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Financial Assets Know About - The irony of having more in less

Financial assets are liquid assets prized through their represented contractual claims. Bank deposits, stocks, bonds, loans and the likes are financial asset examples.  Physical assets such as land, equipment, gold and commodities are different from these because financial assets have no tangible elements.  Financial assets, in simpler terms, are legal claims to future cash. These assets are usually expected to be converted to cash at a defined time of maturity. Counterparties such as banks which came to an agreement with a holder will then pay the future cash.  A FINANCIAL ASSET POSSESSES THE FOLLOWING CHARACTERISTICS:  It can be owned It has monetary value Its monetary value is derived from a contractual claim  Benefits of Owning Financial Assets  Low Maintenance                         Since they have no physical aspect, financial assets obviously do not need space for storage and regular maintenance and insurance efforts. They can usually be checked through institutional statements, automated machines and even online. Easier to Spend                         Majority of the market at present accepts liquid assets in financial transactions such as making large investments. Physical assets need ample time to be converted to monetary form. Lower Loss Risk                         Financial assets carry a lower risk of loss compared to physical assets since they can be quickly sold at a full value. When market forecasts become unstable or financial crises take place, liquid assets can immediately be sold with minimal or no loss at all. These bring less Better Trade Opportunities                         Daily financial exchanges are constantly taking place. Financial assets have the fastest and most convenient ways to trade with a great deal of opportunities and platforms. You don’t have to look for a buyer and pitch your asset with the chance to get rejected. Stronger Financial Profile                         Owning financial assets adds up to your chances to avail other liquid asset offers such as loans and mortgages. Some institutions actually require liquid assets and savings accounts for mortgages.  Types of Financial Assets Stocks These are assets within companies and corporations have no ownership time limit. Investors purchasing stocks from companies became shareholders, sharing even the businesses’ profits and losses. Stocks can be owned as desired but can also be sold to other investors. Certificate of Deposit                         This certificate of deposit (CD) lets an investor deposit money to a bank for a set time frame, with a certain monthly interest rate. Bonds                         Governments and companies use bonds to finance short-term projects. These are paid at the maturity date including interest rates. They contain a declaration of the owed amount of money.

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Things you Should Know About the Hong Kong Dollar

The Hong Kong dollar is the eight-most traded in the currency in the forex markets today and the third in terms of the most active currencies in Asia but isn’t a notable reserve currency despite of the facts stated above.  Hong Kong’s Economy   Hong Kong is an autonomous region but is still a part of China. While its economy is small, it is free according to the Index of Economic Freedom’s standards.  Services are what drives Hong Kong’s economy with 85 percent of workers involved in any kind of service. The major services employers include financial services, hospitality, retailing and trade.  The region's GDP has been quite erratic for the past 20 years usually between around 5 percent and 10 percent. Inflation has shown irregular movements as well with it going as high as 10 percent around 1995 and lowering to the negative territory the time the 20th century came around.  Hong Kong doesn’t have a lot when it comes to barriers to business. Couple that with the fact that Hong Kong has low taxes, it doesn’t take much to see how it has become an integral center for finance and trading in Asia.  Characteristics   The Hong Kong dollar is overseen by the Hong Kong Monetary Authority and is not allowed to be traded freely. The currency trades within a currency band that is very tight thanks to the current exchange rate regime called a “linked exchange system”.  While data such as inflation, GDP, trade balances and more are still a factor, the Hong Kong dollar has other factors that affect it. It is fixed to the U.S. dollar so whatever effects that the economic data mentioned above are minimal.  The Hong Kong dollar drives most traders away due to how miniscule price movements are but major baking institutions try to conduct trades with the assistance of computers that can capitalize on the small price movements. A lot of the transactions that use the currency are mostly for carry trading due to its low interest rates. Investors can buy Hong Kong dollars which they can use to buy bonds in countries like Australia.

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Japan’s Economy in 2017

Japan’s growth has been stable but is considered to be slow in the last few years. This article will discuss a few details about Japan’s market and macro-economic performance in the last year such as the country’s Gross Domestic Product (GDP) Growth, inflation, manufacturing and more.   GDP Growth   Japan had a strong international trade and a productive fiscal activity in 2017. This resulted in an estimated 1.5% growth. The economy has shown an uninterrupted growth for over seven quarters. The country’s healthy global growth and indulgent financial conditions positively affects the Japanese Economy. However, the conditions that pushed its growth this year are beginning to taper off affecting economic activity.   Wage growth has been on the weaker side which limits private consumption. It is unclear how long this growth will continue to rise, because the economy’s main driver which is consumer spending, remains weak.   Inflation   Japan’s inflation is high in 2017 despite weak consumer spending. Inflation rate is measured based on the Consumer Price Index (CPI). Japan’s economy rose in terms of inflation rate (CPI) in 2017 compared to 2016. Japan’s Inflation rate shot up 0.50% in 2017 in comparison to 2016.   Export and Employment Rate   Japan’s exports rose in 2017 despite the decline in international trade since 2016 which contributes to a slowdown in business investments.   Residential investments are also booming with very low long term interest rates. Gains from employment has helped bring up the growth of private consumption to the highest state since 2014. However, the wage worth remains low regardless of the drop in the unemployment rate and the highest job opening since 1976.   Economic Prospect   It is expected that growth will slow down because fiscal consolidation will resume in 2018. Wages are estimated to slowly rise because of the labor market tightening which will damage private consumption. The economy’s fiscal sustainability will be more easily assessed when the more detailed fiscal consolidation plan is officially announced later in 2018.

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All About ASEAN Countries

What are ASEAN countries? The Association of Southeast Asian Nations, also known as ASEAN, consisting of ten Southeast Asian states, is an intergovernmental and economic organization primarily aims to promote growth and stability within the economy of its members.  ASEAN was founded about fifty years ago in 1967 by five of the Southeast Asian countries, Philippines, Indonesia, Malaysia, Singapore and Thailand namely. The goal was to advocate stability in the region while also work on economic growth. Brunei, Cambodia, Laos, Myanmar and Vietnam were later on added to the organization.  The Importance of the Region   Economically, how important are the ASEAN countries? The ASEAN economy together is the seventh largest economy globally with a combined GDP of 2.6 Trillion Dollars in 2014. The combined ASEAN countries possess the third largest workforce in the planet. In addition to that, they also consist of roughly 640 million people which means it is around 9% of the world’s population.  Does Investing In ASEAN Countries Have Potential?   There is great potential in investing in these countries. There are a number reasons why and the following are a few:  Potent Market - The ASEAN’s market comprises 9% of the planet’s total population and its combined income per capita has only been rising in the last 6 years and as of 2011 it has come to an average of $3,600. Labor Force - The ASEAN countries’ workforce is one of the aspects that attract investors. It consists of efficient and productive human resources with highly skilled professionals. The ASEAN labor force is placed at a 70% participation rate. Positive Investment Practices - ASEAN is devoted to giving an excellent investment environment for investors. ASEAN’s initiative focuses on a captivating investment framework that attract investors and help those who are looking to do business in the region. Economic Growth -  The states that are members of the ASEAN have been pursuing and participating macroeconomic policies that helped the economic growth of the region. The region has managed to sustain a 5.3% GDP growth since 2006. From a US$1.8 trillion in 2010, it’s GDP rose to about US$2.2 trillion in 2011.

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All About Index Funds

Investing in index funds is known to be a sensible investment strategy. Though this information is well known, many are not completely aware of how it actually works. Understanding the effect of index funds investments will be beneficial to the investors.   Definition of Index Funds  Index fund is a form of mutual fund designed to match or track a constituent or the return of a market index. It is recognized as a type of mutual fund that provides a large market exposure. The operating cost and portfolio turnover is also known to be low.   A simple way to put it is, if investors purchased  shares of an index fund, they are buying shares from a portfolio that consists of the securities in an underlying index. The securities and the index funds are held proportionally in a way that when the index decreases, the fund for that share decreases as well and vice versa.   Index funds sometimes mirror comprehensive market indices while other forms of index funds replicate indexes with specific characteristics such as those that participate in a specific industry or geography.   Advantages   There are a number of advantages in index funds instead of direct ownership of the underlying securities. The following are a few examples:   Low Cost - The cost of buying and selling index fund shares is a lot lower than direct underlying shares. The index will be the determining factor to deciding which security to invest in instead of the active management. Liquidity - Buying and selling index funds is a lot faster than that of underlying shares due to the fact that index funds are bought and sold in large exchanges daily and numerous funds trade hundreds if not thousands of shares daily. Diversity - It is easy for investors to get exposed to a big group of companies because the interest of the underlying shares of securities is represented in each index fund. Because of this, index funds are also made less unstable compared to individual securities. Returns - Broad indices are proven to have outmatched typical mutual funds overtime which makes index funds a great way to better market returns.

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The Benefits and Risks of Investing In Developing Countries

Countries that are in its early stages are usually attractive to investors. But is investing in developing countries profitable? What are the benefits of doing so? This article will discuss the major aspects involved in investing in the markets of developing countries.   BRIC  The BRIC is a band of countries consisting of Brazil, Russia, India and China. 10 years ago, Jim O’Neill, Goldman Sachs’ asset manager, coined the term BRIC in relation to his prediction in an economic report stating that if the rate of growth and progress of the said countries continue, they would eventually play a larger role in the global economy.   The optimistic scenario that O’Neill foretold was that the GDP share of these countries together would rise from 8% to 14%. In 2008, the actual rise of the combined share in the BRIC countries was around 22%. These countries showed such rapid growth that attracted the attention of investors. It then seemed that investing in developing countries like the BRIC was a good idea.   Growth and Development  The BRIC, together, accounted for about 30% of the global increase in output from 2000-2008. The rate China’s growth and development to date has outmatched the rest of the other BRIC countries.   China has contributed over half the BRIC’s share and has produced more than 15% of the growth in global economic output during that period. The progress and growth that China and the rest of the BRIC countries have shown is one evidence that investing in developing countries is an attractive option.   Potential Risk  There are a few aspects that make investing in developing countries risky. One of these threats is natural disasters. Years of development and growth may easily come to a halt when a natural disaster hits a country you have invested in.   Conclusion  Since 2000, there has only been improvement and growth coming from the BRIC market and it’s definitely a good investment strategy to invest in developing countries as long as you take into account the potential risks involved in any investment.

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Equity Investment and Its Concepts

Equity investment is one of the strategies that investors use to maximize ongoing profits in the form of capital gains. This investment is mostly in the form of stocks. Equity, roughly, is commonly known to be an asset’s value minus its liabilities.   An equity investment in the form of stocks signifies partial ownership of the company. The investor may only gain income upon the company’s decision to distribute its proceeds after asset liquidation or upon selling the shareholdings to other investors.   What to do before carrying out a transaction   It is integral to make sure the investors have a remarkable, detailed and accurate business plan, a superb accomplishment record and portfolio management skills. There are multiple, competitive companies that offer guidance to investors and entrepreneurs alike.   Why it is ideal to invest   Investments in a private equity is relatively beneficial to the economy. Private equity investments commonly attract wealthy people and corporate investors including pension plans, big university donations and family offices.   Equity investment function as a funding source for high-risk projects and early stage establishments. Usually, the money is directed to fresh companies that have potential for considerable growth. These companies may develop and expand using investors’ money.   There is a number of investment banking firms that help and guide the investor appropriately. These investment banking firms examine the stocks with great attention to detail therefore their guidance is of great importance. In most cases, these firms are able to make correct projection as to the future of a stock based on past performances and various analytical tools that assess future trends.   Investors tend to invest in undervalued companies if they shows potential to have substantial growth eventually. This is, in fact, the secret – buy at a low price and sell at a high price. A company growth at a reasonable price will result in an evidently higher returns on the equity investment.

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The Evident Effect of Economic Factors on the Value Currency

The value of a nation’s currency fluctuates regularly due to a large scale influence its economy. It is unmistakable that a nation’s economic factors significantly affect its currency’s value. The question is how these factors relate to forex and, therefore, in what way the economy influences currency.   Currency exchange isn’t as prominent in the financial market headlines as the stock market and commodities but its fluctuation affects the stock market and commodities market strongly. The value of a nation’s currency is integral to its capability to purchase goods and its overall wealth.   Taking into account the state of the currency value and trends is a great strategy to keep up with globalization. Economic factors influence the currency market mainly by the concept of demand and supply. A few examples of additional factors that affect currencies are interest rates, inflation and economic growth and political stability.   Interest Rates   The rate of interest of a nation is one of the economic factors that affect currencies. When interest rate increases, demand increases as well, consequently, when interest rates go down, the currency appears less attractive, and therefore demand decreases.   Inflation   Inflation is another economic factor that influences the fluctuation of currencies. Inflation is an apparent rise in prices concerning goods and services. When there is a covert demand for a product, its price will rise. A rise in price of certain goods or services is a substantial increment to a thriving economy. High inflation on the other hand lowers the money’s buying power thus lowering the value of domestic currency.   Economic Growth   Another one on the list of economic factors is the rate of economic growth. The rate of growth of an economy directly correlates with the demand for products and services. Governments always try to create more job possibilities draw in investments and capital.   Economic growth can be measured by focusing on a nation’s GDP. A growth of 3% in GDP is a sign of growth while falling close to zero or a negative may lead to recession. GDP growth allows for low unemployment and higher national income to develop. It also means higher consumer spending.   Political Stability   A very important economic factor that affects the value of a currency is political stability. A decrease in investor and consumer morale is usually what follows political instability. The absence of political stability may negatively affect economic growth, which leads to investors seeking for a stronger currency in exchange.

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4 Best Shares to Buy for 2018

In the blink of an eye, the stock market will be heading on the final stretch of 2017. At present, there are thousands of publicly traded shares in the market that are trying to catch attention from investors, which is why it is never easy to find the best shares to buy for your portfolio. Investors have different needs, preferences and resources, these should be taken into consideration when choosing a share to buy. With a new year approaching, where should you position your portfolio for 2018? To help you with your selection, here is a list of the four best shares to buy for 2018. Facebook (FB) Facebook has been named as one of U.S. best shares to buy last year and Facebook is the only repeat name on 2018’s buy list. Alphabet (GOOG, GOOGL) and Facebook has formed a duopoly in digital advertising - a fast-growing and a highly profitable industry. Facebook’s 2 billion users continue to fire rapid sales and earnings growth at a much faster pace than Google enjoys, yet both trade for similar forward price-earnings ratios, just above 25. Given the choice, it’s better to pick the faster grower which is FB. It is expected to grow 33 percent in 2018 compared to Google’s 19 percent. Alibaba Group Holding (BABA) Alibaba’s shares has doubled over the course of 2017, making way for a spot on the best shares to buy for 2018 list. Alibaba is the only company worth more than $60 billion that has increased its revenue 50 percent annually for the last 5 years. Its revenue growth spiked this 3rd quarter, jumping to 61 percent on the heels of cloud-computing growth. In 2009, Amazon (AMZN) Amazon (AMZN) Another candidate for the best shares to buy for 2018 is the e-commerce giant Amazon. It has achieved 60 straight quarters of 20 percent-plus revenue growth. On October 26, shares surged from just $972 to the current $110, following another quarter of impressive growth. Amazon reported this year’s 3rd quarter growth of $43.7 billion (up 34 percent year over year) with all segments coming in ahead of estimates. Overall, Amazon has received an extraordinary 32 buy ratings and only 1 hold rating for the last three months. With the average price target of $1,247, analysts are optimistic that shares can climb further by 12 percent. Alexion Pharmaceuticals Inc. (ALXN) Alexion, the global biopharma, develops therapies for patients with adverse and rare diseases. Its key drug, Soliris, has been approved for the treatment of blood disorders and is now being trialed for further applications. Holding a lot of potential, this biopharma makes its way as one of the best shares to buy for 2018. The share has a strong buy analyst consensus rating with near 14 percent upside potential from the current share price. In the last three months, the Alexion has received 11 buy ratings and just 2 hold ratings. One of these buy ratings came from JP Morgan’s Anupam Rama who boosted the stock in early September and raised his price target from $163 to a very bullish $175 (22% upside).

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The ASX 300 Index

The ASX 300 Index (short for Australian Securities Exchange) provides exposure to large, mid and small-cap stocks in Australia. It consists of all the companies in the ASX 200 along with 100 companies that have a smaller capitalization of more than 100 million Australian dollars. The market capitalizations combined sums up to around 85 percent of Australia’s share market as of March of 2017.  The ASX 300 is used regularly by investors as a point of reference for superannuation portfolios and managed funds because it also hosts smaller companies.  A Brief Intro to the ASX   The Australian Securities Exchange, or ASX, is the primary exchange for securities in Australia that is owned by the Australian Securities Exchange Ltd.  The ASX has an average turnover of 4.685 billion Australian dollars every day and has a market capitalization of about 1.6 trillion Australian dollars which is enough for it to be included in the world’s top 15 listed exchange groups along with the likes of NYSE, NASDAQ and Euronext.  Company Selection   Companies go through a selection process facilitated by a committee from Standard and Poor’s and the Australian Securities Exchange.  The ASX 300 is a float-adjusted market cap weighted index so companies are sorted according to its market cap. Exchange traded funds and Listed Investment Companies are ignored. The top 300 stocks in the Australian Securities Exchange that meet the committee’s qualifications become eligible to be included in the index.  Twice a year, the committee conducts rebalances and sometimes whenever a major event occurs such as mergers, an intra-quarter removal may be done. In the event that a company is delisted from the index, a replacement will not be added until the next rebalance date which are in March and September.  Sectors in the Index   The ASX 300 uses the Global Industry Classification Standard to sort companies by the nature of their business.  As of July 2017, constituents of the index are comprised of the following:  Financials: 34.2% Materials: 16.0% Real Estate: 8.2% Industrials: 8.1% Healthcare: 8.0% Consumer Staples: 6.8% Consumer Discretionary: 6.2 Energy: 4.5% Telecommunication Services: 4.1% Utilities: 2.3% Information Technology: 1.6%  Exchange Traded Funds   Exchange Traded Funds are a type of managed funds that track a benchmark, commodity or bonds. They are traded on the index just like regular shares using their ticker code. An index fund’s aim is to be as close to the performance of the underlying index as possible while offering less fees.

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