Hi folks I thought it would be a worthwhile exercise today to look at some diverse opportunities for investment in what are still very unsettled times. Whether we are in a bull market or just a bear market rally is quite a question when respected fund managers such as Neil Woodford and Anthony Bolton currently take completely contrasting views.
The FTSE 100 fell back 2.6% last Monday further serving as a cautionary check to us all. In light of this I feel it’s important for Independent Financial Advisers to inform individuals of uncorrelated opportunities which exist in the marketplace.
As such here are you a couple of different areas for you to think over today.
FOREIGN EXCHANGE
The Foreign Exchange (FOREX or FX) market is by far the world’s biggest. A total of $175.3 trillion was traded on a daily basis by the top twenty banks in Europe alone last year. Trading in this securities market is regularly 10 times that of the equity markets, making it the largest by far. Here are some more market features:-
A 24 hour market- Traders can take advantage of all profitable market conditions at any time. There is no waiting for markets to open.
High Liquidity- The FOREX market because of it’s high trading volumes is the most liquid in the world. This means that a trader can enter or exit the market at will in almost any market condition without any daily limits.
Uncorrelated to the stock market – Trades in the FOREX market involves selling or buying one currency against another. Thus, there is no correlation between the foreign currency market and the stock market. This means stock crashes won’t affect your Forex trades.
Constant market- A bull or bear market for a currency is defined in terms of the outlook for it’s relative value against other currencies. If the outlook is positive, we have a bull market in which a trader profits by buying the currency against other currencies. Conversely, if the outlook is pessimistic, we have a bull market for other currencies and traders take profits by selling the currency against other currencies. In either case, there is always a good opportunity for market trading.
No one can corner the market- The FOREX market is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. Even interventions by mighty central banks are becoming increasingly ineffectual and short lived. Therefore central banks are getting a lot less inclined to intervene to market prices.
Traditionally these markets were only really available through banks which transacted large amounts of currencies for commercial and investment purposes but now anyone can trade currencies if they so wish.
So How Can I trade In Forex?
You can open a currency trading account with a bank or broker, but minimum deal sizes tend to be very large. So for most investors traditionally the easiest way was to play currencies via an online spreadbetting account. There are many of these out there but the problem as with many opportunities is finding a good one, especially if you are taking tips from them.
If you plan on learning how to trade yourself then this obviously takes time to learn and of course there is no guarantee that you will be any good at it. In fact it is estimated that only about 3% of traders make the real money in FOREX trading. To forecast the market an investor must be able to forecast the endless interplay of each of the five primary forces that move the currency markets – pretty complex really.
These are five factors are…
Interest Rates, Economic Growth, Geo-politics, Trade and Capital Flows, Mergers and Acquisitions.
Some investors will enjoy solving the puzzle for themselves but for those interested in reaping the potential rewards there are other options which don’t mean you need to go to DIY Forex school, they could be far more lucrative as well.
This may just be the good news some investors have been holding out for over the last 18 months…
Integrity Financial Solutions Ltd (no relation to our company) have brought us the opportunity to get access to FOREX trading through their Maximiser Product Range.
The fund essentially operates by working with a pool of experienced FOREX traders who will be allocated a percentage to trade with each month. Their performance is monitored constantly and traders can be replaced at any time. At the moment the amount of traders used each month sits at twenty. These traders have different styles but all have had a superb track record in achieving solid returns from FOREX trading.
The fund aims to return a minimum of 2% per month and returns are tax free because it is essentially similar to spread betting. This is available as a direct investment, through a SIPP and will soon be available as an offshore OEIC. To find out more give me a call on 0800 321 3508 or follow this link www.ukintegrity.com
Investing In Property and Land Overseas
Many of you will have looked at investing in overseas property before. The choices are more widespread than ever before with new opportunities opening up as old boundaries disappear, economies expand and airlines increase their number of routes. It is of course also an area of investment which requires careful, thorough research as hidden pitfalls can easily trap the unwary.
Hence your research should be as thorough as possible before committing to anything. As with all investments, timing is also an extremely important feature. With all this in mind I believe that one of the best opportunities in buying overseas at the moment is in Brazil, through Scottish based company Kapital International Investment.
Why Kapital?
Kapital is headed by Keith Punler, a well respected and successful entrepreneur who founded luxury house builder Manor Kingdom in 1991. After a string of house building awards and also receiving the accolades of Young Entrepreneur and Entrepreneur of The Year from Ernst & Young, Keith sold the business in a multi million pound deal in 2004. In 2006, the Kapital Corporation was set up and Kapital Assets, the property side of the group, started to analyse the emerging BRIC countries, where they quickly focused on the opportunities existing in Brazil.
Keith first went to visit the North East state of Rio Grande de Norte and it’s capital Natal in early 2007. On his second visit he also spent time in Fortaleza in the next door state of Ceara. After six months of researching the market, assessing prospective partners and the potential for developing business there, it was decided to establish an office in Fortaleza. Two new companies were born, Kapital International Investment Limited based in Scotland and a sister company Kapital Nordeste emp. Imobiliaros Ltda based in Brazil.
With several projects already up and running and a mission which offers clients complete solutions to overseas properties investment always ensuring smooth, clear and simple processes, I believe that this is a company that can be trusted to help you through the complicated process of buying abroad. Add to the mix a Chairman who knows a thing or two about house building and already has good relationships with The Brazilian Government then I believe Kapital’s credentials certainly stack up.
Some of Kapital’s Unique Selling Points…
- Always own the land the are selling
- Always have their own licenses and permissions. And always make sure licenses are in place before selling
- Clear and upfront processes with British and Brazilian staff ensuring clarity throughout the process.
- Socially responsible and help local communities and charity projects, making sure the locals are happy as well as helping them to upgrade their homes and building a community centre
Why Brazil?
- Brazil is the 5th largest country in the world in population and landmass and predicted to be one of the 5 largest economies by 2025.
- Diverse culture and landscape, 3200km of beaches, wide range of attractions and a booming tourist market.
- Yearly temperature of 26-32 C giving 12 month rental potential.
- Political and economic stability in respect to the rights and contracts of foreign companies.
- Brazil already has achieved “investment grade” by Standard and Poor’s.
- Stability in the economy and control of inflation and a burgeoning middle class.
- Opportunity to build and sell to locals as a second home or to rent properties as a holiday home.
- Fast growing domestic wealth is coupled with a proactive government that’s making serious investment in the country’s economic security, tourism and infrastructure. Brazil’s economy is growing at a rate of 5% a year.
- The value of land has been kept low by limited availability of finance and credit. Finance now becoming available which will boost prices in coming years.
- Brazil is now the eighth biggest oil producer in the world and is almost completely self sufficient therefore bucking the global recession.
- Cost of living 60% cheaper than the UK with low fuel costs.
All of the above makes a pretty compelling case for Brazil. If you’d like to find out more please give me a call on 0800 321 3508 or visit www.kapitalinternational.co.uk
Until the next time, take good care and happy diversifying with your investments.
