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Andy Singh
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My career has been spent working in the financial, retail and technology sectors. I am in the process of pursuing an MBA, following an undergraduate mathematics and finance degree. My financial background has allowed me to successfully manage my own investment and retirement portfolio for the... More
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  • 2010 US Economic Surge Forecasted
    Entering 2009, global financial markets seemed to be mired in doom and gloom. With the collapse of many venerable financial institutions, it looked like another great depression was in store. However from March 2009, stock markets began to rise from their lows despite higher unemployment and tight credit markets. Many stock market pundits predicted this as just a summer bear market rally, but have been proved very wrong as the Dow and other stock market indexes soared over 50%. Despite the large rally though, there is still a long way to go before Americans investment and retirement accounts recover. The good news is that it seems that most economists are predicting that 2010 will be a good year for the economy and markets building on gains in 2009. Only time will tell what eventuates, but the outlook entering 2010 definitely seems much better than it was entering 2009
    According to a Bloomberg News survey, Dean Maki of Barclays Capital and the most-accurate forecaster over the year, predicts that domestic economy will expand 3.5% in 2010. This will be driven by the rebound in stocks and rising incomes, which will prompt Americans to raise consumption levels. Faced with dwindling inventories and growing demand, companies will then soon become confident the expansion will be sustained. This will mean more jobs and hence more consumption. So the vicious downward spiral that ground the economy down will reverse course and instead work in boosting the economy again. Maki predicts that the unemployment rate will fall to an average of 9% by the end of 2010. Faster growth will also push Treasury (and TIPs) yields higher, to around 4.5%, and help the dollar strengthen as the Fed raises interest rates.
    "We don't believe this time is different from all other business cycles," said Maki. "The consensus view that growth will stay subdued all through next year -- there's no parallel to that in modern U.S. history." Maki's forecast for 2010 is among the highest of the 58 economists in a Bloomberg News survey this month. He is more optimistic than Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York, who was No. 1 among forecasters of GDP during the 12 months through June 2009. Hatzius, 41, estimates the economy will expand 2.4 percent in 2010, and his 2.5 percent first-quarter growth forecast is half the pace Maki anticipates. Ed McKelvey, who works with Hatzius, said the Goldman team forecasts "subpar growth" next year because "employers will be reluctant to hire" and households will exhibit "a bias toward higher saving." Budget difficulties at state and local governments and credit constraints will also restrain the economy, he said. Neal Soss, 60, chief economist at Credit Suisse in New York, was the second most-accurate forecaster of GDP over the first three quarters of 2009. He projects the economy will grow 3.3 percent next year. John Lonski, 58, chief economist at Moody's Capital Markets Group in New York, was No. 3. He sees a 2.7 percent expansion.
    It looks like the pendulum that is the economy, is now swinging back in the positive direction, with more optimism than pessimism now becoming evident. Stock markets will still be volatile in 2010, but if forecasts hold true we could see stock markets up by 10% to 20% next year. Like most everyday investors and consumers, I am still taking a cautious approach in 2010. I have become less conservative in my 401K investment mix, yet I am still making sure that I have sufficient emergency funds available if needed. However, you must invest in market and make your savings work for you. Sitting on the sidelines flush with cash can mean you miss out on potentially strong capital gains while you lose your savings in a rising inflation and taxation environment.

    Disclosure: None

    Disclosure: None
    Tags: Economy
    Dec 29 1:34 PM | Link | Comment!
  • The World's Best Companies to Buy
    Business week recently released it’s annual world’s best companies list and as usual there are a number of US companies present, albeit a much smaller number than last year thanks to the recessionand falling US dollar. The list is particularly relevant this year because it highlights the companies that made it through one of worst global financial climates, showing that they and their management are amongst the best out there. The table below (click to expand) shows the best US companies on the list:

    best companies to invest

    What are some traits of the World's Best Companies? According to the article they are the ones that have a commitment to innovation, diversified portfolios, aggressive expansion, strong leadership, and a clear vision for the future. "In an environment of continuous disruptive change, companies that have rigorous strategic planning initiatives that allow them to see over the horizon…are far more likely to win than those that make it up as they go along," says Paul Laudicina, chairman of A.T. Kearney. He sees two important factors that are most likely to drive global economic performance in coming years: leveraging technology and innovation to enhance productivity, and demographic shifts such as graying populations.

    One way I use the above list is to create a short list of quality companies that I would like to invest in; or buy an ETF or mutual fund that contains these stocks. From the list, here are the companies I like best and feel offer some great longer term potential.
    Technology leaders and perennial investor favorites like Google (GOOG) (No. 2), Apple (AAPL) (No. 3), and (AMZN) (No. 17) still look like good buys as they continue to invest heavily in innovation, commanding large market share with new products even as consumer spending and confidence have declined sharply. I also like Microsoft (NASDAQ:MSFT) and General Electric (NYSE:GE) which I discussed in detail in the artcile: 5 stocks warren Buffet would buy
    To play the energy boom driven by India and China, you can either buy stocks of companies that are primary producers - like Apache (NYSE:APA), ConocoPhillps (NYSE:COP) or Exxon (NYSE:XOM). Or for a more diversified play buy the stocks of integated services companies - Fluor (NYSE:FLR) and Schlumberger (NYSE:SLB) that support the entire energy and commodity industry. Most stocks in this category are nearing or have passed 52 week highs, and if you think the globlal energy boom is set to continue (like I do) then buying these stocks for your portfolio is a must. After all they are amongst the best in the world.

    I recommed you review the entire list because not only does it provide a catalog of great companies to invest in, it shows which industries and sectors are going to be the leaders in the 21st century

    Disclosure : I am long AAPL, GOOG, AMZN and GE
    Tags: AAPL, COP, GOOG, XOM, SLB, APA, Stocks, Invest
    Oct 14 11:15 AM | Link | Comment!
  • When Exchange Traded Funds are a Better Investment Vehicle than Stocks

    With the stock market rallying, many investors want to participate in the gains but don't know which stocks to buy. For example, you’ve heard that the tech sector is sizzling and well known names like Google (NASDAQ:GOOG) and Apple (OTC:APPL) are reporting stellar earnings - but still don’t know which one has the best long term potential (and what about other tech stocks). And is it worth investing in one or both of these stocks - which is not a cheap proposition either with the stocks priced over $150 and $400 respectively.

    If you are like me with a day job and a family to care for, there is just not enough time in the day to pick individuals stocks in a consistent and disciplined manner. Further like many retail investors, last year’s investing experience has made me quite risk averse when it comes to putting all my money in a handful of stocks. However there is an easy and lower risk solution available - Exchange traded funds. An exchange-traded fund, or ETF, is an investment product representing a basket of securities that track an index or sector such as the S&P 500 or commodities. They are among the most popular form of investing because they offer the diversification benefits of mutual funds (at a lower cost), but trade just like stocks.

    Finding the Right ETF

    Just like stocks and mutual funds there is no shortage of information available online about ETF’s. The problem has almost become that there is too much information. Personally I like to use my online broker’s research tools (see next section), the Wall Street Journal, Bloomberg, and well known funds research site Morningstar for researching the various ETFs available for a sector or index I want to invest in. If you are a new investor and looking for some straightforward and free information I recommend you start at Morningstar where you can sign up for a free subscription. Their site provides a lot of education information on ETFs and some of the best (and easiest to use) screeners to find the right one for you.

    As an example, suppose you feel that the health care sector is going to be strong for the next year thanks to the Obama health care reform plan and you want to find a large but low cost ETF to invest in the sector. Go to the ETF section of the Morningstar site and click on the (new) ETF screener. It has some predefined criteria like expense ratio and performance, but you can use the add criteria dropdown to select more. Use the Morningstar sector weightings and select health care. Add this criterion and you will see over 200 potential ETF’s returned. To get a more refined list add or change other criteria. Once you play around it for a bit you will get use the tool and the best thing is that you can save your ETF screen for future use. For analyst recommendations, advice and more detailed analysis you can also sign for their paid premium section

    If you are feeling particularly bullish or bearish about a specific sector or index you can also buy l
    everaged ETFs to get double or triple the exposure for moves in the underlying stocks. This is akin to the kind of exposure you have with index options and is definitely for the more seasoned investor, but worth considering once you get comfortable with basic ETF investing.

    How to Buy and Sell an ETF

    Buying an ETF is just like buying a stock. The key is finding an easy to use discount broker that offers low trading cost. Online brokers I recommend and use is leading online broker E-trade, which is the best option for those who want a lot of good investing 101 topics, access to an extensive amount of analyst research and a one stop place to manage their stocks and banking. However if you plan to trade more often and the focus is on getting the lowest trading costs (free to less than $5) then go with award winning ultra-discount brokers Zecco (which has a good free trade option) or TradeKing.

    When you have decided which ETF to buy (after doing your research I hope!), just execute the trade via your online brokerage account like you would a stock. Your broker will execute the ETF transaction process on the relevant trading exchange and you should then see the ETF added to your trading portfolio. Like any investment, make sure you monitor it and the sector or index it tracks. Selling the ETF through your broker is just as simple and transaction costs should be the same as for stocks.

    ETF’s come in all shapes and sizes and can be bought to profit from falling and rising markets. I think they are a much safer way for investors to use in volatile markets and given trading costs for ETF’s are the same as stocks, it makes good financial sense to use them over the longer term.

    Disclosures: I own stocks in AAPL and GOOG.

    Aug 11 12:11 PM | Link | Comment!
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