Exchange Traded Funds have been so successful that the big financial groups are now getting interested. Deutsche Bank has opened up a range of ETFs on the DAX, and even the big mutuals are starting to try operating ETFs to provide more market exposure for themselves. This is partly because ETFs have become so popular that they’re pulling investment capital away from the traditional investment platforms. For SMSF investors, they’re gold.

ETFs deserve to be called “derivatives” in a sense few other financial products can claim. They’re based on hard equity values, to start with. They are literally derived from holdings, not variable earnings. That puts them several classes above other so-called investment vehicles, which are more like skateboards than any sort of “vehicle”. The lucky investors in the derivative junkyard skate along on nominal values until they have to come off.

ETFs have prospered because the equity and financial markets have outgrown the old investment products. They’re far more flexible than their 19^th century- based competitors, and they can target investment areas far more effectively. The average mutual or unit trust tends to be a generic product, with “growth” and other characteristics used as definitions of the nature of the investment. With ETFs you can invest across whole indices and classes of equity, quickly and efficiently, and trade them much more effectively.

There’s also a “class” factor in the ETFs. These are professionally managed funds, and the value of that was shown in the big 2008 crash. Some of the high unit value ETFs took a pounding, naturally, and weren’t helped much by the fact that the sudden loss of capital in the market reduced the high capital flow they needed. The lower unit value ETFs, however, were less affected as a group, and became day trader fodder, which was an interesting phenomenon in itself, because these traders are naturally very margin conscious.

Investors haven’t needed to hear much more than that to jump ship from the markets and head to more remunerative territory. That process has both identified a market for the major leaguers and left them with a problem: How to attract ETF investors?

Deutsche Bank is probably the best example of how the heavyweights are approaching the issue. The bank has had the good sense to use its name as a selling point, and being one of the world’s top banks isn’t exactly a turnoff for investors. The only real market resistance is coming from the fact that other ETFs are good investments. This is a highly competitive market, and getting investments away from the original ETF managers like Vanguard isn’t that easy.

If you’re doing DIY superannuation, you’ll be well aware of the spectacularly uninteresting options for investment available. Equity investments which produce demonstrated reliable ROI are thin on the ground, and those doing better than cash rates are comparatively rare.

Consider:

• ETFs are very easy to buy and sell.
• They don’t have the bells and whistles of mutuals, when you need to move money.
• They pay dividends, and do splits like stocks.

Check your options, because they may be exactly what you’re looking for.

The real derivatives- Exchange Traded Funds attract the financial heavyweights is a post from: Stock Market For Beginners

For anyone new to investment, it is vital to understand the basics of managed funds, their rationale, and what they bring to the investor.

A Range of Money Managers and a Range of Objectives

Managed funds give the investor an opportunity to participate in the growth of the economy. This participation can be spread over a range of assets, such as shares, property, commodities and bonds, or can be concentrated in just one of these assets, or possibly another asset. As this range of assets, or more specific asset performs, so too does the managed fund. There are many money managers out there. Some may focus on trying to outperform a certain stock market index, or possibly focus on a specific attractive sector (for example, emerging markets). Performances and objectives regarding timeframe will therefore vary.

Investment Over a Broad Range of Securities and/or Assets

As mentioned above, many managed funds will invest in a range of assets. For novice investors, such a fund is the safer option if starting out and looking for more general investment exposure. Your funds are essentially divided up across all these assets. To gain such a broad exposure by yourself would be very difficult, and one would end up spending huge amounts in brokerage! A dedicated fund manager, by managing large amounts of money for many investors, can therefore reduce these investment costs, by spreading them across all investors.

Commissions – Active and Passive Funds

A commission is what you pay a fund manager, for managing your money. In general, these may range from around one to a few percent. Naturally, a fund that just replicates an index (for example the ASX100) should charge less than a fund which requires the manager’s expertise and more active management of the fund. Some funds may also pay additional commissions should the fund outperform a given index, or other asset that is easily able to be valued. It’s worth comparing a few similar funds to see whether the performance of the fund justifies the commission being charged.

Returns Linked to Those of the Economy

Our financial system is based on the pursuit of economic growth. The profit motive spurs companies on to continually develop better products, more efficiently than before. The beauty of managed funds is the broad based opportunity they afford investors to participate in this economic system. As companies in general grow, and increase in profitability, so too should managed funds investing in such companies.

Liquidity and Valuation

As managed funds are made up of a number of underlying assets which are continually changing in value, periodic collation of the value of all these assets is required. Your fund manager will do this, leading to a “unit price”, which they will publish periodically. You can then compare this unit price against the unit price at the time you invested, to see how your investment is faring.

If you are not happy with your fund’s performance, or your investment outlook has changed, selling out, or switching between funds is fairly easy. Please note that there may be exit fees, so beware of chopping and changing too much, as this may end up being a drag on your overall returns.

Managed funds revolve around share trading by professionals, in order to allocate your funds to appropriate investments.

Managed Fund Basics – How They Operate and Why They Work is a post from: Stock Market For Beginners

The three-month saga that is the Gulf oil spill isn’t as bad now, but it’s not close to being over. Once BP stopped the flow of oil into the Gulf, some investors showed a bit of optimism by buying shares of the company on both the FTSE and NYSE. However, it’s not all roses from here.

On Tuesday, shares of BP closed at 387.45 on the FTSE and 35.56 on the NYSE—both down very slightly, but still well off their 52-week highs of 658.20 and 62.38 respectively.

While the desire to get in at the bottom might be propelling some investors to buy shares of BP, there’s still a lot of trouble on the horizon and the company’s stock on both exchanges has the potential for more downside.

CNN Money reported today that the fines by  the U.S. government could be fairly steep. In fact, those fines alone could soak up all of the $20 billion fund BP had set aside for compensation to disaster victims. A Justice Department spokeswoman said that BP could be responsible for paying a fine of up to $4,300 per barrel of oil released into the Gulf.

Just how many barrels were leaked into the Gulf? Estimates have ranged around 60,000 barrels per day. Could it be much higher? One can’t take any comfort in that figure, because of how shaky these estimates have been. First it was 1,000, then 10,000 then 35,000 and finally 60,000. Could BP be fined on 100,000 barrels per day?

The political climate in the U.S. is one that demands the heaviest fine possible. The government is in a position where it must make a strong statement to the American people that BP will suffer. After all, many were calling for criminal prosecution of BP executives.

Today, U.S. President Barack Obama met with British Prime Minister David Cameron and BP was the hot topic. Cameron understands the anger of the BP incident and is working on smoothing relations.

And what about looming court cases? While BP has the $20 billion fund setup to compensate Gulf victims, it may need to raise more capital by the time all of this is over. Perhaps in a preemptive move, BP is selling some more assets. Reuters reported today that BP will raise about $1.7 billion by selling assets to Vietnam and Pakistan.

As of now, BP has spent close to $4 billion cleaning up the spill. Perhaps the most telling statement about upcoming BP financial issues is one from Obama’s administration, which said there isn’t a cap on BP’s liabilities.

While BP stock might seem tempting, seeing as it’s down heavily off its highs, buying the stock is speculative at best. Some analysts are getting gutsy by forecasting that BP’s decline is about over, while most others are advising to stay far away from the stock.

BP Problems Not Capped Yet is a post from: Stock Market For Beginners

Since the beginning of 2010, the euro has been in a virtual free fall against the dollar. From the FT to Bloomberg, analysts have forecasted the euro’s eventual parity with the dollar. But are these predictions unfounded?

Just over a month ago, the euro declined to under 1.1900 against the dollar and the market seemed ready to declare parity as the next stop. However, since then the euro has bounced back over 1.2700 on bad news in the USA and perhaps a bit of optimism. While there are still serious issues in both the EU and USA, could the recent bounce off the 1.1900 level signal a stopping point for the decline? It’s very possible, at least for now.

Is the Greece sovereign debt issue as bad as feared? What’s interesting is that Greece only accounts for about 2% of the total GDP of the European Union. What if it fell off the map? Would it really have as devastating of an effect as many currency traders believe?  One solution is for Greece to leave the EU and come back, but use their own currency.

However, Greece recently had a successful bond auction, which is fueling optimism for the moment. Correct or not, it seems investors aren’t too concerned about Greece collapsing within the next 26 weeks. And during periods that lack economic reports, any news can have a significant impact.

Recently, the UK has began austerity measures and Germany (roughly 20% of EU GPD) is looking very strong. In fact, the top three economies of the EU—Germany, France and the UK—that account for about 50% of total EU GDP are anchoring the ship.

So how should you trade? Some analysts believe the EUR/USD will stay just below 1.3000 for another month or two before resuming its overall bear trend toward 1.2000 or even parity. The currency is in a bit of a range right now and could go either way. A move above the huge psychological level of 1.3000 could signal a bull run upward. And a solid close under the 1.2400 level could signal the return of continued downward movement.

Perhaps the bigger issue is the weakness of the dollar, which has suddenly pulled back from months of gains. It’s weaker against most major currencies right now. The Swiss National Bank ended its campaign of strong intervention and since then the USD/CHF has plummeted from dancing around 1.1700 to the 1.0550 level currently. And the dollar has been falling against the yen.

Will the news out of the USA get better? It sure doesn’t seem so. On Wednesday, month over month core retail sales numbers will be out. The market is looking for a -0.1% number, which is a 1% improvement over the last report, but still negative.

Additionally, the FOMC meeting minutes will be released in the evening. And Thursday will be power-packed with news out the USA, including the PPI month over month and unemployment claims.

If analysts are indeed correct, look for the euro to remain around its current level for at least July and perhaps into September, before fading against the dollar later in the year.

Analyst’s Talk of Euro’s Demise Could Miss the Mark is a post from: Stock Market For Beginners

Developing a plan of attack, executing a buy transaction for a particular currency pair, and then following market signals during the course of a trade are all simple enough tasks for the average forex trader to learn and perfect.  However, when it comes time to sell, even for the seasoned trader, there seems to be a nagging little voice in the shadows of the mind urging you to hold on for just a little longer.  Intuition can be a savior at times, but not if the programming has been dysfunctional.  The question remains, “Why is it so difficult to sell?”

The nascent field of investment psychology has actually gleaned a great deal of information from a variety of experiments conducted over the past decade.  Clearly, the difficulties a trader faces when it comes time to exit a position are comprised of both external influences and internal drives and motives.  We tend to be victims of social imprinting and our negative emotions.  In order to survive and thrive in a stressful forex trading environment, we must develop coping behaviors to avoid the potholes our minds have created for us.

From an external perspective, the act of buying is an affirmative and positive statement.  It is surrounded with hope and the possibility of good things to come.  Selling then becomes identified with the opposite end of the spectrum.  It represents stopping or saying no, and we will go to great lengths to avoid being branded a negative person.  While buying is imbued with hope, selling, usually done under stressful circumstances, is conducted with palpable fear that we are making a mistake.  The sad fact is that we remember our losses more than our gains.  When haunting memories of judgment errors persist of when we fell victim to selling out of fear or lack of resolve, we tend to succumb to natural inertia and resist any attempt to pull the sell trigger, no matter what the currency charts are signaling.

Selling is also associated with closure, which, more often than not in our lives, has been a painful experience.  There is a profound finality to closure, coupled with a feeling of sadness and regret that we could have done better.  Part of this is rooted in the desire for perfectionism, an increasingly pervasive cultural force in our electronic age.  Our workplace demands perfection.  Failure leads to dismissal.  Selling invites failure and inspires us to flee from the possibility of self-humiliation.  An aversion to admitting failure is not healthy for our mental psyches.  Denial is also a wonderfully handy, although ultimately dysfunctional, protector of the ego.  Denial leads to rationalization, which then results in procrastination, another deeply rooted psychological behavior.  Refraining from selling has now become a defiant act of a powerless and emasculated ego.

Is there a simple cure for the ingrained and self-destructive behaviors that inhibit our ability to be effective sellers?  Self-discipline is the key and must be developed through practice and repetition.  Professional golfers have learned this lesson well.  When under severe competitive pressure, particularly when putting in a golf tournament, a golfer reverts to a routine that he has practiced for endless hours to perfect.  He may take two practice strokes, reset his position, look at the hole one last time, and then putt.  His personalized routine is a way to remove his emotions or any external distractions from affecting his execution.  You, too, can develop a personalized “selling routine”.  Document the steps in your process, consciously follow the process in practice, and over time, it will become ingrained and easily executable.  Another “mental trick” worth trying is to ask yourself if you would invest more of your precious cash at the point where you should be exiting the position.  This evaluation is a harsh but valid discipline.

Developing appropriate coping behaviors take time and practice.  Perhaps your lack of resolve at selling could be handled best by changing your entire trading modality.  A very popular forex alternative these days is signal-based auto-trading.  These “hybrids” of managed accounts and auto-trading are offered by firms that audit the trades of traders all over the world, and then publish the results of their trading strategies for you to choose from.  You review and choose, and then convert the trading signals of your choice to real-time trades in your own account.  Your forex experience then “mirrors” the often successful and more experienced trading patterns of global experts, thereby eliminating any selling anxiety on your part altogether.

We should never lose sight that our ultimate goal is to increase our overall cash position.  Forex trade positions are only “temporary depositories” that must be converted to cash.  If the act of conversion, selling in our case, is becoming too difficult to handle, then self-examination is in order.  If self-discipline training does not do the trick, then other forex alternatives may be your best plan of attack.

TRADING PSYCHOLOGY: WHY IS IT SO DIFFICULT TO SELL? is a post from: Stock Market For Beginners

After having exited recession only recently, the UK is now ‘on the road to recovery’ – a different story entirely to the one in the US, where the recession ‘unofficially’ ended in the third quarter of last year.

So, with both economies returning to growth, it’s time to take a look back and pick out what actually happened… was the recession in the UK that different to the recession in the US?

Well, to start off with, the US was only in recession for four consecutive quarters (12 months) – which is better than Britain, which remained in recession for a further two consecutive quarters (so 18 months in total), meaning the UK economy was the last major economy to come out of recession (behind Japan, China, France and Germany).

It all started for the US economy when economic growth fell by 0.3% during the third quarter of 2008 – after increasing by 2.8% during the previous three-month period. While for the UK, the economic heartache began when gross domestic product (GDP) fell by 1.5% during the final quarter of 2008. 

Fast forward several quarters of economic uncertainty, and…

In the third quarter of 2009, the US economy posted a better-than-expected annualized growth rate of 3.5% – marking the first positive quarter since Q2 2008. Meanwhile, in the final quarter of 2009, the UK economy posted a weaker-than-expected growth of 0.1% – barely making it out of recession.

Despite the weak economic growth in the UK, Chancellor of the Exchequer Alistair Darling said he was confident that the UK is now “on a path to recovery”.

Over the course of 2009, residents of both countries felt the effects of the recession. In the UK, for example, the number of people declared insolvent reached an eye-watering 134,142 – this was made up of 74,670 bankruptcies, 47,641 IVAs (Individual Voluntary Arrangements)* and 11,831 DROs (Debt Relief Orders)**. While in the US, up until the 30^th September 2009, there were 1,402,816 filings for bankruptcy – this figure included 989,227 chapter 7 filings, 14,745 chapter 11 filings, 487 chapter 12 filings and 398,210 chapter 13 filings.

*An IVA is an alternative to bankruptcy, offering borrowers the chance to clear unmanageable unsecured debts in five years, and have the debt they can’t afford to repay written off.

** A DRO is also an alternative to bankruptcy, and was introduced on April 6^th 2009. It is designed to help people who have very few assets and debts of less than £15,000.

So, now both economies are ‘officially’ out of recession, can we expect things to stay this way?

Although it is hard to predict what may lie ahead for both economies, many experts are expecting a slow recovery from the two countries. This isn’t to say that they won’t dip back into recession though, which is always a possibility when economic growth, particularly in the UK, has been so weak

The recession of 2008/2009 – was it different in the UK than in the US? is a post from: Stock Market For Beginners

Now you can trade the UK100 index daily using intuition (your own feel for the market). Here, you can use an information service that is flexible, as it gives you the option to use the instructions available, or use the numbers predicted for you in your own style, and apply them as you want. The service aims to make it easier to trade the UK100 index, as it can be tailored to your style as you come accustom to the framework and/or numbers available.

The information service available, allows for timing trades with precision. You can follow and go with the trend of the day or trade opposite the market consensus. The choice is yours; you can make it happen for yourself.

The information available, gives you an idea of where the UK index should close.

Basically, the market revolves around the numbers given, which in turn, make it easier to understand the direction the index price is going, into the close. Whether the market is about to go up or down we aim to give the best bargain, to enable you to apply strategies for day trading and maximize profit potential. While minimizing loss, if any.

The service is updated daily, and ready to use to trade the market according to how you see it, the difference being that users don’t need to take the hassle of calculating index numbers, rather the daily highs and lows are calculated and ready, on demand. It is designed to be used by all interested in trading, including for beginners.

Stock Market Bargains, Trade The UK100 Index is a post from: Stock Market For Beginners

Broker Views On Stock Market Fri 12 March 2010 is a post from: Stock Market For Beginners

Broker Views 18 Jan 2010, Recommended Shares To Buy is a post from: Stock Market For Beginners

I’ve recently found out that Alex Reid is being paid £175,000 to appear on Celebrity Big Brother 2010.  Is this guy really a celebrity for being Jordans boyfriend ?

Dane Bowers who used to date Katie Price is only being paid £35,000.  It seems the more your pictures are splatted about in the media the more you get paid for reality TV shows.

Vinnie Joes is being paid £350,000 to appear on the show, not bad for 3 weeks sitting in a house aye ?  Some of the other contestants dont agree with him being paid that much.  He has apparantly starred in over 50 films, yet i can only think of around 3 films he has been in.

Rapper Lady Sovereign is also being paid £35,000 to appear.  In 2007 it was reported that she had a break down live at a gig in the US at one of her shows.  She was signed to Jay-Z record label Def Jam and recorded 1 albulm which didn’t do too well.

Stephen Baldwin is being paid £150,000 while Ronnie Woods ex girlfriend Ekaterina Ivanova is getting paid £75k and also singer Basshunter and Heidi Fleiss.  Actress Stephanie Beachem who starred in Dynasty is being paid £100k

Page 3 model Nicola T is being paid £50k.  After seeing her on screen she comes accross really terrible especially with that voice and she acts very childish.

Alex Reid From Celebrity Big Brother Gets £175k To Appear On Show is a post from: Stock Market For Beginners