Profitable Investing Tips
Earning Potential of an Investment
The point of investing is to make money on your money. Judging the earning potential of an investment is basic to making this work. This is the case for both long term investors who buy and hold for years and for stock traders who attempt to time the market in search of short term profits. The earning potential of any investment depends on appreciation in value, realized earnings in the short term (dividends), and the value of the currency in which the investment is denominated. The last factor is affected by inflation and the volatility of the Forex market.
How to Make Safe Investments
In the midst of a global pandemic, the stock market crashed and then recovered to reach record highs. This has happened despite a grim economic picture. The disconnect between the market and the economy has many investors worried about how to make safe investments going forward. What are the safest investments today? Are there any safe investments with high returns? Are there any safe investments for seniors? And, what are some quick return investments for those willing to jump into and out of the market? What is the safest way to invest money today?
Your Investments and the Weakening Dollar
The dollar has fallen by an eighth against a basket of currencies since its high point in March. How will a weakening dollar affect your investments? The last point of comparison was in 2017. Why is the dollar falling? Will the current trend continue? And, how should you position your investment portfolio to account for a weakening dollar?
Why Is the Dollar Falling?
The dollar is a safe haven currency for people all over the world. When times are difficult, investment tends to flow into the USA and strengthen the dollar. Now that vaccines are expected […]
What Is the CAPE Ratio?
The CAPE ratio averages out the P/E ratio over a ten year period. This acts like important moving averages to reduce the influence of fluctuations in the economy and the market. CAPE is an acronym for cyclically-adjusted P/E ratio and was made popular by Robert Shiller, an economics professor at Yale University.
Biden Bull Market Investments
The new president takes charge on January 20, 2021. We expect to see the stock market respond with a rally for value stocks and those connected to infrastructure investments. A split Congress will likely delay any tax increases and interest rates are likely to remain low for a long time. The pandemic will subside with multiple vaccines available and the economy will improve which will drive value stocks higher, perhaps at the expense of tech stocks that have benefited from stay-at-home work.
Cryptocurrency Investment Regulation
Those who purchased cryptocurrencies like bitcoin when they
were a few dollars each have become rich. And, those who purchased bitcoin at
the end of the 2019 pump and dump lost their shirts as the cryptocurrency fell
from nearly $2000 each to the $600 range. Now that the pandemic has raised
havoc in the economies of the world, bitcoin and other cryptocurrencies are
soaring again. Cryptocurrencies are a concern to governments around the world
because one can buy and sell, transfer assets, and never been seen. Terrorists
and the drug trade are believed to benefit from the hidden nature of
cryptocurrency trading. While many would like Bitcoin and […]
US Isolationism and Your Investments
The South China Morning Post reported the signing of the Regional Comprehensive Economic Partnership that includes China and most of its Asian neighbors. This deal includes Japan, Australia, New Zealand, and South Korea but not the USA. The new trade deal will lower tariffs and aims to increase regional trade with less red tape. Post-pandemic growth is expected to benefit in the region. Not only is the USA not part of this deal but it is also not part of the Transpacific Partnership which the Obama administration helped develop and Trump pulled out of. Here are some thoughts about US isolationism and your investments.
Covid-19 Pandemic and Surge in ESG Investing
Many expected ESG investing to take a dive due to the economic stresses of the Covid-19 pandemic but there has been a surge of ESG investing instead. It appears that long term investors realized that the best-run companies were the most likely to endure and prosper during these difficult times. And, the stresses of the pandemic have also reinforced concerns about how we deal with our planet and each other.
Decoupling of Investment in China
As the Covid-19 pandemic began, the USA had to go begging China to send protective masks made in China (by 3M). American had become dependent on a global supply chain to the extent that it had become a risk to national security. This situation had been decades in the making and the USA and other nations are taking actions. Decoupling of investment in China is a major part of this movement.
Renewable Energy Investments
The election of Joe Biden bodes well for renewable energy investments as the President-Elect calls climate change the greatest threat facing the human race. How can investors position themselves to take advantage of the coming emphasis on green energy? Is a focus on ESG investing sufficient or should you drill down and find specific investment opportunities? Here are a few thoughts on renewable energy investment in the Joe Biden presidency.