Category

Global Investing

This China Province Will Become a Global Oil-and-Gas Market Powerhouse

Like everything else, the balance of power in the global energy market is shifting toward China, where a little-known province is perfectly situated to become a global oil-and-gas market powerhouse.

Nestled in the far northwest of China, Xinjiang is the country's largest province and the primary domestic source for oil and gas. It is sparsely populated and as big as Western Europe. The name, Xinjiang, literally means "New Frontier." And recent decisions in Beijing are going to give that translation even more meaning – transforming this province into a "new frontier" for the global energy sector.

To understand how to profit from this development, please read on...

The Headline You Never Expected: Foreign Growth Could Bail Out the U.S. Economy

During a period of increasingly worrisome headlines about the U.S. economy, there is one bright spot.

The rest of the world appears to be doing much better than we are.

In the long run, that's good news for the United States. Rapid world growth will eventually rekindle the economic fires here, producing a growth that is more balanced than the bubbles of 1995-2008.

Still, getting to that point will be a challenge, since – economically speaking – the home fires don't appear to be burning all that brightly.

To see how foreign growth could bail out the U.S. economy, please read on…

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Defensive Investing: Use Dollar-Cost Averaging to Reduce Volatility Risks

Dollar-cost averaging has long been a strategic staple among mutual fund buyers. Longer-term investors use it to smooth out the effects of short-term price fluctuations, but the tactic seldom has been practical for purchasers of individual stocks – that is until now.

For those unfamiliar with the strategy, dollar-cost averaging – also known as constant-dollar investing – involves the regular purchase of a smaller fixed-dollar amount worth of shares over time, as opposed to the lump-sum purchase of a large number of shares at once. For example, rather than buy $1,200 worth of shares of fictitious company XYZ in January, you might buy $100 worth of XYZ shares each month for the full year.

The technique offers several advantages for fund investors:

  • Because you are investing a fixed-dollar amount at regular intervals, you don't have to be concerned with trying to time the markets.
  • Since the fixed-dollar amount you invest buys more shares when prices are low and fewer when they are high, your average cost basis levels out over time. This reduces the risk that you might pay too high a price by making a lump-sum purchase at the wrong time.
  • The lower average cost basis mutes the impact of short-term volatility on your existing holdings.
  • You can build a sizable position in a single fund, even if you never have a large sum of money to invest at any one time.

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An Anemic Economic Recovery Keeps the Fed From Focusing on Inflation

With interest rates near zero and a balance sheet that's in excess of $2 trillion, U.S. Federal Reserve Chairman Ben Bernanke would be very glad to offload some of the Fed's obligations. But so far he's has been unable to do so, as an anemic economic recovery continues to monopolize his attention.

The central bank yesterday (Tuesday) announced that it would reinvest the proceeds from expiring mortgage-backed securities into longer-term U.S. Treasuries. The move should help a weakening economy by keeping mortgage rates low. And while it also may boost inflationary pressures, the central bank feels it had little choice.

"Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months," the Federal Open Market Committee said.

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Investing Strategies: How to Build a Global-Investing Portfolio Using ETFs

It wasn't all that long ago that global investing was an activity that was restricted to only the wealthiest U.S. investors. If you weren't one of America's ultra-rich, you weren't able to access foreign markets.

That began to change in the 1950s, with the advent of international and global mutual funds, and access further expanded over the next three decades with the introduction of single-country closed-end funds. Today, thanks to the recent explosion in exchange-traded funds (ETFs), investing in overseas stocks is now almost as easy as targeting a given market sector here at home.

In fact, although it has been a mere 17 years since the first ETF began trading in the United States (in 1993), the most recent count finds more than 290 international, regional and foreign-country-focused funds listed on the various U.S. exchanges – enough to entice any investor with even a modest yen for overseas portfolio exposure.

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Drought Forces Russia to Ban Grain Exports

Russia yesterday (Thursday) banned grain exports after unrelenting heat left the country with its worst drought in at least a half-century.

Wheat rose to a 23-month high after Russia, the world's third-largest grower, announced a ban beginning Aug.15 that will last through the end of the year. Corn and rice prices also surged yesterday after Russian Prime Minister Vladimir Putin said a ban on those grains would be "appropriate" in light of skyrocketing prices. 

Domestic grain prices gained 19% last week, faster than at the peak of the global food crisis in 2008.  The ban includes wheat, barley, rye, corn and flour exports, according to the government decree that also set aside nearly $1.2 billion for stricken farmers.

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Cashing in on Canada: Four Ways to Profit – Big – From the World's "Safest Economy"

Canada is more than just back bacon, maple syrup, and hardscrabble-mining claims. It's a leader in natural resources, precious metals, and such alternative-energy investments as oil sands.

In fact, Canada right now boasts one of the world's most compelling targets for investors' hard-earned money. Consider that:

  • Through 2008, Canada enjoyed 12 straight years of budget surpluses.
  • Since the outset of the global financial crisis, not a single Canadian bank failed.
  • Canada was the first G-7 nation to raise interest rates.
  • And while Canada has already reaped the benefits of a full 10 years worth of a full-blown bull market in commodities, there are at least 10 years more to go.

Added together, this points to a major potential payoff for those who invest in Canada right now.

For the four best profit plays in the world's safest economy, please read on...

Hungary's Spat with the IMF and EU Could Signal Another Crisis to Come

The biggest financial news story out of the Europe this summer is getting very little play in the U.S. mainstream press. However, it has the potential to torpedo the European Union (EU), and has disastrous implications for borrowing costs worldwide.

Basically, a miniature banking crisis is festering in Hungary. If it isn't contained, it could grow into a genuine crisis that infects the secondary lending markets around the world.

Hungary is supposed to have about $30 billion in domestic liquidity for exchange, the equivalent of about five months of capital in its national account.  But it won't be getting additional funds from the EU machine in Brussels, or the International Monetary Fund (IMF), anytime soon.

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