Lessons in Investing from Germany’s Repatriation Program

gold investmentLast year, Germany ordered the U.S. to return some of the latter’s gold from its New York vaults. A lot of speculation circulated because of this, and one of the most popular is that Germany is worried about a currency crisis. But whatever the reason is for Germany’s decision in requesting for some of its gold to be sent home, let’s take a look at the lessons we can learn from the issue.

Keep gold investments close to you

This is very important. Gold and the USD is inversely correlated so when the stocks are down, gold prices are up. Just because gold prices are down today due to the anticipated interest rates hike in the U.S. next year doesn’t mean that investors should remove physical gold in their portfolio. After all, people invest in the precious yellow metal in order have something to turn to in times of economic unrest, which is the very reason why Germany has gold investments in the first place.

Gold rewards investors who wait, and Germany is well aware of this as evidenced in their decision not to sell any of their gold until 2020. In 2000, the yellow metal was merely at $300 per ounce. Ten years later, gold’s price spiked to $1,300 per ounce – an increase of more than 300%.

Liquidation

Next is that you want to keep your precious yellow reserves ready for liquidation. After all, there’s no reason to have gold investments if you can’t sell it when you need to. This is the perhaps one of the main reasons why Germany wants to return some of its gold back home. If in case something bad happens to its economy, its gold reserves will be ready for disposal. With around 3,380 tons of gold, Germany would be able to sustain its own economy for at least an entire decade.

Keep some gold overseas

Despite the repatriation program, Germany never intended to return home all of its gold. The country has gold reserves kept all over the world primarily because it wants to be able to turn to something in case another country invades Germany. Thanks to the advancements of today’s investing, private investors can easily store gold overseas, too. People can distribute their gold investments in vaults located in Germany, London, U.S., Paris, etc.

Germany’s tactics to keep gold close and ready for liquidation are lessons that investors need to understand. People shouldn’t only invest in gold for immediate gains. Rather, they should also invest in it for its ability to cover assets in times of an economic slump.

How To Invest In Gold?

Are you new to the world of investment? If yes then you must be unaware of the variety of investment options you have in the market today. You can invest your precious money in stocks, bonds, mutual funds, silver etc. But the wise move on your part would be to invest in gold because during the time of inflation or any such economic crisis, the prices of gold augment and the value of gold will always remain high as it is a precious form of metal.

Investing in Gold Bullion: Experts advice that if you simply want to invest in gold then you should go and buy some. However, you have to make sure that the gold dealer is trustworthy and sells you the gold at an affordable and right price. You can either invest in gold coins or gold bars. So whether you invest in gold coins or gold bars will depend on your personal preferences and the offers you get from the different dealers.

Financial Instruments based on Gold: If you are not interested in investing in gold bullions then go ahead and invest in financial instruments that are based on gold. For instance you can invest in the ETFs (Exchange traded funds) which can be bought from the share market and ETFs are considered to be the safest gold investment option. You even have the option of investing in the stocks of a gold mining or production company. But a lot of uncertainties surround the mining or production company stocks generally so people avoid this option as much as possible. Gold options (non-binding) and gold futures (binding) are also risky gold investment options but the returns you receive on these investment options are usually very satisfying.

Buy Gold jewelry: It would be a smart move on your part if you could purchase gold jewelry because investing in jewelry is a traditional and an old age investment option. However the immensely high making charges of the jewelry pieces can discourage you from investing in gold jewelry.

Investing in Gold certificates: Individual banks issue the gold certificates to investors. But you will not have to worry about the security and storage of such certificates because the bank holds on to them on behalf of you. Gold certificates are rare investment options.

Importance of hiring an investment planner

Hiring an investment planner is not a trivial matter for you. It is a particular proposition that calls for a great deal of precision on your part. It is a fact that proper and reliable investment planners can help you a lot in your growth objectives. They can make it a point that you are going to come out with a profit making deal. Would you like to know more on this issue? Well, in that case you have to cave for a little bit of tête-à-tête on this aspect. Take a look at how these investment planners help you out in making crucial decisions.

• Help you take decisions- it is the responsibility of an investment planner to help you take important decisions in a precise and flawless manner. With the help of their knowledge and incisive suggestions they try to show you the right path.
• Proper knowledge on investment related matter- You cannot choose to ignore or gainsay that that proper and reliable investment planners have got sufficient knowledge on investment related matters.
• They get you right financial solutions- Before you are actually going to hire one investment planner you should know why there are important. No one can offer you such value added advises. They get you right financial solutions.

It is a fact that proper and reliable investment planners can help you a lot in your growth objectives. They are indeed the best friends for you. They are going to make it certain that you get the fruition out of the amount or sum total that you invest. Make it sure that you are going to keep a very close and razor sharp eye on the facts shared on the issue of hiring an investment planner. Indeed it is not a trivial matter for you. Before you are going to choose the services of one you should research sufficiently on this subject.

Government shutdown to prudent investors

The most recent government shutdown took place in 1996 and there have been 17 of them before. These government shutdowns have shown terrible negative effects on the market. Stocks dropped during nine shutdowns among 17 and as soon as the shutdown ended, the market raised and gained an average of 13.3% over the next 12 months. These make one thing clear to us there will be volatility in the market which can never be predicted. So, in these cases it is advisable for you not to sell out because it will be a difficult job for you to decide when to buy back. Surveys say that the investors who got nervous because of the government shutdowns and sold out their shares, they could never enjoy profits in future when the situation became stable.

An investor should not get nervous in tough situations. If you have hired a financial planner, they should be able to motivate you and stick to the plans that you had made before investing. They should sit and discuss the ways by which you can maintain your game strategy and allocate your assets in such a way so that you can meet your long term goals. You should never sabotage your long term investment returns if there is volatility in the market.

It is an useless idea to check out the news and events that predict the market in future. This is because no one can say from before exactly what is going to happen in the market.

A proper financial planning is of utmost importance for an investor. If you are a retired person or you will soon be in that list, the necessary liquidity that you can easily earn to run the expenses of your household for a period of time should be included in your planning. Thus, if you are covered in liquid investments for five to seven years, you need not worry about the short term volatility in the market to run your expenses.

Investment in Bonds: an Overview

Investment market is a highly complex and risky market. If you are a beginner and have no knowledge about the different investment options you have then you must first make an effort to know the investment market better. Money can be invested in a number of things like bond, stock, currency, property and so on. Experts advise that you must enter the investment market for the very first time by investing in bonds as these are considered to be investment options that have low risks involved.

Bond is nothing but a loan that you give to a federal agency, corporation, municipality, government and any such organization which is called the issuer. The bond has a fixed rate of interest which is given to you periodically. When the bond becomes matured, the issuer will pay you the principal (original value) cost of that particular bond.

An investor should make it a point to invest in different things so that his/her investment portfolio becomes diversified and his/her risk exposure is reduced. Thus as an investor you must invest in bonds as these help diversify your investment portfolio and reduces your exposure to risk.

The major risk involved in investing in bonds is the unduly rise or fall of the rates of interest. The rates of interest fixed on the bonds you invest in, can either help you make lots of money or lose huge amounts of money. When the rates of interest will increase, the costs of the bonds will decrease and then you will have to sell those at a lower price. Some other risks involved in investing in bonds are currency risk, liquidity risk and credit risk.

Before investing in bonds, you must approach a reliable financial advisor for help so that you can ensure higher or risk free return on your investment.

Things to consider before you invest

Investment is a very important part of financial planning and your plans regarding your finances are incomplete if you do not take into consideration your investment options. However, just because you have saved up some money does not mean that you will investment without thinking. There are a few factors which you must consider before investing.

Firstly, determine what your financial needs are. If your financial goals are clear, then you will have an idea about the kind of investment that you should make. Secondly, there are some investment options that are widely considered profitable; you must gather information about these options and understand how investing in them will benefit you.

Also, if possible hire an investment professional who will help you with your investment. You can ask your friends for references and then interview the professional to see who will be a better fit for you. Remember that a charming investment professional is not always the best choice.

Investment options for low income investors

Investment is always a smart decision and it goes a long way in securing your future financially. However, people who do not earn a lot are most of the times unable to save up an amount that they can invest. However, you will be glad to know that there are some investment options for people who have low income as well. Here are a couple of those options.

If your income is low, you can open a savings account. You can put a little bit for money from your paycheck every month in this savings account and make some money in the long run. The savings accounts pay a certain interest rate to the account holders and at the end of each year you will get a certain percentage of the money you have deposited in the account.

You can also opt for mutual fund, where you can invest as less as $250. Try to choose a mutual fund that is especially designer for the low income investors.

Top 3 stock market trading rules

If you want to trade in the stock market, then you should know certain rules of trading in the stock market to end up getting good returns. Many people think they will get good returns once they invest in the market. But this is a very wrong notion because to ensure the maximum profit you have to be in constant touch of the stock market. You need to follow the ups and downs of the stock closely to find out the right time to invest your money. You should also follow the market so that you withdraw your investment at the correct time.

If you are going through stock brokers, then first carry out a proper research on the broker you are looking forward too. Not all brokers are competent enough to suggest you the best investment strategies.

Also don’t believe a broker solely thinking that he is the best among the brokers. Also keep an eye on market yourself to see if the broker is guiding you properly or not.

What is capital asset pricing model?

Capital asset pricing model will allow you to split the total risk that is associated with the security into proportions. One of the proportion remains after diversification and the other may be diversified away. The risk which remains even after diversification is a relevant risk for appraising investment.

Initially substantial reduction of risks takes place, but with more and more diversification, the risk reduction slows down and eventually it stops at a point.

With capital asset pricing model, you can clearly detect the risk that is involved with the security you are providing. The risk that can be eliminated using the capital asset pricing model is termed as non systematic risk. The non systematic risk in fact affects the returns on your investment in a very unique way.

Investors are mainly worried about the systematic risk which affects the complete return on the investment. Now the problem is how to calculate the amount of systematic risk. Capital asset pricing model measure the systematic risk taking in to account two base points- the market portfolio and the risk free security.

What do you understand by binary option in trade and finance?

Trading tips, financeIn the world of trade and finance, binary option is basically a method where there is a fixed amount or nothing for the payoff. There are two types of binary options which can be chosen- asset or nothing and cash or nothing. This means you can either have a fixed amount of cash or no payoff or you can have an asset fixed or no payoff system.

You can also go for the digital or all or nothing options with the binary option system. These binary options are given against the fixed time for expiry. The options can also be found online and they expire mostly within 5 top 40 or 30 minutes in most general cases. Online, you can choose the asset or payment and then select the option of putting or calling. Then you can select the investment amount. Just make sure that you have ample amount of time in hands for the investment or you’ll get nothing.

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