Posted tagged ‘investment’

IG Group in Healthy Profits

July 29, 2009

It is the hot new way to invest and is raking in the customers each month – financial spread betting.  The market leader for spread betting, forex trading and CFD platforms, IG Group, have reported healthy profits despite the recession.  Indeed, profits were up 30% to GBP 126 million. 

So why is this trade fashion so huge?  Spread betting firms report 2,000 new customers each month.  In fact, spread betting is attractive to investors and savers who are after a new way to make money.  Low interest rates, no commission – and it is cheap to get cracking.

Spread betting is also extremely exciting to those who have an appetite for a thrill – as markets rise and fall, profits can be large….and so can losses.  Make sure you take out a stop loss!

Futures traders are under a bit of negative attention in the USA, where regulatory watchdogs are trying to prove that Futures trading on the energy market has a direct effect on oil price spikes and dips.  In the UK, the FSA says there is no evidence to suggest speculation on the markets has a negative effect on the price of a barrel of oil and are not taking action. 

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Emerging Market Stock Funds Healthier than Ever

July 24, 2009

Improving sentiment in the state of the US export market is having a great effect on emerging markets.  Investors are pouring into the emerging market, and last week saw the best figures since mid June.

Nations such as China, Peru and Sri Lanka saw some of the best results in funds while the BRIC nations are showing growing signs of strength thanks to the slow recovery of established economies.

Emerging market equity funds drew around £1.6 billion last week alone and since the start of the year investors have been flowing around £20 billion into emerging market stock funds.

Traders Tricks to Stay on Top

July 8, 2009

How Not to Lose Money.  Or, How To Be a Successful Trader.  There are so many versions of this, so many books and articles written, all trying to give the best advice on how to be a good investment trader.  Many are merely trying to sell a product, others are telling first-hand stories of wins….and losses.

The truth is, there is no guaranteed way to make returns.  The only thing you can do is arm yourself with as many tools and as much knowledge as you can.  It may seem frustrating that there isn’t a sure-fire way to make big wins, but most traders will tell you stories of both sides of the scale, and many will say that the best thing to do overall is to:

– stay in control – only invest as much as you can afford to lose

– don’t get carried away by the ‘game’ – addiction is a real risk

do the research. This is the area that most will tell you is ultra important.  An educated trader can analyse the market and stands a better chance

– be proactive.  Don’t expect your broker or dealer to come up with the answers for you

– it is your money.  use it wisely!

– every trader risks losing all capital (plus additional funds)

– there are no guarantees

Keep some of these points in hand.  They are correlated from the advice-givers, from personal stories, from hard experience.  If you want to make money, you have to work at it – that seems to be a general view!

Oil Down….Again..

July 8, 2009

Oil prices have hit six-week lows and a barrel is now worth $62.30, down 63 cents.  Now, the question is: is there a general increase in caution in the trading community?  Is everyone worried about what is happening in the global recovery that we were all beginning to see?

Things are getting confusing again.  Ok, so let’s do a quick round-up:

  • Oil prices have risen steadily and (fairly) quickly since the start of 2009
  • The general mood of late has been of ‘bottoming out’ of the recession – things can only get better
  • Overall good news from industry sectors as demand and production increased
  • ‘Green shoots’ becomes the word du jour again
  • V-shaped is the shape of the recession, say analysts
  • Business sentiment is up in the UK and Europe

Things were definitely looking up, weren’t they?  But, now the USA as the world’s most powerful economy, has put a couple of spanners into the works – 1. the latest unemployment figures were worse than expected and 2. fresh fiscal stimulus is being speculated over

Over in the UK, the BoE is planning new asset purchasing and Alistair Darling is going to announce the new FSA guidelines for the financial sector – set to be much stricter.

So is there an overall “down” mood or is the recession more W than V?  Some are saying that the dip in oil price is merely a correction on the too-early recent rally.

Stick with risk or head to the havens?  That is the most important question for investors right now!  Commodity traders are reminding us that while oil is down, precious metals are remaining consistent!

Commodities Under Pressure

July 6, 2009

What’s in your portfolio?

And what are your thoughts on commodities?  According to a new survey there is still relatively low allocation for this form of investment.  This may surprise newcomers given the size and dominance of the oil market,  but indeed as an asset class commodities are low on the scale.

There are differing reasons for this, including the fact that it is relatively new as an investment tool for financial investors.  Up until around a decade ago, commodities were for producers and consumers.  Therefore, their benefits are still being tested and tried for diversification.

Some believe that the risk premium to commdotities is medium and not ideal.  But many institutions (including Deutsche Bank AG) are exploring the possibilities and even plan to launch new indices that can benefit even from anomalies.

Oil Price Jump on Tuesday was thanks to Rogue Trades?

July 3, 2009

We even reported the jump in oil prices on Tuesday.  We thought it was mainly down to the Nigerian militia attacks, and sure enough the situation in Nigeria is being linked to the push up in oil prices.  However….

…..it turns out that the sudden jump in the price of a barrel on Tuesday was mainly down to a man called Steve Perkins.  The man, who works (or should we say worked) at London oil broker PVM carried out a series of rogue trades which caused the oil price to jump sharply.

By the time the contracts (which were Futures) were sold, the price had fallen…meaning PVM lost a total of $10 million.  The incident is being investigated fully by the FSA.

What really makes this story intriguing is that Steve decided to make the trades at around 2AM London time.  At 2AM most people are fast asleep (well on average on a Tuesday) and trading is generally very thin.  Therefore, the system the company has in place to detect oddities was able to easily point back the trades, which all came from one source,  to him.

Oil Price Spikes

June 30, 2009

Oil prices are up again on a number of factors, including fears for supplies after Nigerian militia attacks.  Oil companies shut various fields in the region near the attacks causing oil and Futures traders to jump on the commodity.

So, the question remains – what exactly is the deal with oil?  The International Energy Agency are in their most recent report saying that demand is set to rise by a decreased percentage from the last report.  Then over in the US they are talking of a rise in fuel demand, and over in Iraq there are large tenders for oil and gas contracts happening live on TV!

At the start of this year, oil was down to just over $30 a barrel.  Slowly it rose, and ever more optimism has begun to spread over the price – forecasts being raised on what the price will be by the end of the year – $70?  $75?  Over $80?

When the price reached $69 at the start of the quarter already, the forecast really looked good.  If it was this high now, what would happen next?  Then it fell more than expected and suddenly we didn’t seem so sure.  Now it is back up to over $70.  But the likelhood that it will be hiked up to as much as last year is unlikely.

So what gives?  And what do we want?  A return to some kind of even steam is the best situation and it looks like there’s a possibility this could happen.

Oil basics.  Sometimes its good to get back to them in a market where there is so much speculation.

On the financial news front – Bernie Madoff got his 150 years.  That well and truly is the rest of his life behind bars – and just where said bars will be is not yet decided.  Some are speculating that he will be sent to a medium to high security jail, and not a nice easygoing camp for white collar criminals.  Either way, the saga that has gripped us for some time now has had its ending.  For the victims, it continues.