goldbars400x282With gold prices topping $1000.00 plus per oz., one has to question, is now the time to buy gold or has the buying opportunity already passed? Should you invest in the actual commodity of gold itself or is there an alternative that could prove to be more profitable?

The rise in gold prices from $250 per ounce in 2001 to over $900 today has drawn investors and speculators into the precious metals market. However, buying gold per se should not be considered an “investment”. After all, gold earns no interest and its quality never changes. It’s static, and does not grow as sound investments should.

“It’s more accurate to say that one might invest in a gold or silver mining company, where management, labor costs, and the nature of new discoveries all play a vital role in determining the quality of the investment and the profits made.”, stated Congressman Ron Paul (TX-R) in his address before the U.S. House of Representatives.

Both gold and dollars are considered money, and holding money does not qualify as an investment. However, there is one big difference between the two. By holding paper money one loses purchasing power. The purchasing power of commodity money, e.g., gold, however, goes up if the government devalues the underlying currency.

Many believe the United States is the cause of the global financial crisis we are currently experiencing and consequently, they are looking to the US to provide leadership in escaping this crisis. The US Dollar is currently experiencing strength over other currencies because it is presumed that since we are leading the pack with recovery initiatives, it stands to reason that our economy will recover before those who are following our lead.
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The latest news on inflation and unemployment seem to be pointing to a gathering storm in the U.S. economy. A lot of readers are wondering: Just how bad is this downturn going to be?

Economic forecasters and weather forecasters have a few things in common. Since no one can see into the future, both kinds of forecasters look at the forces that have created and shaped storms in the past — and then look at current data to help guide their predictions. When you see a sharp drop in the barometer, it’s a pretty good bet there’s a storm coming.
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bailout5_180Five banks have repaid millions of dollars they received from the government’s $700 billion financial bailout pot, the Obama administration said Thursday.

The Treasury Department, which oversees the bailout program, said the banks returned a total of $353 million.

The banks are: Iberiabank Corp. of Lafayette, La.; Bank of Marin Bancorp of Novato, Calif.; Old National Bancorp. of Evansville, Ind.; Signature Bank of New York; and Centra Financial Holdings Inc. of Morgantown, W.Va.

They were the first banks to repay the government, wanting to escape the increasingly tough restrictions placed on participants in the rescue program.

In addition to the $353 million, the banks paid the government a total of $5.4 million in dividends, Treasury Department spokesman Andrew Williams said.

The program was enacted in early October after the financial crisis — the worst since the 1930s — intensified. The goal of the program was to inject capital in banks so that they would be in a better position to boost lending, a crucial ingredient to any economic recovery. Nearly $200 billion has been injected into banks thus far.

The five banks have 15 days to buy back warrants from the government. If they don’t, the government will sell them to private investors, Williams said.

blackfridayRisk is the probability of loss. It is best to estimate it and to adjust your purchase and sell strategies to it in order to control loss before the purchase is made. Correct timing of purchases, buying near support, limiting loss potential, and stopping the decline by using volatility stop losses are all ingredients of a good risk control system. Let’s look at a few of these loss control discipline components.

One method of controlling risk is by timing purchases so that they occur at or near support. That way, your stop loss can be a very small distance away from your purchase price. If you buy when the stock is 5% above its trendline, for example, it will mean little if the stock declines 5% to reach its trendline. Since stocks often return to support, why would you sell? You would sell only if it broke to the downside through its rising trendline. Therefore, your loss would be calculated by adding the distance the sell point is below the trendline to the distance the purchase price was above the trendline. Buying at the trendline instead of above it would eliminate that unnecessary 5% loss.

However, stocks often make a small temporary penetration through a support line and then resume their climb. When, precisely do you sell? Let us use the suggestions offered in Technical Analysis of Stock Trends by Edwards and Magee as an example. If you are using stops that are based on closing prices, they suggest a trendline penetration of 3% would warrant selling. If your stop loss is placed with a broker, they recommend that the stop be placed 6% below the trendline because of the possibility of inconsequential intra-day spikes. Therefore, if you buy when the stock is 8% above its rising trendline and place the stop loss 3% below the trendline, you will lose 11% before your stop is triggered. On the other hand, if you wait for the stock to return to its trendline before buying, you will lose only 3% if your stop is triggered. It is important to buy right so that you can sell right.
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ob-cz950_madbro_d_20090123220849Until now, the official line is that the two Madoff sons, Mark and Andrew, only worked on the market-making side of the business.

Dad’s business — Bernie Madoff Investment Securities — was not their domain, they say, and thus they have nothing to do with the fraud. For a long time, people have suspected this wasn’t true, but a story in offers the best evidence yet. Far from just being in the back office on the brokerage side of the business, the sons were salesman for the Madoff fund:

Dalton Givens saw the warning signs.

Madoff’s sons wined and dined Givens, then a senior vice president of Wachovia Securities, at a steakhouse in Charlotte, N.C., to try to persuade Wachovia to invest in Madoff’s hedge fund.

Givens, now retired from the firm and living in Boonville, said he took a few sniffs and didn’t like the aroma.

Read the whole thing >

This is new. There have never been reports of the sons going out to sell the fund, let alone wining and dining bankers. Obviously, if they thought the fund was legitimate, then there’s nothing wrong with selling it. But obviously their involvement is more than they’ve let on, which means everything else they’ve said should be suspect.

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44140130_5094937001_1217b-yourmoney-ponzi-sj-businessImagine how you might feel if you had entrusted all of your hard earned savings into a high-stakes investment, just to find out later that you had lost it all and had been taken advantage of! Well, that is exactly the sort of thing that often happens with a Ponzi scheme! But what exactly is a ponzi scheme and how can you avoid being duped by this dishonest business practice?

The Ponzi Scheme Definition:

A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by later investors rather than from actual earned revenue. The scheme is named after Charles Ponzi, who became famous for using this technique in the 1920s. He paid investors 50% interest on short-term investments with money from new investors. All the while, spending a good part of the incoming funds for personal purposes.

Ponzi did not invent the scheme, but his operation took in so much money that it was the first to become known throughout the United States. Years later, Ponzi Schemes are illegal but continue to operate on the “rob-Peter-to-pay-Paul” principle, as money from new investors is used to pay off the previous investors in a continuous and destructive cycle until the whole scheme eventually falls apart.

What to look for and how to avoid a Ponzi Scheme:
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462961b2-00345-049d3-400cb8e1_cyvzubkw4x1mThe year 2008 has entered the record books for all of the wrong reasons; the Dow Jones had its worst year ever! So what about 2009, how will stock markets from around the world perform and which are the stocks to follow?

Well in reality you need a crystal ball to be able to answer these questions. 2009 may well be another tough year.

I am a person who enjoys investing on the stock markets and I have to say that I am a bit of a gambler; I am quite prepared to take a risk with my disposable income in the hope that I can increase it etc. Just a quick note however, I am a financial adviser and anything that I write or suggest in this article should not be seen as advice.

I personally believe in investing an amount of money (an amount that I can afford) on a monthly basis instead of investing lump sums. This way I am able to take advantage of what is commonly referred to as Dollar cost averaging in the United States. This is where when prices are high your monthly contribution may buy fewer shares or fund units but that when prices are low your investment buys more shares or fund units.

During these volatile times this method of investing may prove to be the most prudent. Even though stock markets had a very poor 2008 and is therefore quite low there may well be significant falls ahead.
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Let’s say the U.S. government completely nationalizes AIG, so that the new entity now shares the government’s AAA rating.

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photo-theftA company’s ownership of its equipment, furnishings and supplies, as well as its employees’ time, would seem to be an obvious fact. To appropriate company property is theft, or if money – then embezzlement.

But if we look closer, we will see that some form of corporate theft is happening every day in every workplace, and it may be difficult to know what is theft and what is not. Perhaps you phone your husband from the office. That’s technically theft of facilities but widely accepted everywhere. Charging-up your cell-phone is using the company’s electricity. If you work in a clothing factory, there’ll be clothes that can’t be sold, owing to faulty cutting or stitching. But they can still be worn, and if you don’t take them, they’ll just go in the bin. That perhaps seems reasonable enough – except that it could encourage dishonest workers to produce rejects to order!

Consider the theft of usable merchandise. I once knew a storeman in a small bakery who liked to bake his own bread at home, and the manager was happy to let him have a bucket of dough every few weeks. As nobody else was involved, there were no complaints. However, this kind of gesture could be taken, by the bakery owner, as theft, i.e. supplying or taking company property without payment or authority.

And scale is the key to this issue – the danger of small pilfering turning into something more serious, i.e. serious theft.
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