There’s an Investment Market for Hurricanes?
The answer is yes. There is an investment market for hurricanes but it’s not a market that the average stock market investor knows much about. It’s called the futures market. This market is found in Chicago at the CME or Chicago Mercantile Exchange where everything from gold contracts to interest rate contracts change hands.
Hurricanes are traded in the form of futures contracts along with other weather products. Although you can’t buy or sell a hurricane, there are other reasons that investors invest money in to these monster storms.
Don’t know much about a futures contract and you can’t think of any possible way that investors could possibly trade a hurricane? Keep reading. We’re going to learn everything we need to know about these futures contracts.
Continue reading “There’s an Investment Market for Hurricanes?” »
Is It Time To Sell Your Gold?
Rising towards $2,000 during trading on Tuesday, investors may have been tempted to sell gold after the drastic 10% correction this morning. Gold is a commodity, but trades like a currency. Minor news events and people’s speculations can thus make it quite volatile.
If you invest in gold as a hedge, these fluctuations shouldn’t sway your convictions about the precious metal. The experts say the fundamentals are still there, and that nothing has changed. Maybe you don’t care about the fundamentals since you don’t believe in fiat currency and are willing to hold a hard asset no matter what.
Many people also believe in gold because of the status it provides. How many people have you seen adorned in gold – watches, necklaces, earrings, and rings. Even after those desires to impress fade, the gold is still worth something and people forget you can get cash for gold. Cash in your pocket is much better than jewelry collecting dust in your drawers.
If you listen to someone who has the gold bug, every time is always the right time to catch the “Midas Touch” and turn your fake assets into real ones. The government is crumbling and on the verge of failure….
As Forbes notes, gold follows a “Buy the Rumor Sell the Fact” pattern. Fear can drive the commodity’s price, but fulfilling loans and obligations requires liquid currency. Paying off liabilities means selling assets like gold.
No matter your reason for holding the previous metal, remember prices are based not on earnings or dividends, but what the person next to you is willing to pay.
Investing Overload: Reflections of a Freak-out
Returning the “Credit where credit is due”. The inspiration for this article came from Oblivious Investor, which in turn, came from ‘nisiprius’.
It’s time for me to take a deep breath and step back from monitoring the market. After last week’s roller coaster, I’m too drained to worry about what will happen this week.
If you’ve ever played Roulette, those precipitous gyrations reminded me of betting on RED or BLACK. A rather simplistic choice with devastating consequences, you either win or loss.
Being a rather conservative investor, I’m of the “Go Long – Go Vanguard” approach through low-cost indexing; however, it’s undeniably hard to resist the mountains of financial products and tactics available.
Chatting with a friend who works in finance, we reviewed the different option strategies for hedging against short term losses. Even as a Chartered Financial Analyst (CFA), he admitted having a limited grasp on the actual execution of these theories. Both of us have resolved to spend the time to learn more about these after our respective obligations (Him: GMAT & marathon, Me: GRE & half-marathon).
From there it was a slippery slope.
Continue reading “Investing Overload: Reflections of a Freak-out” »
EZ IPO Profits
People have been following the debt-ceiling debate for the past few weeks, but my attention was elsewhere. It’s fascinating what information garners headlines while others get brushed aside.
Four mainstreet brands have had initial public offerings within the past two weeks. I also looked at two other, recent name-brand offers for the purpose of this article.
Teavana (TEA) on July 28th- Dunkin’ Brands (DNKN) on July 27th
- Zillow (Z) on July 20th
- Skull Candy (SKUL) on July 20th
- Pandora (P) on June 15th
and of course…
- LinkedIn (LNKD) on May 19th
The first day action on these offerings was perplexing to say the least. From the pricing range – to the adjusted price- to the open, these stocks seemed to jump by leaps and bounds. Outside of Skull Candy, every other company came out of the gate 25% higher (or more) than the final IPO price.
Ignoring the Fine Print Can Cost You (Big Time)
Thanks to the Credit CARD Act, consumers are supposed to be more protected when using their credit cards. Part of the legislation included provisions for more disclosure, and therefore notification, of any changes. Since the bill was approved, you’ve probably seen a lot more letters in the mail from your credit card companies.
Keeping up with the fine print can be tedious (and boring), but something that requires your attention. While expenses and fees have been curtailed in some regards, banks have been using creative means to make up those “losses” in other areas.
One of my credit cards recently sent a letter notifying me an annual fee was being introduced based on the average spending. If you balance exceeded $1K you’d only have to pay $35/year and if it was under – $55/year. Considering how I barely use this card because of the other reward credit cards, I was quite upset. Cancelling the card wasn’t an option since it’s my oldest account – so I decided to call customer service.
Explaining the situation, they generously offered to only charge me the $35 instead of the $55. Sorry, no thanks. After a brief hold, they came back and said they would waive the fee indefinitely as long as I kept the account opened. That was easy enough! The entire conversation took around 7 minutes and saved me $55.
What was so interesting was how easy and quickly it was resolved, seems like there’s been a shift in the customer service mentality. Gone are the days of yelling and threatening Better Business Bureau complaints (to an extent). Of course, if this conversation took more than an hour as I was transferred between managers maybe it wouldn’t have been worth the time. But $55 in 7 minutes equates to a billing rate of $385/hour – much more than I actually make.
So next time you think of trashing that credit card notice before reading it, take the time to review the details and see how it will affect you. A minor tweak could end up meaning big savings on your part!
Spring Clean Your Finances
As the cold weather starts to leave us it means that spring has finally arrived. Some people see this as an ideal time of the year to give your finances a good old spring clean, especially if you’re still struggling from a start of the year hangover.
The start of the year is notorious for leaving you with a financial headache, the holidays have passed and money has inevitably been spent, but as we approach the months ahead you should be aiming to do something about it.
A financial spring clean is all about making your money work better for you, and you can do this by reviewing all aspects of personal finance, from your debts to your spending and saving until you can make your money go that extra yard. Continue reading “Spring Clean Your Finances” »
