Top crypto-currencies with potentials for growth

Ok, you have lost out on Ethereum and Bitcoin but still want to cash in on another ride? This post aims to enlightening you on the coins that may just exceed 100$ in a few years time.(You can find some broker like alpari, tickmill who allow you to trade crypto-currencies here)


Litecoin

This crypto-currency has been going strong since the beginning of this year. Without bugging you with the geeky details. here are my reasons why I feel the crypto-currency is worth investing in. 

• Atomic swaps between LTC/BTC: The fact that you can exchange Litecoin for Bitcoin makes it more usable and effective for commerce. Currency exchange is very crucial especially if their use is going to widespread. For instance Imagine a scenario where you have 200 Bitcoins and 1000 Litecoins and want to buy something with your bitcoin but realize that your 200 Bitcoins will not be sufficient? What will you do? You are likely going to want to convert your Litecoins to Bitcoins right? That is exactly what makes this attractive for people looking to replace conventional payment systems with crypto-currencies.
• Lightning network should enable even faster transactions: Litecoins is known to have improved on Bitcoins transactions confirmation speeds. This enables you to be able make more transactions in lesser time. This would be attractive to would be investors in crypto-currencies.
• It improves has a faster Mining rate than Bitcoin ($25 per block as compared to bitcoins $12.5/block): If the price of crypto-currencies is bound to soar, you will want to hold a lot of that crypto-currency right? That is exactly what happened to someone who gave up on Litecoin. He had mined Litecoins for long but it was proven unprofitable as at the time he tried cashing in at $2.5 per Litcoin. However, he left 875 Litecoin in his wallet. Today Litecoin is at $58. Read Full Story Here.
• Litecoin returns for 2017: This crypto-currency yielded a return of over 1000% in 2017. Whatever caused the interest should be able to sustain the currency  to the 100$ target in stipulated.

Source:https://www.worldcoinindex.com/trending/overview

Ripple:
The following are one of the reasons people are touting Ripple to be a big hit. 

• It is said to have a  near instant transaction confirmation time.
• It is designed to be processed through banks
• it can be used as a debt instrument
• it has made a nice return this year (see image below).

Source:https://www.worldcoinindex.com/trending/overview

For me, the crypto-currency is just to cheap to pass by. The fact that it is under 1$ gives it more room for growth should the crypto-currency rush extend beyond 2018.

Would you like to trade Forex? buy Learn forex in 5 days which will teach you good money management skills and reduce the likely hood of you blowing your account

Bottom Line

There are other crypto-currencies that one may watch out for like Dash, Monero which I considered because some entities are accepting them as a form of payment. However, These currencies are using technologies that make transactions untraceable. I don't consider this a good thing given the fact that money launders, thieves hackers etc can capitalize on this some day. That aside they should have room for growth. 

The crypto-currencies that have room for growth are bound to move higher and hit the 100$ bench mark as more people buy and hold this currencies. Only government and financial regulatory bodies interventions or other weird situation can abort this. 

Good luck with all investments.

An In-depth Look into the Beauty of Exchange Traded Funds(ETF)

You must have heard about Market indices(or Indexes as some may call it) which aims to track the performance of a group of stocks/instruments in a sector(e.g DowJones Index,S&P 500 Index, ). An Exchange Traded is much more. In the post I will explain why.
Click here for more on indexes

A brief Synopsis.
Exchange Traded Funds also known as ETF is a unique financial instrument that tracks a particular index or indices of a particular sector. There are ETFs that track bonds, energy sector, retail sector, precious metals, manufacturing sector. In fact there are ETF for just about any unique combination you may think of and guess what? They are traded exactly like stocks. You can Daytrade, trade on margin, short sell, leverage etc.

So what is so special about it? 

As mentioned earlier, indices track a sector performance hence when a sector is doing well the index will rise and when the sector is doing badly the index will fall. Now because these indexes track an industry and not a company, they are less laborious to analyse than stocks but can still be traded exactly like stocks. This uniqueness of combining the features of a Mutual Fund, Stocks and Market indices just make it a MUST LEARN and MUST HAVE.

So is that all there is to the Hype?Nope.

Summarized below are the Advantages of ETFs

Low cost: ETFs trades are made at a significant lesser cost that buying and selling the underlying assets individually. This can be a huge advantage when you want to invest in a lot of securities(instruments/assets) but have low funds where margin requirements and repeated costs can seriously hamper your profit potential.

Returns: ETFs have been known to perform very well since they track the market itself. For a single ETF (though it depends on the economy and country) you can earn between 12%-30% per annum. This are attractive especially if you are used to savings accounts or fixed deposit of 3-9%.

Tax Benefits: Capital gain on stocks usually come at a price; you have to pay taxes. As you buy more stocks you have to pay more taxes. With ETFs, however you can own many stocks and pay less.

Diversification: Owning a single ETF investment automatically allows you to own all the underlying assests thus ETF's like Mutual Funds allow traders to diversify upon making a single purchase. 

Coverage: The myriad of choices ETFs presents gives you the flexibility over any market/sector or country. For instance, if you should choose to buy 4 ETFs of a country covering  different sectors you have quickly covered made significant investment in the country. Hence, should they be a well to do company you are going going to be seeing quick and rapid profits.

Dividends:  If you choose to hold ETFs whose underlying assets are stocks for a long period of time you will be entitled to the dividends of the underlying stocks.

It be well if the downsides of ETFs are not discussed.  ETFs tracking major indexes only allows you to track major companies. This may not be favourable if you are looking to trade more stocks than the underlying assets. ETFs are also known to expose you severely to an industry, should you choose to buy one in that sector. Finally a downside you may want to consider is their spread i.e the difference between the ask(buy) and (bid)sell price.

Other Notes: Some Traders do buy and sell the same securities by buying the ETF and selling the Stocks. By doing this they benefit from the differential in price which occured because of the different market and way they are traded. This kind of trading is called Arbitrage it is normally frowned upon by some but is quite profitable if you are able to pull it off.

Learn About Commodities Trading

Commodities Trading is one of the oldest form of trading. From ancient times people exchanged goods to earn a living. Today, Commodities trading has been made a lot easier for those who are interested in the buying and selling of goods. Tradable commodities are divided into hard(mined goods) and soft commodities (Agricultural goods). Items such as gold, silver, platinum, crude oil, brent, wheat, Soya bean are some of the most common commodities you will see often when watching business news. Trading usually occurs on the Spot or Futures Market. The spot market initiates delivery immediately while the futures market initiates delivery at a future specified date. Thus, you can easily cancel and order anytime you choose.

SO HOW ARE COMMODITIES TRADED?
For retail investors such as you and me the most common way of trading commodities is via the futures market. Trades are made buy agreeing to buy or sell a particular commodity at a particular price at a specified future date. For example I can a place an order today to purchase 10 future contracts of crude oil at 50$ per barrel a on the first day of month. You only make a loss upon offsetting (That is confirming debit of your account). On the spot market though, Orders are traded immediately such that your loss or profit is shortly realized thereafter. Kindly take a look at a sample trading session.
From the link you can see that trading is similar to Forex, and other charted trading instrument. As a matter of fact some commodities can be traded against the dollar side by side on Forex Platforms. eg Crude oil, Gold and Silver.

WHAT ARE THE BENEFITS OF TRADING COMMODITIES
Now that we know what commodities are all about. what are the benefits?
Some commodities are safe havens: Commodities such as gold and food Items are safe havens in times of economic crisis as these are more tangible than currencies. Hence, you can choose to move some of your riskier investments such as stocks towards commodities in times of crisis.

They have large profit potential: The high leverage(Borrowed amount) involved in commodities trading allows for large return on investments. Some trades are known to make up to 10% per trade/contract.

They can be traded more easily with Technical Analysis: Majority of trades placed on the commodities market are placed manually by traders. This allows for smoother trends and predictable analysis as human psychology is involved.

They have low volatility as compared to Forex: Commodities in the futures markets are hedged. Thus, sudden large market fluctuations as seen in more volatile markets are readily predictable.

Their demand and supply can easily be tracked:  The goods in the commodities markets are easily tracked for instance you can easily determine the amount of wheat consumed or produced in the world today. The availability of these easy to find information allows traders to be able to analyse where price is going to go in the near medium to long term. For instance, the demand for oil is currently being expected to reduce as greener alternative energies are currently being promoted.

They hedge Inflation: Because the cost of goods is tied directly to the rise and fall of inflation, a rise in inflation is often resulting from a rise in the price of goods. As a result, having these instruments in your portfolio guards against the effect of inflation on your local currency.


DISADVANTAGES OF COMMODITY TRADING

Transaction Speed– The speed of of execution of commodities trading is less than those of stocks and other instruments in the financial market. If you are a fan of high speed trading the commodity market may be too slow for you. Online platforms have however increased made things better in recent times.

Leverage –Leverage increases risk by increasing the size of your position, thus your losses and profit are magnified. The availability of leverage allows traders to sometimes over trade as the can fall into the trap of trying to quickly grow their account.

Risk of Physical Delivery – Purchased commodities can actually be delivered to your door step although as stated by FX Empire Analyst - Irit R. 

Most Futures contracts are just settled through cash once the tenure of the Futures contract has expired.'

WHAT IS THE MINIMUM CAPITAL REQUIRED FOR TRADING COMMODITIES.
The minimum capital for commodities ranges from $3000 to $25000. Due to margin requirements required by the security, some commodities such as Crude Oil can require higher minimum capital.

WHAT DO I NEED TO TRADE COMMODITIES
To start commodities trading you need the following

1. To sign up with a commodity broker
2. Fill your details, i.e address, account details etc
3. Get a good platform to trade

Note: Some brokers may reject your application. Should this be the case you can easily open an account with another broker


In Conclusion,
Commodities are assets one has to have especially for the hedging effect it has against inflation. As a beginner trading items such as gold, oil, corn may be easier for you to track. If you are reluctant to learn commodities trading you can opt to buy a Specialty Mutual Funds that already has a collection of profitable commodities. Learn about them here. There are also Exchange Traded Funds that you can choose to trade. This are easier to track than trading commodities individually.

7 MUST knows about REITS: An Hybrid Real Estate Investment

Having discussed REITs here and extensively classified them here, seven must know properties of REITs will be discussed to ensure you are equipped with every information needed to trade them successfully.

The following are the seven must know properties of REIT

They contain only real estate assets
REITs are great investments for real estate enthusiasts as they only contain real estate investments.

They are dividend producing investments
REITs produce incomes from the income generated from rents for equity REITs, principal and interest payments from Mortgage REITs. This income can be paid monthly, semi annually or at any specified period stated by the REIT company.

They are listed on stock exchange
Unlike traditional real estate REITs can be traded on the stock exchange. There are many Equity REITs listed on the Nasdaq that you can take a look at. The listing of these provides investors the opportunity to benefit from the capital appreciation for an on demand REIT.

Their average yearly returns
Most REITs yields high as 9% annually. They are also one of the highest yielding fixed investment incomes.They are also one of the highest yielding fixed investment incomes.

They are affected by interest rates
It has been established that interest rates are inversely correlated to REITs returns. As interest rate rises the future cash flows stifles dividend payments as a larger chunk of generated revenue is used to pay back loans.

Fig 1: Correlation between REIT and Interest Rates

Acquisition of new properties also becomes more expensive while rents remain fairly the same. For an investor looking to make low risk fixed income investments, adding more REITs to your portfolio in times of low interest can be a very good investment decision.

They are low risks
REITs are generally classified as low risks investments. Mortgage REITs carries a slightly higher risk because of the direct impact from rising interest rates. Many public and private pension plans account for 29.1% percent of its total market capitalization in shares.

They can be Traded as an index
 An investor looking for a more diversified investment in real estate can purchase Exchange Traded Fund REITs as they track investments from different sectors of the Real estate world. In times of real estate boom holding REITs ETFs can be very rewarding.


In Conclusion,
Are you looking to invest in Real Estate but cannot handle the hassles of maintenance, defaulting tenants, accounting etc. If yes, Invest in REITS

RECOMMENDED: Best performing Mutual Funds for 2017

Mutual funds can be quite tricky to invest in because of the large number of instruments that constitute it. A very good performing instrument in the portfolio can cover the poor performance of the many others.As a result I have listed some of the good ones as posted by experts in the industry.
Note: I currently (9/9/2017) don't own any but intend to shortly.

• If you are from India you may want to check out this link. Best Performing Mutual funds in India 2017
• If you want to invest US/London Markets you may want to check out at Vanguard Target Dates or Corporate Mutual Funds here. 
• If you want to invest solely in England you may want to check out at Best Performing stock in England.
• If you are from Nigeria you can check out Stanbic Mutual Funds

On a general note the performance of financial instruments in emerging economies such as
Brazil, India, China etc tend to have higher returns due to their local high interest rates and room for growth. If you are note satisfied with the above mentioned I suggest you take a look at the top performing ones in those countries.

Understanding Mutual Funds

Mutual funds is a collection of funds pooled from Investors and managed by a professional fund manager. The objective, nature are usually specified in the brochure of these funds. In general they can offer one a great opportunity to invest in the financial markets without having to go through all the rudiments of learning and analyzing financial instruments.When Buying  Mutual funds you are going to pay a commission called Load . This can be paid upfront as a Front-End when buying the  Mutual Fund and or as a Back-End when selling the fund shares. Mutual Funds are usually traded on an exchange though some are privately owned

WHAT ARE THE DIFFERENT TYPES OF MUTUAL FUNDS?

By Ownership

A mutual fund may be Open-Ended or Close-Ended. A Close-Ended mutual fund. 

• An Open-Ended fund has no limitation to the number of membership. Hence anybody can buy their shares. The values of this funds are close on demand at their net asset value, or NAV. 

• A Close-Ended fund has a specified number of membership. This Mutual funds are not that common as that of the Open Ended fund. They don't reflect the real value of the instruments in the fund and are usually traded at a discount. 

By the Nature of traded Instruments

There are many kinds of instruments that can be used to comprise a fund. These are the most common.

 

1.Money market funds

These funds comprises of money market instruments such as treasury bills, and other short term low risk investments. Their returns are primarily derived from interest rates hence they are affected by inflation and interest rate changes. You can buy these funds if you have much are averse to high risk.

2. Fixed Income funds

These funds as the name suggest come from fixed income investments such as government and corporate bonds. Like Money market funds their returns are primarily from interests however they also comprise of long term bonds hence their price and returns vary and are slightly more riskier than money market funds.

3. Equity funds

These funds comprises of stocks (also known as shares) they are more riskier than the first two and obtain their return primarily from capital gains. Additional may also come from dividends. Their risky nature implies they are more likely going to give you more return than the first two mentioned.

4. Index funds

These funds aim to track the performance of a specific index in the financial market. Examples such indexes are S&P 500 and Dow Jones. The performance of these funds will largely depend of the ability of the fund manager to track the index that constitutes his portfolio.

5. Balanced funds

These funds invest in a mix of equities and fixed income financial instruments. The fund manager attempts to balance risk by investing in bonds and equity by adjusting the percentage of the investor funds he allocates to each market. If you want a diversified portfolio you can opt for this kind of mutual fund.

6. Specialty funds

These funds are more varied in nature. They comprise of real estate investments, commodities etc and is suitable for someone that truly wants a completely diversified portfolio without having to invest in different funds. 

7. Fund-of-funds

These funds comprises of other kind of funds. The fund manager simply invests in other mutual and exchange funds. As a result they are thoroughly diversified. They beauty of this fund is you own several mutual and exchange funds by simply buy shares of one. 

WHAT ARE THE BENEFITS OF INVESTING IN A MUTUAL FUND?

Diversification

As mentioned already the major benefit of having a mutual fund is that it allows you to diversify without having to buy all those instruments yourself. Diversifying reduces your exposure to a particular market segment hence enhances the probability that your investments will stand the test of time.

Professional Management

Fund Managers are usually professionals trained to identify and manage portfolio of investments. They understand the market better than the investors hence are more likely going to make a better decision than the investors. Mutual funds practically provides professional management at no extra costs. This is quite huge given that the professional services are usually very expensive.

Ease of Investment

Mutual funds allows for easy investment by allowing you to buy multiple investments without having to incur repeated cost from commission and spreads when buying them differently. By buying a share of a Mutual fund you have completely avoid many rigorous modalities.

Liquidity

Mutual funds are quite liquid (i.e they can be easily sold or bought). Therefore they are very handy should you be in dire need of cash.

WHAT ARE TYPICAL RETURNS FOR A MUTUAL FUND?

The return from a mutual fund is closely tied to the nature of the instruments contained in the portfolio. However, for majority of Balanced mutual funds you can expect returns ranging from 10% to 30% annual returns.

HOW CAN I INVEST IN A MUTUAL FUND?

To invest in a mutual fund you need to sign up with a brokerage company that offers the Mutual fund you are interested in buying. You will have to evaluate the fund or have a broker do it for you at a fee before making the final decision to buy.