Bond ETFs Blow Away Bond Mutual Funds
Bond Exchange Traded Funds (Bond ETF) are the best chance to get into the bond market, which at one time was not that easy to penetrate. Fortunately, since the emergence of these exchange traded funds investing in bonds looks more appealing. As an investor I have the possibility to get in and out of the bond market easier, quicker and, as a plus, it costs me less than it used to.
The easiest way to think about Bond ETFs is as a mutual fund that trades like stocks. Relying on this similarity, the mechanism behind the bond exchange traded fund is much easier to comprehend.
As a small investor, there are three issues that pique my interest they are: diversity, low costs and the fact that the ETF trades as stock shares do. There is no minimum investment I am required to make and I am able to sell on the market whenever I like as long as the market is open. So, when I think about Bond ETFs I only see advantages. In fact, I see plenty of them. Plus, I really like to invest when I am offered consistent bonuses.
There are different alternatives to choose from and this allows me to diversify my exposure to a large extent. This makes sure I have greater chance of success. I get to include low risk investments in my portfolio and stay safe if I do not feel like forcing my luck too much with stocks.
On the other hand, I look at junk bonds if I want to get higher payout bargains. However, when it comes to ETF trades I do not put my entire principal at risk.
When judging ETF trades consider that the bond market is more than two times larger than the stock market. This speaks about its huge potential but it also shows that choosing the right bond out of such a wide offer is a tough decision.
Bond ETFs come with very diversified portfolios and cover the following areas: government, municipal, corporate, short, intermediate, long maturity, real return, international, etc.
I am confident that I am not the only one that says bond exchange traded funds are the best. Why so? Because they come at a lower price and at the same time they have increased efficiency, offer better returns and full transparency. Not to mention that they offer me a choice for diversification purposes and they ensure my monthly income. They are definitely tough competition for the bond mutual funds.
In my opinion, they are your best chance to make money if you are considering bonds as a path you would like to follow. They are superior in every way, including management fees. So, it should be a lot easier for you to carry on with your bond ETF investment choice. For me, it definitely is a solid choice. I really like when all things are handed to me on a plate and with Bond ETFs this is the exact situation.
John Brian Taylor is a personal finance freelance writer. For more information on personal finance click on these links about inverse bond ETFs or How to Set Up a Brokerage Account.
Gold ETF Trading Signals And Education for Beginner Traders
Gold etf trading signals allows beginner traders to taking advantage of the gold market using the GLD exchange traded fund to generate consistent profits in any market condition.
As I mentioned before, the past 5 months have been very frustrating for most traders as we are stuck in this sideways price action. I also noted that August to December is generally the stronger months for gold. Although gold has been under selling pressure during the last 4 weeks I think there is light at the end of the tunnel. Its usually the darkest before dawn, but there are some hurtles for gold to over come before we are in the clear which I explain below.
1 The Gold Mining Stocks Index
An 10 year chart with a cup and handle pattern complete with a breakout. Gold mining stocks have continued to collapse below their support level. This does not mean gold is going to follow but it is a red flag which needs to be noted for future long entry points. Gold mining stocks in general are seen as volatile and high risk types of investments so I understand why investors are unloading their positions to lock in profits. Gold mining stocks are pushed below long term support level.
2 Gold Stocks Index
An 8yr chart of the price action of gold stocks and you can see that they are currently testing long term support levels. If this monthly bar closes below this trend line then long term investors should be sitting in cash until we have a new opportunity to enter long or short. The HUI generally makes the move before the price of gold so I follow the HUI in all time frames. The HUI is testing long term support.
3 Performance Chart (Gold Stocks vs Price of Gold)
The past 2 years, from 2006 to present gold stocks have slowly been underperforming the price of gold. This is generally not a good thing to see if we want higher prices for gold. But the good news is that gold stocks appear to be reaching levels at which new rallies have started. Gold stocks under performing the price of gold but near support.
4 Daily HUI Chart
I follow the HUI like a hawk as it fine tunes my entry and exit point for trading GLD, DGP and DZZ funds. Last month the HUI made a lower high and a lower low which is a red flag. While I dont predict prices I am thinking these lower prices for gold stocks are just panic sellers over extending a sell off. I would really like to see an August rally kick into place. The HUI makes a lower high and lower low on the daily chart.
5 GLD Gold ETF Chart
While gold stocks have been selling down, gold has so far been able to hold some ground. As you can see in the chart below the last three months gold has made higher highs, and higher lows. Currently gold is testing Major Support at the 200 EMA. Gold ETF GLD at long term support still holding its ground.
Conclusion:
My analysis of gold above explains that gold stocks and indexes are oversold and are at major support levels. Thus an August rally is not out of the picture and we could have some favorable setups in the near future. I would prefer higher prices, but in the end movement is movement and we can profit in either direction evenly.
GLD gold etf trading for me is the most accurate trading vehicle I have come across. I have been using my proven trading model which avoids the price gaps and keeps risk under 3% for each trade. GLD makes it simple to profit from the markets using a proven trading model for trading long and short term gold setups in all market conditions (bull, bear, and sideways).
My focus for short term trading is simple. Wait for a breakout which satisfies my trading model, enter the trade and then exit 50% of position on the first sign of weakness. Exit second half on a trend line break. My goal for GLD ETF is 2-5% and we are in trades for 2-10 days unless prices continue to run. I generally have 10-20 trades per year with gold.
Chris Vermeulen is a trader and newsletter writer specializing in the price of gold stocks, gold ETF, oil stocks, oil etf, silver stocks, Junior Mining and Energy Stocks listed in the US, Canada and Australia. Please visit my website for more information. www.TheGoldAndOilGuy.com
Segregated Funds – What Is A Segregated Fund And What Makes It A Near-Perfect Investment?
Imagine the scenario where you could make an investment that has the opportunity for growth in the financial markets and comes with a guarantee that it won’t lose money. No, this is not the stuff of dreams. In the real world it is called a segregated fund and you can get one if you are a Canadian citizen.
Now, that we’re all excited lets get right to it. Segregated funds are professionally managed portfolios provided by insurance companies that have a guaranteed return on maturity or upon the death of the investor. The odd name is based on the fact that these funds are not part of the insurance company’s assets but rather from a separate pool of money dedicated to paying out the holders of the policy.
These funds are similar to mutual funds because they are professionally managed, offer diversification, have a variety of different types of focus to choose from, the profits are taxed unless these funds are held in a retirement account. The big difference is that segregated funds are variable annity contracts provided by life insurance companies that usually guarantee a return of at least 75% if held over a period of at least 10 years.
Besides the guaranteed return there are a few other benefits of segregated funds:
1) Reset options – Most segregated funds have the option of ‘resetting’ the investment amount to include the gains made in the portfolio. Their usually a maximum number of increases permitted depending on the contract and also the increase in the amount could extend the date of maturity of the investment.
2) Protection from creditors – As long as the annuity contract has existed for at least two years, and estate taxes are not owed, the investment held in segregated funds is not accessible by creditors. Even if the account holder files for bankruptcy or faces other financial difficulty the beneficiaries of the life insurance have first rights to the annuity.
3) Liquidity – Investors can usually withdraw upto 10% of the investment amount each year without a penalty. If these funds are held in retirement accounts then this figure increases to 20%.
4) Estate Planning – The process of wealth transfer is faster and cheaper because the investment in segragated funds is not subject to probate. The funds go directly to the account holder or the beneficiary.
As expected there a few disadvantages associated with segregated funds:
1) The cost of investing is higher than that of mutual funds.
2) Early redemptions above the limits usually have penalties upto 6% in the first year but they decrease by 1% in subsequent years to 0%.
3) If you decide to change the area of investment there can be additional fees and there is a limit on the number of times you can initiate such transfers.
Overall, segregated funds provide a great investment opportunity for all with room for growth and protection from losses.
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Trading on the New York Stock Exchange
This is one of the leading markets on which to trade in the United States. For starters, the Dow is composed of only 30 large cap stocks. The New York Stock Exchange, sometimes called “The Big Board”, on the other hand, consists of roughly 3,000 companies at a value of around $17 trillion and is one of the largest markets in the world in stocks and bonds trading.
With the current economic downturn, however, the daily reports from the New York Stock Exchange are not glowing. There was a huge stock sell-off. The “Big Board” indicates that losers beat winners 7 to 1 on a volume of 920 million shares. Not the kind of news that investors like to hear. The Dow was also a loser with a new 6 year low.
Educational Offerings
The New York Stock Exchange is considered the most investor-friendly exchange in the world. What this means is that the NYSE is zealous about protecting the interests of both their large and small investors. Each year the NYSE offers a Teachers’ Workshop Program for teaching the basics of stock market procedures for students and teachers benefits. The workshop is held on the trading floor of the NYSE. The workshop for 2009 has not been scheduled yet.
There is an educational seminar offered for College and graduate students, which includes a lecture or discussion session for interested individuals. The New York Stock Exchange website has volumes of information relative to making informed trades.
Learn which investments are right for your situation
Investor education materials are available on the New York Stock Exchange website. Closed end ETF’s and Index ETF’s are among the funds offered as investment choices A closed end ETF is similar to a mutual fund in that it combines the assets of its investors, using a professional money manager. Unlike a mutual fund, however, a closed-end ETF issues a certain number of shares in a public offering and lists them on a stock exchange such as the New York Stock Exchange or the American Stock Exchange. Rather than buy or sell shares directly from the fund, they buy or sell shares through the stock exchange just as they would any other stock purchase or sale. ETF’s may be bought or sold as part of a brokerage account, a retirement account, a trust account, or a custodial account. (A custodial account, for example, is one that might be set up for the education of a child, or a grandchild.) Dividends from ETF’s may be taken in cash, or used to purchase additional shares. Much more can be learned about ETF’s and other investments on the NYSE website or through your professional stockbroker. There is no indication, however, that ETF’s will replace mutual funds. There is still a cost advantage in mutual funds due to dollar-cost averaging.
Before you open an account on the New York Stock Exchange, or before making any investment decision, be sure to check with a financial professional to discuss your long and short-term goals.
Caterina Christakos is a private investor and published author. To get more information go to: http://highyieldinvestmentreview.com
The Biggest Mistake Stock Traders Make
In finance someone who goes investing in opposing manners to the convention, is going for a contrarian investment. Contrarian investment is way beyond conventional wisdom. They might go beyond the consensus opinion, trying to follow pattern of their own. This leads to a revolutionary, leading edge way to growing business.
A contrarian trader would not go with the crowd’s belief. Limiting beliefs would create limiting results, as any marketer would be able to tell you. This can also lead to insecurities about the market as well as misinterpreted pricing or overpricing. Such issues are common with perennial market following investments. But people who dare to think out of the regular market and create their own target clients will always stay way ahead of the game. The contrarian principle also works on the principle that you are not there to please everybody. You will be able to serve only those that you target.
So creating one’s own client standards and client panel becomes one of the most primary aspects of extraordinary marketing techniques. Widespread pessimism and shock will not lead to any great success for the business maker. If one is flexible and willing to change then the market develops for the good. Even when stock prices go low, the market can be turned around with effective contrarian investment. With contrarian investment returning to profitable business is an easy work.
One can purchase, identify or sell distressed stock according to the way it suits business. Recovery gains are made unusually faster and this is no game of blind optimism but a larger strategy building technique that gets you to understand the prospects that lie even underneath risks. Going it this way helps you to understand where you can put higher valuation and where you can utilize your business when just the opposite reaction happens. Contrarian investment thus helps you prepare to mobilize your market to produce multiple strings of income that also influence the whole industry you are a part of and the entire asset class that belongs to you through your business.
There are certain market policies in contrarian investment system. These include the growth of the market on an upward scale. This does not mean that the market gets over valued all of the time but it also means that investment pricing gets regulated in a way that meets the necessity of the condition. While more and more clients come to your program in an uprising market, the opposite occurs when it is a downward sloping economy. But if your business principles change for something that caters to the need of the people in that economy, you are really making a cut. There are opportunities that any market can use and in a flexible economy such changes can be made smartly.
Contrarian investing involves looking for misrepresented price quotes in investment and buying off those that do not give value in an undervalued market. Value investors like John Neff have stated that contrarian investment includes seeing the market in a value based way. While it is possible to keep stock of financial theory, it can also be identified as a theory of finance metrics. So the P/E ratio or the value input of these metrics must be kept in close observation.
Robert Desmond the CEO of the website www.thecontrariantrader.com helps people to generate profits through making investments in a manner that totally differs from the belief of the people and the experts in the field. They often take profits after holding a position for just 1 week. Learn more about contrarian investing today.