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  • Israeli UBQ Is Going To Save The Planet

    Israeli UBQ Is Going To Save The Planet

    3 min read

    Israeli UBQ Is Going To Save The Planet

     

    You have already been reading about socially responsible investing. Traders-paradise, also, wrote about it, you can find it if you join our Investing course. 

    Socially responsible investing, you can find under the names: social investment, also as sustainable, socially conscious, “green” or ethical investing.

    It is an investment strategy which tries to view both financial return and social or environmental good. That means to produce a positive change in both fields.

    Socially responsible investors have different aims for their investments. But one thing is crucial, they always examine moral, human, environmental and governance standards as well as a financial return.

    They are focused on companies which manage a business that have a socially positive impact.

    They may venture investments, that will provide important social or environmental goods. To this corpus goes community development loan funds or portfolios with cleantech.

    We found some interesting story in Jerusalem Post. It is all about socially responsible investing. 

    Despite growing attempts to recycle rejected household goods, the final place where it ends is a non-regulated garbage dump. That may cause vast ecological problems. The methane and other very dangerous gases are delivered to the atmosphere. Yes, everyone is considered about it but there are not many companies that really take care of it.

    One of them is Israeli UBQ. 

    It is based in Kibbutz Tze’elim and founded last year. This company found the solution on how to convert the household garbage into “the thermoplastic material that can be used for commercial and industrial products instead of petroleum-based plastics.”, published in the Jerusalem Post. This fresh company already earned notable attention almost all over the world. 

    “We have created a new natural resource from the household waste that ends up in landfills, avoiding its decomposition into harmful gases, while replacing scarce and expensive plastic materials made from oil,” UBQ co-founder and chief executive Jack (Tato) Bigio told The Jerusalem Post. “That’s a blessing to the industry. Many companies in the last 10 to 20 years have emerged with solutions that turn out to flop in one way or another. Never again,” he added.

    What UBQ Materials exactly is doing?

    Israeli UBQ Is Going To Save The Planet

     

    “What UBQ is doing is taking all these valuable materials that are thrown away and bringing them back to life in an up-cycling way,” said Bigio. “We’re replacing a very expensive and scarce resource, and all of a sudden coming much closer to a truly circular economy. The value proposition is incredible.”

    And here is the proportion: creating one ton of UBQ is equal to the melting of 35 sqm. of Arctic iceberg, or the seizure of almost 550 trees over 10 years old. For every ton of UBQ Material used, up to 15tons of CO2eq is saved.

    Can you imagine?

    UBQ’s international advisory board

    The company’s scientific advisory board consists of Nobel Prize winner Prof. Roger Kornberg, nano-tech specialist Prof. Oded Shoseyov, patent practitioner Dr. Ilan Cohen, sustainability pioneer John Elkington, and here is also a former EU commissioner for climate action Connie Hedegaard.

    And how this innovative technology is connected to investment?

    “One of the first rules of sustainability is being cash-flow positive,” said UBQ chief sustainability officer Christopher Sveen. “If you want to change markets, you need to have an economic incentive. People will be incentivized by environmental propositions, but financial competitive nature accelerates the adoption cycles. We’re less expensive than plastics that come from oil.”

    The first investors in UBQ are Sabra Dipping Co. founder Yehuda Pearl and Ajover Group CEO Albert Douer. Douer already owns 16 plastic factories in eight countries.

    Why sustainable investments is so important?

    The importance of sustainable investments is growing. The proponents of a sustainable investment strategy claim that they generate outperformance.

    One thing is sure, the returns generated by socially responsible investing are bigger.

    Socially responsible companies treat their employees in a good manner, produce healthy products.

    In this type of business, investing is not just about getting a profit. It’s about raising of responsibility and sustainability.

    Traders-Paradise found on their website: “UBQ envisions a world where finite resources are infinitely reused. In this way, we aim to help rescue the planet.”

    The bottom line

    Socially responsible investing enables you to invest your money in the right place. 

    Invest in companies that are not going to destroy the environment. By investing in socially responsible businesses you’re keeping your plate clean and safe. Your food, your lives, your children’s lives depend on that. 

    Moreover, you will earn more. Recently, some academic research revealed a strong connection between ESG and financial performance. Just because a company is building a more positive impact, that does not mean they are producing a less return.  Research has suggested that socially responsible focused companies are more sustainable in the long-term.

    The statistic shows that 89% of investors in socially responsible companies claim these are meeting their return expectations. 

    If you want to become a socially responsible investor, you should do that with a robo advisor. There are other ways, of course, but this is the easiest one.

    Some of the most popular robo advisors have socially responsible investing tracks, focused on ESG (Environmental, Social and Governance). With as little as $50 investment you can start with a robo advisor focused completely on SRI.

  • UK Getting Ready to Trick or Treat the No-Deal Brexit

    UK Getting Ready to Trick or Treat the No-Deal Brexit

    2 min read

    UK Getting Ready to Trick or Treat the No-Deal Brexit

    by Gorica Gligorijevic

    After assuming the office of UK Prime Minister, Boris Johnson is pushing with preparations for eventual no-deal divorce from EU on October 31. The news caused a negative impact on the British pound.

    Some people would say that it was the writing on the wall, but actual writing in the Sunday Times brings confirmation that things are afoot. Things and plans which previous UK PM, Theresa May, not only avoided but actively suppressed and fought against. The UK is getting prepared for the potential no-deal Brexit.

    After a reshuffle of his Cabinet, in which Leavers have remained and Remainers have left, PM Johnson has appointed Michael Gove to mistrial position of the Chancellor of the Duchy of Lancaster and charged him with preparations for the no-deal exit from the EU. Gove has laid out his intentions in the op-ed in the Sunday Times July 28 edition. 

    “With a new prime minister, a new government, and a new clarity of mission, we will exit the EU on October 31st. No ifs. No buts. No more delay. Brexit is happening,” he wrote. With the leaders of EU determined to keep to their current approach to the Brexit, Gove is certain that “no-deal is a very real prospect” and that the UK government is now operating under such assumption.

    Chancellor of the Exchequer, Sajid Javid, in his op-ed in the Sunday Telegraph has announced additional funding in excess of £1 billion pounds, on top of the £4.2 promised by the previous PM after the 2016 Referendum. 

    “Yes, we want to leave with a good deal – one that abolishes the undemocratic backstop,” Javid wrote in The Sunday Telegraph. “That would be better for the UK, and better for the EU, and work is already underway to achieve this.”

    The British pound continues the slide

     

    The British pound continues the slide against the US dollar

     

    Despite this news, the British pound is taking the hit against the US dollar. Having fallen to the 1.2375 parity, lowest since April 2017, the pound has slid almost 17% against the USD.

    And despite all the sterling effort, the UK government might put in staving off the worst outcome of Brexit, the outlook for the pound is not promising. With the Office of Budget Responsibility fiscal stress test predicting a year-long recession after Brexit, the pound is looking to continue the slide.

    Downturn which may easily reach the 25% drop versus the dollar since 2016 Referendum, as predicted by the Bank of England in the worst-case scenario of no-deal Brexit.

    The GBP/USD pair erased more than 100 pips for the week. It is very possible to start this week with gaping lower.

     

    Support levels: 1.2375 1.2330 1.2290

    Resistance levels: 1.2420 1.2460 1.2505

  • The Best Time to Add Crypto Asset to Your Portfolio – BTC breaks $10,000

    The Best Time to Add Crypto Asset to Your Portfolio – BTC breaks $10,000

    The best time to add crypto in your portfolio
    A digital currency similar to bitcoin called crypto-asset could be a good pick to trade

    By Guy Avtalyon

    If you missed getting bitcoin, this is the best time to consider and add this crypto asset to your portfolio. This crypto asset has a  powerful recovery in 2019: Bitcoin.  We can see on the BTC charts and from the market, bitcoin is now one of the best assets since it recovered at $10,000 again in 2019. It happened last month and it looks like it will stay there or climb more. 

    Bitcoin grows approx 163% this year. Most importantly, this time the basics are different. 

    Can you see that frenetic fight among banks, technology, and financial companies? Everyone wants to develop the blockchain. 

    We already wrote about  Facebook, but there are more. Google, Square, Goldman Sacha are also the companies that invested in projects to provide a mass adoption of blockchain.

    Bitcoin’s new rally could be more powerful than ever. How is that possible? The crypto traders and investors already know what creating of own crypto may cause on the market. Twitter is on its way to include bitcoin and other cryptos into its payment, Square. It is the question of the moment. We will not wait so long to see that.

    Facebook announced its plans to introduce its own cryptocurrency, Libra. 

    Fidelity already offers to its traders to trade BTC. Amazon is very close to offering the same possibility but at the same time, they are developing their own crypt asset.

    Moreover, crypto asset-backed ETFs are preparing to enter the market. That will be a really new investment class.

    What is crypto-asset?

    It is a digital currency similar to bitcoin and based on blockchain technology. How things look now, it will enter a bull market. This new asset is getting strong popularity!

    This hype can be compared with the time of Internet adoption.

    In the beginning, it was treated as a fancy freak. Do you remember that time? Okay, someone can, but someone hadn’t been born in that time. The point is that the introduction of the Internet gave a chance to many companies to be created. For example, Google or Amazon, and many others came later. The mentioned companies are among the top market listed firms.

    And now, we are witnesses of the creation of the new crypto-assets based on blockchain technology.

    Maybe this is a chance for you to add crypto assets in your investment portfolio. Yes, the crypto market is volatile. But it is a chance for traders to make a profit.

    Bitcoin is a volatile investment, that the truth. From $20,000 in December 2017, it dropped at a bit above $3,500 next year. It was almost a $17,000 decrease. But this year Bitcoin is doing well. It recorded (and still do) steady climbing in value. Now it is traded around $10,000. Who didn’t sell bitcoin at $3,700 can make a nice profit now.

    How can you as ordinary investors get in on this the most profitable odds? How can you enter the crypto asset market?

    If this is an unknown field for you, you should find some guidance, you have to find some trusted expert to guide you through the market volatility to the possibilities.

    Why is this so important?

    Let’s say, you don’t have a lot of knowledge about crypto assets. So, how could you profit from them without that? You can find more than 2,000 assets in the market whose total value is about $250 billion.

    Which crypto asset to trade? How to pick?

    Wild value fluctuations happen and you may stay confused where to invest. Don’t worry, everything will be more clear very soon.

    The best part is that even the investors with most suspicious can see now that crypto is here to stay. It will not go anywhere or totally disappear. The technology behind digital assets is even more firm.

    Traders-Paradise wants to give a few examples of the crypto assets which you should buy.

    On the top is Bitcoin. BTC should be a central asset in your portfolio. If you still don’t hold it, it is the time to include this asset to generate really high profits because the prices will grow. So, the time to buy is NOW. 

    You have to pick the most future proof coin.  Some will tell you it is Binance Coin, issued by Binance exchange.  The price of BNB tokens will be a good test. Stay informed about it. 

    Some others will suggest it is NEO. It will finally expand to add other cryptos and fiat. It can be one of the most interesting and hopeful purchases. Or Stellar! The guarantee plus is a connection to IBM.  Further, Ethereum. You will never go wrong with Ethereum. And also, there are Litecoin, Dash, Ripple, Monero, Bitcoin cash, etc.

    Bottom line

    If they sound like investments you would like to have in your portfolio, what are you waiting for? 

    Never mind.

    You have to know that some of the biggest world companies are establishing blockchain. But the most important is that the number of companies is increasing. The power of crypto assets to make money is unquestionable. 

    Take your place on time.

     

  • Boost Earning Potential – How To Do It?

    Boost Earning Potential – How To Do It?

    Earning Potential - The Ways To Boost It
    How to boost your earning potential? Here are several ways how to do that.

    By Guy Avtalyon

    Yes, earning potential is the highest salary for some professions. Are you ready for that? How to reach it? Why they won’t pay me that? Am I an stupid idiot who doesn’t deserve it? I am dying on my job, why I don’t have the biggest salary? 

    S**t happens. 

    No, that is the wrong answer.

    The truth is that you don’t know how to boost your earning potential.

    Well, you are not stupid but you never have thought about salary in this way. Your earning potential scenario was something like this: When I finish school I’ll find a job, and after many years of hardworking, I’ll make some progress and become the part of the management and my bosses will pay me more. 

    Good scenario indeed. Do you have the biggest salary in your company or you are still struggling and you are living paycheck-to-paycheck? Are you waiting for the next payment? Do you have a second job? Part-time one? Another full-time engagement? 

    And are you waiting for the Friday eve to get drunk? 

    But your life doesn’t have to look like that. You deserve the better.

    You’re living paycheck-to-paycheck.

    Maybe, but just maybe, you have some savings. It is more likely that you are looking for ways to earn more. Do you want to boost your earnings? Of course, you want. I know that. So, where is the problem? 

    Oh, sorry! You know only one way to boost the earnings. There is the key. What if I tell you there are so many ways to do so? 

    Spending infinite hours every day in trying to survive isn’t the only way. 

    To be clear I am not one of the believers in the Law of Attraction. That’s BS.

    But I truly believe that if you want something, really want, nothing will stop you to achieve that.  

    Also, I know it isn’t enough. If you only have the wish and do nothing, nothing will happen.

    How to boost your earning potential?

    First of all, do you really know your real earning potential?

    I can bet the majority don’t know. You have to utilize your skills where they are valued most. 

    A Google search using the words “earning potential’ will give you plenty of opportunities and ways as a result. Some of them are very stupid and impossible to realize, trust me. 

    If you want to boost your earning potential the first thing you have to do is to figure out what is your skills. What is the field where you are the best, where you are feeling comfortable and have control of the major situations that can arise? Okay, you understand the point.  

    Let’s say you have a job. But the salary is the same almost all the time. Years and years with no progress. Can you be familiar with this? You are of my kind, honestly.

    Let me ask you something. 

    How to ask for a raise?

    Why not?

    It should be a normal thing. But you must have some arguments in your hands. As a must, you have to check how much others are paid for the same job in some other company and compare it with your case. When you find they are paid better, tell that to your boss and point to your advantage, how your work and engagement provide better results to the company. Tell your boss that you are outstanding in your field but underpaid. Well, you have to be reasonable and understand that the rise in your salary will not come overnight. Bosses and companies have their own financial plans. Show that you understand that because you really can. In most similar cases, the answer will be positive. 

    But to repeat, you must have arguments, the wish isn’t enough. Arguments mean that you are truly aware of your qualities. Moreover, you have them and you showed them numerous times. So, ask for a raise to boost your earning potential.

    If your boss disagrees with you, you have two other choices. One is to stay at your current job and wait for the other opportunity, and the other is to start finding a better-paid job in some other company. Sometimes big companies have internal job ads. Stay tuned, ask around and you will find something. A friend of mine is a high positioned manager thanks to an attitude like this.

    Explore new opportunities for earning potential

    Recently I read some surveys. Very interesting thing. That survey exposes that your salary may grow even 20% if you change your job. Changing a job is a great opportunity. Along with your salary raise, you will also have a chance to do what you do best.

    Switch your job!

    Yes, you might be more occupied but you will be paid better. The new job and new position will lead you to the promotion of your abilities. 

    Dear, you are just one step away to boost your earning potential. Do it!

    If nothing helps, start a side job. It can be anything from your own business to the stock market. There are so many ways to make money outside of your current job. 

    The most important is to step away from self-pity. There is no time for wallowing in sentiment. 

    This is the only life you have one and it has no repetition.

  • Tesla’s Claims Fall Short – Again

    Tesla’s Claims Fall Short – Again

    2 min read

    Tesla drops lawsuit against critic

    When ordered to produce evidence of alleged danger presented by a short-seller, Tesla withdraws its request for a court-ordered restraining order. Tesla’s claims fall short once again.

    Earlier this year Tesla has filed a request for a restraining order against a member of short-seller community TSLAQ known as “skabooshka”, real name Randeep Hothi, to the Alameda County Superior Court in Alameda County, California. In filing Tesla has claimed that Mr. Hothi has injured a security guard at Giga Factory in a hit-and-run incident, and also nearly caused a traffic accident while pursuing a test model of Model 3 during a test run on April 16. Upon being granted a temporary injunction by the court, Tesla was requested to provide audio and video recordings of those two incidents as evidence.

    Surprising turn-over

    But, in a surprise move the car producer has withdrawn request for the restraining order on July 19.

    In the letter to the court, Tesla’s lawyers have expressed the opinion that the request of the audio and video recordings of the incidents are an undue imposition on the privacy of their employees, stating that such materials contain personal and private conversations. They have expressed a belief that “restraining order against Mr. Hothi is necessary and appropriate to protect its employees at their workplace.” Further claiming that the company was forced to choose between employees’ safety and exposing their personal conversation to the public. Thus, the document states, the company has decided to pursue the safety of its employees “by other means”.

    And what those other means could be should make people worried, as the history of Tesla’s retaliation against its critics illustrates.

    Tesla’s claims fall short

    Shortly after the Reveal from The Center for Investigative Reporting has published a piece alleging that Tesla is under-reporting the work-related injuries, one of the CIR’s insiders have alleged retaliation. Said doctor alleged that a complaint to the relevant Medical Board was lodged against her, while also an anonymous call was placed to state’s Child Protection Service accusing her of negligence to her children and requesting that her kids be placed under the protective care of the state.

    But such false accusations look to be the modus operandi of Tesla when handling the critique.

    Tesla model 3

    Last year Ars Technica has published a story about the alleged attempt of a mass shooting at Giga Factory by a whistleblower Martin Tripp. At that time the Tesla representative has told Ars that they have received an anonymous call at Giga Factory by a male caller claiming that Mr. Tripp is “extremely volatile” and “heavily armed”. But according to the information provided to Mr. Tripp’s attorney and then to Ars the alleged call was made to Tesla’s call center in Las Vegas and then forwarded to Giga Factory’s head of security, Sean Gourthro. Gourthro then has texted to Story County Chief Deputy Tony Dosen that an anonymous female caller has alerted them that Mr. Tripp is en route to “shoot up Tesla”, per Story County Sheriff’s Office report. According to an in-depth investigation by Bloomberg, when police officers have tracked down Mr. Tripp they have discovered that he presents no danger for Tesla’s employees. 

    “He said he was terrified of Musk and suggested the billionaire might have called in the tip himself. A sheriff’s deputy attempted to cheer up Tripp and then called Tesla to tell the company that the threat, whoever had made it, was bogus.”

    Bottom line

    Since we wrote so many times that any news may have an influence on the stock price of some company, it will be interesting to make a comparison in stock price before and after incidents like this one. Do investors take care of how companies treat their employees? Is the company’s public outlook important for them? We will see. Today Tesla’s stock looks like this:

    Tesla stock target price: $890.00

    Current price: $255.68

    Stay tuned and follow the market

  • Stocks To Buy To The End Of The Year

    Stocks To Buy To The End Of The Year

    4 min read

    Stocks To Buy To The End Of The Year

    Would like to know where to invest in the second half of this year? What stocks to buy to the end of 2019? Yes, we know that the market circumstances are not so good. Uncertainty comes from trading war, this bull market has lasted almost eleven years and the matter of moment when the disturbing calculation will arise.

    What we, in Traders-Paradise, want is to offer you a closer insight into some stocks to buy to the end of this year.

    We have several suggestions about the stocks to buy to the end of 2019. We picked some that are paying a dividend, some utilities, but you will see. The main criteria were to find low-rates because these stocks are able to produce profits when rates climb.

    Dominion Energy (D)

    Yield: 4.7% 

    Revenues: $13.8 billion

    Market Cap: $62.1 billion 

    12-Month Range: $67.41-$79.47

    Why this company from Virginia, US? They have about 7,5 million clients, users of its electricity and natural gas. This company is one of the major producers and suppliers of energy in the US. 

    It has approximately $100 billion of assets.

    Its stock grows at approx 6% from the beginning of this year. Last year Dominion had cash dividend growth of 10% and it is up 10% this year. Domino reported first-quarter net operating income of $873 million which is less for 17,8% in comparison with last year. But, as we said billion times, everything may influence the revenue or stock price, in one word the market. This time it was unusually warm and sunny weather. That decreased this utility’s earnings by approximately $0.06 per share. But its stock is qualified at the 15%-20% rate. Don’t pay more than $85 for them.

    Citigroup (C)

    Stocks To Buy To The End Of The Year

    Yield: 2.8% 

    Revenues : $72.6 billion

    Market Cap: $161.2 billion 

    12-Month Range: $48.42-$75.24

    Some investors believe that this is the best time for the main banks. Citigroup is one of them but it is the sole bank that continues 30%  under its pre-financial crisis top market value. Its stock is much lower than the other three of the four main banks. The global big four are JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup.

    Citigroup improved and develop good relations with its clients, increase client support by digital developing, and has enough capital to invest in the franchise.  It is very possible the share buybacks can double Earnings Per Share which is a guarantee that share price can be doubled too. That sounds good. Buy up to $75.

    Amazon (AMZN)

    Yield: 1,21% 

    Revenues : $59.7 billion 

    Market Cap: $977,589 billion 

    12-Month Range: $1812,97-$1985.63

    Amazon reported earnings for the first fiscal quarter of this year: the revenue $59.7 billion, net income $3.6 billion, and earnings per share  $7.09. Its international sales increased 9% to $16.2 billion. That was much over analysts expectations. Amazon revealed second-quarter revenue direction in the range of $59.5 billion and $63.5 billion. Its current price is $1985.63 in July this year.

    Amazon Web Services is growing 41% in sales to $7.7 billion. It is about 13% of its total revenue. There is a possibility to raise more. Pay up to $1990,00, after that price it will raise more, above $2,000,00, so you could make a good return.

    Vici Properties (VICI)

    Stocks To Buy To The End Of The Year

    Yield: 5.2% Revenues: $893.7 million

    Market Cap: $10.0 billion

    12-Month Range: $17.64-$23.27

    Vici Properties is a spinoff from Caesars Entertainment Operating Co. Vici controls 22 gaming businesses over the U.S. Also, Vici holds almost 15,000 hotel rooms in Las Vegas, Lake Tahoe, and Atlantic City and 4 golf fields. There is also some land but undeveloped for now. The last ownership is great potential.

    Leasing revenue for the first quarter of this year, was $206.7 million, a 6.4% increment related to first-quarter 2018. Net income increased 34% to $150.8 million. Last year it was $112.1 million.

    Its adjusted funds from operations increased 21.6% to $151.5 million from 2018. Current price is $21.60. The yield is well-covered and Traders-Paradise expects future dividend hikes. Buy up to $22,00. The predictions are that the price could easily hit $ 23.804 to the end of the year.

    Kraft Heinz Company (KHC)

    Yield: 5.2% 

    Revenues: $26.3 billion

    Market Cap: $38.5 billion 

    12-Month Range: $26.96-$64.99

    Kraft Heinz is one of the largest packaged food companies in the world.

    The cheese (Kraft) and ketchup (Heinz), bring this company to the portfolio of over 200 brands internationally sale. Revenues remain stable (if not growing), backed by still-popular brands and products. Its profit margins generate important cash flow. It had some problems in the US market, but foreign effects were better.

    The $0.40 per share quarterly dividend is covered and provides a 5,2% yield. In order to stimulate its debt paydown, Kraft Heinz Company could cut the yield.

    KHC’s stock price could provide significant gains. Current price is $31,63. The target price is $45. Buy up to $42.

    Bottom line

    The trade wars, real wars, elementary catastrophes, all around the globe.

    So, it isn’t so hard to recognize possible risks that could turn over the bullish trend. It is possible for the long-interest rates to go higher even they went down from the beginning of this year.  

    What you have to follow in order to choose stocks to buy to the end of this year?

    The indicator of industrial production.

    It is usually presented as an index in volume terms. The annual difference is shown in percentage and reveals the change in the volume of industrial output in comparison with the prior year.

    Why is this matter?

    Annual variation in industrial production presents the status of the economy in one country. If you notice the decreasing in production of consumer durables and capital goods you can be sure that the economic downturn is here.

    The indicator of industrial production is a principal symbol of GDP growth. It is incredibly sensitive to consumer demand and interest rates.

  • Passive Investing is a Good Choice

    Passive Investing is a Good Choice

     

    Why Passive Investing is a Good Choice?
    Passive investing is the way to force your money to work for you.

    By Guy Avtalyon

    Passive investing has become a significant part of the market. Finally! The low-cost index funds or exchange-traded funds are popular. However, there are still a lot of investors who are trying to achieve an excellent return through active investing. The question is why they are doing that when passive investing provides a better alternative.

    What is passive investing?

    It is investing your assets in funds that mimic a market. The main task of fund managers is to purchase the security in the precise proportion of a particular index to copy it. It is a passive investment. Sometimes you will hear the term  “indexed investing.” It is the same.

    Let’s consider a bit more the act of active and passive investing strategies. Three years ago, the S&P500 had a total return of 9.54%. What did every passive investor make? Precisely 9.54%.  On the other hand, an active investor gained 12,5%, but the other made just a 1,9%, or some made losses of -27%.

    How is that possible?

    The passive portion returned 9.54% and the total market returned 9.54%.  But returns before the cost is not what should be counted. You should count what you actually earn. And what is that? The returns after cost and after-tax.

    So, where is the catch?

    Passive management is cheaper than active. Active management is more costly. If you know that the cost of managing an index fund is between 0,15% and 0,50% rely on the market replicates, you will find that an active investing will have a minimum of 1% higher costs than passive investing.

    That 1% is 100 basis points and may not sound a lot.

    But let’s consider the following situation.

    Let’s say you put your money in the bank account instead of buying stocks because you don’t want to pay that 1% of costs. You are short immediately 5-6%. Your wealth is worthless. Actually, if you invest that amount in stocks there is a chance to gain more. With putting money in the bank account you will lose 15-16% of your net profit from potential investments in the stock market. In only one year. Over time this difference could considerably decrease your wealth. It will surely lower your standard when retirement. 

    The costs of active investing are not only fees. The activity by nature adds more costs. The active trades create capital gains more often than passive investing. So, why wouldn’t you avoid them entirely? It is simple math. If you want active investing you would pay more. Just take into account the taxes and costs. 

    So, we have to say, index funds and passive investing can be a better option than actively managed funds. 

    Passive investing in index funds has changed the investment world.

    In 1975, Jack Bogle, the father of passive investing, introduced the index fund. His radical idea showed the financial sector regularly cheated the individual investor with the unknown and opposed fees.

    This doesn’t mean that everyone should be indexed. Of course not. Active managers’ choices hold prices closer to values. That allows indexing to operate. Index investing means to leverage their trade without paying the costs. The majority of investors decide to index part of their money, some do it with all of them. But the others want to explore the less-priced securities.

    Let’s consult the statistic, in 2017, the percentage of securities owned by passive fund portfolios was about 5% of the total in the global market. The biggest part it took in the US where it was 15 %.

    When it comes to investing, you can choose between active and passive investing.

    Picking the right is crucial to your investing profit. If you make a mistake, you can end up with money loss. With the right one, you are the winner and you can make a big success in the stock market.

    How to find the right passive investing opportunity?

    Passive management requires buying investments that track an underlying index or making asset allocation and holding to it for the long term.

    One form of passive investing is the mutual fund investment because the mutual fund’s purpose is to return what the S&P 500 returns every year. The advantages of passive investing are numerous.

    Passive funds don’t require you to make trades and adjust holdings daily. The management fees are much cheaper, which is a benefit in the long run. You will always get the same percentage as the market returns. Good or bad, but the same.

    Passive investing is easy. You just have to pick some investments and that’s all. There is no need to monitor the market every second and make changes or to try to catch price swings. But passive investing is not for investors who want to beat the market. Yes, you can do it from time to time, but all the time. So, probably, if you are not a professional you will make big losses.

    Passive investing is more than set up your portfolio and don’t touch it anymore. You have to monitor your portfolio and make corrections as the market moves. You have to rebalance.

    Say the stocks increase in price, bonds are falling. If you have a 60% stock and 40% bond in your portfolio, this price movement requires an adjustment to 70% stock and30% bond in the portfolio. In case you never make these changes in your portfolio you will take on too much or too little risk. You will not achieve your targets. So, some monitoring has to be done. In the first place, you have to think about your money. The money is not just a piece of paper. Having money means that you are free and safe.

    You have to force your money to work for you. Passive investing is for sure a good way.

     

  • Is the Usage of Robo Advisors a Good Choice?

    Is the Usage of Robo Advisors a Good Choice?

    3 min read

    Is the Usage of Robo Advisors a Good Choice?

    For many investors, robo advisors are the future. 

    That’s because the robo-advisers give an investment chance that grows in reputation and popularity.

    First of all, there is no need to have financial education if you want to use robo advisors. They are available online and all you have to do is to fill out a brief application regarding your investment intentions. An algorithm will take care of the rest.

    Moreover, they are not expensive, and you will have an all-in-one: a diversified portfolio with assets you want and according to your risk sensitivity.

    But still, you can find a lot of many robo-skeptics. The question is why? There is no reason. The robo advisors supported by advanced platforms, provide you many advantages, more than human advisors. As we said, they cost less and, moreover, you will pay fewer taxes.

    Robo advisors employ high-quality portfolios

    But let’s make a brief comparison between human and robotics. When you choose a human advisor, that person can advise you based on his/her experience and very individual knowledge which can be questionable sometimes. For example, you are new in the market and they can advise you a very complex portfolio by experts. And adjusted for different investor plans. But every investor is unique and you would like advice adjusted to your goals, your temperament, your personal aims. 

    A traditional investment manager will guide your investment to particular stocks and that could not be in your best interest. Also, you have to pay a substantial sum for that opportunity. Yes, you can find a fiduciary adviser, such will work in your best interest. 

    But all they can give you are portfolios backed by historical data of previous investment. Also, a human advisor has limited time for the clients and for the research.

    But robo-advisor will give you a high-quality portfolio made with someone like you in mind. For example, the best robo-adviser will use low-cost ETFs with a powerful experience.

    Robo advisor never trade based on emotions

    Is the Usage of Robo Advisors a Good Choice?

    Humans will follow their abilities and wish a risky investment. It may be successful but it might be a disaster. A human can not avoid emotions while investing. Are you able to recognize when the price of some asset is enough low to be worthy of buying? Or high enough to sell it and profit from it? Evry of these decisions are led by emotions. Very often they are guided by the emotion on what you like or not, what you suppose to happen.

    The computer doesn’t have emotions when making decisions for you. So, be honest, which is better for your money?

    Even beginners know that emotional investing can produce big losses. With robo advisors, you don’t have that problem. They will pick the best investment suitable for you. 

    Will robo advisor predict the market downturns? Some are able, we are preparing the advanced algorithm for you. In a few weeks, you will be able to test it.

    Yes, robo advisor will predict the turbulence in the market but it will suggest you hold your investment until the market recovers. As you already know, when the market is a downturn you should not sell in panic, it is the worst thing you can do. Robo advisor will never tell you to do that. Rather it will advise you to stay in your investment and wait for the price swing back up when the recovery comes.

    Robo-advisers use low-fee funds to build your portfolio and low-fees to handle it

    The fund’s that robots uses have fees from 0.10% to 0.23%.

    The majority of robo-advisers invest only in low-cost ETFs. That provides your portfolio with low fees and high liquidity.

    When a computer manages your investments, you will pay a lot fewer fees. Also, you can find fee-free robo-advisor that charge nothing for advising assistance.

    Instead of paying about 1% for a human advisor for managing your portfolio, the robot will charge you from 0,25% to 0,35%.

    Moreover, robo advisors provide automated tax-loss harvesting.

    A human can’t actually follow this action the way a processor can manage tax-loss harvesting. The best part is that for more extensive portfolios, robo-advisor can add up to notable tax savings.

    Robo-advisers and automated trading are the future of investing

    The high-quality providers grant you investments suitable to your individual requirements.

    Robo advisors perform notably better than human financial advisers. The added advantage, they will cost you less and your all-in costs are more economical with this automated investment option. 

    Don’t diminish this difference. It can be worth thousands to your portfolio.

    Think about it. Maybe this is the right time for you to get in this developing trend. We, in Traders-Paradise, truly believe that automated trading and robo advisors are the future of investing.

    So, don’t be too conservative and take your place here. It is time.

  • Who Controls The Libra

    Who Controls The Libra

     

    Who Controls The Libra currency
    Alexandria Ocasio-Cortez had a dispute with Facebook’s crypto boss, David Marcus.

    By Traders-Paradise Team

     

    The subject was about who controls the Libra currency

    Two days of US congressional hearings were quite enough for everyone to reveal what problems may arise with a new cryptocurrency named Libra. We are not sure it is crypto at all, by the way. 

    AOC asked Marcus about who are the members of the Libra Association and how did they selected, trough election or on some other way. He answered that they are not democratically elected instead governed by membership criteria.

    Ocasio-Cortez concluded that Libra is “a currency controlled by an undemocratically-selected coalition of largely massive corporations.”

    Alexandria Ocasio-Cortez centered on a commentary David Marcus, CEO of Calibra. He said he would trust all of his assets in Libra.

    “You said yesterday you would be comfortable taking 100 percent of your pay in Libra. In the history of this country, there is a term for being paid in a corporate-controlled currency,” and asked, “Do you know what that term is?”

    Marcus’ answer was negative.

    Who controls the Libra

    Ocasio-Cortez proceeded,

    “It’s called ‘scrip.’ Do you think there’s a risk in taking your pay this way?”

    There was no answer from Marcus again.

    What is ‘scrip’?

    Scrip is a replacement for the government-issued legal tender. Some companies practice this to pay their workers. It is possible to use scrip only at those companies’ shops. For example, recently Amazon gave to their top-employees “Swag Bucks” and they could make purchasings only Amazon-themed merchandise.

    This tactic is well-known from the past. It was used to pay miners in the faraway mining camps where the cash was rare. And, of course, the price in such stores are under the control of the company.

    So, TP may conclude the Libra is fake currency. But, who controls the Libra is still unknown.

    Business insider published a transcript of their conversation in the US House Financial Services Committee. 

    The full article you can read HERE

    The other AOC’s attack happened when she asked Marcus about who support Facebook’s Libra digital currency.

    He said that Libra will be supported by real financial assets, particularly pointed to the US dollar, the euro, and government securities.  To pacify the audience, Marcus has accentuated that Libra will be conducted by a consortium of organizations.

    “So we are discussing a currency controlled by an undemocratically selected coalition of largely massive corporations,” AOC concluded.

    We have to say that national currencies are under the competence of governments. Do Marcus claims and Facebook’s plans show their influence on broad of governments or they want to say that their Libra, even declared as digital money isn’t crypto in essence. 

    This aspect of Libra could become a stumbling rock for Facebook.

    Who will trust it? 

    About Traders-Paradise’s doubts, you can read HERE

    Jamie Dimon, The CEO of JP Morgan Chase, said that he thinks Facebook’s future cryptocurrency Libra will not have a short-term influence on the bank. 

    When asked about Facebook’s approach to the financial sector by creating its own cryptocurrency, he said: 

    “We’re going to be talking about Libra three years from now. I wouldn’t spend too much time on it. To put it in perspective, we’ve been talking about blockchain for seven years and very little has happened.”

    Anyway, JP Morgan has its own plans connected to crypto. They plan to employ JPM Coin, but internally in order to speed up transactions, as he said.  Is this script too? We’ll see.

     

  • Investing in Bonds – How to Start

    Investing in Bonds – How to Start

    Investing in Bonds
    Bonds as an investment are not free of risks. For many investors, the bonds market is still mysterious.

    By Guy Avtalyon

    Investing in bonds isn’t as easy as you might think. Anyway, read this post to its end and things will be more clear. 

    If you are OK with the lower return but with considerably fewer risk sounds as a good investment for you, it’s time to invest in bonds. Reducing risk is essentially what bonds will provide you.

    Bonds are securities. They are very similar to loans. They are issued by governments or companies. And you can buy them. Governments and companies issued them because they want to fund some new projects, to continue the realization of plans, or some other reasons can be on the scene. 

    The issuer gives periodic interest payments and compensates for the full investment at the end of a prearranged time frame. The bond ends “maturity” when the investor can expect the principal will be returned, plus all accumulated interest.

    How to start investing in bonds?

    It is not so simple

    You can’t simply purchase bonds and hope you have a low-risk investment. Bonds are complex instruments in comparison with stocks. There are some risks involved. For example, the bond can be less worth after some time if the interest rate rises. If the interest rate rises continuously until the maturity of the bond, the value of your bonds will be lower even worthless in some extreme situations. That is the interest-rate risk. 

    There is no bond protected from interest-rate risk. So it is likely to get a lot of risk with bonds. And it is not the case with low-grade bonds issued by the company with financial problems. The risk of investing in bonds may appear with high-grade bonds too because of interest-rate changes. 

    Bonds are assumed to be the firm and low-risk part of your portfolio, but the bond investing is still full of traps.

    Let’s find them!

    Are bonds risky?

    Bonds Market is still enigmatic.

    It’s hard to recognize are you aiming at a good price. Let’s say you want to buy individual bonds. You have to be sure you are not overpaying. If you buy stocks, your broker will charge a commission.

    But when you buy bonds, instead of a commission, you will pay an unrevealed margin on the cost of the bond.

    What is most important when investing in bonds?

    You have to reveal is the closing price you are paying for your bonds matches the price which other investors are giving for the same security. But even institutional investors with lots of money have the same problem: to identify pricing data. The reason is simple. Almost all bonds are traded over-the-counter not on some exchange.

    Bonds are rarely traded. Individual investors will hold bonds until they mature. So prices based on recent sales usually don’t even exist. They are changed or invisible. 

    High liquid Treasury bonds and notes are some other stories. Their prices are broadly announced. But this kind of market is the exemption to the rule.

    The issue price of a bond

    It depends on the relation between the interest rate that your bond pays and the market interest rate on the same date. 

    You have to determine the interest paid by the bond. For instance, a bond pays a 5% interest rate per year. That means on an amount of $1,000, the interest payment is $50.

    How to find the present value of the bond? Say the bond matures in five years, its present value factor is 0.74726, as taken from a table for the present value of 1 due in n periods, and based on the market interest rate of 6%.

    Investing in Bonds

     

    The present value of the bond is, therefore, $747.26.

    Now, calculate the present value of interest payments. The present value of an average annuity of 1 at 6% for five years is 4.212.

     

    When you multiply this factor by the annual interest payment of $50, you will come to a present value of $210.62 for the interest payments.

    Now, calculate the bond price. The result should be $957.88. That is the amount of the present value of the bond repayment at its maturity in five years, and the present value of the associated with future interest payments.

    You see, the price of the bond is lower than its face value. So we can say that the interest rate on the bond is below the market rate. Investors are therefore offering its price below. In order to reach an effective interest rate that equals the market rate. 

    Hence, if the result of this computation a higher price than the face value of the bond, then the interest rate on the bond would be more expensive than the market rate.

    So, we can easily conclude, as interest rates rise, current bond prices normally fall. But these modifications do not change all bonds fairly. It is a matter of duration. Duration regulates how a bond’s price will change in interest rates. Interest rates also affect the duration. The higher the interest rate, the lower the duration.