Deflation is bad for stocks because it erodes profits.
Over the past couple of years we’ve seen the launch of managed funds specializing in infrastructure, agribusiness, climate change, water, property storage . . .
Isn’t it good to invest in something, which might help save the environment? The problem is that many of these kinds of funds have a real downside, and that’s their potential for harmful experiences.
Why Invest in Exchange Traded Fund (ETF)
ETFs have enjoyed a huge popularity amongst both individual and institutional investors, along with traders and other financial individuals. Despite the fluctuation in investments in ETFs, the risk is still meager compared to the money involved in mutual funds.
A noticeable increase in the number and variety of thematic or sector-specialist funds, such as Australian Ethical’s new Climate Advocacy Fund.
It’s always best to invest on the basis of a fund playing a defined role in your overall investment strategy — not just because it’s the “latest thing”. Steer clear of investing on the basis of hype. Stick to the widely-acknowledged basic rules of investing — ensure that your portfolio has a sound balance of asset-class exposures and market-cap and investment styles, and avoid unnecessary costs.
Gold firmed on Tuesday as physical consumers took advantage of lower prices to buy into the metal and as China announced moves to allow greater freedom in its gold trade, but a lack of investment kept a lid on gains.
Benefits of Exchange Traded Fund (ETF)
Tax efficiency
Cost effective
Transparency, trading liquidity and flexibility
Exposure to particular sectors, industries, investing styles etc
Immediate, low cost exposure to global markets
Diversification – reduced risk
Access to long/short strategies
The diversification of most ETFs cuts down investment risk. Each separate stock is merely part of a basket; thus ETFs are less fluctuating than individual stocks.
The best part is there is absolutely no minimum investment, so you are fee to buy as much as you can or as little as you wish.
Investors often don’t realize that prices play a vital role in cutting down their returns. Commissions, advisory fees, load fees, management fees, etc, when sum up, they will reduce overall investment returns comprehensively.
Today’s, Gold investment tip: Buy on dips Now: The seven gold-exchange-traded funds (ETFs) launched in India have given returns of 25.47 per cent annually for the past three years, beating other asset classes.
If you are a conservative investor, around 15-20 per cent of your portfolio should be gold. The aggressive ones should restrict the exposure to 5-10 per cent.
Take the exposure preferably through ETFs, as they are safer and cost-effective compared to buying physical gold. An ETF buys gold on your behalf and the units are mentioned in your demat account. This means a buyer does not need to spend money on a bank locker or other storage. One can buy as little as 1g of gold, without paying any of the premium that banks and jewellers ask. In addition, investor can liquidate ETFs easily.
New Brazil Mid Cap ETF: Global X launched a new Brazil ETF today that consists of stocks for roughly 40 Brazilian companies… BRAZ – Global X Brazil Mid Cap ETF. The stocks in the new emerging markets ETF focus on companies with market capitalizations of $2 – $10 billion, which fall into the mid-cap range. The underlying index for BRAZ is the Solactive Brazil Mid Cap Index, which targets industries in the Brazilian market such as utilities, financials, and basic materials. As of today, BRAZ is trading around $15.72.
Funds and ETFs which invest in China, India, and other emerging markets, for example, do possess attractive characteristics such as the prospect of long-term capital growth.
Homework is essential when approaching managed funds.
Is deflation really a risk? The last deflation scare, after the Internet bubble burst in 2000.
We will avoid deflation.
Exchange traded funds (ETFs) are always cleverly marketed, and frequently tap into current social, economic, and environmental concerns
How should individual investors protect themselves from even a small risk of deflation?
Putting our money into an investment that’s making a contribution to helping solve the world’s problems
Deflation is an ideal environment for high-quality fixed-income assets because the value of the income stream rises as prices drop.
To protect against deflation, investors should maintain the focus on high quality, but lengthen maturities.
Funds aren’t considering investment in the thousands of companies in Europe, North America, and Japan. They’re even missing out on the other emerging economies, such as India, South Africa, and countries in South America that cause for social economy.
Exchange traded fund (ETF) has been in existence since 1993, when the first ETF fund was launched.
That original ETF, tracking the S&P 500 index, today is one of the most famous ETFs. Of late, ETFs became seemingly popular and emerged as a substitute to mutual funds.
ETFs are index funds (low cost) that trade on major stock exchanges like stocks.
They are made up of a bunch of securities, like mutual funds. However, an ETF bears its own ticker symbol and can be procured and sold in market hours like a specific stock through your broker.
Instead of diversification, an investment into these funds can lead you to end up with the opposite characteristic — concentration. And that means that if something goes wrong in the fund’s area of specialty – for example, a prolonged sell-off — you can be left much more exposed than you would be if you were in a more broadly-based fund. (We saw this a decade ago with the funds specializing in technology stocks.)
There are many features and advantages associated with ETFs.
They are basically very inexpensive to hold for the long period of time, unlike other CFDs.
Annual fees may span from around 0.2% to 2% annually.
They are very simple to purchase and sale and need no specific knowledge of the futures markets.
ETFs are not different in terms of risk.
Your investment may fluctuate and can even go down as well as shoot up hence a right understanding of the risk factor is essential.
It is also advisable to understand how the fund is going to monitor the underlying security.
Many of the index ETFs purchase the individual shares to track the index closely.
Many of the metal ETFs actually purchase the metal to store.
It is not imperative to acquire knowledge about the futures market to invest with ETFs, but it is necessary to understand that there is no guarantee to monitor the underlying security.
Many of these new specialist products, though, invest in relatively narrow areas. The countries, sectors, industries, and even the individual companies into which can invest are usually considerably more circumscribed than is the case with traditional funds.
Cellulosic Ethanol:
Cellulosic biofuels are liquid fuels that can be produced from wood, grasses, and non-edible parts of a plant.
In many cases, if the farm gate price of residues is $40 or higher, farmers would have an incentive to harvest, bale, and store residues for conversion to biofuels.
However, collecting the corn stover and removing the residue from the field may have implications for crop land and soil quality.
The impact of removing corn stover varies from field to field, but removing corn stover from the field may result in a negative impact on maintaining or improving soil nutrient matter and organic matter.
One possible feedstock that would not overly affect organic and nutrient content in the soil is the corn cobs. However, little or no work has been done on the economics from the farmer’s perspective of harvesting and collecting just the cobs off the field.
The primary use for cobs today is using the nutrients and tilling them back into the ground. However, the nutrient content in cobs is relatively minimal.
Removing cobs for use of cellulosic ethanol production had no substantial impact on the soil nutrient content.
In fact, they indicate that fertilizer treatment for a field that has removed the cobs would be similar to that of a field in which the cobs were not removed.
There are nearly two dozen exchange-traded funds (ETFs) to play this development.
China is expecting strong growth for the remainder of 2010, and no further economic stimulus is needed.
The largest China ETFs are:
iShares FTSE/Xinhua China 25 (NYSEArca: FXI): $8.2 billion in assets
SPDR S&P China (NYSEArca: GXC): $556 million in assets
Claymore/AlphaShares China Real Estate (NYSEArca: TAO): The top performer, up 10.2% in the last three months
Consumer inflation also eased to 2.9% in the year to June, from 3.1 % in the 12 months to May.
Global X China Financials (NYSEArca: CHIX): up 8.6% in the last three months
A forecast of 8.5% growth is predicted, with the major risk being consumer inflation.
Global X China Industrials (NYSEArca: CHII): up 5.6% in the last three months
Maybe deflation would be a nice thing for people with secure, steady incomes.
Before committing your money, think carefully about what you’re investing in, and where. Perhaps just as importantly, consider where the fund doesn’t invest. Ensure that if you want to buy into one of these specialist vehicles, that you’ve also covered your ground with broader market exposure. This may not be quite so exciting. But you’re much more likely to avoid disappointment.
Following the late-June Tesla Motors, Inc. (TSLA) IPO and recent alternative energy hype following BP’s (BP) oil spill in the Gulf of Mexico, many investors have turned the spotlight back to “green” equities
Japan’s stock market is finally attracting foreign money.
Osaka Exchange to Offer Jasdaq Fund, Futures to Compete With Asian Markets
Osaka Securities Exchange Co.[ http://www.ose.or.jp/e/], the operator of Japan’s second-largest bourse.
Osaka Securities Exchange Co., the operator of Japan’s second-largest bourse, will offer an exchange-traded fund for start-ups as early as October, aiming to increase its lead over markets in South Korea and Hong Kong.
Osaka Exchange, which purchased Jasdaq Securities Exchange Inc. for 7 billion yen ($82 million) last year, plans to integrate the Jasdaq bourse with its Hercules market.
But deflation erodes profits and asset values. People wait to buy expecting lower prices, reducing demand.
According to an Ernst & Young analysis of Dow Jones VentureSource data, U.S. venture capital investment in cleantech start-ups hit $1.5 billion in the second quarter, up a whopping 64% year-over-year.
In Q3 2009, solar firms were the largest recipients of global venture capital investment.
We now use about one third of the U.S. corn crop for biofuels.
The Chinese government may have enacted some self-imposed austerity measures, but its economy is still expanding at an impressive rate.
China’s economy expanded 11.1 % in the first half of 2010.
More recently, attention has focused on cellulosic resources – dedicated energy crops like switchgrass, miscanthus and corn stover.
Deflation—falling prices—doesn’t seem like it would be so bad.
One of the most important concepts in investing is diversification — the process by which you ensure that your investment portfolio is not lopsidedly over concentrated in a particular country, asset class, security, or sector.
Exchange traded funds (ETFs) focused on China are a nice option to get broad-based exposure to help stomach the risk.
The Green ETFs Index is up by 11% over the last month with the Claymore/MAC Global Solar Energy Index ETF (TAN), First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID), and PowerShares Cleantech Portfolio (PZD) among top performers.
From a year earlier, and is likely to grow more than 9% for the whole year.
China moved up another notch to become the world’s No. 2 economy, overtaking Japan.
Many also invite to combine investing with doing something to make us feel better about ourselves.
More recently, there have been high-profile launches of ASX-listed exchange-traded funds offering exposure to single countries (such as Hong Kong, Singapore, and Taiwan), to specific sectors (such as healthcare and telecommunications), and to baskets of commodities such as silver, platinum, and palladium.
Lower profits cause companies to cut expenses, including employees. It is a downward spiral that, if Japan’s experience is any indication, is difficult to arrest.
Most of us have never experienced prolonged deflation in our lifetime.
A three-plus decade of growth has moved China is the number two spot on the global economic stage, bumping Japan into third.
Now the question has been raised concerning the economics of collecting just the corncobs for energy instead of the stover.
The Shanghai Composite is down 22% year-to-date with much of the sell-off because of what may because of economic overheating.
Despite any negative impact it might have on China exchange traded funds (ETFs), the country’s leaders believe that fomenting slower growth is the right thing to do. But let’s define “slow.”
A number of still speculative “green” equity plays already listed on major exchanges, retail investors have no shortage of ways to add cleantech exposure, but depending on risk tolerance and investment objectives, following the venture funds may not be the best strategy.
China is on course to overtake the United States and vault into the top spot around 2025.
Exchange Traded Fund? — Exchange Traded Funds (ETF) are mutual fund companies that are tailored to grab specific markets including commodities, global stock indices, and metals. They have grown immensely, in terms of popularity, partly because of their simplicity. Some brokers offer the opportunity to trade these mutual funds on margin, facilitating greater gains, but at the same time greater losses also.
Tips for Investors:
Outperforming the market, particularly after fees, is tough and most of the investors seldom succeed.
Most investors opt to buy an index ETF, which is low in price and eventually outperform most active managers.
The most important factor for an investor to remember is the accurate asset allocation for his portfolio. ETFs allow active investors to simply adjust their asset demarcation as markets (and risks) fluctuate, increase or cut exposures quickly.
Tax Advantages of Exchange Traded Fund (ETF)
One overlooked issue may turn out to be the high amount of taxable transactions in most of the mutual funds.
Appropriately organized mutual funds offer high turnover of their portfolio, and more trades leads to additional taxation. (The tax is deducted from the investor’s fund, even if they don’t sell their shares.)
This, coupled with all the other costs and fees means an extensive reduction in a fund’s return.
ETFs are generally more tax efficient compared to mutual funds. They are basically developed to monitor benchmark indices, and in this way make fewer trades. The low portfolio turnover cuts down the chances of tax gain distributions.
So in place of looking at the actual pre-tax returns of actively handled funds, you should analyze after-tax returns of current investments prior to deciding where to invest your hard earned money.
This may not be considered as tax advice and may not prove to be accurate at the time of reading. You must consult your tax adviser prior to taking a plunge into the market of Exchange Traded Fund (ETF).
If you own a variety of investments in your portfolio, the diversity this provides gives you a greater chance of having something that performs relatively well, no matter what the current market conditions.
Biomass energy has received much attention in recent years.
Diversification doesn’t mean you’ll never lose money. Nor does it protect you completely from short-term market dips, or guarantee that one investment will necessarily go up as others go down. But by including different kinds of investments in your portfolio, when one particular investment falls, your entire portfolio shouldn’t necessarily fall along with it.
Facilitating Innovation in Agricultural Biotechnology is looking understandable after 2008/09 financial crisis. The financial crisis provides an opportunity to address other Threatening issues such as,
Worldwide oil / food stock & prices. The World Bank estimates that food production will need to grow by another 50 per cent by 2030 (and 85 per cent for meat) to fulfill projected demand. A particularly important part of the picture has been rapidly rising income growth, notably in emerging economies such as China and India. High income growth accounts for perhaps half of the recent increases in food prices. As middle classes grow more affluent, food consumption patterns change too – often towards diets richer in meat and dairy products that are much more intensive in terms of both grain and water use. The role of biofuels as a source of demand for grain has also been a significant element of recent food price rises.
The FAO has already announced that 36 countries are in crisis in terms of food security, and will need external assistance, of these, 21 are in Africa (although not all of them have been affected equally). Poor people typically spend a high proportion of their income on food purchases: at around 50–80 per cent. Of particular concern are landless poor people in rural areas. Most poor people are rural, and most rural poor people are net food buyers, who are unlikely to be compensated fully by additional employment as agriculture grows, or by higher wages. However, the extent and rapidity of current rises mean that urban populations are also being hit, as there is food on shelves but people are priced out of the market. There is vulnerability in urban areas we have not seen before.
‘The Adoption and Diffusion of GM [Genetically Modified] Crops in the United States as well as for world. 2008, there were 33 different GM crops in production worldwide and that this is expected to increase to 124 by 2015.
‘The Economics of Microalgae Oil’. Now, Bioenergy is energy derived from“biomass,”or any kind of plant or animal matter. The most traditional source of bioenergy is fuel wood or animal dung, burned in open fires for heating and cooking. But it’s presumably turns towards ‘algae Oil’.
Energy insecurity, In late 2007, these expected payoffs played a major role in driving an extension and expansion of the national Renewable Fuels Standard, which calls for the use of 36 billion gallons of biofuels nationwide by 2022.
Along with Climate change with the associated extreme weather events.
Without concrete strategies to address these fundamental constraints, the bioeconomy may continue to be emerging for most of the coming decade.
Algae as a Source of Biomass:
The algae that are used in biodiesel production are usually aquatic unicellular green algae. This type of algae is a photosynthetic eukaryote characterized by high growth rates and high population densities. Under good conditions, green algae can double its biomass in less than 24 hours. Additionally, green algae can have huge lipid contents, frequently over 50%. This high yield, high-density biomass is ideal for intensive agriculture and may be an excellent source for biodiesel production
Algae cultivation has four basic, and equally important, requirements: carbon, water, light, and space. By maximizing the quality and quantity of these requirements, it is possible to maximize the quantity of oil-rich biomass and the return on investment. Ironically, using underutilized resources or waste products, which can provide additional benefits or even offset the cost of production, can often do this. This requires innovative approaches. Because maintaining idea growth conditions requires a highly controlled environment, new and innovative approaches to algae production tend to use bioreactors. Although this increases complexity and cost, it has resulted in some very impressive results, doubling or even tripling the 30 g m-2 d-1 yields obtained in the Aquatic Species Program.
Until the recent financial crisis, biology-based industries were some of the most rapidly growing sectors of the world economy. Agricultural biotechnology firms were making record profits, the pharmaceutical industry was increasingly based on biologics, agriculture commodity prices were high & the biofuels business was booming. Along with that the world is entering a period of declining non-renewable energy resources, popularly known as ‘Peak Oil’, while energy demand is increasing.
The introduction of biofuels reduced international fuel prices and gasoline consumed by oil importing countries by 1% and 1.2%, respectively.
Currently entire world is thinking three main aspects of Bioeconomy –
Food crisis, safety and nutrition
Sustainable biofuels production & utilization
The strong support for biofuels mainly by the United States government is premise of reducing dependence on imported oil.
EU also taking strong socializes & research initiative on biofuel & alternative energy’s.
Innovation and globalization for balancing Food & Energy
Despite everyone agree that biofuel production is required for economy & this will help to develop nations economy the main concern is Food based commodity prices are raising in very fast & rapidly.
Some statistics we have found from Internet those we not able to guarantee of certainty & truth,
Last three years global food prices have increased by 83 per cent
By 2007, global food prices had increased to 23 per cent – 37 per cent if December 2007 is compared with December 2006.
2006, the FAO food price index rose by an average of 9 per cent compared with the previous year.
The unusual feature of the current situation is that the price spike applies to almost all-major food and feed commodities, rather than just a few of them.
The world’s oil production is expected to decline in between one and ten decades
Coal is the likely immediate candidate for replacing oil as an energy supply.
Despite ambitious government mandates and strong financial support for the biofuels industry as well as support & research to increase agricultural yields in the longer term, the key challenge is to increase the supply of food & keep balance production between food products with biofuels.
As per some World leading organizations estimates that demand for food will rise by 50 per cent by 2030. Rising affluence and growing world population with the increasing biofuels demands it’s require some massive investment & revolution in agriculture as well as energy sector.
Assistance for poor people:
Whether Africa or India, the first effects surely come to poor people. Governments, NGOs or international organizations should think to increase both the volume and the quality of humanitarian assistance available to poor people. In the immediate term, the priority is to given to below poverty level people. This may include by moving away from in-kind food aid and towards cash transfers or voucher systems. Also it’s important & to be clear that there should have some directly achievable approach & monitor by organization or governments, so these social protection systems will work.
Coming energy crisis:
The world is facing declining liquid fuel reserves at a time when energy demand is exploding. Both governments and private industry are examining alternative sources of energy. More recently, national concerns over inflation and prices have led some countries to reduce exports and others to try to build up stocks – creating a feedback loop that feeds on itself to drive prices up still further. The move to current price levels has also been unusually sudden. At present, the main drivers of increasing prices are on the demand side.
Rising food prices will hit poor countries and poor people hardest, and will present an obvious impediment to achieving the Millennium Development Goal of halving hunger by 2015. Countries to restructure, diversify and strengthen the competitiveness of their commodity sectors’.
Historically, demand growth for food has been about 1. 5 per cent each year; now, however, it has risen to 2 per cent, and estimate that it will be as high as 2. 6 per cent within a decade.
Other non-renewable sources of energy exist currently, such as coal and uranium; however, these sources are limited and will also inevitably decline in availability. As supply dwindles and costs rise, nations will be forced to utilize alternative energy sources. Coal, both non-renewable and environmentally destructive, is the most likely near-term candidate for replacing oil as a primary energy source.
What is Biodiesel ?
Biodiesel is a biofuel consisting of monoalkyl esters that are derived from organic oils, plant or animal, through the process of tranesterification.
The biodiesel transesterification reaction is very simple:
In order to achieve a secure and stable energy supply that does not cause environmental damage, renewable energy sources must be explored and promising technologies should be developed. Biodiesel derived from green algae biomass has the potential for high volume, cost effective production.
Conclusion
Biodiesel has great potential; however, the high cost and limited supply of organic oils prevent it from becoming a serious competitor for petroleum fuels. As petroleum fuel costs rise and supplies dwindle, alternative fuels will become more attractive to both investors and consumers. For biodiesel to become the alternative fuel of choice, it requires an enormous quantity of cheap biomass. Using new and innovative techniques for cultivation, algae may allow biodiesel production to achieve the price and scale of production needed to compete with, or even replace, petroleum.
