Market Cycles Vs Economical Cycles

The indices help the financial growth of listed companies; indices give us indications of future economic cycle. Therefore, the market operates in advance. In summary, the market cycle has a lead time of one or two quarters on the real economy. The graph above illustrates the gap between the economic cycle and the market cycle yellow blue. For long-term investors, it helps to have an idea of the sectors that beat the market during different periods.

In times of prosperity (middle-top bull), you have the total: robust growth, falling unemployment, rising wages, the credit facility. The technology sector, basic industry and capital goods will cost to investors.

 In times of crisis (early top-bear), we arrive at an inflection point. More money circulates with wage increases and low interest rates. Therefore, inflation appears like toothpaste out of its tube, which will cause a general decline in consumption. During this period, the non-cyclical sectors such as the food sector perform well. Finally, precious metals, energy and utilities benefit to the mortification of the purchasing power of households, inflationary effects.

In a recession or depression (early-late bear), households are deleveraging and they consume little, companies are restructuring according to demand and credit activity is scarce. So, we are in a vicious circle and despair reign. At stock, investors are in general, sector based discrimination favoring defensive sectors such as sustainable consumption and unsustainable and health.

 During recovery (late early bull-bear), returns for hope everything is done to break this impasse whatever means: growth is back, the activity is not shrinking consumption and restarts more beautiful. The sectors that will benefit from this new momentum are finance, health and consumer always.

 Hope this article will help you in enhancing your knowledge in the future your future stock market investments.

Want to be a millionaire?

Want to be a millionaire? Who is having his money well placed and with which, if he can easily ensure the financial independence, then he can become millionaire easily. Becoming a millionaire is not as hard as some people think and it does not necessarily to earn five or six digits to get there.

First and foremost one to be a millionaire is, you have to acquire a good financial education and build up some personal qualities such as interest, curiosity, perseverance, love to meet the challenge etc. Most of the millionaires have the excellent investing knowledge with action back up. Most of them read read read read..... a lot. Invest and Read books on personal finance that will make you to win thousand times of your profitable investment in books. The more you earn the more likely you will become a millionaire. However you should know the importance of spending less than you earn. Since you are in consumer society you should know the differentiate between your needs and your desires then only you can save more by eliminating unwanted expenses there by your savings will be more. Leading a simple life with fulfilling your only basic needs pave way for your millionaire dream. Never allow your bank account to dry. Minimize your debts and give first priority to repay them.

If you are to be a millionaire then you must work with your money. To achieve this every month you automatically convert minimum 10% of your income in to your savings. Preferably invest in shares of the growing companies that offer regular dividends that fill your pocket with passive interest. Diversify your investment strategies so that you will not be affected by the stock market fluctuations. Never forget to build a capital security to cope with the unexpected happenings. Finally keep it in mind; the millionaire has a plan and stick to it very firmly with a self disciplined manner. Unfortunately wealth in a quick time does not exist. With respect to your income you always open the opportunities for diversification. If you are earning more means you can invest more and that will create a snow ball effect on all your investments to generate even more.

 Spend less, earn more, save, invest these are the key and the strict rule to follow. Repeat this method as many time as possible.

 Last but not the least: Take action and be persistent in your work plan.

Sovereign Wealth Funds And Global Finance

Since the early 2000s, SWFs from emerging countries like Kuwait, Abu Dhabi, Singapore, China have stopped communicating with the financial sector and the general public with the aim to build an good image among investor and be reliable. Indeed, their rise was alternately seen as a form of threat to the national sovereignty of the host country, due to the lack of transparency and their alleged ambitions to invest in strategic sectors, and as a favorable element international financial stability and an important financing industrialized economies. In total, a consensus seemed to exist to recognize the positive role of these funds.

Until recently when an unexpected event came to trouble: the fund of Abu Dhabi International Petroleum Investment Company (IPIC) has withdrawn capital Barclays Bank selling on June 2 about 11% of the capital of the 16.3% stake. This operation was a surprising, since it was only made seven months before and the fund became the largest shareholder of the British bank, has allowed him to realize a profit of 1.7 billion Euros. At the same time, the action Barclays lost up to 16% during the session. Trying to get some height and to understand the implication of this new element of sovereign wealth funds and global finance as a whole. Few years back. Before the start of the subprime crisis, SWFs have managed to forge an image of stable investors, favoring a long-term horizon and supports conventional investments such as stocks, bonds or hybrid (i.e. convertible bonds). They also seemed to have no requirement to return excess capital.


Traditionally, they carefully avoided all equity investors and majority remained "passive", i.e. the investor not claiming a seat on the board and do not exercise their voting rights. Their public mandate was simply to pay the financial markets of resources from surplus reserves of oil and gas revenues, and even fiscal surpluses. Their assets under management in 2007 were estimated at more than 3000 billion, which are double the financial assets held by hedge funds or hedge funds. The combination of this long-term horizon, these financial ambitions measured, and the passivity of this important financial capacity tended to SWFs investors 'ideal' for the proper functioning of the financial sector. With the onset of the financial crisis, SWFs action took on a new dimension. Their stakes in Western banks have been hailed as rescue actions the global financial system, allowing some observers assert that "sovereign wealth funds play a fundamentally stabilizer in the international financial system and this fact is clearly verified in the current liquidity crisis ".

In total, between summer 2007 and end of 2008, the amount of equity in banks was about a hundred billion. For comparison, the amounts incurred by SWFs in Western financial institutions were valued at about two billion dollars in 2006. It was so relevant and legitimate to ask whether these new commitments, which differed widely patterns found previously, were more an expression of opportunistic strategies that will contribute to saving the international banking system. The episode Barclays has given a strong argument to critics of SWFs. Should this mean to generalize and draw a vitriolic portrait of all these funds, whatever they are? It is simply to make the obvious, funds, sovereign or not, is first of all investors. And like many traditional investors in times of crisis, some have high risks in search of high returns in the short term. Note, however, that the investments of SWFs, like the pronouncements of Warren Buffet or Albert Frère, are perceived as a buy signal from the other operators on the market, automatically assigning goodwill significant target values. By these new practices, SWFs could encourage other players in the market looking for a short-term profitability to do the same and thus unwittingly contribute to the volatility of stock prices.


Since the early 2000s, SWFs from emerging countries like Kuwait, Abu Dhabi, Singapore, China have stopped communicating with the financial sector and the general public with the aim to build an good image among investor and  be reliable.

Indeed, their rise was alternately seen as a form of threat to the national sovereignty of the host country, due to the lack of transparency and their alleged ambitions to invest in strategic sectors, and as a favorable element international financial stability and an important financing industrialized economies. In total, a consensus seemed to exist to recognize the positive role of these funds ... Until recently when an unexpected event came to trouble: the fund of Abu Dhabi International Petroleum Investment Company (IPIC) has withdrawn capital Barclays Bank selling on June 2 about 11% of the capital of the 16.3% stake. This operation was a surprising, since it was only made seven months before and the fund became the largest shareholder of the British bank, has allowed him to realize a profit of 1.7 billion Euros. At the same time, the action Barclays lost up to 16% during the session. Trying to get some height and to understand the implication of this new element of sovereign wealth funds and global finance as a whole.

Few years back. Before the start of the subprime crisis, SWFs have managed to forge an image of stable investors, favoring a long-term horizon and supports conventional investments such as stocks, bonds or hybrid (i.e. convertible bonds). They also seemed to have no requirement to return excess capital. Traditionally, they carefully avoided all equity investors and majority remained "passive", i.e. the investor not claiming a seat on the board and do not exercise their voting rights. Their public mandate was simply to pay the financial markets of resources from surplus reserves of oil and gas revenues, and even fiscal surpluses. Their assets under management in 2007 were estimated at more than 3000 billion, which are double the financial assets held by hedge funds or hedge funds. The combination of this long-term horizon, these financial ambitions measured, and the passivity of this important financial capacity tended to SWFs investors 'ideal' for the proper functioning of the financial sector.

With the onset of the financial crisis, SWFs action took on a new dimension. Their stakes in Western banks have been hailed as rescue actions the global financial system, allowing some observers assert that "sovereign wealth funds play a fundamentally stabilizer in the international financial system and this fact is clearly verified in the current liquidity crisis ". In total, between summer 2007 and end of 2008, the amount of equity in banks was about a hundred billion. For comparison, the amounts incurred by SWFs in Western financial institutions were valued at about two billion dollars in 2006.
It was so relevant and legitimate to ask whether these new commitments, which differed widely patterns found previously, were more an expression of opportunistic strategies that will contribute to saving the international banking system.

The episode Barclays has given a strong argument to critics of SWFs. Should this mean to generalize and draw a vitriolic portrait of all these funds, whatever they are? It is simply to make the obvious, funds, sovereign or not, is first of all investors. And like many traditional investors in times of crisis, some have high risks in search of high returns in the short term.
Note, however, that the investments of SWFs, like the pronouncements of Warren Buffet or Albert Frère, are perceived as a buy signal from the other operators on the market, automatically assigning goodwill significant target values. By these new practices, SWFs could encourage other players in the market looking for a short-term profitability to do the same and thus unwittingly contribute to the volatility of stock prices.

Know The Basics of Forex Trading Part.II

There are three types of investors in the forex:

The first kind is of International companies, which protect against the variation in the currency that could affect their financial stability.

 I wish to site one example for it: Let us imagine French wine producer exports bottles of wines worth 100 Euros of each to the US retailer. Assume at the time of delivery of the wine 100 Euros are worth 130 US dollars. There for this is the price the US retailer is going to offer for each bottle of wine. At the end of the sale the retailer pays the money in dollars but the producer is in need of Euros. Therefore the dollars has to be converted into Euros. Let us compare if 130$ is equal to 100Euros and 130$ is equal to 80 Euros. For the second one the French producer has made a very bad deal and to safeguard the exporter against this risk, it has to pay a premium and purchase an option contract changes on financial markets. And it gets the right payment at the rate agreed at the time of contract so that the producer will get 100 Euros against 130 $.

 Banks are the second category of investors. They will carry out speculative or hedging.

Using the example above, the bank will cover the French producer by selling an option contract currency and pocket the premium paid. It can therefore gain or lose (if the Euro / Dollar has depreciated, that is to say, if my $ 130 is worth more than 80 Euros for example then the bank will have to pay 20 Euros per bottle producer from its pocket.

 The last one is the individuals who for more than a decade are actively involving in the Forex trading. You can see lot of online sites and brokers offer small investors an opportunity to access this market. To get involved through them you have to invest a minimum amount which is reasonable and a computer with fast internet connection and they provide you online assistance and training to get started.

 Main advantage of this market is its timing. This large amplitude of schedule allows the small investors to carry out their transaction at any time at their convenient even at the odd hours of the night. The Forex trading is easy to monitor since they are generally conducted on few major currencies like Japanese Yen, The US dollars, Swiss franc, The Euro and the British Pounds. However there are few more currencies that can be negotiated. The high liquidity of the market allows a large volume of transactions. The forex can be invested as derivatives as CFD through leverage can lift 400 times of the cash invested by the investor. Be careful with CFD investments because losses may also result from such large leverage which may even exceed your initial deposit. Therefore much care must be taken in this type of investment. Another very important one is the transaction costs. Transaction costs are much lesser than any other markets.

Know The Basics of Forex Trading Part.I

Forex is the short form of “Foreign Exchange” currency market. Forex is the second largest financial market in the world by of transactions apart from interest rate. Most of us hear a lot about Forex but it remains unclear to many hence I am trying to make them understand about it in this article and I am trying to portray the Forex trading and operations in a simplified manner.

 Forex is the financial market where currencies are exchanged at exchange at variable rates. The investor can simultaneously buy one currency and selling the other.

 Most often, the exchange rate of one currency is in relation to other is due to the financial or economic conditions of the both countries and the Recent announcements of the countries relative to another. Specifically, investors are betting on a currency if a country or region has a high growth rate for example, or if the interest rates set by central banks are high. This is logical because these two scenarios are indicators of economic health of the country or region.

 If the demand for a particular currency is more then it appreciates more in the market. The interest for a particular currency among the investors are have several reasons, typically the investor wants to preserve their capital (For example, the investor sell dollar and buy the Swiss franc which is a stable currency) and or to make a profit by selling foreign exchange (by selling the currency, which appreciates over time).

 In the same vein, when a currency is sold massively, it depreciates. Besides, we can cite a happening in September 1992the genius of George Soros, who sold short for 10 billion pounds. This striking force has forced the Bank of England to devalue the pound by about 15%. Thus, George Soros was able to buy sterling at a lower price (earned1.1 billion profits). It has been known as the man who broke the Bank of England.

 Unlike other markets, Forex operates 24 hours on all five days per week (from Sunday evening to Friday evening) in order to cover all time zones. Transactions are not made in a physical exchange, but virtually all transactions are made electronically.