Money Games Information

With the current sub-prime credit woes in the United States and the sky rocketing global crude oil prices, many people are finding it challenging to invest their hard earn money. Most of the investment instruments in the market are either tied to the world stock market or crude oil prices. However, there is one form of investment that has a good and strong fundamentals for sustainable growth and returns. It is palm oil (P.O). This article will highlight 3 reasons why palm oil is a good investment for the public.

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1) World population growth. The population of the world has just breached 6 billion. The number will increase exponentially in the near future. This is a great support for the demand of P.O because as an edible oil, it is used in the manufacturing of numerous consumable products. The items derived from palm oil are ranging from ice cream, chocolates, candles, cooking oil, soap, detergent etc.

2) The banning of using trans fat in the US. Since January 2007, US has banned the usage of artificial trans fat on packaged food. Trans fat is a vegetable oil that has been treated with hydrogen in order to make it more solid and give the food a longer shelf life. This substance has been shown to cause major health risks such as cancer and coronary heart disease when consumed. The suitable replacement for trans fat is palm oil.

3) Bio-diesel fuel to replace gasoline. This is going to be the major push for the high demand of P.O in the future. With the current high global crude oil prices, countries around the world is at the mercy of the oil producers. An alternative energy source will have to be found to solve this problem. One feasible replacement for gasoline is bio-diesel. One of the main element to produce cost effective bio-diesel is palm oil.

There are many more reasons that support the high future demand for palm oil. It is surprising how the fruits from these plants can be so versatile and useful. This shows that money really can grow on trees.

The word forex is a short form of the word Foreign Exchange, which is the basis of the commercial transactions which take place between two countries with their own currencies. The forex market refers to the trading that takes place within this area and is different from the stock market. Established since the ’70s, this market deals not just with one business or investment but the entire gamut of trading and selling of currencies.

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While both the forex and the stock markets deal with money, the biggest difference between the two is the sheer volume of money transacted on a daily basis as well the span of operations. The forex market deals with nearly 2 trillions of dollars which in comparison to any stock market is much larger. The players in the forex market are also different, where the money transactions are done between governments, international banks and financial institutions of different countries.

The amount of money which is bought, sold or traded in a forex market can quickly be turned into liquid cash, or better still, it is actually made into hard cash. The speed with which such transactions take place in a forex market can be really fast for any investor, irrespective of the country of his origin.

The other difference between a stock and a forex market is that stock markets operate in shares and businesses which belong to a specific country; forex markets on the other hand operate globally and can include any and every country of the world. Its span of operations is far wider. The market encompasses nearly every country of the world and deal with trading their individual currencies which has nothing to do with any specific business or corporation.

While stock markets operate only on business working days and may remain closed on bank holidays and weekends, the forex market has to consider the several time zones across which it operates. Hence the forex market is open 24 hours 7 days a week to accommodate all the countries. While one market opens another closes. Because of the difference in time zones, one country may close its market but another in another part of the world has opened its own. Thus the trading in a forex market happens on a non-stop basis.

The stock market of any country operates with the prevailing currency of that country. For instance, Japan will work with the yen and the US stock market will work with dollars, Indian stock market with Indian Rupees, etc. The forex market, on the other hand, works with many countries and trades in many currencies. These are the major differences between the stock and the forex markets.

It is important to know the basics of this important financial market called the forex or foreign exchange market, if you also want to participate in it with your investments.

Exchange Trade Funds are an investment tool which is becoming more widely used by financial institutions and private traders alike. But what makes ETF trading so popular? What are the benefits you can derive from investing in Exchange Trade Funds?

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The first benefit is ease of use. There are thousands upon thousands of stocks traded in every country and sector. Picking the right ones can be an arduous and complicated thing. This is something which not many regular people, with jobs and family obligations, can find the time to do well. An ETF is much easier to analyze and monitor.

The second benefit Exchange Trade Funds provide are in relations to traditional funds and is in terms of management fees which can take a substantial bite out of your profits. ETFs usually charge a mere fraction of the fee which regular funds require.

The third benefit is in terms of ROI. Many studies found the managed funds often don’t beat the index or sector in which they specialize. This means that you pay management fees but don’t really benefit from the supposed specialty of the fund manager. An Exchange Trade Fund replaces the need for that manager as it follows the index or sector blindly. They often beat managed funds despite the "expertise" of fund managers.

The fourth benefit of investing in ETFs is the fact that you can trade them flexibly, much more than a fund. You can buy and sell ETFs at all trading hours, just like a stock, meaning that this is a fluid investment and an easy one to manage.

The 5th benefit of trading Exchange Trade funds lie in the fact that they allow you to invest in an entire sector through a single position. This means that you can invest in the oil market, for example, but don’t have to pick and choose specific stocks. This means that you’re less exposed to the risk of one single company taking a bad turn, which can happen at anytime due to many reasons which may not influence the rest of the companies in that financial segment.

Overall, investing in Exchange Trade Funds can be a massively beneficial course of action for you to take.

To see how you start to trade ETFs successfully, click here: Trading ETF Tips

Jonathan Gibson writes extensively on various investment issues. To download a free course on ETF trading, go to this webpage: ETF Profit Driver course

Many investors in the stock market have come to hear of the term ‘yield curve’. This term actually is used to denote the relationship between the cost of borrowing or the interest rate and the time or term of maturity of a certain debt instrument in a particular currency.

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Traders in the different markets closely watches the US dollar interest rates paid on US Treasury securities in varying maturities by plotting them on a graph known as the yield curve. Any movements in rates and maturities of US Treasury securities as plotted by the yield curve will impact on stock markets worldwide.

Yield Curve and US Rates

The yield curve in terms of US government instruments like bonds and treasury notes is a way of evaluating short and long term investment trends and would necessarily reflect the country’s economic outlook.

This is why all traders in the different financial markets of the world closely monitors the varying interest rates and maturities on US government securities to determine the yield curve that would also serve as their basis in determining their own rates for short, medium and long term debt instruments.

Three Forms of Yield Curve

In actuality, there are three kinds of forms that a yield curve can take depending on the interplay of interest offered and the length of maturity.

An upward curve is normal and would indicate a higher yield for longer maturity while a downward curve is not normal and would mean higher yield for shorter maturing instruments. Downward curves or inverted curves are abnormal and would signify an economy nearing recession. A flat yield would signify there is no difference in interest between short and long term investments.

Yield Curve in Bonds

For investors in bonds it will serve them well if they examine carefully the kind of bonds they will be investing because notwithstanding the plotted yield, the risk attendant to the kind of bonds they will invest in will be entirely another factor to consider.

Plotted Yield Curve of Treasury Securities

Financial markets around the world usually relies in the US Federal Reserve for their regular publication containing plotted yield curve based on updated rates and terms of Treasury Securities. Global markets use these plotted yields as basis for measuring yield on other kinds of debt instruments.

Importance of Yield Curve to the Economy

By using the yield curve, investors, traders and economist alike can ascertain the financial standing or situation of the economy. When the upward curve is on a sloping line, it would mean that a higher rate is need by investors due to longer maturities. A steep upward slope means economy is bullish with a corresponding need for higher rates. A flat curve is indicative of uncertainty in the direction of the economy.

The Economy on an Inverted Yield Curve

The inverted yield curve was plotted just recently not elsewhere but in mainland USA. The financial credit crunch brought about by the Home Mortgage problem and exacerbated further by the skyrocketing cost of fuel brought about this inverted curve that suggested to everyone to expect a slowing down of economic growth and low inflation

The lowering of rates was forced on the Government to preclude recession from hitting the economy. The adjustment in the lowering of the interest rates by the Federal Reserve was made in response to the bleak economic forecast. It was done in several stages so as not to jolt the economy until it reached 50 points

Yield Curve Theories

There were several theories regarding the Yield Curve that sought to explain the nature of the curvature. These theories all related the yield curve to the desires of the investors in relation to interest rates and the maturity of their investments.

George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for share trading including forex trading, derivatives, options, warrants and CFD’s.