King Solomon On Diversification
March 8, 2014 Leave a comment
“Divide your portion to seven or eight, for you do not know what misfortune may occur on earth.”- Ecclesiastes 11:2
Efficient Gold Investing
December 5, 2013 Leave a comment
In unsettled times, gold remains relevant. It is an asset of the last resort. It comes in handy in times of personal and social crisis. If you have amassed a fortune, it makes sense to geographically disperse it to ensure that all eggs are not in one basket. Moreover gold tends to be a good hedge against a depreciating currency and can be freely bought and stored abroad to be converted to any currency of choice as needed. A further plus is the lower gold rates abroad. So, for readers who have written in to ask about alternatives to BullionIndia, if you can deal with larger quantities of bullion,there is a better option: BullionVault.
The best gold and silver deals are listed on the international professional bullion markets—where most trade and government industries and banks trade—not the Mumbai Wholesale market. But this market only deals gold in 400 oz good delivery bars, which cost around $500,000(3crores) each. The silver bars weigh 1,000 oz. This puts the best prices out of reach of most private individuals. Further good delivery bars are stored in accredited vaults. The vaults have a high minimum monthly charge, so you would need about 15 of these 400 oz gold bars, worth around $7,000,000(43crores), to make it economic for you to open an account yourself. The large starting balance tends to make the system inaccessible to many private customers. With the help of online trading such as BullionVault, you’re able to obtain information from international gold markets and own gold bars. It’s a good thing that you’ll also enjoy cheaper prices in terms of storage. So whether you are purchasing or selling, expect to find top notch international gold prices. BullionVault offers none of the free storage and zero commission on sales that BullionIndia offers. But the small fees are reasonable if you are dealing with larger amounts. You will make back these small expenses in the better rates you get. Also you will be offered priceless security and guarantees. Read more of this post
Tobias Preiss And Google Trends
April 28, 2013 Leave a comment
Google Trends, a tool that looks at patterns of searches on the internet, is a potential money-spinner for investors as it provides hints of impending stock movements according to a study led by Tobias Preis at the Warwick Business School in England .The researchers analysed data from Google Trends from 2004 to 2011.They looked at the volume of searches for 98 terms, such as “metals”, “stock”, “finance”, “forex”, “house”, “unemployment” and “health” as well as non-specific or neutral words, such as “ring”, “train”, kitchen” and “fun”.They then constructed a virtual portfolio of investment in the Dow Jones Industrial Average (DJIA), with a strategy based on search volumes that occurred on Sundays.If the search volume that day was high compared with a week earlier, the DJIA investment was systematically sold at the closing price the following day, and then repurchased at the end of the first day of trading in the week after.Conversely, if the search volume on Sunday was low compared with the previous week, the researchers “bought” the following day.Using the keyword “debt” – the term that saw the most fluctuation during the study period – the strategy netted a whopping cyber-profit of 326 per cent over seven years.By comparison, a strategy of buy-and-hold – purchasing in 2004 and selling in 2011 – would have yielded only 16 per cent profit, equal to the rise in the DJIA during this time.A third strategy, of buying or selling on the basis of movements in the Dow itself, would have netted a gain of 33 per cent.The results suggest that, following this logic, during the period 2004 to 2011, Google Trends search query volumes for certain terms could have been used in the construction of profitable trading strategies. Read more of this post
Volatility and the Indian Stock Markets
June 19, 2011 8 Comments
The volatility of the Indian market which is above 26% is one of the highest in the world. So though the long-term CAGR of the Indian market is 15.60%, there have been specific points in time when the market returned 1.25% pa for a 10-year period as well as 19.98% pa for another 10-year period.
One of the biggest impacts of this volatility is that it increases the entry-point and exit-point risks in investing. The simplest way of tackling this risk is to invest in the market at regular periods of time, irrespective of its levels to achieve cost averaging and also participate in the long term upward trend of the Indian markets. Also it is better to stick to the stable large-cap blue-chip companies. Read more of this post
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