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Need specialist advice for property in Spain? View the PropertyIndex site to find lots of properties!

Regardless the fact that the Property Index online service is only a fledgling establishment, they were set up in March 2007, they have proven their mettle very quickly. De facto, they are a quite incomplex establishment exclusively focused on offering informed instructions to every customer who is planning to let, sell, rent, etc. land in most popular areas of the world. What they promise is to assist you discover exactly what’s desired very swiftly plus in a trouble-free manner. Realty is up for grabs anywhere in the world nowadays, unquestionably the most called for area being property you can purchase in Spain. It should really be straightforward to list the sensational property available in Spain, one motive for opting for property here being the houses and apartments available for sale and the glorious option to live amongst this animated population.

This is one of the most sought after regions nowadays, and considering the scenic beauty and weather surrounding you here, how can you say no! Realty in Spain is steeped in history, this region has been and is still home to a number of indigenous civilizations. Some thirty years back you’d find only very few of British people who are looking for property in Spain. Ask any individual who has emigrated to Spain and they’ll tell you the same. Plenty of people would insist on seeing it as a basically irrelevant fad and others insist on seeing it as a near to an addiction… People interested in moving over here generally range from newly weds keen on a perspective to senior citizens meaning to put their feet up and enjoy themselves.

Note, though, that you may likely encounter a few situations when acquiring property overseas — there’s hundreds of procedures to consider be it when scheduling, inspecting or completing. Even if a single minute step is missed this can definitely give rise to far-reaching situations not to forget, most importantly, financial damage. Obviously, as is to be counted on with this trendy place, property could be pricey in this area and that is only a result of the top buyer demand. However, real estate buyers are presently very spoilt in such a region so determined by fabulous landscape. It’s able to offer all a patron may relish and lots more.

Just about everyone is a potential target for a lawsuit these days. Here are some facts about the legal climate today. Over 19 million lawsuits are filed in the U.S. each year. We have 5% of the world’s population and 80% of the world’s lawyers. Ninety percent of all lawsuits in the world happen right here in the U.S. And it’s getting worse. According to the American Bar Association, there are close to 700,000 lawyers in practice at present. That’s one lawyer for every 400 men, women and children!

So if you own a business, own investment properties or practice a profession you have a one in three chance of being named in a lawsuit THIS YEAR!

It used to be that people didn’t worry about frivolous lawsuits when they weren’t at fault. That’s not the case any more. Remember the woman who was awarded over $2 million in a suit against McDonalds’ because she spilled hot coffee on herself? It’s these kinds of awards that prompt people to file spurious or questionable lawsuits. The challenge is that most lawyers handle these cases are on a contingency fee basis which means clients don’t pay a dime unless they win or settle the lawsuit. When there are no upfront costs to file a lawsuit, there’s nothing preventing them from making a frivolous claim.
So with that being the mindset of the general public it’s obvious why you need to protect yourself.

What Is Asset Protection and How It Works

Now if you have read anything on asset protection there are two basic questions you should be asking yourself:

1. Does it work?
2. Is it legal?

So now let’s talk about what asset protection is. How it works? And answer these two questions.

Essentially asset protection is a legal way to put your assets beyond the reach of those who would like to take them from you by filing a lawsuit. Here is an example you are likely familiar with that demonstrates its effectiveness and legality.

Remember the O.J. Simpson case? O.J. went to trial in 1995 and was acquitted of murder charges. His story is a perfect example of how and why asset protection works. Now there’s a whole criminal side to O.J.’s case. So let’s put aside the moral issues surrounding O.J. We’re just talking about asset protection here. The point here is that the nation was able to see for the first time how an alleged murderer was able to have a judgment entered against him and no one was able to collect any money. So let’s outline what happened here. By the way, do you know how O.J.’s doing now? Do you have any doubts he’s living all right?

He moved to Florida because the golf was better, the private schools were nicer and frankly the people in Los Angeles didn’t want to talk to him anymore. But no one’s collecting any money from O.J. As we go through this, you’ll see how O.J.’s team of experts used many different asset protection strategies effectively.

What happened after he was acquitted from the criminal charges? The Goldmans sued him on a wrongful death case in civil court and obtained a judgment for $33.5 million. Yet have they collected anything? All they got was his Heisman trophy. The piano he said belonged to his mother. But what happened to his money? Well he was lucky. O.J. had pensions, or retirement plans through the NFL and the Screen Actor’s Guild (SAG), and both pensions were exempt from judgments by law in California.

So what did he have in his pension accounts? He had about $4.2 million, which throws off about $25,000 a month. That’s how he pays his greens fees for golf and how he sent his kids to private schools.

What about his house? He had a nice home near Beverly Hills. What happened there? The house was worth $3.5 million. He had a first mortgage for $1.5 million. The question everyone asked was what happened to the rest of the equity? Why didn’t they take it?

Well, he had what are called friendly liens placed on it. By the time they got to the house all the equity was encumbered in favor of his attorneys. His home was leveraged to the hilt so by the time the Goldmans got to it there was nothing left for them to take. There was also the homestead exemption, which in California is up to $125,000. It varies from state to state.

Now that he’s living in Florida he has a boat, an office, a car. People wonder how he has all these things.

He leases these things. You see, by law no one can seize a leasehold interest.

So back to the two questions we started this example: does asset protection work and is it legal? Well, how’s O.J. doing so far? He’s doing just fine. What about its legality? Remember this was the most publicized trial in U.S. history. It was under total scrutiny from the media, the public and legal professionals everywhere. People were itching to put this guy behind bars or at least force him to pay in dollars for what he allegedly did. They couldn’t because his assets were protected within the lines of the law.

Another question critics of the O.J. case bring up is this, if most of the money he has is protected from judgments and bankruptcy, why doesn’t he just go bankrupt and release this $33.5 million judgment against him? One reason is you must submit a list of all your assets when you file bankruptcy. If you leave something of substance off that list, you can be indicted for bankruptcy fraud. There is only one logical explanation why O.J. doesn’t file bankruptcy; it is because he likely has money offshore. This is the part you probably won’t find in any books or news articles. O.J.’s mother lode is purported to be in the Isle of Guernsey, probably $5-10 million. Now he’s not going to go bankrupt and leave this off the list and then have some angry girlfriend tell on him and get him indicted and sent to prison.

The Nuts And Bolts for Effective Asset Protection

Now to be truly effective, all asset protection strategies must meet three criteria.

1. Liability Protection. You must be legally protected from any liability.
2. Control of the assets must be totally anonymous and private. You see, if assets can’t be legally tied to you then they can’t be taken when someone comes after you. So to achieve this protection you have to set up your asset protection and privacy plan in a jurisdiction that supports these criteria.
3. The third and most important criterion for effective asset protection is that it must be done at the right time. You must act ahead of time to protect what you own BEFORE it comes under attack. Once a lawsuit is expected or has been filed, the law will not allow you to move your assets.

So as we talk about different types of asset protection we will come back to these important criteria.

How to Achieve Asset Protection

What is the best way to achieve asset protection? It can be summed up in three words: Don’t Own Anything.

Now you might think that this flies in the face of the American Dream which says you need to own your own car, home and everything else that is a prerequisite for a happy and successful life. Now we are not talking about not eliminating debt on those assets. It’s great to be debt free. You just don’t want to own those things in your own name because if you technically don’t own the assets, but merely control them, then the assets are well protected, and you still have the use of them. You see, you don’t want ownership. Ownership is a liability. What you want is use of the assets. In fact it was John D. Rockefeller who summed up this philosophy when he said “Own nothing and control everything.” So to really start to understand the mindset around asset protection you need to think like a Rockefeller.

One way to achieve this protection is through the formation of corporations to hold the assets. Why corporations? Under the law, a corporation is an artificial “person” completely separate from the people who own it and control it. This is different from an individual or sole proprietorship. With an individual or sole proprietorship the owner bears full and complete responsibility for his actions. But a corporation is an independent entity. A corporation’s liabilities and taxes are separate from those of its owners, officers, and directors. Therefore a corporation gives you the greatest personal liability protection and this meets our first criteria we talked about.

Another reason corporations are advantageous is because they enable you to compartmentalize your businesses or assets. You can place different assets under separate corporations. Now you still have complete control over everything, but if one asset runs into trouble, it won’t jeopardize the other assets. Without incorporation, all your eggs are in one basket and if something happens to that one basket you could be totally wiped out. For that reason some people choose to have separate corporations for their larger assets such as a home, rental property, boat, or RV, to separate out any liability.

Because of the corporate formation laws in certain jurisdictions, you can form corporations that can provide total privacy. This is why almost all successful people choose to incorporate. It permits you to manage your assets anonymously. Your private corporate life is never made public. And there’s only a couple of states in the U.S. and a few places around the world where a corporation can be formed, while you own and control your corporation, your identity and ownership can remain a total secret. This meets our second criteria mentioned.

Let’s talk about the jurisdictions that allow you to form corporations anonymously. One of the jurisdictions is Nevada. Nevada was really just a desert with very few residents until the mobs came in and started the casinos. The mobs did not want anyone to know who owned the casinos and they made sure the law allowed ownership to be untraceable. The mobs had since gone and Wall Street had taken over. Nevertheless, the corporate formation law has not changed. If you know how to structure it, you can still incorporate in Nevada and no one will be able to trace the ownership of the corporation back to you.

Another jurisdiction is the Bahamas. An international business corporation formed in the Bahamas can remain anonymous if you structure it properly. You can use the Nevada Corporations to protect fixed assets such as homes, boats, planes, and some liquid assets. You can use a Bahamian corporation for large amount of liquid assets such as cash, stocks, and bonds. For most people, a Nevada corporation will be sufficient for their asset protection, however, for maximum asset protection, a higher net worth individual is going to want to utilize both types of entities.

You may be asking why Nevada and the Bahamas are so unique. Well the answer to that comes back to our criteria of privacy. You see both these jurisdictions allow their corporations to use two unique features when setting up their corporations: bearer shares and nominee officers. Bearer shares are shares of stock that are legally owned by whoever holds or “bears” the actual stock certificates. This also means that anyone who doesn’t hold the stock certificate in his or her possession is not the legal owner, and can so testify in court. So you may be driving a Lexus or BMW owned by a corporation, but if you don’t have the bearer shares or stock certificates for that corporation, it’s not really your car. You’re just using it. And this eliminates your liability.

The other feature is nominee officers, which ensures your complete privacy and anonymity, the second criteria we talked about for asset protection. A nominee is simply a trusted person you appoint to stand in and provide their name and signature in lieu of yours. Both Nevada and the Bahamas allow the use of nominee officers and directors in their corporations so your name will never appear on any of the corporate documents if you so choose. Your identity can be kept completely private.

Now the corporations you form there cannot and should never be used to evade federal income tax since all U.S. residents and citizens must pay federal income tax on their worldwide income. There is no state income tax in Nevada and there is no income tax for international business corporation in the Bahamas.

Other states allow lawsuits to pierce the corporate veil and enforce personal liability for the debts and actions of the corporation on its owners and officers but Nevada has one of the strongest corporate veils anywhere. Nevada law clearly makes the actions of a corporation’s representatives exempt from personal responsibility except in cases of outright fraud and even then they have to prove intent to defraud which is very difficult to do.

Here’s an Example on Implementing Asset Protection

So now you have some understanding as to how these corporations limit your liability and provide you with the privacy and anonymity you need for maximum asset protection. Let’s now talk about how asset protection can work for you.

Let’s look at an example here. Let’s assume you sell a product and someone wants to sue you. A customer was slightly injured by a product that he bought from you so he goes down to the local injury attorney and tells him the story. The lawyer says great! We’ll sue him. Let me do some research and we’ll talk tomorrow

The lawyer then orders a preliminary asset search on you. When this report comes back, on the top of the page is your name, underneath that is your date of birth, your home address, your phone numbers, listed and unlisted, any children you have and their names and ages. Below this is the Nationwide Asset Sweep listing all property you own, any vehicles, brokerage accounts, bank accounts and tax information.

When this disgruntled customer returns to the attorney the next day the attorney is going to say one of two things:

1. “Great, all the assets are right here. He has deep pocket. Let’s draft a complaint and sue this guy” or
2. “I can sue this guy but there are no visible assets to go after…I can start proceedings if you want but I’ll need a $15,000 retainer to cover my initial attorney’s fees and expenses.”

Based on human nature, 99% of all litigation will stop right here. Contingency fee lawyers need a pot of gold at the end of the rainbow. They’re not interested unless there is the potential for a big reward

So you want to be in the second category where you are not at risk.

So to start off, let’s assume you have a home worth $500,000 and you have $150,000 in stocks and bonds in your brokerage account. On your home you have a first mortgage for $300,000. You have $200,000 in equity in the home and $150,000 liquid assets exposed. So what do you do?

First you would form a Nevada corporation anonymously.

Do you transfer title of the home into the Nevada Corporation then? No, for a few reasons: One is you want the home to stay in your name. It becomes the decoy. You see, the first things a competent injury attorney will ask are:

• Does he own a home?
• Does he have a job or own a business?

If you are living a six-figure lifestyle and you don’t own a home he’s going to assume your assets are hidden and may want to go looking for them. However, if you own your home and it’s mortgaged to the hilt, well, that’s not so unusual. That’s pretty common these days. The other reasons you want to retain title to your home is for tax deductions on mortgage interest, capital gain tax exemption when you sell your home and the protection you already get from homestead exemption in your home state.

So if you don’t transfer title, what do you do? You can place a friendly lien on the home for $220,000 and record it in favor of your Nevada Corporation. You may be asking, “What is a friendly lien?” A friendly lien is a legal lien placed on a real property and it doesn’t necessarily represent a cash loan from the Nevada corporation you form. The Nevada corporation may have rendered professional advice or services creating the debt owed to the corporation. At any rate, it serves your purpose of encumbering any remaining equity in your home.

Now, you can then transfer the $150,000 in your stock and bond portfolio to a Bahamian corporation under your management with a brokerage account in the Cayman Islands. You still retain control over all the assets yet any equity is now invisible to the predatory eyes of an attorney.

If you don’t have enough cash, stocks and bonds to want to go overseas, you can open a bank account and/or an online brokerage account under the Nevada corporation.

For your vehicles, if you owned them outright you would add the private Nevada Corporation as a lien holder on titles with the department of motor vehicles.

So between the Nevada corporation and the international business corporation you have effectively eliminated your exposure to liability and your assets would no longer show up on one of these asset searches, keeping you safe from lawyers.

As powerful as these strategies are in protecting your assets from lame lawsuits, they must be put in place long before any legal challenges surface. Any asset transfers you make after a legal challenge will be considered fraudulent conveyance and will be set aside by the courts. Therefore, if you feel you are a potential target for lawsuits because of your profession, the nature of your business or your investment property holdings, the time to act is now.

Carlos Lee, MBA, is a senior consultant for Asset Protection Consulting Group.

Visit Asset Protection Consulting Group to find additional information on how to bulletproof your assets.

Many of today’s highly successful traders will tell you that the general key to success in trading is to be able to comfortably take a loss. It is general knowledge among experts in the trading psychology field and among traders that the market is not predictable and it is safe to say that it never will be. In the world of trading, it is expected to take a loss; even those who are highly skilled traders know that it is inevitable. With that said, let us have a look at things you as a trader should be aware of, how you can take a loss effectively and use it towards the greater good of your trading world.

Trading psychology tells us that when a trader loses he begins to become somewhat of a perfectionist in his dealing. Many traders think that in trading, a good day will always be one that is profitable. Trading psychology experts tells us this is not true. A trader should define a good day as one where they have extensively researched and planned with discipline and focus, and have followed through to the entire extent of the plan. Yes, when a trader has mastered the art of accepting losses and working through them with a well thought out plan then good days will become profitable in time.

Because the art of trading in an unpredictable market fluctuates so greatly from one day to the next, experts in trading psychology believe that it is important that you concentrate on what you can control, instead of things that are beyond your control. Looking into the short-term you cannot expect to be able to control the profits of your trading. With that said, look at what you do you have ability to control.

You do have the ability to control the difference between good and bad days. You are able to control this factor by extensively researching the strategies you implement within your trading experiences. By learning to research your chosen strategies, thus controlling the amount of good and bad trading days you experience, you will, in the long-term begin to generate profits, which is the ultimate goal of every trader.

Trading psychology experts tell us that it is important to become realistic in trading instead of becoming a perfectionist. Perfectionist traders, relate a loss with failure, and will become obsessed with the failure, focusing only upon it. Realistic traders understand the unpredictability of the market and taking a loss is simply part of the art. The main key you must remember in trading psychology to be able to effectively limit your losses, instead of becoming obsessed with them. A common thing seen within the trading psychology world is that traders who are obsessed with their losses often have a hard time bouncing back from them, thus losing in the end.

Experts in trading psychology have organized three basic strategies you can use to effectively stop losses. These strategies are:

• Price Based
• Time Based
• Indicator Based

Stops that are priced based are generally used when the other two have not functioned. To make this work you will need to make hypothesis’s about the trade and identify a low point in that particular market. Then you will set your trade entries near your points, thus making sure that losses will not be overly excessive if the hypothesis fails.

Time Based stops constitutes making use of your time. Designate a holding period you allow to capture a certain number of points. If you have no achieved your desired profit within that time limit, you should stop the trade. If effectively used you should stop even if the price stop limit has not been achieved.

The Indicator based stop makes use of market indicators. As a trader, you should be aware of these indicators and utilize them extensively within your trading experiences. Look at indicators such as, volume, advances, declines, and new highs and lows.

Experts in trading psychology say that setting stops and rehearsing them mentally is a good psychological tool to use and will help ensure that you follow through.

Tim Renolds is a contributing author at our website where You can get a free Homeowner Loan Quote right now. Take a moment and see for yourself.

Breakouts through resistance are the most desirable of all trade opportunities. (This discussion will be the buy opportunity discussion of breakouts. (An equal sell opportunity exists on breakdowns through support). A breakout is a penetration of resistance based on a pricing established over time with price reversals taken place at approximately the same price point in previous time periods.

Sounds easy. Well it sure sounded easy when that guy in the $1000 seminar told me about it. I also read how easy it was in the $90 book on trading that said would make me a wealthy independent trader.

Breakouts are wonderful if they continue. If they fail you can expect the pricing not to trend but to return to a range bound probably touching the lower pricing before it rises again. That price movement is probably beyond your stop loss and you will not be pleased.

This occurs more often than you want to believe. Since so many other people see the breakout they are as nervous about it as you are and you have a larger number of quick exits with the slightest wiggle. This is referred to as “buyers remorse” or a “bull trap”. What this really represents is a serious hit against your P&L.

Remember, breakouts are a product of an established range bound market. The continuation of the sideways market is the rule with a move away from support or resistance back into the trading range. That means a failed breakout is the rule. The breakout is the exception. Some traders believe the reverse is true. That can cost you a bundle of cash in trading losses.

In addition, MACD Plays: When you are considering any stock you need to know if that stock is exhibiting a tendency to trend. If you wish to be more successful in your trades, then you should be able to identify those stocks with this tendency. Logic dictates that you will make more profits in trending stocks rather than in those issues that fluctuate up and down.

The Stocks2Watch® newsletter has been published since 1998. For a FREE report on HOW TO TRADE FAST, enter your email address at: lb.bcentral.com/ex/manage/subscriberprefs?customerid=12826

Of all the accounting tasks required for active traders to file their taxes, calculating wash sales has to be the most daunting. When trading the same stocks over and over again, buying and selling unequal share amounts, making small gains and losses, hundreds or thousands of wash sales are inevitably generated.

Therefore, this rule is unbelievably cumbersome when it comes to filling out a proper schedule d. How can a rule that sounds relatively simple cause so much confusion and headaches? Read on…

What exactly is the wash sale rule?
IRS publication 550 page 52 states:

“You cannot deduct losses from sales or trades of stock or securities in a wash sale. A wash sale occurs when you sell or trade a stock or securities at a loss, and within 30 days before or after the sale you: buy substantially identical stock or securities, acquire substantially identical stock or securities in a fully taxable trade, or acquire a contract or option to buy substantially identical stock or securities.”

“If you sell stock and your spouse or a corporation you control buys substantially identical stock, you also have a wash sale.”

The IRS further states that “If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities. The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities. Your holding period for the new stock or securities begins on the same day as the holding period of the stock on securities sold.”

In plain English, this means that if you close a trade and take a loss, and then buy back the same, or “substantially” the same equity, you cannot take the loss at that time.

According to the IRS, the loss now has to move forward, and has to be attached to the cost basis of the trade in which you bought back the same stock. If that trade also ends in a loss due to the new cost basis, and you buy the same stock again, the loss gets moved forward again.

This can keep happening indefinitely if you continue to trade the same equity again and again and keep ending up with a loss, and do not stop trading for at least 31 days.

In addition, the holding period of your trade may also change, thus changing the wash sales tax. I am sure you can see how calculating and keeping track of the many nuances of this rule is an active trader’s worst nightmare and potentially could end up costing you money come tax time.

Here’s just a brief look at some of the other problems associated with wash sale accounting. We’ll consider each of these topics in-depth as our series continues.

Wash Sales on Unequal Numbers of Shares - When you buy back shares of stock in increments that do not equal the number of shares sold at a loss, it is the trader’s responsibility to determine the particular shares to which the wash sale rule applies. This requires complex matching and splitting of shares based on the order in which the shares were purchased and sold.

Wash Sales on Short Sales - If you short sell stock, this adds a whole new dimension to the wash sale rule since you must also now be concerned with sales rather than purchases that trigger wash sales. When you buy-to-cover a short sale and take a loss, if you short that stock again within 30 days, you will trigger a wash sale.

Wash Sales between Stocks and Options - If you take a loss on a stock or an option then buy an option on the same stock within the 30 day window, you will also have triggered a wash sale.

You would think that the IRS would only care to see wash sales that cause losses to be deferred to another tax year, but this is not the case. The IRS requires that traders report each and every wash sale throughout the year. This means that each time a stock that is sold at a loss is repurchased within the +/- 30 day window, a wash sale must be reported on the schedule d.

Therefore, an active trader may have hundreds or even thousands of wash sales throughout the year. Even the casual investor may be plagued by having to report several or many wash sale occurrences. What every trader needs then, is an automated method to deal with this headache. Thankfully such software does exist.

David Eich, Author
TradeLog trade accounting and tax software
http://www.armencomp.com/tradelog

The yield curve refers to the interest rates on bonds of varying
maturity. Normally, we expect the yield on bonds with longer
maturities to have a higher yield than those of shorter maturity
bonds. Because it is less of a burden to tie up one’s money for
three months or a year, rather than five years or ten years,
investors must be given an incentive to place their funds in
bonds of longer maturity. This incentive takes the form of a
higher interest rate paid on bonds with longer duration.
Similarly, we can justify the higher yields on longer maturity
bonds based on risk: the foreseeable risk to the economy over
the next three-months or year is much less than the risk over
five or ten years. Thus the higher yield on long-dated bonds is
required to compensate for the added risk of holding an
investment that long.

On December 30, 2005, many newspapers heralded the fact that the
yield curve on U.S. government bonds had become inverted. In
fact, the curve was not consistently inverted. The yield on
two-year Treasury notes (just under 4.4%) barely exceeded the
yield on ten-year Treasury notes (4.39%). Ordinarily, this type
of yield structure will be a self-correcting problems. Investors
will no longer choose ten-year bonds, when they can get the same
interest rate or even a higher one on two-year bonds. With fewer
people wanting to hold ten-year bonds, the interest rates will
rise on these in order to clear the market and induce investors
to hold ten-year bonds once again.

But when long-term interest rates rise, so too do rates on
15-year and 30-year residential mortgages. If the costs of
obtaining a mortgage loan rise, then fewer people will want to
buy houses. The result could be either a cooling of the
previously hot real estate market, or a potential collapse of
some regional price bubbles on real estate.

If inverted yield curves were merely a transitory phenomenon
with little or no economic impact, except for people in the
business of trading interest rate derivatives, swaps, and bonds;
then no one would worry. However, inverted yield curves have
often signaled a recession will follow, and the potential for a
recession is a legitimate cause for worry.

It would take more than one sign of an impending recession
before most economists would start to worry. At the start of
2006, American businesses are expected to increase investments
on capital equipment, which should be a boost to the economy.
The major cause for concern is the seemingly ever rising foreign
trade deficit. Americans consume more than they produce and make
up for the difference with imports. Foreign businesses that sell
goods to America often invest the proceeds in U.S. government
bonds. Because so many of our imported goods are produced in
China, the U.S. now has a significant portion of its long term
government bonds held by Chinese investors. The U.S. faces
political risk that the Chinese investors may one day decide to
cut back on their dollar holdings and place their cash in some
other government’s bonds.

An article published on Dec. 31, 2005, in the Financial Times
(London, England) noted “Each of the last six US recessions has
been preceded by an inverted yield curve, [but] . . . it has
sent out two “false positives”, inverting in 1966 and 1998.” As
noted above, with yields of 4.39% and approximately 4.40%, the
yield curve between two-year and ten-year is actually more flat
than inverted. For now, in the first week of January 2006, the
best course is to wait and see if the yield curve becomes more
inverted or reverts back to its normal shape. As a professional
economist, I will not begin to worry unless the yield curve
remains flat for over a month, or the inversion increases from
0.01% to 0.50%.

For additional articles by this author on financial economics,
please see http://michaelguth.com/finecon.htm

One of the great charges by adversaries of the faxless fast cash advance industry is pinpointing the annualized rate of interest usually charged for a short term payday bridging loan which might accumulate to twohundred percent or more. Learn more about the payday advance online here.

As is well known, the annual percentage rate or “APR” may be described as a widely accepted metrics sizing up the effective interest a debtor would actually pay tallied for one full year. The Annual Percentage Rate (”APR”) gives us an accepted mechanism to determine which vehicle displays a higher / lower drain on resources impacting the deal, including extra fees that may be imposed.To be sure, APR can be a decidedly worthwhile device bearing upon financial investments extending over a time span of 12 months minimum .However, in regard to two weeks loans or investments the annualized rates of interest are undeniably hardly suited.

Rather, compare payday advances to hiring a taxi home from the office meeting. Likely it will cost you 40 dollars to get back home this way. Now of course 40 dollars qualifies for a lot of money to have to pay for such a ride despite which we’ll probably do it because it is convenient and addresses a specific demand. Sure, we all know that we could easily hire a car for the whole day for 40 dollars allowing us to drive as many miles as we need to.

Now let’s say we do just that— rent a car and drive four hundred miles during this single day we’ve rented it. Subscribers of APR will claim that we will have to annualize this figure to produce valid comparisons! Fine, so let us take the price we’re paying for the taxi ride ($2 per mile times 400 miles) which gives us: exactly $800. The APR correlative of the car rental solution compared to the taxi ride gives us $40 vs. $800. Obviously, there’s preciously little doubt that car rental wasn’t the best option for us, notwithstanding how much more expensive the rate of interest p.a. was in this case.

And the same holds true for short term payday bridging loans. Remember that short term payday loans are limited to two weeks, they’re not annual loan arrangements. The seemingly high annualized rate of interest is no meaningful metrics because at the end of the day the loan under investigation doesn’t extend over a full year. The interest charge is 15%-25% for the entire loan. A pay day advances is a pretty penny contingency option nobody should go for without prior appraisal of any and all feasible alternatives.

Of course, they can be a tremendous help in times of financial extremity. But they were never assumed as intermediate or long-term financing options.

I have been reading a lot about immediate annuities lately and I really have to address this question, are immediate annuities any good now a days? I will say this, they have their place. They are not what I would call the best vehicle for many people. These instruments have there place in a portfolio, but why would you want one in today’s world?

An immediate annuity is great for people who want income for a specified number of years or for the rest of their life. The problem with an immediate annuity is the income is fixed, forever. There is absolutely no chance to keep up with inflation. These types of investments may make sense for a potion of your portfolio, but not a big portion.

I read yesterday that some experts say 25 to 50% of your retirement savings should be invested in an immediate annuity. Are you crazy? Why in the world would you invest half of your nest egg in an investment that guarantees that you will not keep up with inflation? You wouldn’t and you shouldn’t. I would say no more than 10 to 15% should ever go into an immediate annuity.

Some immediate annuities have inflation riders on them were your income will go up by 3 to 5% a year. I used to think this was a great feature, and it is if you buy one, but when you add up the amount of premium it takes to make this option work it does not make sense. It takes a larger amount of money in an immediate annuity with the inflation rider on it to generate decent income in the first few years, as compared to a regular immediate annuity.

The other drawback is in today’s interest rate environment. You are buying a vehicle, which will never change, at very low interest rates. I will not get into speculation over where interest rates will go in the future, but it is safe to say that 30 year lows and an immediate annuities equals a problem in the future for you. The inflation rider is very interesting, but like I said it will take a lot more money to generate decent income in the first few years.

I compare this to a variable annuity with a For-Life benefit and the variable annuity looks far better. For starters the income will be pretty darn close to an immediate annuity, a For-Life benefit usually allows you to withdrawal up to 5% from your initial investment for the rest of your life. Fees are not a concern, or should not be a concern for you, mainly because if you are willing to hand over your investment for an immediate annuity then what does it matter?

With the For-Life benefit you have the ability to keep up with inflation. Usually the benefit has some kind of step-up in the benefit. This means that if you experience positive market growth then your benefit can increase with your investments. The typical step-up will range between 1 to 5 years, depending on the company. Your money can be invested into stocks, bonds or the fixed account (if offered) to address your risk tolerance concerns.

The investment will fluctuate with the market, but as long as your income is stable what is the difference? The whole point is this; if you are giving your money away to an insurance company to pay you out a little bit of interest and basically your money back then what are you worried about risk for? As long as it is meeting your income needs, the income never goes down, but has upside potential it will do the same thing as an immediate annuity will do for you.

With the variable annuity For-Life benefit you have many advantages. You have: upside potential, steady income, the potential to have that income increase, you do not lose control over your money and you may have a death benefit for your heirs. With an immediate annuity you have none of those features, when you die (unless you choose a period certain) typically your money is left to the insurance company.

I am not saying a variable annuity is right for everyone, but as long as your income is stable it should not matter. With the variable annuity For-Life benefit the income is guaranteed for your lifetime, just like most immediate annuities. Consult a qualified investment representative t find out if a variable annuity is right for you or not.

You can beat up on variable annuities all you want but I dare you to compare an immediate annuity to a For-Life variable annuity any day. The benefits to not losing control of your money, upside potential and life time income beats a fixed payment for as long as you live any day.

Remember both these investments are very different and you should weigh risk, objectives and risk tolerance before you invest. Variable annuities are sold by prospectus only and you should read and understand the prospectus before you invest. For more information on variable annuities please go to www.annuityiq.com.

Scott DeMonte is a widely respected expert in variable annuities. Scott has worked as both a financial advisor and as an executive for 2 of the best selling variable annuity contracts sold in America.

With over 12 years experience in the financial services industry, Scott decide to start his own company, http://www.annuityiq.com Through his expertise he evaluates and rates variable annuity contracts.

By educating both brokers and consumers, Scott’s goal is clear: Get the right information, the first time.

Options are most commonly used by investors for either leverage and / or insurance (hedging). As leverage, options allow the investor to control an equity position without paying 100% of the share price. For example, rather than going on the open market and purchasing 100 shares of IBM for $8,257 ($82.57 per share), an investor could control the same amount of shares at a given strike price for a fraction of the cost such as the Jan 07 $80 strike with a total cost of $1,050. As insurance / hedge, options can assist in protecting against price fluctuations. For example, the same IBM investor can sell a call against his shares which will reduce the basis in the equity position by the premium received. In other words, he has hedged his position against any short term fluctuations his equity position may experience.

Selling options provides many benefits with the major reason being collecting premium from the sale of such an option. The premium collected goes into your account and can then be used to invest in other positions. The writer keeps the premium regardless of whether or not the option is exercised. Another important aspect with selling options is that of time value which now works for you rather than against you.

Selling options is not new and it isn’t as complicated as many make it out to be. It is a viable means of generating consistent income from your portfolio. If you are not selling options against your positions you are losing out on money you could be putting in your pocket each and every month. Keep in mind writing covered calls are not get rich quick strategies. They are a means of generating income for the individual investor regardless of their trading expertise.

Stock Market Cash Machine helps traders learn the advantages of writing covered calls. Covered Calls are often misunderstood but when used correctly can assist investors in generating monthly income as well as providing downside protection.

Covered Calls

Portfolio Caffeine

The effects of caffeine on the central nervous system were
first discovered in the 6th century in the Ethiopian highlands
by a sheepherder called Kaldi. After his sheep ate red berries
from a coffee tree, they seemed a bit jumpy and had difficulty
sleeping.

The berries next made their way to a local monastery where the
Abbott made a drink by mixing the beans with water into a
concoction that kept him alert through the long hours of evening
prayer.

Coffee most likely made its way to Asia in the latter half of
the 17th century when a Dutch trader brought a seedling from
Yemen to Java where the soil proved hospitable leading to a
thriving and profitable industry to this day. Vietnam is now
the world’s second largest coffee producer while India and
Indonesia are in the top ten.

Despite substantial coffee production in Asia, much of the
growth in the popularity of coffee in this predominantly tea
drinking region can be attributed to instant coffee and the
marketing efforts of Nestle. It rolled out the first
commercially viable instant coffee in 1938 and it spread to Asia
becoming a prestigious alternative to tea.

As incomes rose in Japan, coffee consumption grew as well making
it the third largest consumer in the world. This is a trend that
could continue in countries with rising disposable incomes such
as China.

Coffee is now big business and as a world commodity is second to
only oil.

This size and growth potential for a habit forming product like
coffee sure sounds like an investment opportunity to me. But
how should you play the rise of coffee in Asia.

Since it takes about 4-5 years for a coffee tree to bear
cherries, investing on the production side is not for the faint
of heart due to hard to predict coffee price fluctuations. As
one of the largest coffee plantation companies in Asia, Tata
Coffee Ltd. of India, is worth a good look especially since it
is an integrated coffee company with roasting, exporting and
retail operations.

Nestle is also a possibility since it is the leader in instant
coffee in China and many parts of Asia. A drawback is that the
coffee business represents only roughly 10% of the sales of this
diversified food powerhouse.

The most attractive option is to invest in the retail coffee
market which is highly fragmented. Starbucks (SBUX) is the
global leader with 10,500 retail outlets of which 3,500 are
outside North America. Starbucks began in Asia with its first
store in Japan in 1996 and now has 165 stores in mainland China,
221 in Hong Kong, Taiwan and Macau, 595 in Japan, 64 in
Australia and 34 in Singapore.

Starbucks is a classic growth story. It added over 1,000 stores
last year and plans 1,800 more in the fiscal year ending
September 2006. 35 million people visit a Starbucks store each
week and it has operations in 37 countries.

Its global goal is to reach 30,000 outlets with half of them
located overseas. China could perhaps become its second largest
market after America.

The core of Starbucks is its premium branded coffee but it
offers much more. It has become a second gathering place outside
of work and home. Starbucks Entertainment produces CD’s and is
considering providing music download facilities in its stores.

I am one of the millions around the globe that use Starbucks as
a second office. During my last visit, I got behind a gentleman
who added several pricey pastries, and a CD to his coffee for a
whopping bill of $27.

One caveat for investors is that sales growth expectations are
high and any significant disappointment would likely hit the
stock rather hard. Another is that its China expansion may run
into some difficulties though I have been impressed with its
incremental strategy since its first store in Beijing opened in
1999.

With its financial strength, knowledge of markets and attention
to detail, Starbucks seems to have the recipe for success in the
fragmented retail coffee business. Since it is opening 4-5
stores a week, competitors will need to scale up rather quickly
to pose a threat to its growth. Copycats are a problem though.
Starbucks recently gained a key judicial victory when it won a
court case against a Chinese company that infringed on its
copyright.

Meanwhile, back in Ethiopia, another Starbuck’s knock-off called
Kaldi’s does a brisk business. While Starbucks is not amused, it
cannot help but be flattered by the imitation in the very
birthplace of coffee.

Carl Delfeld is head of the global advisory firm Chartwell
Partners and editor of the the “Chartwell Advisor” newsletter.
He served on the executive board of the Asian Development Bank
and is the author of “The New Global Investor.” For more
information go to http://www.chartwelladvisor.com or call
877-221-1496.