May 27th, 2010: Are US Treasuries the new CDO's?
Everyone knows that a castle built on sand is a poor risk. In the global investment marketplace, it has long been assumed that the U.S. Treasury bond is like a castle built on bedrock: perhaps not very exciting, but totally reliable. But how should investors respond to the notion that the bedrock foundation of the T-bill is more unstable than it may appear?
April 20th, 2010: The Dow Hits 11,000 - But Hold the Champagne
On April 12 the Dow Jones Industrial Average closed at 11,006, its first landing above 11,000 since Sept. 26, 2008. Many investors broke out the champagne. Others have stuck to bottled water, wishing to remain clear-headed as the market teeters on the edge of what could be either continued growth or a sobering correction. Either way, market volatility is not a thing of the past. Many hurdles lie ahead - here are a few...
March 18th, 2010: Investors Uncover Risk in Greece
In the world of investing, there are the risks that you know and the risks that you don't know. And then there are the risks that you have a right to know but never learn about...
February 9th, 2010: The Rain in Spain is a Hurricane
Of Spain's four regional stock exchanges including Barcelona, Valencia, and Bilbao, the Bolsa de Madrid (Madrid Stock Exchange) is the largest and most international...
January 15th, 2010: Dubai World: Ripple Effects and Market Volatility
A hallmark of today's global economy is that capital can flow freely around the world to a wide variety of investment destinations. Investors can seek exposure on a vast playing field and realize optimum profits from international sources. But a crisis in one region can have a ripple effect that increases volatility in markets on the other side of the globe...
December 17th, 2009: BOVESPA, BRIC, and Volatility
In its April 2007 edition of the World Economic Outlook, the International Monetary Fund pronounced, "The old saying, 'If the U.S. sneezes, the rest of the world catches a cold,' remains relevant.'"...
December 7th, 2009: The Fed’s Quantitative Easing
Don’t you wish you could add a few zeros to your online bank balance? Try it and the cops will be at your doorstep with handcuffs. But the Fed can create and spend money. Under the right circumstances investors will applaud. What are the right conditions...
October 19th, 2009: Japanese Government Bond Futures
National governments of industrialized nations, like big ocean-going supertankers, take a long time to change direction. The forces that act upon them must be powerful and the effects of change may take a long time to appear...
October 5th, 2009: Platinum Prices May Depend Upon What’s in Your Garage
While the price of gold tends to attract headlines, many investors seek exposure in other precious metals including platinum. This dense, malleable, ductile, gray-white transition metal occurs in some nickel and copper ores along with native deposits. Platinum resists corrosion and is used in jewelry, laboratory equipment, electrical contacts and electrodes, platinum resistance thermometers, dentistry equipment, and catalytic converters...
September 14th, 2009: A Wild Dragon: The SSE Composite Index
Back in 1978, Jimmy Carter was wearing sweaters in the White House
and the Bee Gees topped the pop music charts. But something momentous was happening in the
People's Republic of China: under the leadership of Deng Xiaoping, the Chinese government
began to open the doors to foreign investment. Just thirty-one years later, the Chinese economy is one of the fastest growing economies in the world, having maintained a consistent average annual growth of more than nine percent. The growth and accessibility of the Chinese economy, with a current GDP of US $3.25 trillion, have made Chinese financial instruments increasingly attractive to investors...
August 18th, 2009: Corn Futures & Volatility
In the musical "Oklahoma," Curly enters the stage singing the
classic song "Oh What a Beautiful Morning." What accounts for his expansive mood? The
corn is as high as an elephant's eye, which on nearly every farm from Oklahoma City
to Beijing is considered a mighty good thing...
July 24th, 2009: Plastics Futures Remain Volatile
In the classic 1967 film "The Graduate", Mr. McGuire has one word
to say to Benjamin: "Plastics." It was sound career advice, because forty years later
the thermoplastics market is worth $200 billion, an amount comparable to nonferrous
metals. In 2007 global consumption of all plastic was 181 million tonnes, and by 2010
analysts forecast consumption will reach 227 million tonnes...
July 9th, 2009: ETF Volatility
In their endless quest for investing opportunities that are both
highly complex and easy to trade, investors are finding exchange-traded funds (ETFs) to be
increasingly attractive. These vehicles resemble mutual funds in that they consist of bundled
securities or other assets. The assets may be correlated or uncorrelated. Each ETF portfolio
is designed to track an index international stock, broad stock or bond market, or stock
industry sector while trading like a single stock. ..
June 22nd, 2009: Oil Prices Exhibit Continued Volatility
Hold on to your hats! The rollercoaster ride of oil prices experienced during the
past year may only be beginning. After soaring to a peak in 2008 of US$147 a barrel, prices fell more than 70
percent by the end of the year. This represented the largest percentage decline ever exhibited over a short time
period, exceeding even the reversals of 1986...
June 5th, 2009: Swine Flu Rocks the BMV
A declining stock market is in many ways like a human patient suffering with a
disease. There are symptoms of illness (in the case of the market, a decline in prices) prompting an examination
by analysts. Sometimes the source of the illness seems easy to pinpoint, but in other cases there may be a
multiplicity of forces at work, and it may be difficult to judge the individual effects of each...
May 20th, 2009: Natural Gas Price Volatility
In the past decade natural gas has exhibited increased price volatility on the
commodity market and a corresponding increase in investment risk. Price volatility is defined as the annualized
standard deviation of the percentage change between daily closing prices. It does not necessarily imply either
high prices or low prices...
May 4th, 2009: The VIX: Fear and Volatility
What if you could read the thoughts of millions of other traders at every moment? What if you knew their
feelings and intentions? Since the founding of the NYSE in 1792 such a crystal ball has been the object of
desire for every investor on the planet....
April 22nd, 2009: General Electric: From Rock Steady to Risky
Back in the nineteen fifties and sixties, the American dream meant a house in the
suburbs, a Ford or Chevy in the garage, a career for Dad, volunteer work for Mom, and maybe a little nest egg of
stocks and bonds. The preferred stock? General Electric was at the top of the list...
April 1st, 2009: The Wizard of Oz and Stock Options
Among serious investors, it is fundamental that stock market investments
carry exposure to risk. Maybe lots of risk, maybe a little, but as we have seen in the past six months even
traditional blue-chip stocks can be volatile...
March 16th, 2009: The Cost of Copper
Amid rapidly fluctuating hi-tech and financial stocks, basic commodities would
seem to provide a long-term source of stability. Yes… and no. With a history of human use since 8,000 BCE,
copper is a mainstay in the production of cable, wire, and electrical products, as well as pipes for plumbing,
heating and ventilating, building wire, and sheet metal facings. In the past five years the price of copper has
ridden a rollercoaster up and down, proving that even in common metals there is risk and reward...
March 3rd, 2009: Gold as a Measure of Risk
How is a precious metal like a singing bird? For many risk analysts, gold is the
proverbial canary in the coal mine. Gold prices benefit from safe-haven buying as investors seek shelter from
the volatility of the stock market and an uncertain economy. Indeed, on February 20 the price of gold broke
above $1,000 for the first time in nearly a year as the Dow Jones industrial average plunged 100 points...
February 18th, 2009: Risk and The Treasury Bill
Risk versus reward: at the end of the day, it's what investing is all about.
Minimize risk, maximize profits. But in the quest for profits even the most sophisticated investors can make
assumptions and overlook subtle shifts in risk that can mean the difference between profit and loss...
January 26th, 2009: The Rising Yen
In December of 2006, you could exchange 120 Japanese yen for one U.S. dollar.
A year later the yen went for 110 per U.S. dollar. In December 2008? Your dollar bought 90 yen. Forecasts
through the third quarter of 2009 see little change...
