Investing Guide

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• Calls for substitutes threaten America's most successful export, the greenback. Is the Floating Dollar Sunk?

  In theory, floating exchange rates were supposed to allow economies to reduce trade deficits by letting the currency adjust. A weaker exchange rate would drive up the cost of imports and make exports more competitive, thus reducing deficits. Under fixed exchange rates, the economy would have to be constricted to eliminate imbalances, reducing imports and lowering prices to make exports more competitive. That’s a more painful process than the seemingly benign adjustment of the exchange rate to bring things into balance.

  That’s what the textbooks said anyway. The reality has been more complicated.

  It’s the flow of money that dominates the flow of goods, not the other way around. Governments, moreover, manipulate the quantity or the value of money to their ends, which is also outside the textbook model.

  The rest of the world holds dollars as investments. Foreign central banks use dollars predominantly for their reserves. Dollar-based financial markets are the deepest and biggest in the world. In other words, the liabilities of the U.S. are the main assets of the rest of the world.

  This has conferred on the U.S. something that King Midas couldn’t imagine. We can effectively print dollars and the rest of the world takes them. Imagine what you’d do with a money-printing press in your basement. You’d spend like crazy on stuff. Or you’d acquire real assets, such as houses.

  Extend that notion globally. Since the rest of the world takes our paper money, we get to acquire their products or assets in exchange. As a result, America can spend more than it earns and save less than it invests. The difference is made up by foreigners accepting our dollars and lending them back to us.

  The clearest example is China. Its massive trade surplus with the U.S. gives it boatloads of greenbacks. The textbook says that would make its currency, the yuan, rise, which would make Chinese exports dearer in world markets. That’s the last thing Beijing wants as it tries to keep the economy growing at 8% to provide jobs and maintain social stability.

  So, China’s central bank accumulates billions and billions of dollars, which it invests in U.S. securities. Much of that money went into Fannie Mae and Freddie Mac securities, which in turn helped finance the U.S. housing boom. But the bulk of China’s dollars went into U.S. Treasury securities, which helps fund the budget deficit.

  Americans should realize that the nation’s most successful export isn’t Coke or Boeing airliners or Microsoft software or even Hollywood films. It’s the dollar, which is accepted around the world as a store of value.

  Under the current floating exchange-rate system, the U.S. wasn’t limited by the gold in Fort Knox as to how many dollars it could issue. It was limited only by the willingness of the rest of the world to accept greenbacks in payment for their goods and services.

  But, for the first time since the early 1970s, America runs the risk of being constrained by international considerations. Nixon could get around them simply by abrogating the promise to maintain the dollar’s value in gold. Now, America’s main creditors could impose the discipline on the U.S. that gold couldn’t.

  Poll: Agree or Disagree?

  Source:
  http://online.barrons.com/article/SB123793604883731531.html#mod=rss_barrons_markets

   

• is it safe to say that (nearly) every investor is poorer now than they were a year ago?

  I know there might be a few exceptions. But it seems like all investments have more or less decreased dramatically, across the board.
  Home prices, stocks, bonds, commodities, everything.
  So is it fair to say that everyone is poorer now than they were a year ago?

   

• Im looking for the absolute software crack!!!?

  I’m working in a finance company. We are investing large sums in immigration cases and are looking for a program that can track time lines, portfolios, diverse time sensitive investments, job creations and some personal stuff like results of background checks, so on and on
  I imagine it would be some mix of an investment software as also an information management system. Any ideas out there? It has to be very easy and simple user friendly. Where do I find a genius who can develop something if it not exist yet and how much would that cost to engineer?

   

• What is the best way to invest $150k in real estate now?

  Do not like REITs and risky real estate investments. Looking for rental property and monthly income and the ability for the property to maintain and increase value over time.

   

• What is the best way to invest $150k in real estate now?

  Do not like REITs and risky real estate investments. Looking for rental property and monthly income and the ability for the property to maintain and increase value over time.

   

• Any advice on Stock Market and Trading/investing methods?

  Hi, thanks for any help in advance.
  Looking for both short and long term investing.

  What are the signals you look for to get in and out of trades. Includes day, swing trades and long term investments.
  How successful have you been? Do you think you can make a living out of short/day trading?

  Also can you tell me what the term "Put" and "Call" means?

  Any good sites online for stock market terms? I need to start out very simply as I have no experience with trading.

  Thanks a lot…

   

• Having a Tax Deferring mutual fund as a core component of my 401k / IRA investments. Is this unwise?

  Or merely un-necessary? I own a mutual fund that’s all about being invested in dividend-paying stocks that are well-rated companies. The strategy statement also mentions "taking advantage of tax regulations" as being a central principle and objective. Since this is in my tax deferred retirement accounts, that part doesn’t matter to me. Is it foolish? Or irrelevant?

   

• Having a Tax Deferring mutual fund as a core component of my 401k / IRA investments. Is this unwise?

  Or merely un-necessary? I own a mutual fund that’s all about being invested in dividend-paying stocks that are well-rated companies. The strategy statement also mentions "taking advantage of tax regulations" as being a central principle and objective. Since this is in my tax deferred retirement accounts, that part doesn’t matter to me. Is it foolish? Or irrelevant?

   

• 18 y.o. intrested in investments; should I get an etrade account?

  Hi!
  I’m 18 and I am interested in investing. I’m not incredibly read up on the subject, but it sounds like an interesting thing to get into. Is etrade an easy site to maneuver and is it helpful for beginners?

   

• Stocks, shares, commodities investments?

  Can anyone tell me how to start dealing in shares and stocks and dabbling in bullion and commodities on the net. Is it difficult to understand? I am a homemaker who wants to make some money.

   

• What is the best online trading site for small trading (<$1000 )?

  I don’t have much money to invest, and I don’t plan on jumping around the market or trading much. I am studying charts and have a few stocks in mind for quarterly investments. What do you recommend? Anyone heard of soho or suhu or something like that? I read about it a little while ago and can’t find out any more about it…it’s an online trading platform.

   

• Realistically how much can the Average salary say around 50k a year make in the stock market with smart invest?

  smart\good investments over 10 years,

   

• Realistically how much can the Average salary say around 50k a year make in the stock market with smart invest?

  smart\good investments over 10 years,

   

• Will Royal Bank of Canada Mutual funds be affected by stock market crash?

  A friend invested into Mutual Funds several months ago, wondering if September 15, 2008’s crash will have an affect on those investments.

   

• Could it be argued that Osama bin Laden caused the financial crisis?

  It was in the wake of the 9/11 attacks that the Fed cut the overnight rate to 1.00%, and it was the low rates that in turn fueled the bubbles in housing and commodities and masked the risk inherent in many of the loans and other investments that ultimately went bad.

   

• Self Employed People — What Percentage Of Your Annual Income Do You Put Into Investments?

  This could be in the form of mutual funds, stocks, commodities or bonds. An indicative figure is fine.

   

• What are the best green stocks to invest in? How do I invest?

  Hi, I am looking to invest in green stocks. Any ideas as to which ones and if so why? What experience do you have with certain stocks so far? How do I do this? Can I go online to invest in stocks? Any good or bad investments centers I should go with or stay away from? How much can I buy a stock for?
  Thanks for your help in advance.

   

• Why govts favor people investing money in stock markets (by giving tax sops) rather than putting it in banks?

  Not sure whether this is true of other countries, but in India govt gives tax sops for investing money in equities, eg you can claim tax exemption for investing money in certain equity oriented mutual funds and you dont pay any tax for profit you make on equity investments you hold for more than 1 year. On the other hand, any interest on money in banks is taxed at upto 30%. Would’nt it serve governments purpose to have people put their savings in Banks. The govt has more control over this money and can actually control its flow into ‘priority sectors’, eg infrastructure in India, through legislation and tax sops to the banks. Also this money is more ’stable’ because people dont break their fixed deposits in a hurry. Risk of losing the money is also lower.
  Not sure whether this is true of other countries, but in India govt gives tax sops for investing money in equities, eg you can claim tax exemption for investing money in certain equity oriented mutual funds and you dont pay any tax on profit you make on equity investments you hold for more than 1 year. On the other hand, any interest on money in banks is taxed at upto 30%. Would’nt it serve governments purpose to have people put their savings in Banks. This money also would ultimately endup supporting businesses through loans. At the same time, the govt has more control over this money and can channel its flow into ‘priority sectors’, eg infrastructure in India, through legislation and tax sops to the banks. Also this money is more ’stable’ because people dont break their fixed deposits in a hurry. Risk of losing the money is also lower.

   

• At home software that tracks your stock activity?

  I have invested in stocks for years now. I was wondering is there a software that I can purchase that will allow me to track each individual stock from teh time I invested in it to the current price. My investments are with several different banks so in order for me to check I need to go to each bank to look them up seperately. I would like to be able to track them with one software……….are there any available?

  Thanks for your time!!

   

• Where I find the latest research papers from Investments banks?

  Always financial news talk about investment banks (like JP Morgan, Goldman Sachs) projections for commodities or equities or the economy in general. Where I find them? Have you know an use full link?