Overseas Investment Property - 2008 Hotspots

Overseas Investment Property is becoming increasingly popular with people in the UK for a multitude of reasons. Some simply want sun, sea, and sand and of course to make good money in the process.

We all know it is the investors that get into an emerging market early that make the real money. Now the burning questions is,

What and where are going to be the new emerging hotspots for overseas investment property in 2008?

Lots of companies, property developers and agents all shout that there properties are the best, the locations are the best and the properties being sold off plan are under market value.

That's all good and well but of course you can not take things on face value and its important, as the savvy investors will tell you , to examine the facts and to do your own due diligence and home work.

Here are a couple of new emerging markets we feel are rising start with a few facts to back them up and to point you in the right direction.

Brazil: land of the carnival and now as we have found out miles and miles of quintessential tropical white sandy beaches.

We have not got room here to go over all the facts so will only highlight some of the financial ones, the important ones, right?

Cost of living: For those people looking to enjoy the properties themselves the Brazil is a big attraction when it comes to living expenses which is 20% that of the UK plus with low property prices, you can purchase a beach front villa for under 50K its easy to see the attraction.

Capital Growth: As mentioned overseas property investors are of course looking top make money from the properties they are buying and capital growth, high increases in the value of the properties is another big attraction.

As the Brazilian economy keeps getting stronger with no sign of slowing down and with the inward investment in both tourist and infrastructure (the massive airport being built 15 minutes from Natal), then it stands to reason that the right properties in the right locations will increase in value, some properties in the North east have increased in value by 100% in the last 36 month.

Rental potential: Ok so a lot of investors will not be using the properties themselves and will of course be looking for good rental returns for extra income or to pay for loans taken out on the properties. Natal and the north east regions of Brazil are experiencing an ever increasing international tourist demand from both North America and Europe so therefore the right type of property on a nice Tourist resorts (right location with good infrastructure and facilities should offer excellent rental potential.

To learn more about Brazil we recommend you take a look at Brazil Real Estate.co.uk it's a nice little site that show cases investment properties on new tourist developments in the North East of Brazil, they also offer a free country and property buyers guide to download.

Cape Verde: dubbed the Caribbean on Europe's doorstep; the nearest tropical Islands to Europe: Around 4 hours closer than the Caribbean islands with direct flights of only 5.5 hrs from the UK with no Jet-lag, interesting, lets investigate further.

So why are second home & holiday home buyers as well as international property investors heading to these islands, again we can think of lots of reasons but let's keep this article focused on the financial attractions.

High Retail potential: High Rental Value: Fantastic climate and sunshine for most of the 365 days of the year as well as booming tourism industry equals a strong possibility of year round rental income.

However as we know a destination needs either a good domestic rental marker or a very good and growing tourism market, and of course lack of quality accommodation, meaning that new build quality tourism properties should rent well

Here are some facts and statistics about Cape Verdes Tourism industry

Huge growth tourist industry: The National Statistics Institute (INE) says that around 250,000 tourists arrived in 2006 - a 25% increase over 2005. Seventy percent of tourists visited Sal and 15% Santiago. INE estimates that tourist arrivals will increase by 22% during 2007 and forecasts around 1m tourists annually by 2015. It also predicts that the number of cruise ships visiting the islands will increase from 30 in 2006 to as many as 70 this year, further putting the destination on the tourist trail.

Huge government investment: The Cape Verde government identified the growth tourism as a strategy for sustainable economic growth.

The Government implementing a number of programmes through The NDP (National Development Plan 2001 - 2005) to develop and improve the infrastructure of the Islands.

The NDP covers areas such as transportation (air, maritime, inter-island and road transportation), communications, banking, and health provisions. A major new airport, new roads, water desalination plants, and improved electricity have already been implemented.

Tourism development: The infrastructure development and increased awareness mean that the islands are becoming increasing popular with holiday makers looking for a tropical holiday destination with our the very long flight times to say the Caribbean and Thailand.

In summary it is still early days but as soon as Cape Verde becomes a mainstream holiday destination the price of property should almost certainly increase drastically.

Other factors that are an attraction of Cape Verde for overseas property investors are;

Low property prices: Cape Verde remains much cheaper than many Mediterranean places, and offers the opportunity to get in 'on the ground' of a soon to be booming tourist destination.

High Capital Growth: all the above activity has led experts to predict a 30% increase per year in property values on the main tourist locations and resorts in Cape Verde.

Again here is another little site that is showcasing current investment opportunities Cape Verde Real Estate

To summaries both Brazil and Cape Verde are set to be two of the hottest emerging overseas investment property markets for 2008, the facts speak for themselves and we hope this short article gives you food for thought.

11 Advantages Of Mini Forex Trading

The forex industry has seen the entry of many traders with limited capital.Traders who are comparatively new to the online forex trading business are also able to sustain the risks involved.

The traders were exposed to the world of currency trading with not that high a risk with the development of Mini forex trading accounts that requires a minimum account size of $300. Also, the mini forex trading account holders can trade 1/10 currency lots instead of the entire currency lots.With smaller lot sizes, the traders are exposed to real life trading with comparitively lesser market and risk exposure because,the value of one mini pip is the same as one dollar.

The traders are exposed to the trading and are made aware of the reliability and the quality maintained in the trade practices and also the stability of the forex trading.Individuals who are wanting to develop their own strategy and build on their confidence in this particular industry will be benefited by mini forex account trading.

The advantage of mini forex trading is that, the traders in this segment have the liberty to enjoy the benefits that are applicable to the full size holders as well.

1. Mini forex trading uses the exact same state of art resources and tools as that of standard account.

2. The traders will continue to be exposed to the world's biggest liquid market.

3. Traders receive a complete free streaming, live and double sided quotes

4. It provides immediate fill reports

5. The trades are not commission based and the traders are able to check their accounts live.

6. Another important advantage in case of mini forex trading is that the traders are able to create a strategy on forex trades and they also improve their discipline and at the same time, not giving more importance to their profits and losses.

7. A trader can fixate on the fluctuations of his equity, if he can trade a full size currency of 100,000 units. This can be done by traders who have small balances.By doing so, the decision making capacity of the trader can get affected, as it is highly based on the emotions of the traders.

8. The traders usually do not close out those trades that do not result in profits, as they continue hoping that the market would in fact favour them.It is the instinct of the traders to make immediate profits with the market movement, rather than maximising gains by allowing free flow of profits.

9. The training methods developed in case of mini forex trading, gaining the confidence of a particular trader who is successful, helps one to sustain the distractions, pressure and the anxiety in case of occurrence of any P&L swing.

10. It is not always necessary to use all currency units when starting a mini forex trading account. The lots can be utilized as and when required when a trader builds his confidence level, in order to increase his profits. The lot of 10,000 is available for a trader to customise the size per deal that might suit his needs and requirements.

11. Another good point in case of mini forex trading is that, a trader would not be too stressed out in case of a loss. It depends on the trader's ability to stick to his strategy and to maintain discipline in order to perform well in the future. For example, a loss of 50-pip on a position of 100,000 EUR/USD is the same as $500 loss, however, it would only be $50 in case of a 10,000 EUR/USD with respect to a mini account.

One has to have the guts and the will power to face losses in a forex trading industry;however,if one can perform making use of the platform that is similar to the standard account, why not go for mini forex which gives an individual it's unlimited benefits.

History Of Gold With Relation To Currencies And Its Outlook

Much has been written about the current bull market in gold and how it compares to previous moves, in particular during the 1970s when the metal soared to at the time unimaginable heights.

On this basis it is worth looking at the background to the value story on gold, and this may shed some light on why its bull market may have significantly further to go for CFD traders in coming years.

The gold standard

The UK, which at the time was the world's dominant economic powerhouse, adopted a gold standard in the early 19th century. Other currencies then looked to have gold backing, and towards the end of the century, various European countries joined the standard, though some chose for a time use a joint gold and silver standard.

The emerging strength of the US saw it adopt the standard in 1879, by making "greenbacks" that had been issued during the Civil War period convertible into gold, and the gold standard was formalised by legislation in 1900. On the outbreak of World War One, it was accepted by the whole of the developed world. This called for fixed exchange rates, with parities set for participating currencies in terms of gold, and it provided that any paper currency could on demand be exchanged for gold by its central bank

The system worked well having been designed to make each country adjust in terms of external deficits or surpluses in transactions between countries. Any deficit country would then have to surrender gold to cover its deficit, with the result that the volume of its money would be reduced, leading to lower prices, while the influx of that gold into the surplus economy would expand the volume of that country's money and lead to higher prices.

This meant that there were effective pegs in the foreign exchange market, so that exchange rates would fluctuate only within very narrow limits determined by the costs of shipping and insuring gold.

US and UK comparisons in terms of gold

Up until 1914, the parity between the U.S. dollar and sterling was approximately $4.87, based on a U.S. official gold price of $20.67 per ounce and a U.K. official gold price of £ 4.24 per ounce, and the exchange rate would not fluctuate beyond about three cents above and below the mint parity, which represented the cost of shipping and insuring gold, since otherwise there would be arbitrage potential.

Although there were some gold transfers under the system, it was easier to adjust monetary policy to attract currencies, which might offset the financial impact of any import excess. Higher interest rates would usually have a deflationary effect in the deficit country aswell.

Under this system, participating countries needed to give an absolute priority to external adjustment over domestic objectives, so if there was a conflict between domestic and external objectives, policy tools might not be available to be used for domestic problems of recession, unemployment, or inflation. This reflected the prevailing economic philosophy that economies would tend naturally toward reasonably high levels of employment and reasonable price stability without such government policy actions.

The effect of the First World War

The four great economic powers, the US, UK, Germany, and France saw unchanged currency values up until the war. There were few barriers to gold shipments or capital controls in the major countries, and capital flows appeared to play a stabilising role.

After the outbreak of the First World War, each country needed to raise cash for the war effort, and at this stage they began to issue more and more bonds, some of which still exist today. These were domestically issued at the time and not backed by gold, but the promise to repay came from the central bank and was seen as rock solid. This was the beginning of what is known as fiat monetary policy, and which is widespread today.

The result of this was that as more and more paper was not backed by the common value of gold, floating exchange rates began. The US, which entered the war later than the others, had maintained gold convertibility, and soon the dollar floated against the other currencies, which were no longer convertible into dollars.

Dollar strength and weakness

Once the war ended there were significant economic problems in Europe, and exchange rates began to change rapidly, with many major currencies devaluing against the dollar.

This helped cement the US dominance of world trade, as the dollar had greatly improved its competitive strength over European currencies during the war.

In a reverse of what is happening today, within much of Europe and certainly in the UK there was a widespread desire to return to the stability of the gold standard, and growing concern over the attractiveness of the dollar, which was still convertible into gold, and of dollar-denominated assets. The pound thus went back on the gold standard, but this coincided with the Wall Street Crash and the beginning of the great depression, which highlighted the weaknesses in existing economic policy.

Following a disastrous five years back on the gold standard, the UK abandoned it in 1931, and others followed over the next few years. There were also problems in the US, and in 1933, President Franklin Roosevelt imposed a ban on US citizens buying, selling, or owning gold in order to kickstart the depressed economy. This was the birth of Keynesian policies which shaped much of economic policy in coming decades.

At the same rime, the Federal Reserve continued to sell gold to foreign central banks and government institutions, but the ban prevented hoarders from profiting after Congress devalued the dollar against gold in 1934.

This action raised the official price of gold by more than 65% to $35 per ounce. Only gold coins and certificates considered collectors' items were exempt from this prohibition, and artistic and industrial users were allowed to deal in gold under a special Treasury license. Once the price rose, there was a mining boom, which saw major growth in gold output.

The 1970s

The licence to print money had been conveniently forgotten, despite the widely remembered problems in Germany's Weimar republic in the 1920s, and just fifty years later, in 1971, President Nixon ended US dollar convertibility to gold. On the 31st December of that year, gold stood at $43.8 per ounce.

This finally ended the central role of gold in world currency systems and it then began a spectacular bull market as inflation raged and the value of paper currencies fell. Gold enjoyed a nine year bull market, with the price hitting a record of $850 per ounce against a background of an international crisis arising from the Soviet invasion of Afghanistan and the Islamic Revolution in Iran. If this was rebased to today, the all time high would be equivalent to $2,100 per ounce.

Why gold could go a lot, lot higher

Gold's current bull market has lasted six years, during which it has risen around 200%. In the 1970s, gold peaked with a 2000% rise in just nine years, so this gives some food for thought.

Admittedly inflation art present is not the problem it was at the beginning of that decade, but don't bet against major changes in the value of gold against paper currencies in the years to come. For long and short term CFD traders this creates a major opportunity to profit from a potential further major revaluation.

Most Common Investment Terminology - Terms

Below is a list of twenty five of the most common investment terminology and tools, as well as their basic definitions. Make sure you take the time to learn all of these terms; if you plan on get involved with investing you'll hear them daily.

Assets - Resources owned by a company, fund, or individual; i.e. cash, investments, money due, materials, inventories, etc.

Bear Market - A market in which prices are falling, or expected to do so.

Bond - A debt security issued by corporations, governments, or their agencies, in return for cash from lenders and investors. A bond holder is a creditor, not a shareholder.

Bull Market - A market in which prices are rising, or expected to do so.

Commodity - A tradeable item that can generally be further processed and sold; i.e. metals, wheat, coal, etc.

Compound Interest - Interest which is calculated on both the principal and interest previously earned.

Dividend - The amount of a corporation's after-tax earnings that it pays to its shareholders.

Dow Jones Index - A leading index of U.S. stock market prices.

Financial Analyst - A person trained to advise on the risk and return characteristics of investments and in the management of investment portfolios.

Index - A numerical measure of price movement in financial markets.

Investment - An asset acquired for the purpose of producing income and/or capital gains.

Liquidity - The ability of an investment to be easily converted into cash with little- to no loss of capital and a minimum of delay.

Market - A public place where buyers and sellers conduct transactions, either directly or via intermediaries.

National Association of Securities Dealers Automated Quotations (NASDAQ) - The New York based U.S. stock exchange that specializes in technology companies.

Option - An agreement that conveys the right, but not the obligation, to the holder to buy or sell a particular security at a stipulated price within a stated period of time.

Portfolio - An investor's collection of investment holdings, usually with reference to its composition.

Prospectus - A legal document, required by the Securities Act of 1933, setting forth the complete history and current status of a security or fund; it must be made available whenever an offer to sell is made to the public.

Return - The amount of money received annually from an investment, usually expressed as a percentage.

Risk - The measurable likelihood of loss or less-than-expected returns.

Securities and Exchange Commission (SEC) - The U.S. regulatory authority for the securities industry.

Security - The paper right to a tradeable asset.

Simple Interest - Interest that is paid on the initial investment alone.

Stock - An instrument that signifies an ownership position (equity) in a corporation.

Trend - The current general direction of movement security or commodity prices.

Volatility - The extent of fluctuation in share price, interest rates, etc. The higher the volatility, the less certain an investor is of return; therefore, volatility is one measure of risk.

Buy, Hold, or Sell?

The markets continue to be tumultuous and we're seeing the markets re-test the lows that were reached in August. Since October 29th, the S&P 500 is down 8.5%, the Russell 2000 is down 10.7% and the emerging markets are down over 15%. Even energy stocks are getting hit hard. Should you be selling stocks, gritting your teeth and hanging on or be stepping up to the plate and buying?

To answer that question, you can't just look at the headlines or your account value and decide whether or not action should be taken. The market headlines are based on averages. Movements of the bigger companies in the averages can easily skew the performance. The financials have been getting hammered lately and financials make up a large part of the S&P 500.

Of course, that doesn't mean that other stocks are immune. Investors (and traders) can panic when they see the decline of the averages and they sell everything. And sell they have.

The decision to buy, sell or hold shouldn't be based on the overall market. It shouldn't be based on fear or greed. I believe we need to look at individual holdings to determine which action we should take.

I don't know of anyone who has stopped using their telephone or internet based on the recent decline in the market. You'll continue to use it and you'll continue to pay your phone bill month after month. That's money the telephone companies can use to grow their businesses and to pay dividends. Rural telephone companies also receive subsidies from the U.S. Government. This represents a very stable cash flow.

To say that differently, a rural telephone company's ability to pay their dividend usually isn't affected by the economic cycle. That's one reason I regularly use them in my clients' portfolios.

That hasn't prevented a sell-off of these rural telephone carriers of late. Those buying these stable companies now are handsomely rewarded by higher dividend yield (many now in the 6-10% range).

The underlying businesses of these companies haven't changed. Their ability to pay and increase their dividends hasn't changed. So it's hard to justify selling them now. It's quite easy to build the case for buying them.

Another group of securities that haven't been fairing well lately is the closed-end bond funds. Typically, bond funds do well when the stock market is falling and interest rates are going down. Credit-related panic selling, though, has driven the price some quality shares down 8-10%. Will the credit crunch adversely affect these holdings?

I don't think it will. There are closed-end funds with attractive portfolios of bonds that can be purchased for less than the underlying costs of the bonds themselves. For instance, a sovereign government fund isn't going to be adversely affected by the sub-prime mortgage situation, yet these shares have been sold-off just like everything else. But they continue to pay their dividends and have yields over 6%.

With the 10-year U.S. Treasury now yielding less than 4%, these are very attractive yields. As market fears subside, investors looking for a higher level of income will once again recognize these securities and move money back into them. That should bring a recovery in their share prices. In the meantime, we continue to earn over double the 10-year Treasury note.

In short, if we just look at the headline numbers of the major stock market averages, it's easy to come to the conclusion that we should get fearful, sell off stocks and move a large part of the portfolio to cash. When you dig below the headlines and do some research you see that there are high-quality, defensive companies that make sense to continue to hold and to buy more.

I've just highlighted a few examples. The market downturn, in my opinion, has also created some attractive opportunities in growth-oriented companies. In particular, I like companies that are part of longer-term global trends. For instance, global growth and the need for alternative energy have spurred tremendous demand in several industries. Those stocks are now very attractive.

The key is to not run with the herd. When everyone is rushing for the exits, those brave enough to stay behind can pick up some real bargains. I believe that now is one of those times.

History Of The Stock Market

While some historians believe that the roots of the modern stock market go back as far as 11th century Egypt, most focus their study on European markets in the 12th - 14th centuries. From the first debt brokers in France through the commodity and government security traders of Italy, various models of investment trading flourished. It was the Dutch who first started joint stock companies, allowing shareholders to invest in exchange for a share of the profits. This culminated with the first offering of shares on the Amsterdam Stock Exchange in 1602.

American Stock Markets

Alexander Hamilton, first US Secretary of the Treasury, facilitated the development of the American stock market. After studying British exchanges, he promoted security trading in New York in the government's formative years. The corner of Wall Street & Broad Street in what was then the US capital city was the center of trading which quickly expanded from government securities to stocks.

In 1792 the New York Stock Exchange (NYSE) began with an agreement of 24 men to sell shares in companies, charging commissions to outsiders in order to trade on their behalf. In 1817, the New York Stock & Exchange Board was organized, moving into a building at 40 Wall Street. NYSE is the world's largest exchange, trading $7.3 trillion in 1998 and has been in near continuous operation since its inception.

During the Industrial Revolution of the 1900s, investors wanted a way to trade shares of companies not included in the NYSE. These stocks ended up traded outdoors and coined the name "curb trading." In 1842 the New York Curb Exchange was founded to formalize trading of curb stocks. This eventually became the American Stock Exchange (AMEX). They remained outdoors, where the shouting of brokers reached such levels that a system of hand signals had to be developed to allow facilitate trading. Even after the move indoors in 1921, the hand signals remained in use for several decades.

Stock Market Crashes

Certainly the most famous American stock market crash came in 1929. While known as "the Crash of '29," the collapse was a series of crashes that began on Black Thursday (October 24th) with a significant drop and peaked on Black Tuesday (October 29th) with the disastrous crash that led to widespread panic and a collapse that lasted a month. In one week, the market lost $30 billion in value, tens times more than the annual budget of the US.

More recently, the Black Monday Crash of October 1987 saw the largest one-day percentage decline in stock market history. In 2001, another large decline occurred when the markets reopened on September 17th (the first day of trading after the September 11th terrorist attacks).

Stock Markets in the Computer Age

In 1971, NASDAQ became the world's first electronic stock market. Originally a simple computer bulletin board system, it grew to include trade and volume reporting and automated trading systems. After the 1987 Black Monday crash, when many brokers refused to answer their phones, the Small Order Execution System (SOES) was created to provide electronic submission of trades.

In 1992 NASDAQ formed the first intercontinental securities market, linking with the London Stock Exchange. Then in 1998, it merged with the American Stock Exchange to become the NASDAQ-Amex Market Group. By the early 21st century, it was largest electronic stock market in the US in share volume as well as dollar value.

With the advent of personal computing combined with electronic markets such as NASDAQ, trading has evolved from the physical transaction of brokers yelling on street corners. Both NYSE and NASDAQ began allowing after-hours trading in 1999. Day trading developed as technology created opportunities for numerous computer trades to occur in a single day with large cumulative gains and losses.

Computers also allow for trading across international markets and for the performance of markets in one country to significantly affect those in others. Additionally, online trading software and the availability of market research online, provides opportunities for investors to take increasing control of their portfolios and stock activities.