Gold Is Good, These Five Metals May Be Better

Copper is the "metal with a PhD in economics"

By Tim Begany

Gold tends to be all the rage in times of economic uncertainty. Investors flock to the “yellow metal” when things go sour because they see it as a safe haven for their money until they feel better about venturing back into things they view as riskier, like common stocks and real estate.

Such a strategy can actually be very dangerous, though. When gold or any other investment becomes too popular, it raises the risk of ?unsustainably high prices that could suddenly plummet, losing investors a lot of money very quickly.

That doesn’t mean you should avoid gold altogether; just don’t put most or all of your money into it. There are lots of other metals, and many could be considered better investments than gold because they’re more versatile and aren’t such strong objects of investor sentiment. Here are five metals that may be an alternative to look at besides gold.

Special Offer: The result of easy money from the Federal Reserve has always been a tsunami of inflation. Don’t let inflation destroy the purchasing power of your dollar-based assets.? Click here for time-sensitive investment information from renowned precious metals and hard asset advisor Curtis Hesler in?Professional Timing Service.

1. Copper: This is one of the most versatile metals. It’s used to make electrical wiring, car batteries, microchip circuitry, pipes for plumbing in homes and commercial buildings, roof flashing, gutters, musical instruments and solar power cells. Copper can also be mixed with other metals to make valuable alloys such as bronze, pewter and brass.

2. Zinc: Like copper, zinc is present in many alloys (in fact, zinc and copper are both in brass and bronze). Zinc is also important for die-casting, galvanizing and rubber making and can be used as a paint pigment, wood preservative and agricultural fungicide. As a dietary supplement, it is thought to have antioxidant properties that speed healing and slow aging.

3. Silver: Besides its well-known uses in making jewelry, silverware and coins, silver is in dental fillings, architectural glass and hearing aids. Some musical instruments are made of silver or silver alloys and silver is used to produce formaldehyde. Because it has antibacterial and antifungal properties, it is included in catheters and other medical devices to reduce the risk of infection. It is even added to socks to help control bacteria-related foot odor.

4. Platinum: As a primarily industrial metal, platinum plays the role of catalyst in the processing of petroleum and chemicals such as nitric acid, fertilizers and synthetic fibers. It is also a vital component of high-voltage wires, magnetic coatings for high-density hard disk drives, fiber optics, fiberglass, catalytic converters and spark plugs.

5. Palladium: Like platinum and silver, palladium plays key roles in the dental, chemical and auto fields. iPhones and other electronics might not even exist if it weren’t for palladium. Also known as “white gold,” palladium is used to make jewelry and watches, too.

Why They’re Worthy Investments

Precious metals with lots of different uses make attractive long-term investments. These metals are more apt to appreciate and hang on to their value over time because they’re vital to industries around the world. However, you can expect their prices to fluctuate greatly from week to week and month to month, just like most other investments.

Gold really isn’t the greatest investment for the long haul because its price often depends mainly on how people feel. It may rise a lot when investors are nervous and want something that seems safe. But it can very quickly lose value when investors start feeling bolder and begin venturing into other areas. Sentiment certainly plays a role in the value of other precious metals, but not to the extent that it does with gold.

How to Invest In Precious Metals

Precious metals are generally available as coins or bullion. However, most people invest in them by purchasing stock in the associated mining companies or buying shares of mutual funds or exchange-traded funds (ETFs) that specialize in one or more metals.

Be careful when investing in precious metals. Because they can be very volatile in the short-term, it’s best not to over-represent them in your portfolio. Keep the portion reasonable – 4-10% of your overall portfolio, for example – so you can enjoy the shine without undue risk.

More From Investopedia:

Trading Gold And Silver Futures Contracts

5 Metals That May Be Brighter Than Gold

10 Tips For The Successful Long-Term Investor

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.

View the original article here

Seven Reasons ETFs Are Better Than Stocks

ETFs enjoy advantages over single stocks

By Stephen Simpson

Apparently nothing can ever be simple on Wall Street. Take the case of a simple question like “should I invest in ETFs?” A beginning investor can spend less than 10 minutes on Google (Nasdaq:GOOG) and learn (if that is the right word to use) that exchange traded funds (ETFs) are the greatest invention since fire, the worst thing since the Yugo, or “investing in ETFs involves risks and may or may not be appropriate for your individual situation, please consult an advisor”. (For a background, see our Introduction To Exchange-Traded Funds.)

While it is true that everybody’s financial situation is different, here are some advantages of ETFs relative to stocks and mutual funds for beginners to consider.

Less Due Diligence
The iShares US Medical Devices ETF (NYSE:IHI) contains?40 different stocks. It would take weeks for an individual investor to do proper due diligence on each of those names, and that is one of the advantages of ETF investing. Because the impact and importance of any one stock is relatively small, investors can spend their time thinking about which sectors and markets are poised to perform and make investment choices without being bogged down by an overwhelming amount of initial and ongoing due diligence.

Special Offer: You can still lose your shirt in an ETF. ?Buy the right ones at the right time and make big money. ?Click here for instant access to Jim Lowell’s model ETF portfolios in Forbes ETF Advisor newsletter.

Might Be Cheaper
Whether you compare them to mutual funds or individual stocks, ETFs can be cheaper to own and trade. Many major brokerages now offer a selection of ETFs that investors can trade commission-free, and that gives them a cost advantage relative to individual stocks. Many ETFs, particularly index-type ETFs, have lower annual expenses than comparable mutual funds and can be cheaper to hold.

No Minimums
While it is possible to find quality mutual funds with low minimum initial investment requirements, ETFs have no such requirements at all. If an investor has $100 to invest and has an account with a broker that offers free ETFs, it is possible to put that money to work immediately. Likewise, there are no minimums for subsequent investments and no minimum “maintenance” amounts.

Instant Diversification
ETFs provide instant diversification relative to individual stocks. It would be challenging to have a properly diversified portfolio with 10 individual stocks, but relatively simple with the same number of ETFs. (To learn more, see 10 Ways ETFs Can Grow Your Portfolio.)

Invest In Hard-to-access Markets
Owning gold is a pain for most individual investors; owning SPDR Gold Shares (NYSE:GLD) (which owns gold bullion) is simple. Not only does this ETF bypass the bid-ask spreads of retail gold and the expense of rolling over futures contracts, but it has no storage or security requirements. Likewise, investors can access commodities like copper, precious metals, timberland and so on through the convenient forms of ETFs. (For more, check out Commodities: The Portfolio Hedge.)

Can Buy Insurance
Because they are for all intents and purposes stocks, ETFs offer more sophisticated options for experienced investors – particularly when it comes to insurance. If you own the S&P 500 SPDR (NYSE:SPY) – an ETF that mimics the S&P 500) -?you have broad exposure to the U.S. stock market. If you are worried about a decline in the market, though, you can also buy put option contracts to cover some or all of that exposure. This helps ensure your position against loss, though at a cost -?just like insurance. This strategy is not really an option with mutual funds.

Can Pair-trade
Pair-trading is only for sophisticated investors, but it is another strategy that ETFs can enable. Pair trading involves buying one security and shorting a similar security, for instance buying a stock like Merck (NYSE:MRK) and simultaneously shorting Pfizer (NYSE:PFE). The idea is to profit from the relative difference in fortunes between the two companies, but investors can use ETFs to pair-trade by buying or shorting “the industry” and taking an opposite position in a particular company that the investor believes will do better/worse than the industry. (To learn more, see Give ETF Pairs Trades A Chance.)

The Bottom Line
There is no such thing as a perfect investment, so investors need to accept that any idea will have its flaws and drawbacks. Still, ETFs do stand apart as an investment category with some real positives for individual investors. As a cost-effective way of achieving a broadly-diversified portfolio including hard-to-own (but worthwhile) assets, ETFs are hard to beat. Accordingly, almost any investor may find that ETFs can play a useful role whether in place of or amidst a portfolio of stocks and bonds. (For more, see How To Use ETFs In Your Portfolio.)

More From Investopedia:

10 Reasons To Add ETFs To Your Portfolio

7 Tools Of The Trade

10 Tips For The Successful Long-Term Investor

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.

View the original article here

Rent Ratio Tells You Whether Renting Or Buying Is The Better Deal

Lower home prices and low mortgage rates make buying look good, but compare the payment to what renting gets you.

Even with this week’s recent bump higher in the benchmark 30-year fixed-rate mortgage, we are still in historically low territory for residential mortgages. That, coupled with home prices that are largely at the bottom of this cycle, has a lot of people wondering if now is the right time to jump into the market and buy a house.

As with most things in life, there’s not one “right answer,” but there are a few guidelines that anyone can use to figure out if buying a home makes sense, or if renting is a better choice.

Do the Math
When making the decision to rent or buy a home, it’s not enough to?look at home prices and mortgage rates. ?You also need to look at rental rates for comparable properties to understand if it makes more economic sense to buy or rent on a long-term basis. One useful tool is the rent ratio, the ratio of the purchase price of a house divided by the annual rent of a similar home.

In a market where a 3-bedroom house costs $500,000, for example, and the annual rent for a similar home is $24,000 ($2,000 per month), then the rent ratio is about 21.

The rent ratio mimics a flipped version of a metric used in evaluating stocks, the dividend yield. ?In the case of residential real estate, however, it’s the inverse: the stock price (home price) divided by the dividend (rent). ?The concept in play is that every asset has a fundamental value that equals the present value of its future payoff. For stocks, that payoff is its dividend. For a home, that future payoff is a roof over your head. The proxy used for the value of that is the rent one pays for a similar asset in the same market.
Special Offer: Save money for a down payment with smart fixed-income securities. Click here for the November model portfolios, including a “low-risk” portfolio yielding 6.64%, in Forbes-Lehmann Income Securities Investor.

Experts vary in their opinions as to where the rent ratio tipping point is, but most would agree that it is around 15-20. The higher the ratio, the more you would need a spike in housing prices in the coming years to justify the price you are paying today. So at those levels, it makes sense to consider renting. Conversely, if you have a ratio below 15, it may make sense to consider buying a home rather than renting at least from a purely financial perspective.

Take Stock of Your Financial Situation
If you’ve done the math for the neighborhood of your choice and have determined that now is a good time to consider buying a home based upon the relative prices of renting and owning, the next step is evaluating whether you can handle the immediate financial impact of buying a home.

When estimating your mortgage payment, make sure to use mortgage rates for your specific area, loan amount and credit score, rather than national averages, which may not apply to your situation. In addition to the mortgage, you will need to look at the costs of property taxes, insurance and homeowner’s association fees, if applicable.

You will also need to add in the costs of making runs to Home Depot or Lowe’s for redecorating or remodeling (usually much greater with homeowners than renters), maintenance and repairs (usually about 1 percent of the home price per year), utilities (which tend to be higher for homes because they are usually larger than rentals) and supplemental insurance.

If you can comfortably pay for these expenses with some financial cushion, then home ownership may be an option for you. If you need every penny of your current cash flow to cover these expenses, then home ownership is probably not feasible at this time. Ask yourself the following questions:

• Will I have to dip into my savings a little or completely exhaust it in order to make the down payment?
• Will I have at least six months’ worth of savings to cover unexpected financial demands, such as medical emergencies or job loss?
• Will I be so financially stretched each month that I can’t enjoy small luxuries like a family vacation or dinner out at a restaurant?

After looking at the feasibility of homeownership from a “cash flow and cushion” standpoint, think about your longer-term financial needs and goals. Does home ownership allow you to save enough for your future plans? Perhaps you have growing children you want to send to college or aging parents you may need to eventually care for. What about that business you’ve always wanted to start or that carefree retirement you’ve been dreaming of? If homeownership will put a damper on your hopes for the future, then perhaps it should not be a part of your plan.

Evaluate Lifestyle Changes
Lastly, when considering whether to rent or buy your home, look for any lifestyle sacrifices that you might have to make. Today, with such high levels of economic uncertainty, many people are not willing to give up the financial flexibility that comes with renting and fear being tied to a long-term mortgage. Some people would like the ability to move where there are jobs available without the burden of selling a home, or simply need to know that their home won’t be foreclosed on if they lose their job and can no longer afford the monthly mortgage payment. In addition, many are unwilling to give up the amenities of higher-priced cities for the affordability of the quiet suburbs. They like the shopping, restaurants, nightlife or culture that is often harder to come by in more affordable locations or may enjoy the convenience of a shorter commute to work.

If, after evaluating market conditions, your financial situation and your ideal lifestyle, you find that homeownership is a good fit for you, then jump in and enjoy the ride. But if it doesn’t seem to add up, just remember that you can still enjoy the freedom and flexibility that renting has to offer. Even better, you’ll be comfortable in the knowledge that you have made a sound decision for both your current lifestyle and your future.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.

View the original article here

Better buy a value of at least $45 if sales per square foot Houle

A little more room if the sales efficiency jumps

Revenues per foot square for the United States Best Buy stores have decreased by a $953 estimated in 2006 to $905 in 2008, [1] partly driven by declining sales comparable store in 2008 and a below-average performance of new stores opened each année.Malgré, we expect revenue per foot square to pick up the future and Trefis member of forecasts of revenues per square foot suggest towards even more.

Best Buy is in competition with other large retailers such as Wal-Mart, Costco, and save.? We currently have an estimate price Trefis $ 41 Best Buy stock at the current price of $42 market.

Television sales represent an important part of Best Buy.Une units sold increased revenue is expected to offset the reduction in average prices for televisions, boosting sales revenues. Best Buy has been expanding its products and services with more than offers mobile web services as well as new Logitech and Sony associated with Google.Toutefois, a weak macroeconomic environment and sales increasing by discount retailers such as Wal-Mart and Costco can pose threats to revenues from Best Buy consumer electronics devices.

Special offer: Jim Oberweis purchased Baidu to $7.90, readers win huge profits.Cliquez here to learn more recommended stocks in the Oberweis report.

Average Member Trefis per foot square for Best Buy United States income forecasts indicate an increase of approximately $912 $ 2010 in 1 233 by 2016, compared to baseline estimate an increase of $913 in 2010 to 1 059 Trefis $ at the end of the forecast period Trefis.Member estimates imply an increase of 10% for estimating price Trefis Best Buy stock.

You can drag the forecast trend-line above to express your own views and see Best Buy income per square foot for Best Buy, United States fellow sensitivity.

Our complete Best Buy stock analysis is here.

Notes:

1 Average income per Square Feet for Best Buy US stores is calculated as: (total number of stores) x (income / store) / (total square footage) .Best total Buy reports total number of stores by and place images in its annual deposits of the SCE.

As our maps?To incorporate them in your own posts using Trefis Wordpress Plugin.

This entry transmitted via the service for full-text RSS - if this is your content and you read on someone to another site, please read our FAQ page fivefilters.org/content-only/faq.php
Article five filters features: After Hiroshima - non-rapport Cancer Catastrophe of Fallujah.

View the original article here