4 Safe Investments After the Recession

Posted on March 27, 2023 by schatzi

Although we don’t think this “recession” is anywhere close to over and will get better any time soon, it would be wise to watch these forms of investments very closely. If or when the double-dip comes, be prepared to jump on these investments like a rabbit on viagra because when the dust settles, these areas will be where the parties at.

Gold, Energy, Food and Land

Investors who have survived the deepest recession in decades have witnessed a dollar collapse, a housing market collapse, government defaults and a stock market collapse. After the recession started in 2007, everyone is thinking the same thing, where do we invest our money now? In as early as 2005, a monkey could close their eyes throw their money into stocks, bonds and real estate to easily profit. The buy and hold strategy was lucrative and quite accurate. Most retail investments had a perceived safety of principal and long term growth. From March 6th, 2009 to the second quarter of 2010 we witnessed a confident bear market rally, meaning we had a 30% recovery in stocks overall, but still down 30%-40% from pre-recession highs. We are all still trying to recover back to even.

So what is an investor to do?…. Let’s start by decreasing ownership of pieces of paper like stock certificates, bond certificates, mortgage documents. Over the coming decade smart investors will be a shifting from paper assets to physical assets and commodities. If someone could find a good way to invest in clean drinking water, that would be a good idea too!

It’s time to invest in Gold and Silver, Energy, Food and Land. These investments are based on earth produced physical objects… I know that sounds like weird description, but think about it. They are in high demand, they are finite (will run out) and are increasingly harder to produce.

GOLD and SILVER

Gold and Silver represent the physical forms of money, because they are resilient to financial collapse and will be a store of value for your savings. Gold and silver stocks are highly volatile and will fall with the market, but they can turn and start increasing as markets fall. The key is to find growth companies. Canada dominates gold mining and exploration, being a commodity based market.

Physical Gold is great if you can afford it, because it will protect against inflation and has done well over long periods of time. See our post on “Gold is Money”.

As you can see from the chart above, physical gold has been on a tear since 2000. Regular people in the growing middle class of Russia, India and China are buying gold jewelery and gold investments at an alarming rate. It is not usually a good idea for the average investor to buy when a chart is at such a peak, but gold prices can continue to rise on fear. $1,200 may become $1,800 in the next few months. Physical Gold can typically have corrections between 10% and 25%. Buy as price drops and then buy more regularly.

Some small and intermediate gold stocks for the growth investor:

Yamana Gold (AUY), Jaguar Gold (JAG), Detour Gold (DGC), U.S. Gold (UXG), Eldorado (EGO), IAMGOLD (IAG), LIHIR Gold (LIHR)

Juniors (TSE)‎

Minera Andes Inc. (MAI), Terrane Metals (TRX), Claude Resources Inc. (CGR), Atac Resources Ltd(ATC), Rubicon Minerals Corp (RBY)

Junior Gold stocks are often long term holds and are also high potential acquisitions by larger companies.

Silver Stocks to look at:

Silvercorp Metals (SVM), Hecla Mining (HL), Silver Wheaton (SLW)

Energy

Oil is the number one energy source in the world and consumption will continue to rise with the rise of China, India and Brazil. Look for oil to push for $100+ a barrel. This is almost a no brainer, however, you cannot just buy mature Oil stocks and expect a return, because they are volatile and don’t offer much growth for the average investor. To invest, you must invest in Oil Futures and Options. It took me years to understand that a regular investor can buy oil futures. You will have to sign up with a broker that has e-mini futures like optionsXpress.

Oil Futures – miNY Crude (QM)

OIL ETFs

Hori. Beta. NYMEX Cr. Oil (HOU)

For stocks, Energy companies that produce natural gas, heating oil, hydro and oil delivery pipelines produce great returns even after the recession.

Food

Food is our lifeline, literally. When you invest in Agriculture, farming and processing after the recession, you’re essential betting that we will continue to run out of food and consumption will be more than demand. Here are a few companies.

Exchange Traded Fund:

The Market Vectors Global Agribusiness ETF (amex:MOO),

Fertilizer companies:

Potash Corp (POT), Agrium (AGU), Mosaic (MOS)

Real Estate and Land

Owning property in areas that will grow is a great way to invest for the future. A company can go bankrupt, jobs will be lost, money can be printed, however land cannot be reproduced, it is finite. The recession has brought real estate prices down in several parts of America and the world, not quite in Canada though. The key is to expand your horizons past your own city and assume that the market has some downside risk.

We are not affiliated with nor do we offer this article as a solicitation to buy the above mentioned securities. Please do your research and/or contact an advisor before making a qualified investment decision.

– Kwam Mensah, MastermindGrowth.com.

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Insurance Helps Assess Cost

Posted on March 26, 2023 by schatzi

Insurance can help with many business related items, one of them being the assessment of cost. Here is a look at how insurance can do this.

Insurance as a necessity

Insurance helps to deal with the high amount risks that are an inherit part of business. It is because of these risks that it is important to have an organized system to determine how much a business will pay for an insurance policy. This is done so that every policy holder is treated the same and given the same comparable amount of insurance This means that for every type of insurance there are mathematicians and actuaries that come up with the specific numbers of an insurance policy.

Judging risk

These numbers come from the amount of risk a business has. An insurance company has to know more about the risks of any given business than the actual business owner. Insurance companies have to understand the risk factors involved for their particular type of insurance They also have to be able to draw up numerous contracts and be ready to make changes depending on new risks that are discovered. The insurance company has to be aware of all the angles of risk for that particular type of insurance.

For example, with fire insurance the insurance company needs to know the different risks of fire. This includes the type of manufacturing a company does, chemicals and machinery used, etc. In marine insurance similar measures have to be taken, as well taking risk factors of how far a boat or ship goes, the type of cargo it carries, the weather conditions it sails in, and so on and so forth. Information such as this can then be turned into a mathematical equation that determines the rates and the amount of coverage that is needed.

Why insurance is necessary

Insurance for business is extremely necessary, indicating all of these complex equations are required. Why is this? It has to do with the different variables that make up business risk.

As an individual, you have no way of knowing whether you will have to deal with a natural disaster like a fire or a flood, an employee injury, or loss or damage of your business’ products. This creates an exceedingly risky gamble. However, insurance does not look at the individual.

Insurance companies look at your business group as a whole, among other factors, that can allow them to assess your risk as a member of a group. Take, for example, car insurance Younger drivers tend to have to pay higher insurance rates than older drivers. This is because, as a group, younger drivers tend to have a higher accident rate than more experienced drivers. Drivers that already have accidents on their record tend to pay higher insurance premiums than drivers that don’t. This is because they have been placed into a higher risk category by the insurance company. As the variables change, say a driver gets older or the accident rate goes down, then the risk changes and the premium also changes. Insurance is about reducing the affects of risk, whether you are an individual or business.

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5 Basic Tips For Multifamily Apartment Financing

Posted on March 25, 2023 by schatzi

In these recent economic downturn, with home ownership on the downturn and people losing their home, multifamily rental demand has reached an all time high. This article cites the 5 basic tips for obtaining multifamily financing. Owning multifamily properties offers you many long term cash flow advantages that can be recession proof over the long term.

5 Basic concepts in multifamily apartment financing:

1. Capital: There will be a requirement for the borrowing entity to have some cash on hand for reserves. The amount will vary depending on the building and the amount of money being borrowed. You can also obtain like minded partners to raise capital. Be forewarned that any and all partners will need to be clearly defined via a LLC or Corporation contract.

2. Credit:The borrowing entity either and individual or Corporation, LLC, etc will need to show they are credit worthy. If the credit is shaky then there are alternatives via bridge or short term financing.

3. Property Evaluation: This is the biggest difference between multifamily apartments and single family homes. The value of the multifamily property is based on the net income it produces. Money will not be lend on a property that is in the red or upside down. Net Income is what is left over after all expenses, property taxes, and mortgage payments are deducted. Typically banks want to see at least $1.15 to $1.25 in net income for every $1.00 being borrowed plus all expenses. This is what is commonly referred to as Debt Coverage Ratio or DCR for short.

4. Apartment Management: There are apartment or commercial property management firms that can be contracted to manage the property. Their responsibilities are to handle the tenant prescreening, process rent payments and handle maintenance issues. In return for their service, they will charge a nominal fee that will be taken from the gross rents received. Make sure to interview at least three firms to select the most reliable.

5. Risk, Responsibility and Reward: An apartment is a business and you have to treat it as such. You have to view it as a money making venture and know that there may be times that the money will fluctuate. You have to be proactive in ownership and be aware of the risks and responsibilities that goes along with it. Treat the property and the tenants with the respect they deserve and the reward will be long term cash flow and constant tenant lease renewals.

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How to Grow Your Business World-Wide With Parcel Forwarding Services

Posted on March 24, 2023 by schatzi

To Grow a Global Business or Not Grow a Global Business

The notion of growing your business globally by opening up sales to a world-wide market, at first thought, seems like a no-brainer. Why wouldn’t any company, be it small business or large corporation, not want to offer their goods to a global market, right? Well, the answer to that question so far has ended with most of the largest corporations saying “no, thanks.” You might be dumbfounded by that answer, but there are some very good reasons behind that answer: exporting regulation and cost, equipment not designed to accept foreign postal codes, increased labor costs involved with the additional handling, increased packing costs, increased liability risk and product replacement costs.

How Parcel Forwarding Services Can Help

Parcel forwarding companies, also known as mail forwarding companies, can be very valuable from small businesses to large corporations, because they act as a contact for the client, they provide customer service, are responsible for receiving and warehousing items, they do the labeling and completing of customs forms, arrange for carrier pick-up and shipping, and assume the back-end role of customer service to the point the global customer receives the item. Each one of these things represents a huge saving in operating costs… free warehousing, free labor and free customer service – how great is that!

On top of that, many of these forwarding companies offer other ways to grow your business. For example, some offer what is called “assisted purchasing.” Assisted purchasing opens up another door for businesses to grow globally by offering world-wide customers the ability to wire cash to the forwarding company, which then makes the customers purchases for them.

And what could be better… the customer is the one that pays for these services, either through increased retail pricing to cover international shipping costs or by paying for each service needed to the forwarding company directly.

Growing Your Global Business

As you can see, taking advantage of these services can be a great way to grow your global business. Some suggestions for doing this are as follows:

  • Since your business reputation will rely on your customers’ satisfaction with the particular parcel forwarding service you use, make sure this is the right service for your business. This means you may want to interview and test out the services offered by the parcel forwarder.
  • Compare apples to apples. Not all parcel forwarders offers the same services. Find those that offer you the services you want and need.
  • Don’t overlook small parcel forwarding companies. The few large forwarding companies started out small and grew with their client demand. They may not be as motivated to nurture your client base. Small forwarders are often willing to give a personal level of service that will help you make a good personalized impression with your newly budding global customer base.

By utilizing the valuable services offered by parcel forwarding companies, you can give your business a good shot at growing global business without the expense of doing so. What business wouldn’t want to take advantage of that…

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