Month: March 2012

By CountingPips

The EUR/CHF came alive this morning and trades at its highest level in over month. This pair has been more or less dormant for the last month as the Swiss National Bank (SNB) has vowed to keep the pair above 1.20 to stem too much strength in the franc (hurting Swiss exports). The EUR/CHF continued to stall just above the 1.20 level lately as traders have anticipated intervention by the Swiss Bank.

Although today’s bullish action is very unlikely due to SNB buying, it will be interesting to see if the move will be sustained and present higher levels into play or will be beaten back down and perhaps testing the SNB’s resolve in keeping the pair above 1.20.

EUR/CHF – Breaking out of its recent range on the 4-hour chart

Urban Outfitters (NASDAQ:URBN) who reported earnings after bell yesterday saw shares fall in premarket trading this morning.The company reported Q4 EPS of $0.27 and revenues of $731 million, missing by $10 million.Urban Outfitters (NASDAQ:URBN) has potential upside of 4.2% based on a current price of $28.11 and an average consensus analyst price target of $29.3.Urban Outfitters is currently above its 50-day moving average (MA) of $27.46 and above its 200-day of $27.32.In the last five trading sessions, the 50-day MA has climbed 0.38% while the 200-day MA has remained constant.Urban Outfitters, Inc. operates retail stores and direct response, including a catalog and Web sites. The Company’s Urban Outfitters and Anthropologie retail concepts sell fashion apparel, accessories, and household and gift merchandise. Urban also designs and markets young women’s casual wear which it provides to the Company’s retail operations and sells to retailers worldwide.

Dividend aristocrats allow investors to harness compounding returns of both capital gains and continually increasing dividends.

I couldn’t believe the returns I was seeing. Could investors really generate this much money by using this strategy?

I emailed Wall Street Daily’s Matt Weinschenk, my go-to guy when I have questions about quantitative or mathematical issues. “Can you check these numbers? They seem a bit high to me,” I wrote.

I was using a financial model on an Excel spreadsheet to figure out a way that investors could generate double-digit yields and returns over the long term. The theoretical returns that the model said were possible were enough to satisfy nearly any investor.

A short time later, Matt emailed me back. “Yes, these numbers are accurate. And they’re not just theoretical. Check out the attached.” Matt was referring to a screen shot he attached to the email that showed some startling figures.

Using this strategy, an investment in Southern Company (NYSE: SO) 10 years ago had an average annual return of 11.4%. That compares to the S&P 500, which only rose 9.5% over the entire decade.

If you go back 20 years, the returns were even more impressive. A $10,000 purchase of Colgate-Palmolive (NYSE: CL) grew to $102,190 – a return of over 900%.

It’s why I call this investment methodology “The Only Investing Strategy You’ll Ever Need to Become a Millionaire (or Stay One).” It’s the topic of my presentation next week at the Investment U 14^th Annual Conference in San Diego.

One thing you’ll notice about the two stocks mentioned so far, they’re not exactly exciting names. You won’t find them on anyone’s hot lists or must-buys for 2012. Yet these companies and others like them outperform the market year after year, decade after decade, because they have one thing in common: They pay dividends and raise them every year.

I looked at hundreds of stocks. Most of them are what you’d consider boring companies. Companies such as Coca-Cola (NYSE: KO) and McDonald’s (NYSE: MCD) – they all produced stunning results when you invest over many years. And if you reinvest the dividend over those years, look out, your returns really get amplified.

That’s because of the power of compounding. When you reinvest your dividends, you buy more shares, which spin off more income, enabling you to buy more shares, which spin off more income…

“The Most Powerful Force in the Universe”

Albert Einstein said that compound interest is “the most powerful force in the universe.”  Whether we’re talking about interest or dividends, it’s obvious that compounding really picks up momentum after several years.

For example, let’s look at Kimberly-Clark (NYSE: KMB) – another stock that isn’t going to get anyone’s adrenalin pumping. I mean, you can only get so excited about Huggies, Kleenex and Scott paper towels.

But Kimberly-Clark pays a healthy 4.1% dividend yield, or $2.96 per share. If you bought $10,000 worth of stock, reinvested the dividends, and the dividend grew 9% per year like it has for the past 10 years, in 2022 your stock would yield nearly 14% on your original investment. Instead of $416 in income that you receive the first year, you’d get paid $1,388.

And if you could keep on reinvesting the dividends, the compounding machine kicks into overdrive the longer it goes. In 15 years, you’d receive $2,900 per year in dividends, or a 29% yield on your original cost. And in 20 years, $6,482 for a ridiculous 65% yield. So you’d make your original investment back every 18 months at that point.

These numbers assume the stock price rises 5% per year.

I call these kinds of stocks Perpetual Dividend Raisers – and will be talking about my specific strategy for how to invest in Perpetual Dividend Raisers at the conference in two weeks… It will be the first time I’m revealing this strategy to the general public.

But even if you need income today and won’t be reinvesting dividends, Perpetual Dividend Raisers can ensure that you stay ahead of inflation by receiving more income every year from the same stocks.

The best part is that these stocks tend to have lower volatility, and can even be safer than the broad market. And certainly more so than any hot stocks you may have been chasing to try to boost up your portfolio.

Don’t Trust Wall Street

I believe so strongly in this method of investing that I’m setting up my kids in Perpetual Dividend Raisers.

I’m no longer trusting their college educations to Wall Street professionals like mutual fund managers. Last year 84% of stock mutual funds underperformed the market, according to Standard & Poor’s. Over the past 10 years, more than half of all stock funds didn’t perform as well as the overall market.

So why would I trust my kids’ money to people with an established track record of underperformance, when I can instead invest in stocks and a strategy with a long history of producing strong returns?

For decades, dividend paying stocks have outperformed the general market. Perpetual Dividend Raisers even more so. And when you reinvest the dividends, the total returns compete with and in most cases far outpace nearly all Wall Street pros.

Good Investing,

Marc Lichtenfeld

P.S. Marc will be making his presentation, “The Only Investing Strategy You’ll Ever Need to Become a Millionaire (or Stay One),” in a closed-door meeting next week at an undisclosed San Diego resort.

There are no more seats available, but you can still gain access to Marc’s presentation along with an absolute wealth of investment ideas and strategies from our experts. To find out how you can access this event from almost any location, click here.

Article by Investment U

London Gold Market Report
from Ben Traynor
BullionVault
Wednesday 14 March 2012, 09:15 EDT

WHOLESALE MARKET gold prices dropped to their lowest level in 8-weeks, hitting $1641 an ounce shortly after US markets opened on Wednesday – 4.4% down on the week so far.

Stock markets gained while US Treasury bonds fell, following yesterday’s news that US Federal Reserve policy will remain unchanged this month.

The Dollar meantime added to recent gains, with the US Dollar Index – which measures the Dollar’s strength against a basket of major currencies – hitting its highest level in nearly 8 weeks on Wednesday.

Silver prices dropped to $32.77 per ounce as the US opened – just above last week’s low – while other industrial commodity prices also ticked lower.

As well as hitting their lowest level since January, gold prices also fell back through their 200-day moving average, which by PM London Fix prices was $1677 on Tuesday.

“Gold remains vulnerable to the downside,” says the latest technical analysis from bullion bank Scotia Mocatta.

The Federal Open Market Committee voted Tuesday by a majority of nine to one in favor of holding its main policy interest rate at 0.25%. Yesterday’s FOMC statement also noted that the Fed “expects moderate growth over coming quarters”.

“Knowing how dovish the Fed – especially [chairman Ben] Bernanke – is, for him to say we’re seeing growth is surprising,” says Ole Hansen, senior manager at Saxo Bank.

“Removal of [a potential increase in] quantitative easing and a higher rates forecast is not good for gold in the near term.”

The Fed also published the results of its annual bank stress tests yesterday, two days ahead of schedule. Based on the tests, the Fed says that 15 of the 19 banks tested would maintain their capital levels above the regulatory minimum of 5% of risk-weighted assets in an extreme scenario; specifically a rise in the unemployment rate to 13%, a 50% fall in stock prices and a 21% fall in house prices.

JPMorgan Chase, one of the 15 banks that passed the test, yesterday announced it is increasing the dividend it pays to stockholders by 20%. Shares in the bank gained 7% in US trading.

US stock markets rallied, with the S&P 500 hitting its highest level in four years, while the Dow hit levels not seen since late 2007.

“The froth is leaving gold to go into stocks,” one precious metals trader told newswire Reuters this morning.

“[Investors] see an opportunity there due to a slight improvement in the data. It’s not over yet, but overall sentiment seems to be turning.”

Britain’s chancellor George Osborne, who makes his latest Budget speech next Wednesday, is expected to ask the Debt Management Office to explore the possibility of offering 100-Year Gilts, which would potentially lock in prevailing low interest rates. Osborne is also expected to moot the possibility of so-called ‘perpetual gilts’, UK government bonds that have no maturity date.

Perpetuals were “first used in the wake of the 1720 South Sea Bubble crisis, to allow the government to borrow for as long as possible at record low rates”, newswire Bloomberg reports.

The longest-dated bond issued by the DMO during financial year 2011-12 was a 50-Year index-linked gilt. Britain tried issuing perpertuals to deal with its debt following the Second World War, though FT Alphaville reports that the so-called Dalton Bonds, named after the chancellor at the time, “flopped”.

“The political winds in countries with central banks are a long way from blowing in the direction of fiscal rectitude,” says today’s commentary from Societe Generale strategist Dylan Grice.

Grice contrasts countries like the UK and US with those like Ireland, which gave up its monetary sovereignty to join the Euro and which, he argues, has experienced a sufficiently severe crisis for people to accept the need for “draconian fiscal policies”.

Grice, who last year made a case for gold at $10,000 an ounce, goes on to argue that the time to sell gold will be when “majority opinion [accepts] the painful contractionary medicine”.

Elsewhere in Europe, Greece’s €130 billion second bailout was formally approved today.

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.

By TraderVox.com

Tradervox (Dublin) – After the FOMC announced its decision on Tuesday, it dampened the prospects of another round of bond purchases causes the dollar to rise against the south pacific currencies. However, this has not been the case with the yen. BOJ Governor commented that the plan for more asset purchases was still on the table. This caused the yen to depreciate against the south pacific currencies. The Australian dollar was at 10-month high against the yen as commodity prices boosted prospects for the export industry.

The New Zealand dollar was at 7-month high against the yen as Asian stocks offered support for riskier assets. However, the two south pacific dollars were not strong enough to reverse their losses against the US dollar. After the FOMC decision the greenback rose against both currencies. Investors have interpreted the decision to mean that the Fed is reluctant to go ahead with the next round of quantitative easing.

Adam Carr a Senior Economist in Sydney indicated that the rebound in commodity prices may keep the Australian dollar stronger against the yen. On the Kiwi, Carr said that positive global economic data and increase in commodities prices may make kiwi stronger against the yen. He added that the New Zealand dollar may even increase on the sentiments alone.

In the Sydney trading session, the Australian dollar rose by 0.2 percent against the yen to settle at 87.71 yen. The increase comes after the comments by the BOJ governor on the possibility of another QE. The Aussie had increased to 88.01 yen on March 2 the highest it has been since May 11. The New Zealand dollar traded at 68.28 yen yesterday but edged a little to 68.26 yen today maintaining its 1.5 percent increase from yesterday. Both south pacific dollars reduced against the dollar with Aussie declining by 0.1 percent to trade at $1.0544 while the kiwi declined by 0.3 percent to trade at 82.06 US cents.

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

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.

Good Afternoon, You are watching the financial news network online, I am Ian Temple.Today and Precious MetalsWhat to Expect, and How To ProtectWith the Dow Jones getting bashful about the number thirteen-thousand while the fed pumps money like there’s no tomorrow, it’s only natural to wonder, ‘what am I supposed to do?’ It’s times like this that test our Metal.But is it Gold, or Silver? Silver tends to fare better in the early stages of an inflationary boom because it trades as an industrial metal more than it does as a precious metal, and as such will be strongly in demand.However—it’s a good deal more volatile, so take your Dramamine with your shares of SLV if you get motion sickness.Gold is a bit more stable—some folks even suggest that the price of Gold doesn’t move at all—merely the price of everything else moves around it. That may be giving our little yellow friend a little too much credit, but Gold without a doubt fares better during periods of high inflation than your 2-percent government savings bonds ever will. And with a decreased industrial demand, Silver will take a hit.Now if things get bad—and I mean REAL bad– Silver’s gonna outperform Gold heavily. Why? Because the value of Gold is impractically high. You or I could never exchange an ounce of Gold for a bag of groceries. Not inless you’re Jabba the Hutt, anyways… But with Silver which trades around thirty dollars an ounce, in today’s dollars, you could. And with more and more middle class people looking to ride out the inflationary storm, Silver just may be the only game in town.You are watching the financial news network online. For more updates, stay tuned, I’m Ian Temple.

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.

Source: ForexYard

Investors took positive US retail and core retail sales figures, both released yesterday, as further evidence of growth in the world’s biggest economy. As a result, the USD/JPY shot up to 82.83 during the afternoon session, a fresh 11-month high for the pair. Today, a speech from Fed Chairman Bernanke is likely to be the highlight of the trading day. While no major announcements are expected during the speech, any hint that US interest rates could go up earlier than expected may help the dollar extend its recent bullish trend.

Economic News

USD – Bernanke Speech Set to Generate Volatility

The US dollar saw another bullish day yesterday, following the release of positive US retail sales and core retail sales figures which signaled additional growth in the US economy. Following the news, the USD/JPY spiked to an 11-month high to peak at 82.83 for the day. Against the euro, the combination of positive US indicators and general investor pessimism in the euro-zone economic recovery, led to significant dollar gains. The EUR/USD dropped as low as 1.3050, before staging a slight correction during the evening session.

Turning to today, traders will want to pay attention to a speech from Fed Chairman Bernanke. While it is not yet known what the Fed Chairman will say, his speeches have been known to generate significant amounts of market volatility. Any indication that the US could raise interest rates earlier than expected could help the dollar extend its recent bullish run. At the same time, if Bernanke once again maintains that US interest rates will remain at their current levels through 2014, the greenback may give up some of its recent gains.

EUR – EUR Tumbles despite Strong German Data

The euro was once again down against its main currency rivals yesterday, despite a significantly better than expected German ZEW Economic Sentiment figure. Investor confidence in the euro-zone economic recovery is still extremely low, as the prospect of the debt crisis spreading to other countries in the region is still very likely. Analysts are warning that Portugal, Spain and Italy are susceptible to many of the same troubles as Greece, and that there is still significant work that needs to be done to get the euro-zone back on track.

The EUR/USD dropped close to 140 pips yesterday, reaching as low as 1.3050 during the afternoon session. Against the British pound, the euro fell as low as 0.8328, down close to 100 pips, before staging a slight upward recovery.

Turning to today, traders will want to note the British Claimant Count Change figure, as well as the speech from Fed Chairman Bernanke. The British figure is forecasted to show a slight drop in the number of people claiming unemployment benefits last month. If true, the pound may extend its gains against the euro. Similarly, the dollar could see additional gains today, if Bernanke’s speech points to continued growth in the US economy.

JPY – JPY Moves Up vs. Euro

The Japanese yen made gains on Tuesday following an announcement from the Bank of Japan indicating that there would be no further steps to increase quantitative easing. The JPY remained bullish throughout most of the morning, and saw gains against the euro and greenback. While the yen remained strong against the euro, the USD was able to bounce back during the afternoon session, to stabilize around 82.74. This was preceded by news of positive economic growth in the form of increased retail sales numbers from the U.S.

Heading into today, we may see a possibility for the JPY to continue its bearish trend against the dollar. The big news for today will come in the form of a speech from Fed Chairman Bernanke. The chairman will indicate the overall state of economic recovery in the U.S. and this could boost the USD even further up on the yen.

Crude Oil – Crude Oil Drops Slightly

Crude oil dropped slightly on Tuesday following gains made the previous day. The commodity traded around $106.20 for most of yesterday which marks a slight drop from the $106.37 level reached during trading on Monday. Investors are keeping an eye on crude oil given the recent gains made by the USD on Monday and Tuesday.

Others indicators in the market are contributing to the most recent slump in the price of crude. For example, the recent news out of China regarding its shrinking manufacturing sector and overall weakened growth rate has pushed down demand for crude oil. Countries across Europe have also been reporting a shrinking demand for oil, which could inhibit any further rise.

Heading into today, traders will want to pay close attention to how the market reacts to a speech given by Fed Chairman Bernanke. Any continuation of the bullish trend in the USD following the speech could lead to a further decline in the price of crude oil.

Technical News

EUR/USD

The Relative Strength Index on the daily chart has dropped into oversold territory, indicating that upward movement could occur in the near future. That being said, most other long-term indicators place the pair in neutral territory. Taking a wait and see approach for the pair may be a wise choice.

GBP/USD

While the Williams Percent Range on the daily chart has entered the oversold zone, which means that upward movement could occur, most other technical indicators are inconclusive at this time. Traders will want to keep an eye on indicators like the Slow Stochastic and Bollinger Bands on the daily and weekly charts, as a more defined trend may present itself in the near future.

USD/JPY

Following the spike the pair saw to close out last week’s session, technical indicators now show that downward movement could occur in the coming days. The Slow Stochastic on the daily chart has formed a bearish cross, while the Relative Strength Index on the weekly chart has entered overbought territory. Going short may be the wise choice for this pair.

USD/CHF

The Bollinger Bands on the weekly chart have begun to narrow, indicating that a price shift could occur in the coming days. The Relative Strength Index on the daily chart, which has crossed into overbought territory, shows that this shift could be downward. Traders may want to go short in their positions.

The Wild Card

EUR/JPY

The daily chart’s Slow Stochastic has formed a bearish cross, indicating that this pair could see downward movement in the near future. At the same time, the Williams Percent Range is approaching the overbought zone. Forex traders will want to watch the indicator. If it crosses above the -20 level, a bearish correction could occur.

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) – From the controversies surrounding the Bank of England’s massive government bond buying program, one is left to wonder whether the BOE is certain of the outcomes of the process. In its defense, BOE is claiming that the quantitative easing program is an extension of ordinary monetary policy operation, insisting that it is no different from the interest rates. However, a further scrutiny of the program raises more questions than answers.

The BOE is printing money to buy gilts, this is something that has been questioned by many analysts who claim that this move will eventually cause more inflation in the Kingdom. Others are criticizing the policy on practical ground saying that it will not perfrom in the way the BOE wants it to work. The heated exchanges between the House of Commons Treasury Select Committee and the BOE Governor Sir Mervyn King only add to the questions being raised about the program.

If the BOE continues with this plan, it will accumulate gilts worth $427 billion, which almost a third of the governments bond market. This would represent the highest expansion of Central bank’s balance sheet in the world. However, this will not be supported by any fundamentals as the economy declined by 0.2 percent in the last quarter in 2011 and is expected to make minimal growth in 2012. Further, the inflation is higher than the set target and the household spending power is expected to be crimpled.

In comparison with the ECB’s quantitative easing plan, BOE’s plan seems impossible. While the ECB is flooding the economy with more money by directly lending to the banks, the BOE is trying to evade the use of banks by buying government gilts. The ECB move will reduce the pace of bank deleveraging hence allowing governments in the region to put their financial systems in order. On the other hand, BOE’s strategy is aimed at increasing government borrowing hence reducing the hence increasing the pace of public sector deleveraging, this would force the banks to pay their debts. According to analysts opposed to this move, buying government bonds is riskier than buying private sector assets since BOE has no authority over the government but other the private sector.

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