likely than not in the future to lag behind its rivals with leaner structures.

In tackling these issues, a sensible step is to begin with a muster of the top 10 funds by way of growth. Then the other factors such as risk and cost can be brought to bear on the evaluation.

Read more on Top 10 ETF List for Growth – Performance, Risk and Cost.

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