InvestMacro Forex News

By Dennis Miller

You don’t have to be an expert at ferreting out a bad financial advisor; if you were, you probably wouldn’t need one in the first place. Thankfully, you don’t need to become an expert in finance to spot the red flags. We’ll go over a few key warning signs here.

Credentials and Experience

Financial advisors often have all sorts of certifications and association memberships. While many of them sound impressive, they’re actually not terribly difficult to acquire. For example, the Series 7 Test, which allows one to sell securities, is just a 250-question, multiple choice exam; one only has to answer 72% of the questions correctly to pass. Another key test, the Series 66, is only 100 multiple choice questions. These aren’t difficult hurdles to jump over.

For this reason, many advisors are not highly proficient in their trade, despite what the certifications imply. I know of someone who went to take the Series 7 Exam and told about meeting a young shoe salesman there. The shoe salesman realized that he had quite a skill in sales, so he decided he could make more money selling mutual funds than shoes. He passed the test on his first try with no prior financial experience.

We don’t want to demean all financial advisors, but this isn’t an unusual case. Most of these kinds of advisors end up at firms that follow the suitability standard—a less than optimal code of professional conduct. Professional firms that adhere to a higher, fiduciary standard would likely weed them out fairly quickly. They have a reputation to protect and can ill afford an employee of questionable ethics.

Certainly, some credentials are tougher than the Series 7, such as the Certified Financial Planner, but that still doesn’t guarantee a truly knowledgeable person. Nonetheless, the more credentials and certifications an advisor has, the better. He at least shows a willingness to learn and invest time in becoming a better advisor.

What about the advisors with actual degrees in business or finance? This isn’t a guarantee of quality either. Many a commencement speaker has referred to a degree as an opportunity to go into the world and learn. A degree in finance or business may get a person in the door of a professional firm, but one still has to learn everything in this industry from the ground up. A degree is good, but it doesn’t necessarily give a huge edge.

There’s absolutely no reason to settle for a freshly minted advisor; the more years in the industry the better. There are plenty of advisors begging for your business. Many of the top professional firms do not hire anyone who does not have a good track record of experience.

Many of the captive houses are losing a lot of their top people. They are looking for firms that are truly independent, where they can apply their skills and experience for the remainder of their careers. Demand more credentials and experience and be wary of brand new advisors.

Fees and Expenses

When it comes to fee structure, character matters over credentials. Whether you’re someone’s first client or their thousandth, he can just as easily pull the wool over your eyes with fees. You should always seek low-fee fund options. Ask for low-fee funds as well as exchange-traded funds (ETFs) and index fund options.

Professional financial advisors can go to either extreme. Some actually have a contract that stipulates anytime your money is invested in a fund where they receive a commission, that commission is credited back to your account. Other firms will take those commissions and use it to enhance the personal compensation of the advisor.

Asking your advisor to show you ETFs and low-fee fund options is a subtle test. If he or she pretends that high-fee mutual funds are the only options, then that’s definitely a red flag. In some situations, a higher-fee fund might make sense, but the advisor better have a damn good reason for it. It is our responsibility to ask for and listen to the reason and then decide for ourselves if it makes sense.

So, what’s a reasonable expense fee for a mutual fund? According to the Investment Company Institute (ICI), the actual average rate paid by mutual fund investors was 0.77% in 2012. That goes to show that investors are staying clear of the higher-fee funds. They are seeking out cheaper mutual funds, and even cheaper ETFs and index funds.

Equity funds will have slightly higher fees than money market funds and bond funds, so be aware of this difference. You might pay more than average for aggressive growth strategies or international equity funds. On average, these will charge 0.92% and 0.95% respectively. If you’re pursuing these strategies, give your financial advisor a little leeway – but not much.

Load fees are also important to understand. I’ll share a short description of various load shares, but the main takeaway is that you want a no-load fund. Think of load shares as a sales tax on your fund purchase – not a good thing.

The only situation where a load fund might be good is when you plan to hold shares for a very long time – close to a decade. Load funds will have a high upfront fee, but the annual fees are typically a bit lower, so if you’re in the fund for the very long run, they might work out. However, unless you’re committed to a very long-term investment, we suggest no-load funds.

• Front-End Load Shares – typically called Class A Shares.With these funds, you pay a percentage of your assets when purchasing the fund. The maximum one can be charged by law is 5.4%, which is an enormous amount. Think about it. You’re down 5.4% on day one. However, many investors get a discount through employer-sponsored retirement plans, so the average front-end load share paid for an equity fund by the average investor is 1%. Going through a financial advisor, it will likely be slightly more. Match that with a 0.77% average annual expense fee, and you’re still considerably behind right off the bat.
• Back-End Load Shares – typically called Class B Shares.As you might have guessed, you pay a percentage of assets when redeeming the fund rather than at purchase. However, the fee will often decrease the longer one holds the shares. Essentially, the mutual fund company wants to get your money one way or the other, through years of annual fees or through the back-end fee. Either way, you’ll end up paying.
• Level-Load Shares – typically called Class C Shares.These shares are a combination of back-end load shares and no-load shares. The back-end fee will be lower than regular back-end load shares, but the annual fee will be higher.
• No-load sharesAs the name suggests, there is no back-end or front-end load fee here. However, the annual fees are slightly higher. Unless you plan to hold a fund for nearly a decade, you will save money by going with a no-load fund. As more people are figuring this out, they are flocking to these funds.

Some advisors will want to put you into the front-end or back-end funds. That’s how they get a cut of the deal. However, you should insist on a good reason why, and ask for a much cheaper fund or ETF alternative. If push comes to shove, you can always ignore your advisor and call the mutual fund company directly to purchase the no-load funds. That might seem like a mean thing to do to your advisor, but then again, charging someone unnecessary fees sometimes as high as 5.4% isn’t nice either.

Remember that understanding these fees and other product alternatives isn’t just about cash in your pocket. It’s about understanding the character of your advisor. If he’s not getting you the best deal available, then that’s certainly a red flag.

Check for a History of Fraud

This one seems like a no-brainer, but we’ll make it easier with links to several sites that track advisor and broker improprieties. Here are a few places to check:

• The Financial Industry Regulatory Authority (FINRA)This organization is the same one that administers the Series 7 Exam. Its search tool lets you find out how long an advisor has been registered and if he has any history of incidents. It will even tell you whether or not someone has been fired. Once you’ve selected an advisor’s name, make sure to click on the detailed report link which specifies everything from a complete employment history to descriptions of specific damages and incidents.You can also look up information about individual firms such as their assets under management and the size of their average client.
• SEC Investment Advisor Public DisclosureThis is another site with much of the same information as the FINRA site.
• North American Securities Administrators Association (NASAA)This site has a couple of interesting ways to find out more about offenses in your state. First, you may browse its contact list of state regulators, or you may also view its list of state enforcement websites.

Excessive Trading

Since some advisors are paid on commission, they have an incentive to constantly make trades, a practice also known as “churning.” When a broker is constantly pestering you with reasons to buy and sell, this can be a little obvious. However, there are other areas where they can trick you into buying or selling more than necessary. For example, they can insist on regularly fine-tuning or rebalancing your portfolio to make sure all the allocations are even. If a portion of your portfolio has really become overweight or underweight from gains or losses, this might be appropriate; but rebalancing your portfolio on a monthly basis for very small changes just isn’t necessary. This practice can trick a lot of people since it seems sincere and appears to make sense.

Your portfolio should need rebalancing only once or twice a year, or when there’s been a large move up or down in the market. Otherwise, an attempt to rebalance is suspect.

No Research Department

One of the benefits of big-name companies is that they come with extensive, professional research departments. As a result, their recommendations come from proper due diligence. If you have more questions about a certain company, the advisor can find out more about the investment through the equity research department.

However, this might not always be the case with small, independent financial advisors. Although many don’t have full research departments, they can still pay for research from other sources. If a company doesn’t have a source for research, you should be concerned about the quality of its recommendations.

Sure, some investments might still be appropriate without a full research department. For example, if the advisor recommends extremely diversified funds, then this really isn’t a problem. But if your advisor is recommending purchases of Microsoft, Coca-Cola, and IBM but really has no research to back these recommendations, that’s a problem.

We want to reinforce that we should delegate – not abdicate – our nest egg to a professional financial advisor. Trust is paramount. There are many good professionals available who have earned their clients’ trust year in and year out. That is the advisor we all are looking for. While watching out for these five items doesn’t guarantee a good financial advisor, it certainly will weed out the worst apples.

It can be difficult to find a financial advisor who will always come to you with the cheapest and best options. Some financial advisors have all the wrong incentives in place. However, knowing their compensation structure and the other available options helps to keep you in the driver’s seat.

Keep in mind that some advisors are fee-based or don’t receive commissions or kickbacks from mutual funds, so they necessarily avoid some of the conflicts of interest mentioned above. You can search for fee-based advisors in your local area on The National Association of Personal Financial Advisors (NAPFA) website. This is a good place to start, but make sure you still get a clear explanation of a prospective company’s fee structure.

To sum it up, don’t fall for high fees and big-load funds, and watch for excessive trading. Seek out credentials, experience, and a clean record. Ultimately, an advisor can’t force you into anything. If one offers expensive products, push back and ask for cheaper options, or find another advisor. If you find a good one, hold on to him or her. They are worth their weight in gold.

The Money Forever team is here to help you sift through the rubble and find the exceptional advisors. If you’d like to receive more information on how to find an advisor to prescribe the right financial solutions for you, please check out our special report, “The Financial Advisor Guide.” If you are not already a subscriber, you can still get your own copy HERE.

By CentralBankNews.info
    The Central Bank of Iceland held its policy rates steady and eased up on its previous warnings about the need for rate hikes to curb inflation, saying short-term expectations for inflation had declined while long-term expectations still remain well above the bank’s target.
    “Because inflation is lower, the krona stronger, and wage increases smaller than was forecast in February, the medium-term inflation outlook has improved from previous estimates,” said the central bank, which kept its benchmark seven-day lending rate at 6.0 percent in 2013 after raising it by 125 basis points in 2012.
    Iceland’s inflation rate eased to 2.1 percent in February from 3.1 percent in January, the lowest rate since February 2011. The bank said data showed that over the past two years, wage costs per man-year had risen considerably less than previous data had suggested and last year’s wage deals would apply to most of the labour market.
    The central bank targets inflation of 2.5 percent and last month forecast that inflation in 2014 would average 2.7 percent, rising to 3.4 percent in 2015.
    The central bank has been warning about the need for rate hikes for many months and in February it said that its policy stance could be tightened sooner than expected due to the outlook for growth.

    The central bank has forecast Gross Domestic Product growth of 2.6 percent in 2014 and 3.7 percent in 2015 and the bank said the outlook for increased growth in demand will, other things being equal, call for an increase in the interest rates.
     However, measures that support monetary policy, including medium-term fiscal policy, could offset this while improvements to the economy’s supply side could weaken the inflationary effects of increased demand.
    “Whether there is scope for a nominal interest rate reduction will depend on developments in inflation and inflation expectations in coming months,” the bank said.
    Further ahead, the bank said real interest rates “must be raised” if the expected outlook materializes but the extent of the increases would depend on inflation.
    Iceland’s GDP expanded by 0.3 percent in the fourth quarter of 2013 from the third quarter for annual growth of 3.8 percent, down from 4.9 percent in the third quarter.
  The Icelandic krona rose 10 percent in 2013 and has continued to rise this year. Against the U.S. dollar, the krona was trading at 112.85 today, up 2.7 percent this year.

    http://ift.tt/1iP0FNb

By HY Markets Forex Blog

Crude prices were seen trading lower on Wednesday as the tension in Ukraine eases, reducing the negative impact on the market.

The North American West Texas Intermediate (WTI) for April delivery came in 0.42% lower trading at $98.49 per barrel on the New York Mercantile Exchange at the time of writing, while the Brent crude fell 0.11% lower to $106.68 per barrel at the same time.

Crude – Ukraine

On Tuesday, the Russian President Vladimir Putin signed a treaty on Crimea joining the Russian Federation.

Following the signing of treaties, President Vladimir Putin said he was not interested in seizing any other part of Ukraine, however the Western nations, including the US and the European Union imposed travel bans and sanctions against Russian and Ukrainian officials responsible for the Crimean referendum.

Crude – Other news

According to reports from the American Petroleum Institute (API), the US crude oil inventories added 5.9 million barrels in the last week, while gasoline stocks dropped by 1.4 million barrels.

Reports from the US Department of Energy Information Administration (EIA) are expected to be released later in the day.

Investors are also focusing on the outcome of the Federal Reserve’s (Fed) March policy meeting which will end later in the day. Analysts are expecting the US central bank to reduce its monthly bond purchases by another $10 billion to $55 billion.

Meanwhile in Iran, the Persian Gulf broke sanctions imposed by the Western nations for the fourth consecutive month in February, as it sold over 1 million barrels a day.

Visit www.hymarkets.com   to find out more about our products and start trading today with only $50 using the latest trading technology today

The post Crude Futures Edges Lower as Ukraine Tension Eases appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By HY Markets Forex Blog

Gold prices dropped for a third straight session on Wednesday, as the market waits for the conclusion of the US Federal Reserve’s (Fed) March policy meeting later in the day, as the situation in Ukraine continues to be in the spotlight.

Gold futures for April delivery edged 0.27% lower to $1,355.40 an ounce at the time of writing, while silver futures declined 0.11% to $20.840 an ounce at the same time.

Holdings in the world’s largest bullion-backed exchange-traded fund, SPDR Gold Trust; came in at 812.78 tons on Tuesday.

Gold – Fed Meeting Conclusion

The Federal Reserve’s March policy meeting continues on Wednesday and expected to conclude the meeting later in the day. Following the cuts of $10 billion at the prior two meetings, analysts are expecting the central bank to continue to reduce its monthly bond purchases by another $10 billion to $55 billion  and continue that pace at every meeting before ending the program at its October 28-29 policy meeting.

The Fed Chair Janet Yellen will be holding a press conference after the meeting.

Gold – Ukraine

On Tuesday, the Russian President Vladimir Putin signed a treaty making the Crimea peninsula officially a part of the Russian Federation.

As the Western nations, including the US and the European Union assured more sanctions on Russia for his drive to annex Crimea.

The tension in Ukraine continues to boost gold prices, making the precious metal a safe haven asset as gold has risen by 13% this year.

Visit www.hymarkets.com   to find out more about our products and start trading today with only $50 using the latest trading technology today

The post Gold Prices Drops Ahead Fed Meeting Conclusion appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

U.K. Unemployment has remained the same at 7.2%, and the Claimaint Count Change was better then expected at -34.6K, down from -33.9K last month.

Capital Trust Markets – GBP/USD (cable) has been consolidating in a tight channel for over a month now, grinding lower at a very slow pace while maintaining a bullish trend on the large timeframes. Cable fell as low as 1.6544 in yesterdays trading, bouncing off the support of the channel with a bullish pin bar.

Within the channel there is a steeper bearish configuration based on the most recent three swing highs and the 200 simple moving average on the 1H timeframe. While price remains below 1.6664, cable will remain bearish in the short term. Selling rallies remains the preferred trading strategy at this point, with a stop loss above the afore mentioned level.

In the large picture, the bullish trend will degrade considerably if GBP/USD breaks below 1.6544, where the support lies for the current channel formation. MACD is showing increased weakness on the Daily timeframe; as it is approaching negative territory we are about to exit the current slow grind and see some increased volatility.

For bullish scenarios, a break above 1.6664 should lead to yet another test of the channel resistance around 1.6763 area.

*********
Prepared by Alexandru Z., Chief Technical Analyst at Capital Trust Markets

Capital Trust Markets is a fully regulated and compliant online Forex Brokerage, offering a flawless trading environment to traders of all types. The world class trading infrastructure – backed up by advanced trading tools and cutting edge trading software and technology – is combined with award winning customer support to provide a highly successful blend of customized trading solutions.

USDCAD:  With USDCAD extending its Tuesday rally  and breaking out of its symmetrical triangle, further bullish offensive is envisaged in the days ahead. The warning is that it must break and hold above the 1.1192 level and the 1.1223 level to prevent a return into that triangle. Further out, resistance is seen at the 1.1300 level and subsequently, the 1.1350 level. Its daily RSI is bullish and pointing higher supporting this view. Conversely, support comes in at the 1.1153 level, its Mar 12 2014 high. Bulls may come here and turn the pair back up but if that fails to occur, further decline could occur towards the 1.1100 level and then the 1.1050 level. Further down, support is located at the 1.1000 level, its previous week low. All in all, USDCAD faces further bullish risk.

Article by www.fxtechstrategy.com

Article By RoboForex.com

Analysis for March 19^th, 2014

DJIA Index

Index is still being corrected. Probably, wave [2] is taking the form of zigzag pattern with wave (B) being completed inside it. In the near term, price is expected to start falling down inside wave (C).

More detailed wave structure is shown on H1 chart. It looks like after completing bearish impulse inside wave (A), Index started forming ascending zigzag pattern. On minor wave level, market finished wave C of (B). During the day, instrument may start forming initial descending impulse.

Crude Oil

Yesterday Oil formed bearish impulse inside wave 1 and started correction. Most likely, the second wave will continue for the next several days. During local correction, I opened short-term buy order.

As we can see at the H1 chart, after finishing the fifth wave inside the first one, Oil started forming bullish impulse inside wave [A]. Probably, market may reach new maximum during the day.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Article By RoboForex.com

Analysis for March 19^th, 2014

EUR USD, “Euro vs US Dollar”

After rebounding from upper target levels, Eurodollar started consolidating. Probably, it nearest future current descending correction may continue up to level of 50%. If later price breaks, market may start deeper correction.

As we can see at H1 chart, price reached its upper target levels right inside temporary fibo-zone. After that, local correction reached level of 78.6%. Possibly, in the nearest future price may continue moving towards level of 50%.

USD CHF, “US Dollar vs Swiss Franc”

At H4 chart, Franc is trying to rebound from lower levels again. I’ll move stop on my buy order into the black as soon as market breaks local maximum. Short-term target is at level of 50%.

At H1 chart we can see, price rebounded from lower targets right inside temporary fibo-zone. Closest target is at level of 0.8810, where there are several additional fibo levels. After reaching them, pair may start new correction.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Article by Investazor.com

EURUSD it seems to be moving sideways between 1.3945 and 1.3875, but above the 200 exponential moving average. A break above the resistance area could signal a rally to 1.3965 or 1.40. A drop bellow the local support at 1.3915 could mean that the Euro might lose some ground and retest 1.3900 or even lower the EMA. Do not forget about the FOMC meeting and statement today. It might trigger high volatility for this instrument.

The post EUR/USD Price Action For March 19 appeared first on investazor.com.

By MoneyMorning.com.au

It’s time for a change of pace.

Gold is back in the picture.

And there’s good news for gold lovers. It’s back to behaving as it should behave. Since the start of the year, gold has climbed more than 13%.

So much for our claim that gold wouldn’t do much this year. Although, we won’t say we got it completely wrong. We said there would be better places to invest your money.

It turns out you could have made twice as big a return if you had bought another kind of gold…

Last year gold had its first losing year in 12 years.

This year it has a chance of ending the year in the black. The low point for gold over the past year coincided almost exactly with the end of 2013.

So providing that low point acts as a support for the gold price, there’s a good chance that gold investors will have a profitable year.

Of course, the reality is that most serious gold investors don’t care about the gold price. Most serious investors (those who own bullion rather than exchange traded gold) buy gold for the long term.

They don’t buy it as a one-week, six-month or one year trading bet. They buy gold because they know governments and central banks will devalue a nation’s paper money over the course of many years.

So when that happens (as it surely will), gold investors know that they have a safe asset that should be worth the same to them 40 years from now as it is today.

On the other hand, with this other kind of gold there’s no such certainty, but there is the potential to make a lot more money.

Stocks Beat Gold Again

As Bloomberg News reports:

‘Investors seeking a hedge against a waning U.S. economy recovery and escalating conflict in Ukraine made twice as much money buying gold-mining shares rather than the metal the companies produce.

‘The Market Vectors Gold Miners ETF climbed 35 percent this year, more than double the 12 percent advance for the SPDR Gold Trust…‘

This provides more proof for the idea that stocks are the best way to build long term wealth. Gold is great. You should own it. But if you want to make real money, the best place to do it is in stocks.

That’s why we often refer to the Bloomberg Billionaires Index. We point to the fact that there isn’t a single person in the top 100 who has amassed their billions by investing in gold.

The vast majority of the Bloomberg Billionaires made their fortunes by investing in businesses. They’re entrepreneurs or capitalists who have an eye for making money.

But that’s not the only message you can get from that report. It also lights a fire under the lie that the resource sector is dead.

Over the past three months the Market Vectors Gold Miners ETF is up 39%. The index that follows the supposedly dead Aussie resource sector, the S&P/ASX 300 Metal & Mining Index is up 2.3%.

Sure, that’s nothing to crow about. But it’s only just below the performance of the S&P/ASX 200 index, which is up 4.9% over the same timeframe.

The point we’ll make here is that despite all the talk about China’s economy collapsing and emerging market turmoil, the reality is that the market had already taken this into account over the previous two years, when resource stocks fell.

We’ve said it more than once so we’ll say it again: this isn’t the time to sell, it’s the time to buy. It turns out we’re now gaining some support from the mainstream on our position.

Don’t Repeat The Mistakes of The Past

Take this from another Bloomberg report, quoting Sam Vecht, fund manager at BlackRock Emerging Europe Trust Plc:

‘“For several years we had been relatively bearish on emerging markets in general and Turkey in particular, but in the last few months we have turned more bullish,” Vecht said. Investors getting out of emerging markets now risk repeating the mistakes of 2009 to 2011, when many were too late to share in the biggest gains, he said.‘

The important thing with any big picture approach is that it’s almost impossible to pick the exact bottom of the market. Vecht admits that when he said he turned bullish a few months ago…before emerging markets took a beating.

The same has happened to us. We started looking at emerging markets around the middle of last year as an investing opportunity. And as for the resource sector, we turned bullish on that market around this time last year.

So, did we get it wrong? Of course we did. Look at any resource or emerging market price chart and you’ll see that. But has it changed our view on both sectors? Not a bit.

Hunting for a Crisis That Doesn’t Exist

Markets move all the time. They move up and down second by second. The important thing is to take into account the big underlying trends.

And the big trends are that there will always be a demand for resources, and Asian economies (despite the bumps) are on an inevitable growth path. Remember, China’s economy is set to double within the next nine years.

Plus, there’s the other factor that we’ve also written about for some time – the urge among some to seek the glory of picking the next market crash.

From the same Bloomberg report, quoting Paul McNamara, fund manager at GAM UK Ltd:

‘“Everyone who missed the 2008 crash wants to call the next one, and emerging markets are the new-found object of expertise,” McNamara said in e-mailed comments yesterday. “Claims of a global crisis are overstated.”‘

We won’t agree with everything McNamara says, because it depends on which crisis he’s talking about. If he’s talking about the big one…the eventual collapse of the monetary system, then we’d say the claims are actually understated.

But if he’s talking about the global impact of Russia, Ukraine, Crimea, Argentina, or even China, then yes, we totally agree that these are the ‘crash catalysts’ some analysts claim.

In short, while we can’t claim that investing in stocks will get you a place on the Bloomberg Billionaires Index, we can say that if your goal is to grow your wealth over the next five or six years then checking out the beaten-down opportunities on the stock market is the best thing you can do.

Your first port of call should be to check out the latest on resource stocks here. Resource expert Jason Stevenson says the market in certain commodities is set to boom.

We agree.

Cheers,
Kris+

Special Report: Mining Boom Act II

Join Money Morning on Google+

By MoneyMorning.com.au