Can I Depend On Social Security For Retirement? With all the concern over the solvency of Social Security, many are concerned, and rightly so, that Social Security may not be a dependable source of income during retirement. Worse yet, will Social Security even be around
Is Your Portfolio In Need Of Some Energy? In recent months, oil and natural gas have been getting headlines, as the U.S. has slowly climbed the ladder becoming one of the leading producers of oil in the world. While these new discoveries aren’t going to
Are Emerging Markets Too Risky? In any economy, trying to determine whether an investment is worth the risk is often a very difficult decision. As of recent years, Emerging markets have been viewed as having amazing profit potential, and being one of few investments offering
Wall Street Is Entering A Period Of Volatility For awhile, there was some smooth sailing and some serious highs for investors to enjoy on Wall Street. For those brave enough to get in early, the going was good and the returns, even better. Lately, however,
Is Your Portfolio In Need Of Some Energy?
In recent months, oil and natural gas have been getting headlines, as the U.S. has slowly climbed the ladder becoming one of the leading producers of oil in the world. While these new discoveries aren’t going to bring the cost of oil back down to a $1 a gallon, there are endless ways the energy boom in the U.S. could open doors for investors.
U.S. Oil Production Is Increasing
The U.S. is currently the fastest growing non-OPEC oil producer, production has increased to 7 million barrels a day, up from 5.7 million barrels/day in 2011. Most of the new oil supply is coming from land based sources, which are a lot more costly to extract than water-based oil sources. According to Ted Davis, the manager of Fidelity Select Natural Gas: “Companies need $85-$90 a barrel for capital investment to grow in these regions.” However, with all of the attention the land-based oil producers have been garnering, there is a real neglect of offshore drilling opportunities. For investors, there is tremendous potential for expansion in both off-shore and land-based opportunities
The BP Oil Spill Decreased Off-Shore Oil Expansion
Every since the BP oil spill in 2010, the focus has primarily been on land-based drilling. Recently, the amount of oil rigs in the golf has gone back up to around 53 rigs, which is where they were at pre-oil spill. Off-shore exploration is expected to increase, which in conjunction with the land-based oil resources could really bolster oil production in the next several years.
There Is Tremendous Investment Opportunities In Oil And Energy
As the supplies of oil and natural gas are increasing there are many industries set to benefit including chemicals, railroads, and production companies. As an investor now is the time to get involved before these industries take off. If you haven’t yet made room for energy in your portfolio, now may be a great time to consider it. Speak to a Redhawk Financial Advisor today about energy stocks and other companies surrounding the production of oil and natural gas, to see if you could benefit financially from the current energy boom.
Are Emerging Markets Too Risky?
In any economy, trying to determine whether an investment is worth the risk is often a very difficult decision. As of recent years, Emerging markets have been viewed as having amazing profit potential, and being one of few investments offering significant yield and return on the investment. However, in recent months, many question whether or not it is wise to sink your assets into the volatility of emerging markets. Richard Bernstein, a well respected executive of Richard Bernstein Advisors LLC commented that “People have grossly underestimated the risks in the emerging markets.” His feeling is that the earnings that are expected out of the emerging markets are a little exaggerated, and that these markets are also prone to inflation.
Inflation a Risk Factor In Emerging Markets
Inflation can be a huge risk for Emerging markets. Take turkey for example, in June Turkey announced that inflation will rise in June and July duet to base effects. Emerging Markets are also more susceptible to the effects of a bubble economy. Many markets like Mexico and Thailand have relied on the housing market in China as a source of exports. China’s housing market is currently overpriced, and at some point a correction can be expected.
Currency Devaluation a Problem For Emerging Markets
Another factor that could be detrimental to Emerging markets is the devaluation of currencies due to global stimulus. Japan, for example, has recently committed to $1.4 trillion in stimulus into its economy in less than two years time. This could be difficult for emerging bond markets in the economies neighboring Japan.
Regardless of the reason, there are many factors pointing to volatility in the emerging markets. The window of time may have ended in which emerging markets were great investments, with more chance for reward than risk. Today, there may be better investment choices available to investors. For more information on which investments are expected to perform in today’s economy, speak to a Redhawk Wealth Advisor near you today.
Wall Street Is Entering A Period Of Volatility
For awhile, there was some smooth sailing and some serious highs for investors to enjoy on Wall Street. For those brave enough to get in early, the going was good and the returns, even better. Lately, however, volatility has kicked it up a notch, and June has taken investors for a wild ride with the Dow swinging more than 100 points during 7 out of the 8 trading days in June. The two primary gauges for volatility the “Fear and Greed Index” and the Chicago board Options Exchange’s Volatility index have moved towards obvious volatility. The Fear and Greed shifted from a comfortable ride with “Greed” to a sudden switch towards “fear”. The Volatility index jumped up 42% in the past six weeks, which is significant for that particular index.
Is Volatility On Wall Street Here To Stay?
Jamie Tyrell VIX trader at Group One Trading feels that unfortunately, volatility may be here to stay for awhile. He’s expecting a prolonged period of time where the DOW and the S&P 500 experience some pretty big swings. The primary reasons for the volatility are the Central bankers. Central Bankers at the FED, the ECB and the Bank of Japan have been in the bond buying business, which has boosted the stock markets over the last year. However, recent sentiment expressed by central bankers, indicates that central banks may not be dependable to keep bolstering stock market growth.
Central Bankers Play A Huge Roll In Market Volatility
If you’ve paid attention to the Fed Minutes, you’ll see the stock market yo-yo with each announcement from the Fed. Additionally, the U.S. treasury note has recently gone from 1.6% to 2.2% interest rates, indicating that easing is no longer suppressing interest rates. For more information on how to play the markets given the current volatility, it’s very important that you stay a step ahead of the economy and remain prepared for whatever lies ahead. In any economy, regardless of the state of the “fear and greed” index, there is money to be made, and profit to be generated. It’s simply a matter of getting in the right investments at the right time. For more information on which investments are expected to perform given today’s economy, speak to a Redhawk Wealth Advisor near you today.
World Bank Cuts its Global Growth Outlook
In spite of its optimism for an improving global economy, the World Bank has lowered its expectations for global growth in the upcoming year. Due to the recession in Europe that has been deeper and longer lived than anticipated, and a slow-down in some of the emerging markets, expectations have been brought back down to earth as far as world-wide economic growth.
Why The Lower Growth Outlook?
For the emerging markets, much of the growth prior to the worldwide recessions was spurred on by other countries and their ability to consume resources. With recession at every turn, these emerging markets have had no choice but to bolster their own growth based on structural reforms. Places like Brazil, India, Russia and China, can expect a much lower forecast for growth next year. Rather than big jumps they may see growth go from 5.6% next year to 5.7% of GDP in 2015.
GDP Will Be Only 2.2% for Global Growth
Last year, the actual world’s entire gross domestic product was 2.3 percent. This year, they have slightly lessened their numbers and the anticipated GDP is only 2.2% this year. Previously, it had been expected that the world’s growth rate would increase slightly to 2.4% this year.
What Can the World Economy Expect Going Forward?
In recent years, the global economy has been characterized by volatility and lack of predictability. Looking forward, we may see growth rates slow, but hopefully things will be far less volatile and more predictable for investors. Currently, the World Bank is holding onto hopes that the global economy will grow as high as 3.3% by 2015. Slower growth may not be an entirely bad thing. According to Andrew Burns, the lead author in the World Bank report, he stated: “Growth is not slower because of inadequate demand but rather because, in our view, the very strong growth we saw in the pre-crisis period was due to that bubble phenomenon.” The elimination of “bubbles” is a very positive thing that should produce lasting growth and less volatility for the world’s economy.
As an investor, you may be wondering how the slowing of growth affects you and your investments? For more information on the markets and how they may be expected to respond to the current growth predictions, speak to a Redhawk Financial Advisor near you.
Looking Back How Has Sequester And Widespread Spending Cuts Impacted Institutions in 2013
If you were indirectly affected by sequester and the spending cuts in 2013, you may have already forgotten the struggles and debates that characterized the beginning of 2013. After much deliberation on the part of congress, the spending cuts were permitted and across the board spending cuts were forced on government agencies, including the military, airports, hospitals, etc. You don’t have to look too far to see public services that were impacted by the 2013 spending cuts. Where I personally live and work, the air traffic controller tower was shut down, leaving many without jobs and threatening the safety of those travelling in and out of the airport. The hospital, too, is facing loss of income from the government, fewer bonuses and reimbursements, and is making massive cuts across the board to try to reduce expenditures with the start of the new fiscal year this July. For patients, this means fewer nurses, which increases the likelihood of sentinel events, decreasing the level of care able to be provided by the staff.
Looking Forward, More Spending Cuts To Occur In 2014
Understanding the plight of the country in regard to their budget deficit has made it easier to understand the need for spending cuts, but the overall application of the spending cuts can be more difficult to swallow. Starting in 2014, an additional 19 billion in spending cuts, on top of the current spending cuts, are set to go into action. This will affect the discretionary budget, which typically funds government programs and agencies, national parks and the FBI.
Execution Of The Spending Cuts Will Be More Flexible In 2014
Compared to the spending cuts in 2013, which consisted of mandatory, across the board cuts, the 2014 cuts will offer more flexibility in how they are executed. Lawmakers are simply obligated to keep spending below the cap. Basically, this means that in 2014, some agencies may be spared entirely, and other agencies may feel the full force of the spending cuts. At this point, it looks like Social Security, Medicare and a few other programs will be left untouched, whereas unemployment benefits, farm subsidies and WIC, may feel the force of the spending cuts.
Will Congress Prevent 2014 Spending Cuts
As per usual, congress is still divided on whether or not to allow the spending cuts, and on whom the spending cuts should affect the most ie, domestic spending vs. defense programs. Unless congress can reach an agreement on spending, the government is scheduled to shut down on October 1st. Since this is not a great option for either party, in all likelihood there will be an extension that will fund the government for a few weeks or months. To complicate the matters further, in addition to the issue on spending cuts, the government will also be forced to make a decision on the debt ceiling this fall. Weighty decisions that impact everyone rest on the shoulders of our congressmen this fall, and their decisions could have a direct impact on the economy and the future.
For more information on how the government could impact the economy and how that will affect your investments, speak to a Redhawk Financial advisor near you today. It’s very important for your personal financial health, that you stay ahead of the markets and the economy when making financial decisions. By getting in touch with a Redhawk Advisor today, you can protect your future, and prevent it from resting solely on the decisions of lawmakers.
Gold Prices To Take Off In The Near Future
In a recent article by Addison Wiggin, a scenario is described where on a Sunday night in October 2013, everything in the world carries the semblance of normal, but then all of a sudden all hell breaks loose in the precious metals markets. Right before the Commodity Exchange Inc. opens at 6pm the Comex makes the announcement that a large gold contract will be settled in cash rather than the promised gold. Essentially, Comex has defaulted on a gold contract. Everyone else holding on to a gold contract also wonders if they too will be stiffed. Once this occurs, it leads to a crazy cycle in the prices of gold. Spot price roars up to $1800, but gold Eagles that would normally sell for $1890 to include a 5% premium are selling above $2000 per troy ounce. Eventually demand is so high, that no one can get their hands on physical metal anymore.
Manipulation In The Gold Market Exposed
Are you familiar with the story “The Emperor’s new clothes?” The story regales a tale where a king has new clothing spun by the countries “finest” seamstresses. When all is said and done he puts on imaginary clothes and tromps through the kingdom in his birthday suit. Everyone embraces the king and his new wardrobe until a small child calls a spade a spade and points out to everyone that the king was buck naked. In a real life scenario, the emperor is the central banks, and the commodity exchanges. When everyone recognizes that they are stripped of the gold they claim to hold, it may force them to stop parading around naked and put on some real clothes.
Can We Really Expect This To Happen In The Gold Market?
According to Eric Sprott, who oversees $10 billion at Sprott Physical Gold Trust, the odds are almost 100% that this scenario will occur. Eventually people are going to realize that gold prices have been manipulated and that the true gold supply could never keep up with the rising demands. When this happens, it could really shake things up in the gold market.
Gold Supply And Demand Problems
As far as supply goes, gold supply has remained steady for a long time. Demand, on the other hand, has increased significantly in recent years. Since 2000 when the Bull Run began, many new demand sources have added strain to the gold supply. Those include:
-Central banks, ETFs, sales of gold coins by the U.S. and Canadian mints, Chinese Consumption of gold has quadrupled, Indian Consumption has gone up by 30%.
These new sources of demand have led to the increase of gold sales by 2,268 metric tons per year. (On top of the demand that existed prior to the bull run). Supply has remained the same at 3,700 metric tons per year. There are also many unofficial gold sales that cannot be tracked with official numbers. Those include purchases of physical metals from coin dealers, ebay and many other sources.
The Central Bank Gold Scandal That Causes Gold Price Manipulation
One further weight on the gold market is the reality of what’s occurring with gold sales in the central banks. Central banks are legally able to lease their gold out for 1% to commercial and investment banks. Those commercial and investment banks in turn, go and sell the gold for a price generating more than a 1% return. The financial statements record it as “gold and gold receivables”. The receivables are not real gold, it’s the leased out gold that has been pilfered off to other investment banks who in turn sold the gold to China or some other gold buyer. So the deep gold reserves we are convince the central banks are holding on to, are more myth than reality. When this is realized by the masses, price manipulation will no longer be able to occur, and we will see gold prices take off.
Gold Prices To Skyrocket
As you can imagine, it’s only possible to cover up gold demand for so long before it quite obviously exceeds known supply. When investors get wind of this, those with money in ETFs and other “paper gold” investments, will demand physical gold to back their investment. When this happens we can expect gold prices to take off and be unstoppable. For those holding physical metal, the profit potential is incredible.
For more information on the gold market and on holding physical metals, speak to a Redhawk Financial Advisor near you today.