Month: April 2012

Article by Investment U

Approaching the graded coin market can be a bit intimidating at first. The grading system is ultra-specific, and high-grade coins can be pricey. But, at stake are remarkable opportunities in the numismatic market for those open to an interesting investment alternative.

Numismatic experts say the coin market is on the verge of a major break out. David Hall, founder of the Professional Coin Grading Service (PCGS) and regarded as one of the top numismatists of the twentieth century, says “we’re now experiencing a renaissance in coin investments and collecting.”

Graded gold and silver coins have the advantage to leverage both the numismatic and bullion markets. And for investors already interested in precious metals, high-grade bullion coins offer an intriguing and beautiful opportunity.

Here, we’ll take a quick look at the graded coin market, and I’ll show you the exact products that I believe are the best high-grade gold and silver coins for investment.

A Quick Look At Graded Coins

The majority of all coins are produced for general circulation purposes. Over the years, coins in general circulation can experience heavy wear and damage. But a few coins never go into circulation and are preserved – stored through the years in a bank, attic, garage, etc. These very well preserved coins are the most prized by collectors.

Third-party coin grading companies perform evaluations for general currency and proof coins and assign grades based on preservation.

These grading companies use a standard 0- to 70-point scale to appraise a coin’s state of preservation. But buyer beware…

There are many coin graders that try to establish themselves as experts. However, most of these grading companies represent nothing more than one-man operations (called “self-slabbers”) that significantly over-grade coins to dupe unwary buyers into lofty prices.

In the graded coin world today, there are only two highly respected coin grading companies: The Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corp. (NGC). I highly recommend only buying coins that have been graded by these companies.

At the extreme bottom end of the grading scale (0), coins are worn almost smooth so that the type of coin and date is unreadable or barely discernible. At this grade, a coin is basically piece of metal that you can assume was once used as currency. The coin to the right, for instance, is extremely low grade.

On the extreme top end (70), coins are considered absolutely flawless. There are no microscopic scratches or marks, the coin has a sharp strike, it’s perfectly-centered, bright, and has the original luster and overall outstanding eye appeal. I’ll show you some of those in just a minute.

Here’s a general breakdown of the current grading system for U.S. coins:

That means the highest-grade coins command the highest prices. But excellence commands a premium in everything. It’s why people pay hundreds of thousands of dollars for a Rolls Royce, or a Patek Philippe. And in the graded coin market, experts say quality is key.Most coins produced are never in MS 70 condition. It is only a few specimens that are ever struck flawlessly. So for every year a coin is produced, there are only so many flawless examples. And it’s the general rarity of these perfectly struck coins that piques the interest of collectors.

David Hall says:

“The best quality is in the greatest demand; therefore, prices of high-quality coins increase more rapidly. So, buy the best quality.”

The bottom line is, quality of preservation is what the graded coin market is all about. And when it comes time to cash out of a high-grade coin investment, perfect-grade coins are going to be the easiest to sell at the highest premium. So invest in quality. Now, let me get down to specific coins…

The Best High-Grade Bullion Coins for Investment

The American Gold and Silver Eagles set the global standard for bullion coins. They’re the most widely recognized and liquid bullion coins in the world. So I believe perfect-grade American Eagles are best high-grade bullion coins for investment.

The U.S. mints produce the American Gold and Silver Eagles in two strike types: A business strike, and a proof strike.

Business strike coins are produced for general circulation. The coins in your pocket, for instance, are business strike. But, as I mentioned earlier, some business strikes are never circulated. They will go directly from the mint to collectors or grading companies who are looking for flawless business strike examples.

Third-party coin grading companies grade business strike coins on their “mint state” (MS). The highest grade American Eagle business strike coin is MS 70. Have a look at two perfect-grade business strike American Eagles from PCGS and NGC:

American Gold and Silver Eagles graded MS 70 by NGC and PCGS

Proof coins are primarily produced for the collector’s market. Modern proof coins often have mirrored backgrounds with contrasting frosted figurative designs. Proof coins are graded on the same 0- to 70-point grading system. But third-party grading companies also evaluate the contrast of the frosting on proof coins. And the highest contrasts are the most sought after.

PCGS and NGC have slightly different terminology and abbreviations in their labeling of perfect-grade proof coins and their cameo contrasts. It’s important not to get confused. Have a look:

American Gold and Silver Eagles graded PF 70 DCAM by PCGS and PF 70 Ultra Cameo from NGC

The U.S. Mint also produces a one-of-a-kind proof for the American Eagle series of bullion coins called a “reverse proof.” For these coins, the mirrored and frosted finishes are reversed. They look pretty wild. Check one out:

2006 American Eagle Reverse Proof graded PF 70 by NGC

Professionally graded MS 70 and perfect proof American Gold and Silver Eagles are widely available from most bullion dealers. You can even buy these right from Dave Hall himself.

As I mentioned, these coins will sell at a significant premium over spot prices. But excellence is the standard in the graded coin market and will pay off in the long run. And recent date, perfect-grade American Eagles are one of the best high-grade bullion coins to own for investment.

So to wrap it up…

1. Avoid Over-Graded Coins – Buy only PCGS and NGC graded coins. These are the most highly respected coin grading companies.
2. Invest in Quality – Buy MS 70 or proof 70 coins with the highest cameo contrast. Excellence is the standard in the graded coin market.
3. Buy American – The American Eagle series of bullion coins are the most widely recognized and liquid coins in the bullion coin market.

Experts say the market for coins as investment is rapidly growing. If they’re right, perfect-grade silver coins like the MS 70 and proof 70 American Eagle will continue to command higher prices while retaining full leverage on bullion spot prices. And for investors already interested in precious metals, high-grade gold, and gold and silver coins offer an exciting and beautiful opportunity.

Good Investing,

Luke Burgess

Article by Investment U

By TraderVox.com

Tradervox (Dublin) – With the FMOC minutes casting doubt on the prospects of QE3 and the low employment in March resuscitating concerns on QE3; the speech by Ben S. Bernanke on Monday and Friday, and US trade balance and the jobless claims will be the major event for the dollar. However, other events that will affect the forex market over this week include the Japan rate decision on Tuesday. The BOJ has decided to refrain from stimulus hence boosting the yen which has increased against major currencies. The Australian dollar which had increased on the prospects of another stimulus declined after the news hit the market.

However, the Australia Employment Data which is expected to be released on Thursday at 1:30 GMT is expected to show an addition of 6,700 jobs after the job market contracted in February where 15,400 people are said to have lost their jobs the unemployment rate increased from 5.1 percent in January to 5.2 percent in February. The upward trend of unemployment rate is expected to continue with analysts talking of about 5.3 percent.

Another report expected on Thursday is the US Producer price Index. In February, the PPI inflation by 0.4 percent from 0.1 percent registered in January. Analysts are noticing that the PPI is increasing more than the Fed’s prediction but they are saying this is due to energy prices which is just temporary. These readings and positive job market reports are expected to ease the QE3 prospects. The index is expected to register an increase of 0.3 percent. This report will be released at the same time as the US Trade Balance report which is expected to show that trade deficit narrowed to $51.9 billion and the US unemployment claims expected to register another drop to 355,000. The reports will be released at 12:30 GMT on Thursday.

On Friday, the US Prelim UOM Consumer sentiment report to be released at 13:55 GMT and the Ben S. Bernanke speech at 17:00 GMT is expected to be the main events of the day. The US Prelim consumer sentiment report is expected to show an increase to 76.5 indicating that consumers still remain optimistic. Ben S. Bernanke is expected to talk in New York.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

By TraderVox.com

Tradervox (Dublin) – The positive effect that came with the Long Term Refinancing Operation done by the European Central Bank is now fading as concerns about sovereign debt crisis are reemerging in the 17-nation trading bloc. Last week’s Spain bond auction signaled concerns about the region’s debt crisis with investors taking a smaller portion of Spain debt than it was expected.

This has sparked negative comments from economists who are concerned that the LTRO measures are fading in their effect.  Analysts are warning that the not-so-well-received Spanish auction may lead to fear in the coming auctions especially for peripheral countries leading to low uptake of government bonds in the region.

There has been a continued competition between Spain and Italy for funds from international investors which is expected to heat up during the second quarter as the effects of the European Central Bank LTRO fades. These sentiments have been precipitated by the recent low demand for the Spanish and Italian bonds. Further, this situation has been aggravated by the Spanish Prime Minister Mariano Rajoy who indicated that his country was experience extreme difficulty.

The effect of LTROs that ECB President Mario Draghi said they present an opportunity for the region’s government to consolidate fiscal budgets and structural reforms have faded in their effect in the region with investors raising concerns of debt crisis in other countries such as Italy, Spain, and Portugal.

According to Werner Fey of Frankfurt Trust Investment, the positive effects of Long Term Refinancing Operations are fading with the market shifting to political developments. Fey also talked about the Spanish auction which he said that it was not well received hence posing a risk for other bond auctions.

These concerns are coming at a time when the Bank of Japan has refrained from another round of stimulus causing the yen to gain. This is expected to push the euro further down against the yen and other major currencies. Chinese import data and the Euro-zone Sentix Investor Confidence report are expected to push the euro down.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 10 April 2012, 08:00 EDT

U.S. DOLLAR gold bullion prices fell as low as $1642 an ounce during Tuesday morning’s London trading – though still slightly up on last week’s close following Asian session gains – while stock markets fell and commodities were flat as markets digested last Friday’s disappointing US jobs data.

“Major support [for gold] comes from the long-term uptrend, which is still intact, currently around $1600,” says the latest technical analysis note from bullion bank Scotia Mocatta.

Based on PM London Fix prices, however, gold bullion remains below its 200-day moving average, which was $1687 per ounce following the last fix before the Easter break on Thursday.

Silver bullion meantime dipped to $31.49 per ounce before recovering some ground by Tuesday lunchtime in London, remaining broadly in line with where it began the week.

Asian traders reported increased physical gold bullion demand Tuesday, following the end of the three week strike by gold dealers in India, the world’s largest source of private gold demand.

Indian gold dealers are now turning their attention to this month’s Akshaya Tritiya festival as well as the wedding season.

“There were good retail sales yesterday,” Harshad Ajmera, proprietor of JJ Gold House, told newswire Reuters this morning.

Despite the strike ending, however, industry insiders predict that gold and silver imports will fall this year as a result of taxes, duties and volatile prices curbing demand to buy gold and silver.

Over in Vietnam meantime, reports reaching BullionVault over the weekend suggest that many jewelry shop owners will close their business when a new government decree comes into force next month, since they fail to meet specified criteria to operate in the industry.

European stock markets traded lower Tuesday morning, with both the FTSE in London and Germany’s DAX down 1% by lunchtime. The losses come after US markets sold off on Monday, following the publication on Friday of worse-than-expected US jobs data.

Nonfarm payroll data published by the US Bureau of Labor Statistics Friday show that the US economy added 120,000 nonagricultural private sector jobs in March – compared to analysts’ consensus estimates of over 200,000 – prompting speculation that the Federal Reserve might consider another round of quantitative easing.

Despite this speculation, gold prices remain below where they started last Tuesday, before the publication of Federal Open Market Committee minutes that appeared to suggest Fed policymakers have become less inclined towards additional QE.

“It looks like we need bigger and better news to support gold right now,” says Ole Hansen, senior commodity manager at Saxo Bank.

“Traders have been wrong-footed on numerous occasions during the last two months on QE on/off talks…The non-farm payrolls and India ending the strike should have triggered a stronger bounce, but at this moment… traders want to see the cash before jumping back into gold in a major way.”

The net long position of so-called speculative gold futures and options traders on the New York Comex – measured as the difference between bullish and bearish contracts – fell 6.5% in the week ended last Tuesday, according to the latest Commodity Futures Trading Commission figures.

“Last week’s poor jobs report raises doubts about the strength of the US expansion,” adds Dan Morris, London-based global strategist at JPMorgan Asset Management.

“There are some uncomfortable parallels between the current macroeconomic environment and that of July last year when equity markets began their precipitous fall. Investors are worried again about the Eurozone crisis.”

Benchmark yields on 10-Year Spanish government bonds climbed to 5.9% on Tuesday – their highest level since December – as investors worried whether it will become the fourth member of the single currency to require a bailout.

“Sentiment towards [Spain’s] sovereign bonds is now the bellwether for Europe’s debt crisis,” says Mansoor Mohi-uddin, chief currency strategist at investment bank UBS.

“If investor appetite wanes, then currency markets will start to price in either ECB rate cuts to help restore sentiment, or Madrid requires external assistance from its European Union partners.”

China meantime confounded analyst expectations by recording a trade surplus in March, data published Tuesday show. While imports rose 5.3% compared to a year earlier, exports were up 8.9%. The trade surplus was around $5.35 billion.

“The sluggish import growth shows weakening domestic demand and investment growth while exports are stabilizing,” reckons Barclays Capital economist Chang Jian in Hong Kong.

“Policymakers need to strike a delicate balance between preserving growth and containing inflation at this stage, yet they may tilt more toward sustaining growth in the second quarter.”

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

By TraderVox.com

Tradervox (Dublin) – Speculation of an additional stimulus in Japans economy has continued as the Bank of Japan prepares to conclude its policy meeting. Traders are expecting the BOJ to add stimulus which has resulted to the strengthening of the Australian Dollar. Aussie has been declining but as Asian stocks rose and the business environment increased at the start of the week, the demand for risk has been boosted hence boosting the Aussie. However, the gains in the Aussie were limited due to reports of slowing Chinese economic growth.

Most analysts and traders alike are looking at the BOJ’s decision with hyped easing hopes from the recent data and BOJ sentiments. According to Cameron Umetsu who is an economist at UBS AG, the Bank of Japan easing will boost the potential to put the yen under pressure. A National Australia Bank Ltd survey on investor confidence showed that investors were more confident in the economy in the month of March. The Australian dollar also declined by most in the same month. Speculations of a BOJ easing have improved the Aussie while weakening the yen against major currencies.

The yen has weakened by 0.5 percent today making it the worst performer among major ten currencies. However, the Australian dollar strengthened by 0.2 percent against the US dollar to trade at $ 1.0337. The Aussie registered a 0.5 percent increase against the yen to trade at 84.48 yen as well as the Kiwi, which gained by the same margin to trade at 67.27 yen.

The positive reports expected from China showing that the imports rose by 9 percent may boost the Aussie. However, according to Janu Chan, a St. George Bank Ltd Economist in Sydney, signs of weakness in the Chinese report expected to be released today will ultimately weigh down on the south pacific currencies. China is the biggest trading partner for Australia and the second largest for New Zealand.

Ahead of the decision by the BOJ, yen fell by 0.6 against the euro to trade at 107.39 and by 0.3 against the US dollar to trade at 81.74 yen.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Source: ForexYard

Safe haven currencies, in particular the Japanese yen, started off the week on a bullish note as investors continued to digest last week’s disappointing US Non-Farm Payrolls figure. The US added just 120K jobs last month, significantly below the forecasted 207K. Today, traders will want to note the results of the Japanese Overnight Call Rate and the Bank of Japan (BOJ) Press Conference. Any indication that the BOJ will intervene in the markets to limit yen growth could result in the currency reversing some of its earlier gains.

Economic News

USD – Jobs Data Continues to Weigh Down USD

The dollar extended its bearish trend against the Japanese yen during yesterday’s session, as a disappointing US jobs report released last week continues to weigh down on the greenback. The worse than expected news prompted fears among investors that the Federal Reserve may initiate a new round of quantitative easing in the near future. As a result, investors flocked to the safe haven yen and drove the USD/JPY to a one month low at 81.19.

Turning to today, a lack of significant news out of the US means that any dollar movement is likely to be determined by international fundamental data. Traders will want to note the result of the Japanese Overnight Call Rate and the subsequent BOJ Press Conference. Any indication that the BOJ could step in to limit yen growth could result in the dollar recouping some of its earlier losses. In addition, the Chinese Trade Balance figure could influence the markets. A worse than forecasted figure could result in further risk aversion and may boost the dollar against currencies like the euro and AUD.

EUR – Debt Concerns Cause EUR to Remain Bearish

Following a disappointing debt auction out of Spain last week, the euro remained bearish against virtually all of its main currency rivals during yesterday’s trading session. The debt auction reinforced investor fears that the euro-zone debt crisis is far from over. As a result, the EUR/USD dropped as low as 1.3032 before staging a mild recovery during the evening session. Since last week, the pair had dropped almost 300 pips. Against the Japanese yen, the euro dropped an additional 75 pips yesterday, reaching as low 106.13.

Turning to today, euro traders will want to continue monitoring any news out of the euro-zone, particularly with regards to countries like Spain and Portugal. Any negative news may result in additional risk taking and could cause the euro to drop further. That being said, traders will want to note the result of the euro-zone Sentix Investor Confidence figure. A better than forecasted result may help the euro recoup some of its earlier losses.

Gold – Gold Turns Bullish

The price of gold went up during yesterday’s session, following negative US news released last week. Disappointing US employment data has led to the possibility of the Fed initiating a new round of quantitative easing in the coming months. As a result, investors have sought out alternative safe-haven assets, gold being one of them. Gold reached as high as $1648.55 an ounce during European trading, up 1739 pips for the day.

Turning to today, a lack of significant US news means that gold could maintain its upward momentum going into the rest of the week. Analysts are warning that without substantially better global data, particularly out of the US, the price of gold and other precious metals may continue to go up for the foreseeable future.

Crude Oil – US Data, Iran News Cause Oil to Drop

The price of crude oil fell during yesterday’s trading session as the combination of negative US data and positive developments regarding the conflict with Iran caused investors to abandon the commodity. Negative US employment data last week has led to investor concerns that demand in the US will go down. At the same time, Iran has recently agreed to resume negotiations with the West regarding its nuclear program. The news led to a reduction in fears that Iran would cut off oil exports. The price of crude dropped as low as $101.29 a barrel yesterday, down from $103.23.

Turning to today, oil traders will want to continue monitoring any developments regarding the situation with Iran. Any signs that negotiations will not take place as planned could result in renewed fears that supplies could be in danger, and may cause the price of oil to stage an upward reversal. That being said, as long as market sentiment toward the US dollar remains negative, oil may extend its recent bearish run.

Technical News

EUR/USD

While most long-term technical indicators show this pair in neutral territory, the weekly chart’s Bollinger Bands are narrowing, which is typically a sign of an impending price shift. Traders will want to take a wait and see approach for this pair, as a clearer picture is likely to present itself in the near future.

GBP/USD

The weekly chart’s Williams Percent Range is currently at -20, indicating that this pair could see downward movement in the coming days. That being said, most other long-term indicators show this pair trading in neutral territory. Traders will want to monitor the Relative Strength Index on the weekly chart. If it crosses above the 70 line, a bearish correction may take place.

USD/JPY

After tumbling in Friday’s trading session, long-term technical indicators show that this pair may extend its bearish run. The weekly chart’s Williams Percent Range and Relative Strength Index are both showing that further downward movement may occur. Traders may want to go short in their positions ahead of a downward breach.

USD/CHF

The weekly chart’s Slow Stochastic, Williams Percent Range and Relative Strength Index all show this pair trading in neutral territory, meaning that no major price shift is forecasted at the moment. Taking a wait and see approach for this pair may be the wisest choice, as a clearer picture is likely to present itself in the near future.

The Wild Card

Dow Jones Industrials

A bullish cross on the daily chart’s Slow Stochastic appears to be forming, indicating the possibility of an upward correction in the near future. This theory is supported by the Williams Percent Range on the same chart, which is currently around the -70 level. Forex traders may want to go long in their positions ahead of a possible upward breach.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

The Japanese Yen made gains over the greenback early Tuesday as the Bank of Japan decided to keep its rate on hold between zero to 0.1% and withstood to mention anything regarding further policy easing.

The dollar bought 81.28 Yen this morning whilst Monday’s trading saw the greenback buy at 81.65, clear indication of the Yen’s upward move.

Japanese Prime Minister Yoshihiko Noda stated yesterday that the government will hold specific meetings to come up with plans to overcome deflation as policy makers discuss ways to put an abrupt end to price declines.There is a possibility that the meetings could start this month.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By TraderVox.com

Tradervox (Dublin) – Analysts are expecting the euro area Sentix Investor Confidence survey to show a decrease in investor confidence in the month of April. The investor confidence in the region had rose to an eight-month high in March only to retract this month due to a weakened economic outlook in the region. The drop has been instigated by the recent resurgence of concerns about the debt crisis in the region. This report is expected to cause a selloff in the euro-US dollar pair as the negative results heighten speculation for another monetary support from the ECB.

According to some analysts, the continued risk of a prolonged recession may force the European Central Bank to continue with its easing cycle during this year. According to David Song who is a Currency Strategist, the ECB President Mario Draghi may target the interest rate as the LTRO measures taken have had limited impact on the economy. Since the sovereign debt crisis continues to drag the real economy, investor confidence may be dampened by the impending prolonged recession; this may lead the ECB to leave the door open for more monetary easing and favorable monetary policy as it tries to balance the risks in the euro zone.

The Sentix Investor Confidence will majorly affect the EURUSD pair; where a positive Sentix Survey may push the pair back towards the top of its current range of 1.34 due to an increase in the fundamental outlook for the euro region. Analysts are however expecting the report to show that Investor Confidence has dropped in the month of April which may force the pair to break below the 1.30 support. This would expose the 23.6 percent Fib retracement to the 2010 low of 1.2630-50 from the 2009 high.

Some analysts have suggested that the survey will spark a bearish trend for the euro against the dollar. The drop in Investor Confidence is due to the recent sentiments from the region leaders indicating that the 17-nation trading bloc may be experiencing difficulties in managing its debts.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

By MoneyMorning.com.au

Before the start of last year, we thought investing in 2011 would be hard.

Turns out we had no idea just how hard.

The good news is last year’s market behaviour is set to repeat this year. Now, saying that’s “good news” may seem strange considering the poor performance of shares in 2011.

But that’s exactly why it’s good news.

Share market volatility and a falling market is what any cashed-up speculator dreams of. Simply because volatility and falling markets scare investors away. And when investors are scared, share prices fall…

A Great Buying Opportunity for Small Cap Investors

If you’re cashed-up, you’re in a great position to benefit from the coming year of volatility.

The only question that remains unanswered is how you’ll profit.

Of course, investing in small-cap stocks is a risky business. To give you a comparison, the S&P/ASX Emerging Companies Index is down 11.11% since January 2011. And the S&P/ASX 200 Index is down 9.21% in the same time.

Click here to enlarge

That gives you a clue about the risks of investing in the market.

But it also shows you something else… that diversifying a portfolio for the sake of it doesn’t work.

That’s why it’s more important to focus on good business ideas rather than just buying any old stock or sector that moves….

Three Small Cap Investing Themes for 2012

We’ve targeted three big themes: “creative destruction”, “disruptive technology” and “entrepreneurial vision“.

Understanding why these are important and the role they play in the economy will be vital to making money from small-cap stocks in 2012. But in case you’re not familiar with these themes or you need a refresher, here’s a quick rundown…

Creative destruction is a term coined by early 20^th century economist, Joseph Schumpeter. In simple terms it’s the idea that new ideas and ways of doing business emerge to replace old or inefficient ways of doing business.

An example we like to use is the typewriter. Functionally, there was nothing wrong with the typewriter. But as technology developed with the invention of computers, it became obvious personal computers could replicate and improve on anything a typewriter could do.

Another example is music players. Over time technology has seen the arrival and departure of the gramophone, record players and cassette players. And one day CDs will disappear too, as music buyers shift to MP3 players.

The important point is that creative destruction is a positive process. It results in consumers getting a better or more efficient product.

As for disruptive technology, well, that’s slightly different.

Rather than destroying one thing and replacing it with something new, disruptive technology shifts the market in a new direction.

For instance, catalytic convertors didn’t destroy anything. And they didn’t replace anything. They simply shifted the auto industry in a new direction, away from leaded petrol and towards unleaded petrol.

Again, disruptive technology is a positive process. It’s about innovation… new ideas.

And ultimately, that’s what small-cap investing is all about.

It’s identifying companies that could change the shape of their industries.

But, creative destruction and disruptive technologies don’t just happen. They’re only possible if they contain a key ingredient –

Entrepreneurial Vision

Entrepreneurs are the driving force behind any economy.

Without them, there’s no progress.

Economies need men and women who forego the safety of 9-to-5 jobs. Those who prefer to borrow, scrimp and save to see their ideas through to completion.

But remember this: most entrepreneurs fail.

Either they get their timing wrong on what the market wants or they’ve just got a bad idea.

But that’s what makes small-cap investing so rewarding. Because if you back the right idea at the right time, the payback can more than make up for the risk.

The thing is, which ideas should you invest in and how do you find them?

Over the last few weeks we’ve been working on a brand new presentation that explains exactly that. In it, we also reveal our top five speculative ideas for 2012 and 2013.

Each of these tiny companies is run by true innovators in their industry. Of course, they could fail. But these guys are not after safety. They are after success. And if they succeed, they’ll make a fortune.

More importantly for you, so will the shareholders in their companies.

The market was rubbish in 2011. And right now there a whole raft of brilliant companies like these trading for prices we haven’t seen since the lows of 2009.

For speculative investors, it truly is a paradise to play in. And in our new presentation we aim to show you how to best profit from it.

So keep an eye on your inbox over the next couple of days.

Cheers.
Kris.

The Conference of the Year “After America” DVD

Why You MUST Speculate

Disruptive Technology Stocks For Smart Small-Cap Investors

How to Make the Most Out of Small Cap Investing