Daily Investment Tips

New Zealand Dollar is a good hedge against the fear of the long term fall of US Dollar. The FT reported in May 30, 2011 that the New Zealand dollar hit a record high.

Factors Causing Rise in New Zealand Dollar Vs US Dollar.

1. Tight Monetary Policy – The Reserve Bank of New Zealand is maintaining a long term policy of a tight monetary policy this is versus the loose monetary policy(massive stimulus programs) in US.
2. Rising trade surplus – Higher global demand for food, particularly its meat and dairy products, means exports will always outpace imports. Compare this to the US that is operating in a trade deficit thanks to massive imports from China.

written by Constantine Njeru \\ tags: Bank Of New Zealand, China, Dairy Products, Fear, Global Demand, Massive Imports, New Zealand Dollar, Reserve Bank Of New Zealand, Stimulus, Tight Monetary Policy, Trade Deficit, Trade Surplus

For hungry investors looking at the rising price of Gold, It feels like the good times will never end.In this frenzy it is easy to forget that whatever goes up will one day come down.

Three Signs Gold is in Bubble State

According to the classic book “Manias, Panics, and Crashes: A History of Financial Crises” by Kindelberger and Aliber, past bubbles have occurred during good economic times when interest rates are low, credit is plentiful and easy to obtain, and national optimism is running high.

One major event that has fueled the Gold frenzy is the massive stimulus programs by governments around the world. As governments try to reduce spending that could be the strike that will burst the Gold bubble. The recent Republican take over of the house could just be the beginning of the end.

written by Constantine Njeru \\ tags: Beginning Of The End, Bubbles, Crashes, Economic Times, Financial Crises, Frenzy, Good Times, Governments, Interest Rates, Investors, Kindelberger, Optimism, Panics, Price Of Gold, Running, Stimulus, Three Signs

If you are asking the question whether this is a good time to invest in the stock market? Then read the following investing check list that will guide you to answer that question.

Are you young?

If you are in your 20s this is the best time to start investing in the stock market. Young investor have the advantage of time. The more time you have the more money you can invest over time.

Do you have the capital?

Most investors reason you should start investing immediately you have the capital. If you you keep the money in the bank you run the risk of spending the money.

The Price Earning Ratio.

Is the the Price earning ratio at historical low. A low P.E is a sign of a bargain more so if the company earnings are projected to remain stable.

Governement stimulus

Government stimulus have a habit of giving an economy a big kick. All that government money goes into the hands of consumers, who spend the money in making purchases. That consumer demand boosts companies revenue and profits. Higher profits translates to higher share prices.

Market Psychology

The best investor to explain this concept is Warren Buffet in the following quote

“Be fearful when everyone is greedy and greedy when everyone is scared”

written by Constantine Njeru \\ tags: Bargain, Best Time, Boosts, Company Earnings, Consumers, Good Time, Government Money, Habit, Invest Stock, Investing In The Stock Market, Investing Stock, Investor Advantage, Market Psychology, Money In The Bank, Price Earning Ratio, Profits, Share Prices, Stimulus, Warren Buffet, Young Investor

Warren Buffet is having a look at how his company, Berkshire Hathaway is performing and is convinced the US economy is on the upswing.

In  a 2010 yahoo finance and huffington blog interview the famous investor was quoted saying : -

The stimulus is working

If you feel the massive stimulus is not working for you, Buffet may disagree

“We’re hiring,” he adds, referring to many of his Berkshire Hathaway companies.

Buffet then painted a sunny picture for the US economy

The stimulus is working and the economy will improve in the next 2-3 years.

If you doubt Warren Buffet predictions Just remember his nick name is the Oracle of Omaha

To watch the full interview visit yahoo finance

written by Constantine Njeru \\ tags: 3 Years, Berkshire Hathaway, Company Berkshire Hathaway, Economic Forecast, Economy, Finance, Investor, Nick Name, Oracle, Oracle Of Omaha, Stimulus, Upswing, Warren Buffet, Yahoo, Yahoo Finance