Why invest in physical gold?

Image source: LOM Financial

Gold is one of the most precious metals known to man and it has been valued greatly in many civilizations in history for thousands of years—even until to this day. You might be wondering, why do people invest in gold even in this modern day and age? Let’s discuss some of the financial benefits of investing in this precious metal:

  1. It can protect investors against potential market crash.

For every worst financial crisis, gold has been a go-to option for many investors – and this because, even during financial uncertainties or even political instability, gold retains its value.

  1. It’s a vital entry in a diversified portfolio.

Gold is an asset of choice and a refuge for even high net-worth individuals in times of financial panic because it’s a relatively safe investment.  It can withstand the threats that can easily crush other investment options. For this reason alone, gold should be in every wise investor’s investment portfolio.

  1. It has a global and cultural demand.

Gold is a sacred part of several cultures in the world, especially for many emerging economies. Its global demand can be credited to its cultural value as a symbol of wealth and prosperity.

For instance, in India alone, the country’s demand for gold increased by 9.1%  in 2017, from 666 tonnes in 2016 to 727 tonnes. China, on the other hand, sees owning physical gold bars as a form of savings.

  1. Despite short-term volatility, gold remains stable.

Gold has seen its ups and downs but its regular price swings won’t remove the fact that the benefits of investing in this precious metal will always outweigh the risks. Aside from being relatively easy to acquire physical especially for small investors, owning a piece of this valuable metal can be satisfying.

Why the filthy rich invest offshore

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The richest people in the world have relied on very few highly-efficient investment strategies in their lifetime and offshore investing has been one of them. Basically, offshore investing looks at opportunities offered beyond the limits of the investors’ home countries, giving them the power and freedom to capitalize on the advantages of tax-reduced, confidential and wider investment pool transactions.

Aside from the unlimited bond and equity assets offered by many offshore companies, there are several reasons why the filthy rich invest offshore.

Tax-neutral jurisdictions in the Caribbean region such as Bahamas and Bermuda, for instance, have economic policies designed to provide favorable tax incentives to foreign investors. These small countries have served as ideal destinations for many corporations and high net-worth individuals, ensuring that their accounts are free from higher tax burdens imposed by their home countries.

Aside from that, investing offshore―through international financial services companies like LOM Financial―gives the rich access to a wider pool of investment options that will help them freely diversify their portfolio. This is because, accounts invested offshore can be more flexible, and more open to international markets.

These destinations also provide a healthy and safe environment for restructuring and protection of ownership of assets—without the worries of lawsuits or foreclosures and other domestic troubles. Furthermore, the same advantage of such offshore jurisdiction provides the benefit of confidentiality.

Offshore investing is a safe and tested option especially for the richest and multi-million investors―and perhaps it’s the only place in the world where their identity, asset, and wealth information, can be legally protected from the public, and more importantly, from potential competitors.

These countries have the most financially literate teenagers

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A recent study that examined young students from several participating countries have been recently published and it exposed some shocking truth about the state of financial literacy today.

One concerning data revealed that 25% of the participants did not even have the comprehension nor the right skills to make the simplest financial decisions.

In definition, financial literacy is an individual’s ability to utilize the skills and knowledge that they have learned to make educated and informed economic decisions related to investing, savings, and even the most basic financial concepts.

While a majority of the participants did not pass the criteria, these countries were able to deliver impressive results and topped the ranks for having the most literate teenagers in the world.

  1. China

According to the report published by the Program for International Student Assessment, China is the most financially literate country in the world.

While the survey focused on a population of 48,000 15-year old students and examined their skills in reading, math and science, the assessment also measured the subjects’ ability to make sound financial decisions.

  1. Canada

Canada ranked third among the 30 countries that participated in the same study. The report was released by the Organization for Economic Co-operation Developed (OECD) and the International Network on Financial Education (INFE).

  1. Belgium

Belgium also joined the league of the most financially literate countries in the world and won its own title as having the highest financial literacy in all of Europe.

The Flemish community of Belgium bested other participating European countries like Italy, the Netherlands, Poland and Spain.

REPOST: How to Build on Europe’s Economic Recovery

Strengthening engines of growth, building a more collaborative working relationship between countries, and developing more concrete collective responses to outstanding challenges are some of the possible ways to increase Europe’s economic resilience and agility. More insights from Bloomberg:

Relationship status: It’s complicated. Photographer: Jasper Juinen/Bloomberg

After years of crisis management, heightened self-doubt and even existential threats, Europe is in a much better place. Economic growth is picking up, political uncertainty has diminished, and despite (if not partially because of) Brexit, the vision of an “ever-closer” regional union is energizing some new constructive thinking in core countries. Translating this into sustainable prosperity, however, is far from automatic, and that pivot will be problematic without progress in four key areas.

The latest set of robust high-frequency numbers shows that Europe’s economy is growing at a much healthier 2 percent to 2.5 percent annual pace, with many more of its member states sharing in the growing expansion. Although youth joblessness remains an acute problem in several economies, the overall unemployment rate is coming down. And, with ample liquidity, European financial markets have been performing well, both in absolute terms and relative to others.

The endogenous economic and financial healing is opening the way for reducing the prolonged reliance on the unconventional monetary policy measures being implemented by the European Central Bank. The ECB can start thinking seriously about an exit plan for both negative interest rates and its program of large-scale purchases of securities, though it will be very gradual, which will also help to reduce a high risk of greater political challenge to its institutional independence.

France and Germany have had their key elections, and there is now hope for a constructive regional political runway anchored by a strengthened collective vision and coordinated action by the two countries. Even though German Chancellor Angela Merkel encountered some domestic political turbulence over the weekend, the relationship between her and President Emmanuel Macron of France combines new energy with deep experience and credibility, raising hopes for progress on some long-delayed elements of the European project.

The internal push for reforms is amplified by several pressure points.

The U.K.’s vote in favor of Brexit has provided an impulse for greater coordination among the other 27 members of the European Union. Since the highly uncertain days immediately the referendum, the remaining countries of the union have developed — rightly — much greater confidence in their ability to move forward without the U.K., especially now that the economic performance gap has swung against Britain and is widening.

Brexit has amplified other external pressures on the effective functioning of the EU. These include the common challenge of migration, Russia’s annexation of Crimea, uncertainties about common defense, and grumblings by some of the eastern members.

All of this places the historical European project in a different place, and not just in terms of the situation on the ground. A reactive crisis management and prevention mindset is giving way to a more confident proactive and strategic one that seeks to achieve common prosperity.

Continue reading HERE.

A brief history of the Euronext and its role in today’s markets

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At the heart of the European capital markets is Euronext, an inter-border stock exchange that has been through a lot of transformations before it became the largest in the world.

Its early history tells about the crucial 2000 merger that brought Brussels, Paris and Amsterdam stock exchanges together.  Its further acquisition of the Bolsa de Valores de Lisboa e Porto (BVLP), the Portuguese stock exchange and the London International Financial Futures and Options Exchange (LIFFE) the following years have made Euronext a global superpower.

Its influence and markets expanded beyond Europe that in 2007, an agreed merger was reached with the NYSE Group, giving birth to the NYSE Euronext, based in New York and holds the record for the largest equities-based exchange in the world.

In the following year, it was managing different types of exchanges from six countries, with almost 4,000 (as of 2008 data) organizations representing an impressive market capitalization of $30.5 trillion. By this time, Euronext was operating and managing the most liquid exchange group across all continents.

In 2012, Euronext revealed its plans to operate listings venue in England, particularly in London under the name, Euronext London. This move boosted its visibility and reinforced its competitive seat in the Europe.

Currently, Euronext connects four of the national markets in the European regions. Aside from cash and derivatives markets, it offers listing market data, market solutions as well as settlement and custody services.

It operates trading stocks of many major companies from each of its participating countries while also managing the primary national indices related to these stocks.

As of 2016, Euronext has 259 members divided into dealers, fund agents and brokers – in which 51 are trading clearance members and 208 are trading members.

Europe’s most spectacular skylines that will leave you breathless

Europe is one of the top travel destinations out there but it’s not all thanks to its impressive natural landscapes, romantic getaways, or impressive medieval monuments. In fact, the continent is home to some of the most unique and spectacular skylines in the world, too! Often associated with robust economic development and industrial advancement, towering skyscrapers give cities a distinctive charm and character. Let’s take a closer look at the best skylines in Europe:

Rotterdam, Netherlands

Image source: Wikipedia.com

This architecturally diverse man-made wonder presents a staggering sight that leaves anyone who is fortunate enough to witness its beauty speechless. Rotterdam’s skyline is located in a vibrant, modern port that is slowly transforming into the most innovative metropolitan cities in the world. In fact, it is where the Maastoren, the country’s tallest building, stands.

Frankfurt, Germany

Image source: study.eu

This European cosmopolitan offers an astounding downtown skyline. Nicknamed as the Manhattan of Germany, it houses the major finance and business center of the country, and is on the list of one of the most livable cities in the world. The architecture of the city is a celebration and a show of its economic power, boasting a futuristic skyline shaped by the great Europaturm, the Messeturm, and the 56-story Commerzbank Tower. Tourists who want to fully experience the beauty of the city can go up the 208-meter Westendstraße 1 and the Main Tower – a popular skyscraper in the city with an observatory for public viewing.

London, England

Image source: architectsjournal.co.uk

Come 2020, London’s famous skyline will be remarkably unrecognizable, thanks to the new permission for future architectural projects and innovations within and outside its financial districts. Currently, the city is a home to architectural innovations that make London’s skyline the most stunning in the world. The structures and style-rich buildings of this old city feature historical and modern artistry like the Big Ben, the London Eye, the Palace of Westminster, to name a few.

The Case of the Missing $20,000

A few years back, I did a wonderful trade with a mining stock and made around 300% gain, around $20,000 USD, in less than a week.  I’d like to believe that I’m a genius day trader but really, I think I was just lucky that one time.  Unlike what they do in LOM which is precise and educated guesses, I just had a gut feel about that stock and I traded it without looking at the chart.

Anyway, I’m not writing about how to win at mining stocks.  This is about something else and that’s just the introduction.

easy moneyMy husband, my two kids and I – we rented an apartment in the central business district that time.  We decided to live there so that we could just walk to our place of work.  It was practical, convenient and saved us on time and transportation costs.  The money we saved on transport, we instead allocated for the higher rent. At least, we saved on travel time – and we converted that to time which we could spend as a family.

Normally, we were prudent with our finances, trying to be as wise spenders as we could be.  Looking back, however, I admit, making that $20K was bad for me.  I felt  “rich” when I made that money so quickly.  And I was making more every day.  Smaller gains, but almost every day I was winning at the game!  It was a bull market that time.  It felt good to be a day trader!  I think if I threw a dart at a list of stocks pinned on our office wall and bought that stock where the dart landed, it would still have been a winner.  I couldn’t believe how fast the money came.

Being the “prudent” woman that I was, I deposited my $20,000 check into our joint savings account.  But here was the problem, the apartment we rented was right across the street from the most fabulous shopping destination in the city.  All those restaurants to choose from!  All those spas and salons! And so many shoes!

Since I thought I had a lot of money, a “few” fancy dinners out wouldn’t hurt, I said to myself. And of course,missiny money working so hard, I surely deserved to get the best hair keratin treatments money can buy, right?   And let’s not forget, nice Italian shoes and bags are an “investment.”

This went on for a few months.  All that time, I was thinking I “kept” my $20,000 gain safely in our savings account, while also saving up on my regular income.  I was so sure I had money that I never bothered to check.  My husband, he kept paying my credit card, getting the money from the bank.  But I think he was also preoccupied with his work that time, so he didn’t bother to do a cash flow analysis either.

To this day, it remains a mystery were that $20,000 went.  When we finally decided to take stock of our assets, my $20K was gone.  Actually, I don’t know where my other earnings went as well during that bull market.

Ever since my $20K went “missing” I realized that having the “easy money”, working as a day trader distorted my thinking.  It made me so ecstatic, like someone drunk in a party that I didn’t know I was actually already burning through all the money I earned.  My thinking was, “I deserve this. What’s the use of earning money if you don’t enjoy a little of it?”  But the “little” spending here and there was actually already a lot.    I was celebrating the fact that I earned the money, but in celebrating, I used all of it up.

Fast forward to today, it’s been a horrible year for stocks.  I still make commissions but I haven’t traded for a while.  I’ve won some, lost some.  Ironically, I have been able to save some money from the relatively smaller amounts I’ve earned.

Not feeling the easy money flowing that easily anymore, we’ve made a few adjustments for our family.  We moved to another place farther out from the city, where our rent plus transportation costs are much lower. Amazingly, the living space is even bigger and the air less polluted.  I also made sure this time that our house is NOT going to be across from a mall!  In this part of town, the cost of food and utilities is also lower.  I cook most of our meals at home now. My sons are healthier and not getting so sick anymore because of it.   And the last time I went to the salon was 5 months ago.  Fortunately, my Italian shoes and bags are still fabulous (I guess they really are a good investment). Overall, our lifestyle has actually improved. Just not much of the commercialism that was there before.

Today, I just consider that missing $20K as cost of training.  I learned the lesson that you can lose your money just as fast as you earn it if you don’t get a grip of your expenses.

2016 Outlook

2015 was a rollercoaster ride for investors.  But what awaits us in 2016?  Calmer seas or even more raging storms?

As the year comes to an end, it’s but prudent and wise for any investor to take stock of his portfolio.

Fund managers may have different motives compared to the individual investor. Apart from rebalancing their portfolios to properly position and adopt to current market conditions, fund managers are also concerned about how fund investors are going to review their performance.  Hence, we see a bit of window dressing at year-end to make fund portfolios look prettier than they really are.  The fund manager would sell his lackluster investments and acquire some really brilliant ones right near the close of the year.  That way, when the fund investors look at their fund’s stock position report, the snapshot will show a portfolio with holdings in the best performing stocks.  “What a great fund manager we have!  He picked all the winners!”

Individually however, an investor can afford to be more realistic and practical in rebalancing his personal portfolio.  He doesn’t necessarily have to sell all his losers if he has the conviction that a stock that looks awful as of year-end is going to be a real winner soon.

The key to making intelligent decisions and properly positioning your investments, like people at LOM do, is by having a relatively realistic outlook for the coming year.  What trends in 2015 will have a significant effect on investments in 2016?  Which sectors are the big money going to flow into?  Which sectors are in trouble? What trends are expected to reverse? What are the threats being faced – economic, financial and geopolitical?

By considering the answers to such questions, an investor can have a realistic outlook for 2016 and onward.  He will be making better informed decisions with his investments.

This article lays out an investment outlook for 2016 to help you plan your investment moves.

economic outlook 2016 | LOM

  1. Economic outlook by geographic location. Big funds are looking at better growth prospects in Europe and Japan. Asia similarly has the best growth potential among emerging markets, whereas the UK as well as the BRICS are still expected to decline in their economies.  Meanwhile, the US, is seen to remain a big threat to the stability of the global economy, particularly with its shaky bond market.  Canada also faces further economic weakening as oil prices are forecast to continue in their decline.

 

  1. Outlook by industry. Big money is looking more favorably towards the banking and consumer goods sector.  Meanwhile they are bearish on oil, commodities/natural resource, as well as on emerging markets as a group.

 

  1. Threats to the economy.

 

  1. Refugee crisis in Europe. This issue currently impacts Germany the most.  Not only does the crisis put a strain on the financial and economic resources of the country, it also has caused a lot of dissatisfaction with the country’s leadership and its immigration policies. Recently, Europe already temporarily suspended its Schengen open borders to address security concerns.  The common euro currency comes hand in hand with open borders – as border policy affects the ease of trade between EU members.  Should the refugee crisis continue, investors must be on the lookout for how Europe responds in terms of its foreign, immigration, trade and financial / economic policies.

 

  1. Bond market crisis. Just as 2015 was about to end, the US junk bond market has begun to unravel.  This goes in tandem with the continuing decline in oil prices.  The oil and energy sector has been a primary borrower and source of junk bonds.  As these highly indebted oil and energy companies post losses and default on their obligations, we can see more funds heavily invested in junk bonds start getting into trouble.

 

Sovereign debt crisis. The US and EU have been on a quantitative easing binge over the past few years to stimulate their economies.  However, government deficits and national debts have also significantly grown.   How these countries handle or fail to handle their liabilities, as the debt reaches critical levels, will play a major impact in 2016.

Analysts always have their forecasts and predictions of GDP growth, interest rates, foreign currency strength or weakness, so on and so forth. The caveat is a lot of them also get it wrong.  This is why an investor must be constantly monitoring his investments to watch out for any deviations from the expected.  Never try to buck the trend.  Go with the flow of big money.  At the same time, an investor also needs to be cautions of simply accepting consensus opinions.  Contrarian investing can profit sometimes because the “talking heads”still get it wrong.  Most of the time, they fail to foresee crisis situations.  Hence it is critical to be alert to trends and to be hedged for any unforeseen turns in the market this coming year.