World Investment Report Blog

During the past several years I have posting charts showing annual stock market and bond market returns for various indices for the time periods from 1980-2006, 1980-2007, 1980-2008, 1980-2009, and 1980-2010. I have generated an updated chart to include returns from 2011 as shown below (click on the image for a larger view).

The chart shown below illustrates returns for small cap indices (Russell 2000, Russell 2000 Value, and Russell 2000 Growth), large cap indices (S&P 500, S&P/Citi 500 Value, and S&P/Citi 500 Growth), a broad-based foreign stock index(Morgan Stanley Capital International Index for the developed stock markets of Europe, Australasia, and the Far East (“MSCI EAFE index”)), an index of bonds (Barclays Capital Aggregate Bond Index Lehman Brothers Aggregate Bond Index (“BC Agg.”))*, and the Nasdaq Composite Index.

2011 was a mediocre year for most stock market indicies as performance was held back by the financial turmoil in the Euro Zone. International indicies performed particularly poorly as American investors generally prefered to invest in the safety of bonds instead of foreign equities.

Bonds provided steady returns as they have since 1980, with the BC Agg. Index rising 7.84%, its best calendar year return since 2002. The S&P 500 Growth Index was the strongest equity performer of the indicies shown below, returning about 4.65%. The S&P 500 Index was the only other index which generated positive returns, rising a pedestrian 2.11% in 2011.

International equities were hammered during 2011, with the MSCI EAFE Index dropping 12.14%. Value equities also underperformed – the Russell 2000 Value Index dropped 5.50% and the S&P 500 Value Index dropped 0.48%. Tech stocks were also underperformers, as evidenced by the 1.80% drop of the Nasdaq Composite.

As shown in the chart below, the Russell 2000 Value Index provided the strongest returns by far between 1980 and 2011, returning a total of 4,105.20%, or an average of 12.39% per year. The total returns of the Russell 2000 Value Index has returned more than 1,300% more relative to its initial value on December 31, 1979 than the next best index I tracked, the S&P 500 Index.

In case you are a struggling employee and is suffering from any kind of work related injury or disability that affects your salary, then you become eligible for obtaining the finance and workmans assurance for a recovered future. But it is essential that you follow step by step guidance and apply with the entire requirements needed for the claim. If you fail to produce the same then there are chances that your application to be rejected.

Initially you should consult with your lawyer about the settlement amount to be claimed according to the level of injury.

Secondly it is very essential that you take immediate medical and legal action as soon as you are affected with the injury or disability.

You can browse through the terms and conditions quoted in the US Department of Labor official website in order to educate yourself about the name, contact numbers and addresses of the accredited agency.

You should fill in the file a Notice of Injury with every detail about your work and injury to the United States Department of Labor.

America is leading the world economy all the time. Its trading amount tops the world. And US dollar is always the strong currency acting as the world currency. For foreign trade business in most countries, they choose USD as the settlement currency. In a word, it has always been quite important. But with the downfall of American economy recently, the currency rate of USD has been devalued. It is no more favorable in investment market.

In this case, we can choose gold as the investment projective instead. As the saying goes, gold is born to be currency. It is easy for keeping. So the value of gold is always stable. It is always the best investment choice no matter how the economy market flucatuates.

The gold investment products can be categorized into three types. One is paper gold. It’s available in all banks. The minimum limit of transaction is ten units. The price changes everyday and you can buy or sell it at anytime. Mostly it is transacted through the online banking or phone banking for self-service.

Second, it is gold product. In some important occation, banks always carry out certain gold products for customers’ investment. You can well earn from them and keep them for value-add over the long run. In most cases, the price is always not much higher than the real gold in market. So it’s a good investment choice on you.

Third, it’s the gold future. The future can be used for value-keep by buy or sell a contract of a certain future gold price in international market. And the earning is dertiminated by the gold price on different moment of buy or sell. It requires the insurance fund like all other commercial future. It is high flexible and financial managed. And compared with the real gold, it save much trouble in keeping them.

People make a lot of investment with varified types in differet fields. We have to choose different investment projects for good benefit in different economy situation. Investment in shops is often a good choice for its stable earning. If the economy is in good condition, it can well bring more considerable benefit. But there are some strageties we should know about.

First, make a prudent decision on position. The condition of the shops’ position should well be considered. It includes the popularity, stream flowrate, business atmosphere and transportation condition etc. Good position can make the shop develop with much value-add room.  People are likely to rental or buy your shop and leave you much profit margin.

Second, choose a good project for the shop business. Learn to distinguish the profit future of your business in different fields by location. For shops locating near the residential house, it fits for consumption business like supermarkets, retailing shops and other residential service. If it is near the school, business like stationary, restaurant and daily comordities are more accurate. Also, it may be besides the office building, those business deal with working facilities can be a good choice.

Third,  choose shops in region more developed. As we know, cities in easten costal region are with better economy oppotunities. They can bring shops better chance in development. Also, the cities that are listed as the developing objectives in country economy policy, are also quite acceptable. The value of shops will soon be promoted on the favor of good macro economy situation.

The strageties in shops are much many. It needs you to discover.

Shares of chipmaking companies soared on Tuesday following Texas Instruments’ late Monday $6.5 billion bid for rival National Semiconductor.

Both companies make analog chips, which are used to help computers sense the world around them.

National Semiconductor (NSM) led the pack, gaining more than 70% in early trading, but other analog chipmakers also rose significantly: Intersil (ISIL) climbed 13%, ON Semiconductor (ONNN) rose 5%, and Fairchild Semiconductor (FCS) gained 3%

Shares of Analog Devices (ADI), Linear Technology (LLTC), Maxim Integrated Products (MXIM),International Rectifier (IRF) all rose about 1%.

The deal would give Texas Instruments (TXN, Fortune 500), already the world’s largest analog chipmaker, an even more sizable lead over its competition. The combined company would control 18% of the market, with the next largest rivals holding a 4% to 6% share.

As a result, analysts anticipate more deals in that segment of the chip market

“We do believe that more consolidation is possible in the analog space given the fragmented and diffuse nature of that market, and given that TI is so much larger than its next few competitors,” said Craig Berger, analyst at FBR Capital Markets.

TI could buy up more analog chipmakers, or smaller competitors could merge for scale and efficiencies, analysts say. Shares of TI fell more than 2%.

Berger sees Fairchild Semiconductor and International Rectifier as the most attractive takeover targets. Both have high exposure to the industrial and automotive sectors, and their share prices are relatively cheap compared to their earnings expectations.

Even Intel (INTC, Fortune 500), AMD (AMD, Fortune 500), and Nvidia (NVDA), which have all suffered through recent slumps and aren’t players in the analog business, were up about 1% on Tuesday.

Chip stocks got knocked around in the past two days, after IHS iSuppli reported that semiconductor suppliers’ string of six consecutive quarters of sequential sales growth ended in the fourth quarter of 2010.

With the recent introduction in Europe of a proposal to tax stock and bond transactions at a rate of 0.1 percent, and derivative contracts at a rate of 0.01 percent, as this KPMG summary highlights, the issue of a possible financial transactions tax here in the U.S. has arisen again.

While it’s critical that the pros and cons of such a tax be studied and debated, it’s worth correcting some misinformation regarding possible legislation on financial transaction taxes. According to Politifact.com/Oregon, an email has been spreading across the Internet, claiming “that (Rep. Peter) DeFazio (D-OR) wants to levy a 1 percent tax on every financial transaction, like depositing a Social Security check or cashing a paycheck. The letter claims his proposed legislation had the blessing of President Barack Obama’s ‘finance team’ and that Democrats are waiting until after the Nov. 2 election to pass H.R. 4646.”

As the Politifact story notes, H.R. 4646 was indeed a proposed bill. But, it was another elected official, Representative Chaka Fattah (D-Penn.) who introduced the Debt Free America Act in early 2010. The proposed bill would have, among other initiatives, “amended “the Internal Revenue Code to impose a 1 percent fee, offset by a corresponding nonrefundable income tax credit, on transactions that use a payment instrument, including any check, cash, credit card, transfer of stock, bonds, or other financial instrument.” However, the bill had no co-sponsors and never became law, GovTrack.us reports. Rep. Fattah reintroduced the bill, now H.R. 1125, in March of this year. Again, it has no co-sponsors.

Senator DeFazio did introduce a bill several years ago that would have taxed some Wall Street trades. However, the amount of the tax and the types of transactions on which it would be levied are much more limited than would be the case under H.R. 4646. Instead, the “Let Wall Street Pay for the Restoration of Main Street Act of 2009” or H.R. 4191, “amends the Internal Revenue Code to impose an excise tax on certain securities transactions, including transactions in stocks, futures, swaps, credit default swaps, and options. Exempts transactions for securities held in tax-exempt retirement accounts, health savings accounts, educational accounts, and regulated investment companies,” according to the GovTrack.us summary. The tax would equal one-fourth of one percent on speculative Wall Street trading and two hundredths of one percent on exotic derivatives, according to information on Rep. DeFazio’s website. The bill was introduced in December, 2009 and did not become law.

If you want to try to generate a little bit of extra cash with what you have squirrelled away then a great way to do so is to trade on the forex. A lot of traditional investment routes are out of limits at the moment thanks to a relatively depressed economy, but the one great thing about the forex market is that there are always fluctuations in the value of currencies, meaning that there is always money to be made. When one currency is struggling, it has to be struggling in
comparison to another currency, which creates the sorts of margins that allow people to make money on the market.

If you think that it is something that you could be successful in, then it is very simple to get going in, but you do have to remember that Rome wasn’t built in a day, so you have to approach things sensibly. The first step for anyone new to markets should be to find a broker. Although this inevitably means losing a small amount of your profits, it is certainly worth it considering you probably wouldn’t have any profits to lose if you tried to go it alone! The best thing to do is to search for forex brokers on the internet. You will find that they are easy to come across, and won’t cost you as much as you think considering just how much money they
could make you in a short space of time.

I’m normally not excited by water heaters, but I do love the idea of investing small money upfront to lower my expenses and save big money in the future. We currently have a 10-year old electric water heater which I’d like to replace soon due to age and inadequate size. We live in a warmer climate and thus considered a solar hot water heater, but the combination of cost and having to cut and install water pipes through our roof didn’t sound especially fun. I just saw that until October 5th, Lowe’s is selling the GE GeoSpring 50-Gallon Hybrid Electric Water Heater for $999. Currently, both GEAppliances.com and Sears also have it at $999. If you can get free delivery in your area, one may be cheaper than the other. Both Lowe’s and Sears offer another 5% off if you have their store credit card.

Tax credits. There is a Federal tax credit of $300 available on electric heat pump water heaters. In addition, check for state energy rebates here, and you may get even more back (look carefully, as many states have already exhausted their rebate funding). Without anything local available for me, this makes the net cost $700. A conventional 50 gallon electric heater with a shorter warranty can be found for about $300, with a 9+ year warranty runs about $400. This makes the cost difference with no state credits to be no more than $400. Both could be installed yourself if you’re handy, otherwise installation is extra.

Potential $2,400 in savings. With average electric cost assumptions, this heater is supposed to save about $25 a month, or $320 a year in electricity costs. If you have your electric bill handy, you can do the math yourself as a 50-gallon standard electric tank water heater uses about 4881 kWh per year vs. the GE Hybrid water heater at 1856 kWh per year. Using their standard numbers, this hybrid system would pay for itself less than two years. Assuming a 10-year usage, you would then have 8 years x $300 a year = $2,400 of potential total savings.

What’s a hybrid water heater? It’s called a hybrid because it can heat up your water using a heat pump as well as the conventional electric resistance coil. I was having flashbacks to my thermodynamics college courses while learning about it, but essentially a heat pump takes the heat from ambient air and transfers it into the water. This is kind of like an air conditioner in reverse, which takes the heat in the air and moves it outside with the aid of a refrigerant like Freon. The heat pump is more energy efficient than the electric coil, but slower, so the coil is still there as a backup during times of high demand. A heat pump works better in warmer climates, as there is more heat in the air. You’ll also end up with condensation which will need a drain unless you want to empty out a water pan every few days.

The added complexity of the heat pump does make for more things to go wrong, which is why I suppose it comes with a rather long warranty. It is worth the upfront investment? I think so for us, but I’ll haven’t fully run the numbers on a similar whole-house tankless system. Thoughts?

Beware of Financial Clutter

When I work with a new client in my financial planning practice, I often come across a condition that I call “financial clutter.” This has many forms, but a common version might look like this:

• Husband and wife have worked at several jobs and have a number of 401(k) plans left with their former employers.
• Three Roth IRA accounts are held with various custodians.
• Four Traditional IRA accounts are scattered among several custodians.
• The husband and wife each have a 401(k) account at a current employer.
• There are two taxable brokerage accounts, an annuity, and two accounts directly held via mutual fund companies, each with a single fund holding.
• Overall, there are 53 distinct holdings among these accounts.

What’s wrong with this picture? In my experience:

• Typically, clients with this type of profile have not looked at their holdings as an overall portfolio. In fact, they have generally not reviewed the individual holdings since the time at which they were purchased.
• Such clients are not aware of their overall asset allocation. Are they taking too much risk or too little? Is there a high degree of overlap (of the underlying holdings) within the funds held?

These problems are a sign of a collection of investments accumulated over time for various reasons, instead of a portfolio that was built as the result of a financial plan tailored to their unique situation.

Financial clutter can also extend beyond investments and may include:

• Nonexistent or missing beneficiary designations on insurance policies, annuities, and retirement accounts. The beneficiary designation is the final determinant as to how these types of assets are distributed at death. A missing or outdated beneficiary designation can cause these assets to go to someone other than whom you would choose. Beneficiary designations may need to be updated for various life changes, including marriage, divorce, birth of a child, or a family death.
• Outdated or nonexistent estate-planning documents. If you have minor children, you must have an up-to-date will that designates your desired guardian for those children. (Check with an attorney for the requirements in your state.) Without these documents, in the worst-case scenario, the outcome for your children and your family could potentially be very ugly. For more help, see my previous blog post, “How Often Should I Update My Estate-Planning Documents?”
• Lost or misplaced assets. This is a huge problem and the reason why most states have an unclaimed property department (usually in the office of the state treasurer). This situation can even happen to professionals. About a year ago, I discovered that around $1,500 had been sent to a former address in 1985. I completed the paperwork, and 12 weeks later I received my check from the Wisconsin treasurer.

Macfarlane’s new report on how to invest offshore in rare earth metals and rare industrial metals – and how you can invest in these physical methods for privacy and profit!
With gold having reached an all time high again yesterday, and silver soaring back upwards, investors’ eyes are once again closely focused on precious metals. Our advice in Q Bytes of a few weeks ago to buy up gold has paid off handsomely again. One client recently wrote in about how surprised he is that the world seems to be going bankrupt. On both sides of the Atlantic, emotions and concerns are running high. Asia is the notable exception to the doom and gloom – which is why we are running our next event there this October. More details soon, or email us if you would like to be notified in advance.
Meanwhile, offshore banking expert and consultant Peter Macfarlane has just finished his latest new research report that he’s been busy on for the last few months. It’s downloadable as of today free of charge for Q Wealth members – just log in and look under ‘Special Reports for Members.‘. It’s about another metal investing class, one that we also expect will see substantial gains over the next few years. And once again it’s also about investing in physical, hard money assets with no reliance on banks, stock markets or the global financial system.
This report is about rare earth and rare industrial metals. These rare metals are essential ingredients in many high tech products, from iPads to solar panels. They have been called ‘green elements’ (although this report explains why that is really a misnomer) Still, we believe that the world will continue to consume and demand more and more of these metals for complex industrial processes
Investing offshore in rare metals is also an investment play on Asia and especially the Chinese economy and currency. China currently controls 97% of the world’s supply of rare earth metals. The Chinese have effectively stopped exports of these essential rare metals to the rest of the world, simply because they need their entire production capacity and more to feed the Chinese industrial giant.
This report explains how you as a private individual anywhere in the world can buy physical rare metals and have them stored in a tax-free Swiss vault. Any time you want to take physical delivery you can (subject of course to taxes and shipping costs and government restrictions.) Stockpiling rare metals seems to us like an excellent way to secure a part of your wealth offshore for the future. Unlike gold and silver, these metals are less sensitive to governments since they are not traditionally used as money. There are no reporting requirements on this asset class. In fact, there’s even a way to hold this investment completely anonymously.
For further details of how you can achieve privacy, profit and asset protection read our Rare Metals Investing page, or go directly to the report in the Members Area. If you are not yet a member of Q Wealth, besides instant access to this report you can get a whole range of other exclusive benefits that are listed here.
IMPORTANT: this report also contains a number of warnings about how NOT to invest in rare earth metals. Some classes of investment are already in bubble mode. Please take note.