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Solid Stock Picks

admin — Tue, 20 Sep 2011 22:31:30 +0000

First Alert 2072F Anti-Theft Safe with Digital Lock, 1.00 Cubic Foot, Gray

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Smart Money Magazine (World’s Greatest Investors: Rock-Solid Stock Picks, Monumental Returns)

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Consumers mean profits: Vivian D. Hairston says consumer staples provide solid growth under various economic conditions.(Stocks Picks): An article from: Black Enterprise

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This digital document is an article from Black Enterprise, published by Earl G. Graves Publishing Co., Inc. on April 1, 2005. The length of the article is 739 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation Deta…

A Solid Pick on Tap – Morningstar Video

Best Stock Picks List > Top 20 Hot Stocks to Buy Now – 2011 System

BY.- http://www.ProfitableStockMarket.com

In the Stock Market it’s not impossible to watch a stock move up dramatically in a matter of hours or days. Investors and Traders can make great money and fatten their wallets every time this happens.

This seems great for every one that wants to try their fortune in The Stock Market, but the problem is that if you don’t know what stocks to look for and how to properly approach them you could end up wasting cash instead of making your profits grow. That’s why the most important aspect of stock tradingis the knowledge FILTER you employ to make your buy and sell decisions.

There are many “fantastic” stock systems and Trading software out there, but you need to test them in order to discover which ones help you the most. That’s part of your homework as a Stock Trader. Test, test and test again.

Complicated Stock Trading Strategies that rely on a “boat load” of technical analysis indicators can make you slow, and being slow when trading stocks can be as dangerous as not knowing what to do in the first place.

The worst thing that can happen to a beginner trader is to get information overload. It’s better to go step by step, and test a practical Stock Trading Strategy that can show you how to focus on concrete ways to make money while picking SOLID Hot Stock trading opportunities once at a time.

In essence, You can be sure that the trading method you employ to approach the stock market and pick stocks can make a big difference in your results as a trader.

Fortunately some sites on the web can show you how to take advantage of stocks in a practical way every week by minimizing risks. One of those sites is Profitable Stock Market at

http://www.ProfitableStockMarket.com

They focus on picking certain stocks that can generate excellent gains on the same day.

Visit them today and learn how to take advantage of the market by picking the hottest opportunities.

About the Author

Profitable Stock Market helps Stock Traders and investors take advantage of practical stock trading opportunities every day at http://www.ProfitableStockMarket.com

Top Five Stock Picks

admin — Mon, 10 Jan 2011 10:01:49 +0000

top five Stock Picks

The Five Rules for Successful Stock Investing: Morningstar’s Guide to Building Wealth and Winning in the Market

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The Five Rules for Successful Stock Investing”By resisting both the popular tendency to use gimmicks that oversimplify securities analysis and the academic tendency to use jargon that obfuscates common sense, Pat Dorsey has written a substantial and useful book. His methodology is sound, his examples clear, and his approach timeless.”–Christopher C. Davis Portfolio Manager and Chairman, Davis Adv…

How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition

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From the school of unemotional investing comes the classic How to Make Money in Stocks, by Wall Street analyst and publisher William O’Neil. Readers new to securities will find it an excellent primer, one that relies on time-honored indicators such as quarterly earnings, market capitalization, and daily indexes. O’Neil’s study of winning stocks stretches back to the 1960s, and he shares his …

The 100 Best Stocks to Own for Under $25

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If its not written by Walden, your stock pick book isnt the real thing. Consider the fate of Waldens stock picks from his first edition in less than a years time. Fifteen picks doubled. The top stock pick gained 225%. And one company, Newport Corp., realized a 1,180% gain! Gene Walden updates the hugely successful The 100 Best Stocks to Own for Under $25 to bring even more top-qu…

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Sudarshan Sukhani’s top five picks for today’s trade

The companies which sell this type of stock are in serious financial difficulties, and this makes their Stocks high risk, because there is a significant risk of that company being declared bankrupt. The value of these Penny Stocks can change enormously over a very short time span, usually decreasing, but in some cases the value does rise.

Why do people invest in penny stocks if they are this risky? Although this investment is very unpredictable, some people believe that they can get a quick return for their investment in this way, and because they are available at such a low purchase price, investors can buy a large number of them. For example, an investor buys penny stocks at $0.10 each, and invests $1000, for which he receives 10,000 shares. If the value of these stocks rises to $0.25 each, and he sells at that price, he has made a quick profit of $2,500.

If you are considering Investing in penny stocks in the Stock Market, see if you can find companies which are likely to have a good future. Perhaps they are about to expand, which could mean they are likely to improve their share value.

If a company which is new on The Stock Market is offering Penny Shares, then they are worth considering. Microsoft, for example, offered penny stocks for $2.50 each when they were new on the market. This is an unusual example, however, because not all companies are bound to have such huge success, and you may need to look deeper into the company itself before investing in a new one which is offering penny stocks.

Remember always that penny stocks are high risk investments, and therefore there is a high likelihood that you could lose money when you buy them. The information which you obtain on the companies which are offering them is unlikely to be accurate, or reliable, and in fact you may not get much information at all. In fact penny stocks may not even be listed on the stock exchange at all, because of the criteria that that particular exchange may have set in order to qualify for listing.

Penny stocks are frequently offered by new companies in the stock market, which do not have much of a financial history that they can rely on. The company must perform well in the stock market if the value of the stocks is to rise, and this takes time. This means that you must be very confident of your choice before you decide to invest in penny stocks.

Even though they are a high risk Stock Market Investment, penny stocks can be one which will produce a good profit.

Alexander West holds the Financial Planning Certificate. One of his passions is learning and teaching people about finances. To read the rest of this article and to join others creating more wealth in their lives visit [http://www.thesavvytrader.com/penny-stocks.php]

Semi-Responsible Goldfish Caretaking?

I recently picked up a modest tank, and five feeder goldfish to stock it.. then found out about their space requirements, a total shock. I’m planning on buying a 20-gallon tank to complement the 10-gallon one, but in the interim, my question is:

I have a 40-gallon rated air pump, a hob power filter, a few fake plants and hiding rocks, gravel, and do 10% water changes twice a day (once off the top, once off the gravel with a vac tube). I’m careful to feed them twice a day and remove excess after a few minutes.

What are some things I can do to make their stay more comfortable, or speed up the cycling process of the tank? I don’t want to put any of them down, and giving them back to PetCo would certainly result in their quick deaths.

It sounds like you are very dedicated to keeping these fish alive, which is fantastic. Very few people care about the lives of fish.

Anyway, I would definitely invest in at least a 30-gallon, if not a 55-gallon tank instead of the 20-gallon. In the long run, you will have happier, healthier fish.

As for speeding up the cycling process, do you mean in the new tank or the old one that already contains the fish?

The new tank needs to be filled with water with the filter running for at least 24 hours after dechlorinating and, if you want to put some Cycle in it (which adds good nitrifying bacteria in the tank) that might not be a bad idea. Put 3 of the fish in the 20 gallon and keep 2 in the 10 for now. Soon you will need bigger tanks, like i mentioned earlier. After 24 hours, you can add the three fish, and see how they do. The actual cycling process doesn’t start until you add fish, because there is no ammonia or nitrogen to start the nitrogen cycle, but you need to regulate the water temperature and the chemicals in those first 24 hours.

Your fish will probably be fine in the combined thirty gallons of water that you have now, as long as you keep up with your daily water changes. I may even go as far to say that the 10% off the top of the water may be unnecessary. Keep vacuuming the gravel once a day, only 10%, and you should be in good shape.

Add 1.5 teaspoons per gallon of uniodized salt (aquarium salt) to the goldfish tanks. It keeps away parasites and diseases and, in goldfish, swimbladder problems, which can be fatal.

So keep taking good care of your fish, and let me know how it goes!

Wind Stock Picks

admin — Tue, 21 Dec 2010 09:15:15 +0000

wind Stock Picks

Platinex CEO Interview July 2010 – Part 1

Stock Option Trading Millionaire Principles

INTRODUCTION

Having been trading Stocks and options in the capital markets professionally over the years, I have seen many ups and downs.

I have seen paupers become millionaires overnight…

And

I have seen millionaires become paupers overnight…

One story told to me by my mentor is still etched in my mind:

“Once, there were two Wall Street Stock Market multi-millionaires. Both were extremely successful and decided to share their insights with others by selling their stock market forecasts in newsletters. Each charged US$10,000 for their opinions. One trader was so curious to know their views that he spent all of his $20,000 savings to buy both their opinions. His friends were naturally excited about what the two masters had to say about The Stock Market’s direction. When they asked their friend, he was fuming mad. Confused, they asked their friend about his anger. He said, ‘One said BULLISH and the other said BEARISH!’”

The point of this illustration is that it was the trader who was wrong. In today’s stock and option market, people can have different opinions of future market direction and still profit. The differences lay in the Stock Picking or options strategy and in the mental attitude and discipline one uses in implementing that strategy.

I share here the basic stock and option trading principles I follow. By holding these principles firmly in your mind, they will guide you consistently to profitability. These principles will help you decrease your risk and allow you to assess both what you are doing right and what you may be doing wrong.

You may have read ideas similar to these before. I and others use them because they work. And if you memorize and reflect on these principles, your mind can use them to guide you in your stock and options trading.

PRINCIPLE 1

SIMPLICITY IS MASTERY

When you feel that the stock and options trading method that you are following is too complex even for simple understanding, it is probably not the best.

In all aspects of successful stock and options trading, the simplest approaches often emerge victorious. In the heat of a trade, it is easy for our brains to become emotionally overloaded. If we have a complex strategy, we cannot keep up with the action. Simpler is better.

PRINCIPLE 2

NOBODY IS OBJECTIVE ENOUGH

If you feel that you have absolute control over your emotions and can be objective in the heat of a stock or options trade, you are either a dangerous species or you are an inexperienced trader.

No trader can be absolutely objective, especially when market action is unusual or wildly erratic. Just like the perfect storm can still shake the nerves of the most seasoned sailors, the perfect stock market storm can still unnerve and sink a trader very quickly. Therefore, one must endeavor to automate as many critical aspects of your strategy as possible, especially your profit-taking and stop-loss points.

PRINCIPLE 3

HOLD ON TO YOUR GAINS AND CUT YOUR LOSSES

This is the most important principle.

Most stock and options Traders do the opposite…

They hold on to their losses way too long and watch their equity sink and sink and sink, or they get out of their gains too soon only to see the price go up and up and up. Over time, their gains never cover their losses.

This principle takes time to master properly. Reflect upon this principle and review your past stock and options trades. If you have been undisciplined, you will see its truth.

PRINCIPLE 4

BE AFRAID TO LOSE MONEY

Are you like most beginners who can’t wait to jump right into the stock and options market with your money hoping to trade as soon as possible?

On this point, I have found that most unprincipled traders are more afraid of missing out on “the next big trade” than they are afraid of losing money! The key here is STICK TO YOUR STRATEGY! Take stock and options trades when your strategy signals to do so and avoid taking trades when the conditions are not met. Exit trades when your strategy says to do so and leave them alone when the exit conditions are not in place.

The point here is to be afraid to throw away your money because you traded needlessly and without following your stock and options strategy.

PRINCIPLE 5

YOUR NEXT TRADE COULD BE A LOSING TRADE

Do you absolutely believe that your next stock or options trade is going to be such a big winner that you break your own money management rules and put in everything you have? Do you remember what usually happens after that? It isn’t pretty, is it?

No matter how confident you may be when entering a trade, the stock and options market has a way of doing the unexpected. Therefore, always stick to your portfolio management system. Do not compound your anticipated wins because you may end up compounding your very real losses.

PRINCIPLE 6

GAUGE YOUR EMOTIONAL CAPACITY BEFORE INCREASING CAPITAL OUTLAY

You know by now how different Paper Trading and real stock and options trading is, don’t you?

In the very same way, after you get used to trading real money consistently, you find it extremely different when you increase your capital by ten fold, don’t you?

What, then, is the difference? The difference is in the emotional burden that comes with the possibility of losing more and more real money. This happens when you cross from paper trading to real trading and also when you increase your capital after some successes.

After a while, most traders realize their maximum capacity in both dollars and emotion. Are you comfortable trading up to a few thousand or tens of thousands or hundreds of thousands? Know your capacity before committing the funds.

PRINCIPLE 7

YOU ARE A NOVICE AT EVERY TRADE

Ever felt like an expert after a few wins and then lose a lot on the next stock or options trade?

Overconfidence and the false sense of invincibility based on past wins is a recipe for disaster. All professionals respect their next trade and go through all the proper steps of their stock or options strategy before entry. Treat every trade as the first trade you have ever made in your life. Never deviate from your stock or options strategy. Never.

PRINCIPLE 8

YOU ARE YOUR FORMULA TO SUCCESS OR FAILURE

Ever followed a successful stock or options strategy only to fail badly?

You are the one who determines whether a strategy succeeds or fails. Your personality and your discipline make or break the strategy that you use not vice versa. Like Robert Kiyosaki says, “The investor is the asset or the liability, not the investment.”

Understanding yourself first will lead to eventual success.

PRINCIPLE 9

CONSISTENCY

Have you ever changed your mind about how to implement a strategy? When you make changes day after day, you end up catching nothing but the wind.

Stock market fluctuations have more variables than can be mathematically formulated. By following a proven strategy, we are assured that someone successful has stacked the odds in our favour. When you review both winning and losing trades, determine whether the entry, management, and exit met every criteria in the strategy and whether you have followed it precisely before changing anything.

In conclusion…

I hope these simple guidelines that have led my ship out of the harshest of seas and into the best harvests of my life will guide you too. Good Luck.

About the Author

Jason Ng is the Founder of Masters ‘O’ Equity. He is a fund manager specialising in options trading and his Star Trading System has helped thousands of traders worldwide achieve financial freedom. Please visit Masters ‘O’ Equity’s Website.

Need help with wind stocks?

I want to invest in some pure wind plays. After doing a little research, I found ticker VWS (Vestas) looks like a good pick. Does anyone think it is overbought, or is there more upside to it? Also, is VWDRY the same as VWS? Or, are they different? What would be some other good pure wind plays?

If by pure wind play you mean companies that sell and install wind turbines, then no. Take a cue from the oil and solar energy sectors. Don’t buy the oil company, buy the company that explores for oil. Don’t buy the company that sells solar panels, buy the company that makes them.

GE, Siemens, and Woodward Governor are key turbine manufacturers. But hey, go for it.

Vanguard Total International Stock Market Index

admin — Mon, 13 Sep 2010 11:04:22 +0000

vanguard Total International Stock Market Index

Vanguard International Index Fund ETF Video “VGK” Chart Trading Analysis

Toyota Land Cruiser

Chronology

Prehistory

In 1941 the Imperial Japanese Army occupied the Philippines, where they obtained a Bantam Mk II, and promptly brought it to Japan. The Japanese military authorities commanded Toyota to make a similar vehicle but to not model the appearance on the American Jeep. The prototype was called the Model AK and was formally adopted by The Japanese Imperial Army as the Yon-Shiki Kogata Kamotsu-Sha ( The Imperial era 2604th model compact cargo-truck ).

Later in 1941 the Japanese government asked Toyota to produce a light truck for the Japan military campaign. Toyota developed a 1/2 ton prototype called the AK10 in 1942. The AK10 was built using reverse-engineering from the Bantam GP. There are no known surviving photographs of the AK10. The only known pictorial representations are some rough sketches. The truck featured an upright front grille, flat front wheel arches that angled down and back like the FJ40, headlights mounted above the wheel arches on either side of the radiator and a folding windshield.

The AK10 used the 2259 cc, 4-cylinder Type C engine from the Toyota Model AE sedan with a three-speed manual transmission and two-speed transfer gearbox connected to it. There is no mechanical relationship between the AK10 and the postwar Toyota “Jeep” BJ. Most of the AK10’s were not actively used (unlike the U.S. Jeep) and there are almost no photographs of it in the battlefield.

BJ and FJ

Production

1951-1955

Assembly

ARACO

Yoshiwara, Aichi, Japan

Body style(s)

2-door Softtop

Layout

FR layout

Engine(s)

3.4 L I6 B petrol

3.9 L I6 F petrol

Wheelbase

2,650 mm (104.3 in)

1950 – The Korean War created demand for a military light utility vehicle. The war put a Jeep on Japan’s doorstep. The United States government ordered 100 vehicles with the new Willys specs and Toyota was asked to build them.

1951 – The Toyota “Jeep” BJ prototype was developed in January 1951. This came from the demand for military-type utility vehicles, much like the British Land Rover Series 1 that appeared in 1948. The Jeep BJ was larger than the original U.S. Jeep and more powerful thanks to its Type B 3.4-liter six-cylinder OHV Gasoline engine which generated 85 hp (63 kW) at 3600 rpm and 215 Nm (159 lbft) torque at 1600 rpm. It had a part-time four-wheel drive system like the Jeep. Unlike the Jeep, however, the Jeep BJ had no low-range transfer case.

1951 – In July 1951, Toyota’s test driver Ichiro Taira drove the next generation of the Jeep BJ prototype up to the sixth stage of Mount Fuji, the first vehicle to climb that high. The test was overseen by the National Police Agency (NPA). Impressed by this feat, the NPA quickly placed an order for 289 of these offroad vehicles, making the Jeep BJ their official patrol car.

1953 – Regular production of the “Toyota Jeep BJ” began at Toyota Honsya Plant (Rolling chassis assembly), and body assembly and painting was done at Arakawa Bankin Kogyo KK, later known as ARACO (now an affiliate of Toyota Auto Body Co.). The “Toyota Jeep BJ” Series was introduced alongside the following:

BJ-T (Touring),

BJ-R (Radio),

BJ-J (Cowl-chassis for a fire-engine).

1954 – The name “Land Cruiser” was created by the technical director Hanji Umehara. “In England we had another competitor – Land Rover. I had to come up with a name for our car that would not sound less dignified than those of our competitors. That is why I decided to call it ‘Land Cruiser’,” he recalls.

1954 – The 125 hp, 3.9-liter Type F gasoline engine added for the fire-engine chassis. Models are renamed as:

BJ-T (Touring),

BJ-R (Radio),

BJ-J (Cowl-chassis for a fire-engine),

FJ-J (Cowl-chassis for a fire-engine).

20 Series

Production

1955-1960

Assembly

ARACO

Yoshiwara, Aichi, Japan

Body style(s)

2-door Softtop

2-door Hardtop

2-door pickup truck

4-door Station wagon

Layout

FR layout

Engine(s)

3.9 L I6 F petrol

Wheelbase

2,710 mm (106.7 in)

1955 – The Second generation, 20 Series was introduced. It was designed to have more civilian appeal than the BJ for export reasons. It also had more stylish bodywork and a better ride thanks to longer four-plate leaf springs which had been adapted from the Toyota Light Truck. It had a more powerful 3.9-liter six-cylinder Type F gasoline engine. The interior of the vehicles were made more comfortable by moving the engine 120 mm (4.7 in) forward. The 20 Series still had no low range, but it had synchromesh on the third and fourth gears.

1958 – The first Station wagon Land Cruiser was introduced with an even longer 2,650 mm (104.3 in) wheelbase (the FJ35V; wagon and van). The FJ25 production started in Brazil being the first Toyota vehicle built outside Japan.

1957 – A 4-door Station Wagon was added as the FJ35V. Land Cruisers were first imported into Australia by B&D Motors as FJ25/28 cab chassis with Australian made bodies. They were the first Japanese cars to be regularly exported to the country and were initially used in the Snowy Mountains Hydroelectric Scheme.

40 Series

Also called

Toyota Macho (Venezuela)

Production

1960-1984

Assembly

ARACO

Yoshiwara,Aichi, Japan

Body style(s)

2-door Softtop

2-door Hardtop

2-door pickup truck

4-door Station wagon

Layout

FR layout

Engine(s)

3.0 L I6 B diesel

3.9 L I6 F petrol

4.2 L I6 2F petrol

3.6 L I6 H diesel

Wheelbase

90 in (2286 mm)

Length

151.2 in (3840.5 mm)

Width

65.6 in (1666.2 mm)

Height

Softtop 76.8 in (1950.7 mm)

Hardtop 78.8 in (2001.5 mm)

Curb weight

Softtop 3,263 lb (1,480 kg)

Hardtop 3,427 lb (1,554 kg)

Fuel capacity

18.5 US gallons

Main article: Toyota FJ40

1960 – The 20 Series was upgraded to the now classic 40. Toyota made many production changes by buying new steel presses. Mechanically, the FJ40 was given a new 125 hp, 3.9 liter F engine and the Land Cruiser finally received low-range gearing. The Brazilian model was rebadged the Bandeirante and received a Mercedes-Benz built Diesel engine generating 78 hp.

1965 – Global production surpassed 50,000 vehicles.

The Land Cruiser was the best selling Toyota in the United States.

1968 – The 100,000th Land Cruiser was sold worldwide.

1972 – The 200,000th Land Cruiser was sold worldwide.

1973 – The 300,000th Land Cruiser was sold worldwide.

The first diesel Land Cruiser was introduced for export on long wheelbase models with a six-cylinder H engine[citation needed].

1974 – A four-cylinder 3.0-liter B diesel was offered. The introduction of this engine boosted sales in Japan by putting the Land Cruiser in a lower tax compact Freight-car category than its 3.9-liter gasoline version. Note: the new B diesel engine was different from the B gasoline engine used in the original BJ.

1975 – The 3.9-liter gasoline engine was replaced by a larger, more powerful 4.2-liter 2F unit.

The FJ55 received front disc brakes.

1976 – United States-version FJ40 Land Cruisers received front disc brakes like the FJ55.

The Toyota Land Cruiser Association was founded in California.

1977 – The Irish Army took delivery of the first of 77 FJ45 Land Cruisers. Although fast, reliable and with good off-road performance the type tended to rust excessively in the wet Irish climate. A few which did not succumb to the effects of weather were repainted in gloss olive green and survive as ceremonial gun tractors at military funerals.

1978 – The first BJ / FJ40 and FJ55 models were officially sold in West Germany with both diesel (BJ40) and petrol engines (FJ40 /55).

1979 – United States-version FJ40s were updated this year with a new wider, square bezel surrounding the headlights.

Power steering and cooler were offered in FJ40s for the first time.

The diesel engine was improved, evolving into the 3.2-liter 2B only in Japan.

The 3.6-liter H diesel engine was optional in some markets.

1981 – the Diesel version received front disc brakes and the more powerful 3.4-liter 3B engine.

50 Series

Production

1967-1980

Assembly

ARACO

Yoshiwara, Aichi, Japan

Body style(s)

4-door station wagon

Layout

Front engine four-wheel drive

Engine(s)

3.9 L I6 F petrol

4.2 L I6 2F petrol

Transmission(s)

3 or 4-speed manual (J30, H41 or H42)

Wheelbase

2,710 mm (106.7 in)

Length

4,673 mm (184.0 in)

Width

1,710 mm (67.3 in)

Height

1,864 mm (73.4 in)

1967 – Production of the FJ55 began. The FJ55 was a 4-door station wagon version based on the FJ40’s Drive-train, replacing the 4-Door FJ45V (I). It was colloquially known as the “Moose”. It has also been referred to as a pig or an iron pig. The FJ55 had a longer wheelbase 2710 mm and was designed to be sold in North America and Australia.

Jan 1975 saw the F engine replaced by the 2F engine. Unusually for Toyota, the model (eg FJ55) did not change.

Model 56 is in Japan only, with 2F engine ( Jan. 1975 – Jul. 1980 ).

60 Series

Also called

Toyota Samurai (Venezuela)

Production

1980-1990

Assembly

ARACO

Yoshiwara, Aichi, Japan

Body style(s)

4-door station wagon

Layout

Front engine, four-wheel drive

Engine(s)

3.4 L I4 3B diesel

3.4 L I4 13B-T diesel turbo

4.2 L I6 2F petrol

4.0 L I6 3F petrol

4.0 L I6 2H diesel

4.0 L I6 12H-T diesel turbo

4.2 L I6 1HZ diesel

4.2 L I6 1HD-T diesel turbo

Transmission(s)

4-speed manual H41F or H42F

4-speed automatic A440F

5-speed manual H55F (non-US)

Wheelbase

2,730 mm (107.5 in)

Length

4,675 mm (184.1 in)

Width

1,800 mm (70.9 in)

Height

1,750 mm (68.9 in)

The original Toyota Land Cruiser FJ 60 was available for purchase from 1981 through 1987. It is a front engine four door wagon which has available seating of five to seven. It is well known in the off-roading community for it’s tremendous 4X4 capabilities, despite being somewhat limited by its poor departure angle. The FJ 60 was offered in the following solid exterior colors: Alpine White, Brown, Desert Beige, Freeborn Red, Royal Blue; and in the following metallic exterior colors: Charcoal Gray, Cognac, Gray-Blue, Rootbeer, Sky Blue, Stardust Silver. In contrast to the FJ 62, the FJ 60 exhibits the classic round Land Cruiser headlights which are replicated now on the retro-style FJ Cruiser.

1980 – The 60 series was introduced. While still retaining the rugged off-road characteristics of previous Land Cruisers, the 60 was designed to better compete in the emerging sport utility vehicle market. The 60 was given a variety of comforts like air conditioning, a rear heater and an upgraded interior. The FJ60’s “2F” petrol engine was left unchanged from the “40″ series while six-cylinder 4.0 litre 2H and four-cylinder 3.4 litre 3B diesel engines were added to the product line.

1981 – Land Cruiser sales surpassed 1 million and a high-roof version was introduced. The 60 was introduced to South Africa when a stock Land Cruiser competed in the Toyota 1000 km Desert Race in the punishing wilds of Botswana.

1984 – This was the final year for the 40. Specialist suppliers of aftermarket parts and restorers who return old FJ40s to better-than-new condition replace Toyota dealers as the main source of Land Cruiser expertise.

1984 – Alongside the 60, the Toyota Land Cruiser 70 Series were introduced.

1985 – The Direct-injection 12H-T and 13B-T turbodiesel engine were introduced.

1988 – The petrol engine was upgraded to a 4.0-litre 3F-E EFI engine. The FJ62G VX-Series was introduced allowing the Land Cruiser to be sold in Japan as a passenger vehicle.

1990 – The 80 series station wagon was introduced, replacing the 60. The 80 was initially offered with a choice of three engines; the 3F-E six-cylinder petrol engine, a six-cylinder the 1HZ diesel and 1HD-T direct injection turbodiesel.

1990 – All 80s sold in North America and Europe now have a full-time four-wheel drive system. In Japan, Africa and Australia, a part-time system was still available. 80s produced between 1990 and 1991 had an open centre differential which was lockable in 4HI and automatically locked in 4LO. From 1992 onward, vehicles with anti-lock brakes had a viscous coupling that sent a maximum of 30% torque to the non-slipping axle. The differential was lockable in 4HI and automatically locked in 4LO.

Toyota Land Cruiser facelift (U.S.)

19871990 Toyota Land Cruiser (FJ62RG) GX (Australia)

70 Series

Also called

Toyota Machito [2 Doors model](Venezuela)

Production

1984-Present

Assembly

ARACO

Yoshiwara,Aichi, Japan

Body style(s)

2-door pickup truck

2-door softtop / hardtop / troopie

4-door van

Layout

Front engine, rear-wheel drive / four-wheel drive

Engine(s)

4.0 L I6 3F petrol

4.5 L I6 1FZ petrol

4.2 L I6 1HD diesel turbo

4.2 L I6 1HZ diesel

2.4 L I4 2L diesel

2.4 L I4 2L-T diesel turbo

3.4 L I5 PZ diesel

3.4 L I4 13B-T diesel turbo

2.4 L I4 22R petrol

4.5 L V8 1VD diesel turbo

Transmission(s)

5-speed manual

Wheelbase

2,980 mm (117.3 in)

Length

4,995 mm (196.7 in)

Width

1,415 mm (55.7 in)

Height

2,070 mm (81.5 in)

Fuel capacity

1 or 2 90-litre tanks each

Main article: Toyota Land Cruiser 70 Series

BJ74 Mid wheel base FRP-top 3.4D-T LX (Japan)

HZJ75LV Troop Carrier 4.2D

HZJ79R Cab-chassis 4.2D

New South Wales Rural Fire Service Toyota Land Cruiser Personnel carrier

1984 – 70 Series was introduced. 70Heavy as a soft-top, hard-top, FRP top, utility, cab-chassis, and Troop Carrier (inward facing rear seats).The petrol engine was replaced with a 4.0-litre 3F engine. The 70 Light had a four-wheel coil spring solid-axle suspension for better ride quality. This lighter duty version of the Land Cruiser had the 22R 2.4-litre gasoline engine, 2L and 2L-T ( turbo ) 2.4-litre diesel engines commonly found in the Toyota Hilux. The 70 Light was sold in some markets as the Bundera or the Landcruiser II, later called 70 Prado. The 70 Prado eventually became popular and evolved into the 90. An automatic transmission (A440F) was introduced making it the first four-wheel drive Japanese vehicle with an automatic transmission.

1990 – New-generation diesel engines were introduced including a five-cylinder SOHC naturally aspirated motor (1PZ),and a six-cylinder SOHC naturally aspirated motor (1 HZ).

1993 to 1996 – the KZ 3 litre turbocharged diesel engine replaced the LJ in the 70 series in European markets where this model was known as the KZJ70.

1993 – An advanced 24-valve, 4.5-litre six-cylinder petrol engine, 1FZ-FE was introduced.

1999 – Toyota updated the 70 series in several ways. The solid front axle received coil-spring suspension. The rear leaf springs were lengthened for increased ride comfort and wheel travel. The six-bolt wheels were replaced with five-bolt wheels. Several smaller modifications to the drivetrain provided increased durability. The long-wheel-base models received new designations: 78 for the troop carrier, and 79 for the pick-up.

2002 – HDJ79 is introduced to Australia with the 1HD-FTE 4.2-litre six-cylinder 24-valve turbodiesel EFI engine.

2007 – Toyota’s first turbodiesel V8 engine, the 1VD-FTV was released in some countries for the 70 Series Land Cruiser. Other modifications include the addition of a 4-door medium-wheel-base model (the 76) and a significantly altered front look on all models.

The Sixth and Seventh generations of the Land Cruiser are still being produced and sold in African and Latin American regions, Venezuela is one of them, the Sixth generation is sold under the nickname of “Machito”(MACHO in Spanish is a very strong man, MACHITO is his son) and the Seventh being nicknamed “Autana” (After a mountain in the Gran Sabana region of Venezuela). NOTE: Production of the seventh generation of the Land Cruiser in Venezuela ended in 2008.

The 70 series (6th generation) is also still marketed in Australia as 4-door medium wheelbase, 2-door ‘Troop Carrier’ and 2-door utility.

80 Series

Also called

Toyota Burbuja (Colombia Ver.)

Toyota Autana

Lexus LX

Production

1990-1997

Assembly

ARACO

Toyota City, Aichi, Japan

Cuman, Venezuela

Body style(s)

4-door SUV

Layout

Front engine / four-wheel drive

Engine(s)

4.0 L I6 3F petrol

4.5 L I6 1FZ petrol

4.2 L I6 1HD diesel turbo

4.2 L I6 1HZ diesel

Transmission(s)

4-speed automatic

5-speed manual

Wheelbase

2,850 mm (112.2 in)

Length

4,780 mm (188.2 in) (1990-94)

4,820 mm (189.8 in) (1995-97)

Width

1,830 mm (72.0 in) (1990-91)

1,930 mm (76.0 in) (1992-97)

Height

1,785 mm (70.3 in) (1990-91)

1,860 mm (73.2 in) (1992-94)

1,870 mm (73.6 in) (1995-97)

The Land Cruiser 80 series was introduced in late 1989. It had swing-out back doors, which were replaced by a winch door in 1995. The Land Cruiser was nicknamed the Burbuja (Bubble) in Colombia and Venezuela due to its roundness, but it was officially released as Land Cruiser Autana in both countries (In reference to Venezuelan Tepuys).

A 80 Series Land Cruiser

with swing-out back-doors

( Model HZJ81V Japan)

1995-1997 Toyota Land Cruiser (US)

1995-1997 Toyota Land Cruiser

with an electric winch

(HDJ81V Japan)

1990 – New-generation diesel engines were introduced, a six-cylinder SOHC naturally aspirated motor (1HZ) , and a six-cylinder SOHC turbo-charged engine (1HD-T). Land Cruiser sales reached 2 million vehicles. The 80 was introduced to the Australian market with two diesel and a four litre inline six-cylinder petrol carb engine 3F.(derived from the earlier 2F petrol motor from the 60 series.) By mid 1991 the 3FE was introduced which was a fuel injected version of the 3F.

1993 – An advanced 24-valve, 4.5-litre six-cylinder petrol engine, 1FZ-FE was introduced. Larger brakes were added from October 1992 and the total wheelbase was made slightly longer.Front and rear axle lockers (code k294) appeared as an option.

1994 – A limited edition Land Cruiser Blue Marlin FZJ80R was introduced into the Australian market. They have 4.5 L straight 6 petrol motors with double overhead cams, automatic or manual transmission and 158 kW (215 PS; 212 hp) at 4600 rpm. The car is blue from the Blue Marlin fish and they have the Blue Marlin logo throughout the car. Some of the features that the Blue Marlin included were altimeters, power windows, disk brakes, leather gear knob and steering wheel, central locking, leather trim, chrome handles and sidesteps, 16″ alloy wheels, limited slip diff, ABS (antilock brakes), power steering, CD and cassette players, flares and a limited edition bull bar. Only 500 were made.

1995 – Driver and passenger airbags were introduced as were adjustable shoulder-belt anchors and an anti-lock braking system. The “T O Y O T A” badge was replaced with the modern Toyota logo (which is sometimes described as a “bean with a hat” aka “the sombrero”).

1996 – In the Dakar Rally, a pair of Land Cruisers finished first and second in the unmodified production class. All American and British 80s adopted anti-lock brakes and airbags as standard equipment. Alongside the 70 and 80, the 90 Prado was added. The 90 Prado was made by Tahara Plant, available as a 3-door short wheelbase and 5-door long wheelbase version with either the 5VZ-FE petrol engine (24-valve six-cylinder, 3.4-litre), the 3RZ-FS (four-cylinder 2.7-litre) petrol engine or the 1KZ-TE turbodiesel (four-cylinder 3.0-litre) and 5L diesel(four-cylinder 3.0-litre). The Land Cruiser was withdrawn from Canada this year and was replaced by the Lexus LX.

1997- A limited run of Land Cruiser 80s was built specifically for collectors and therefore called the Land Cruiser Collector’s Edition. The Collectors Edition sported Collectors Edition badging, “Collector’s Edition” embroidered floor mats, automatic climate control, wheels with the “D” windows painted dark grey and special grey side moldings, and black pearl badging. The Collectors Edition was only available for the 1997 model year and the package was added to many of the available body colors.

1997- An unknown number of FZJ-80 Land Cruisers were sold in the United States as “40th Anniversary Limited Edition” models. They were available in 2 colours; Antique Sage Pearl (Often referred to as Riverrock, Pewter or Grey) and Emerald Green. The 40th Anniversary models included apron badging, a serial number badge on the centre console, black pearl exterior badges, “40th Anniversary Limited Edition” embroidered floor mats, automatic climate control, two-tone tan and brown leather interiors and wheels with the “D” windows painted dark gray. Many were manufactured with the optional electric front and rear locking differentials, keyless entry, port-installed roof racks and running boards. There are some examples that did not have many of these extras.

2008- Last 80-Series vehicle was built in Venezuela which was the only country producing the vehicles after production ended in Japan in 1997.

90 Series

Also called

Toyota Mer (Venezuela)

Production

1996-present

90=Short wheel base

95=Long wheel base

100 Series

Also called

Lexus LX,

Toyota Land Cruiser Amazon (UK 1998-2003)

Production

1998-2007

Assembly

ARACO

Yoshiwara, Aichi, Japan

Body style(s)

4-door SUV

Engine(s)

4.5 L I6 1FZ petrol

4.2 L I6 1HD diesel turbo

4.2 L I6 1HZ diesel

4.7 L V8 2UZ petrol

Transmission(s)

6-speed manual,

5-speed automatic

Wheelbase

2,850 mm (112 in)

Length

4,890 mm (193 in)

Width

1,941 mm (76.4 in)

Height

1,849 mm (72.8 in)

Curb weight

2,320 kg (5,100 lb)

Fuel capacity

80 l (21 US gal)

Toyota Land Cruiser (US)

19982002 Toyota Land Cruiser (FZJ105R) GXL.

1998 – Toyota introduced the 100 Land Cruiser to replace the 80.

At launch the UZJ100 featured the first eight-cylinder engine (4.7-litre 32-valve 2UZ-FE petrol engine) in a Toyota four wheel drive.

Other engines in non-US markets included the 1HD-FT/E turbodiesel.

For the first time in Land Cruiser history, the 100 Series featured independent front suspension for increased on-road handling. In Africa and certain other markets, Toyota offered a 105 model, which retained the solid front axle for more demanding off-road use.

The Land Cruiser won Australian 4WD Monthly’s “4×4 Of The Year” award for the third time in a row.

It was called the Land Cruiser Amazon in the UK until 2003.

1999 – In 1999 Toyota worked with Sega to produce an advertising tie-in for the Land Cruiser 100/Cygnus and other vehicles using the Sega Dreamcast. These featured detailed 3D models of the cars and other promotional video.

2000 – 50th Anniversary of the Land Cruiser. Total global production to date is 3.72 million vehicles.

90 Prados get active traction control (Active TRAC), Vehicle Stability Control (VSC), and electronic brakeforce distribution (EBD) systems as standard equipment in some markets.

2002 – All new 120 Prado is released and the 100 is restyled.

The centre of gravity was lowered by 30 mm, ensuring better stability and dual fuel tanks with a total capacity of 180 L in the new 120 Prado.

Downhill Assist Control and Hill-start Assist Control enhance the vehicle’s stability under difficult off-road conditions.

2007 – Toyota unveils the Lexus LX570 URJ200 at the 2007 New York Auto Show.

For model year 2007 on Japanese models only, G-Book, a subscription telematics service, is offered as an option.

200 Series

Also called

Toyota Roraima (Venezuela)

Production

2008-present

Assembly

Toyota Auto body

Toyota City, Aichi, Japan

Tahara, Aichi Japan

Tianjin China

Body style(s)

4-door SUV

Layout

Front engine / four-wheel drive

Engine(s)

4.0 L V6 1GR petrol

2.7 L I4 2TR petrol

4.6 L V8 1UR petrol

5.7 L V8 3UR petrol

4.7 L V8 2UZ petrol

4.5 L V8 1VD diesel turbo

Transmission(s)

6-speed automatic

5-speed automatic

5-speed manual

Wheelbase

2,850 mm (112.2 in)

Length

4,950 mm (194.9 in)

Width

1,970 mm (77.6 in)

Height

1,880 mm (74.0 in)

Lexus LX

The Toyota Land Cruiser was redesigned for 2008. Known as the 200 Series, it will share the 2008 Lexus LX’s platform and overall design. Though many time-honored Land Cruiser supporters have welcomed the re-invigoration of the mechanical aspects of the vehicle, the 200 Series has encountered criticism due to its controversial body restyling, with some claiming that Toyota has ‘overdeveloped’ the classic trademarked Land Cruiser identity in its efforts to fit the Land Cruiser in to modern 21st century motoring. Toyota presented its completely redesigned Land Cruiser in October at the 2007 Australian International Motor Show in Sydney. The vehicle entered production in September and was available for sale in November 2007. Although the new Land Cruiser was presented at its first motor show in Sydney, it was already on sale in Japan, launched there in September 2007. It also became available in Venezuela for sale early in November under the local nickname of “Roraima” (Taken from Mount Roraima in Venezuela). The 200 Series is offered in three different levels of trim in Australia and Oceania:

GXL

Sahara

The 200 Series, offered numerous features and upgrades over its predecessor not limited to the cosmetic changes made to the body and interior, including:

Smart Entry – A sensor is triggered when the remote is brought near the vehicle, allowing the user to simply touch the door handle to open it.

Smart Start – Start/Stop push button for ignition; a key is not required.

4-zone climate control on Sahara models, with outlet vents increased from 18 to 28

10 airbags (VX & Sahara)

Stronger and lighter frame

Various driver assist technologies not offered on previous models including:

CRAWL; a four-wheel drive control system that operates like an off-road cruise control, automatically maintaining a low uniform vehicle speed using brakes and throttle.

Downhill Assist Control

A newly developed ABS system, the multi-terrain anti-lock braking system (ABS)

Kinetic Dynamic Suspension System (KDSS), allows for greater wheel articulation

Engine and transmission improvements include:

An all new optional V8 Diesel engine, the Toyota VD engine (A Twin-turbo version of the engine used in the 70 Series since 2007).

Automatic transmission standard across all levels of trim of the 200 Series, 5-speed manual transmission is offered only with the 4.0L GX models (in selected regions). A five-speed automatic gearbox is assigned to the 4.7L petrol models, while the 4.5L diesel models receive a six-speed automatic.

Sales numbers

Calendar year

United States

2000

15,509

2001

7,591

2002

6,752

2003

6,671

2004

6,778

2005

4,870

2006

3,376

2007

3,251

2008

3,801

Vanguard Total International Stock Market Index Fund

admin — Thu, 22 Jul 2010 11:47:32 +0000

vanguard Total International Stock Market Index fund

Authors@Google: Burton Malkiel

United States Utility Exchange Traded Funds

One area of the economy is so basic that it’s often overlooked by investors.

However, we all use its products every day of our lives. Demand for them slows down during bad economic periods but never stops. Furthermore, they are legal monopolies. And their profit margins are guaranteed by local and state governments.

For all those reasons utility Stocks have traditionally been considered so safe they’re most appropriate for widows and orphans who have no other source of income.

When investors think of “growth,” they never consider utilities. However, the demand for electricity, natural gas and water grows at least as fast as the population. The invention and spread of high tech gadgets from PCs to big screen TVs has fueled a tremendous surge in the use of electricity.

Utility companies do have disadvantages for investors. They’re capital-intensive. And the same regulatory agencies that guarantee their profit margins are subject to political pressures to reject rate hike requests and to force utilities to spend money on environmental considerations. Because of the fear of global warming, utilities are under pressure to find ways to reduce carbon emissions. Water utilities are faced with aging pipes and competition from bottled drinking water (but still provide the water for most showers, baths, dish washers, and clothes washers).

Therefore, as always, the safest course for investors is to diversify their utility portfolios. Three exchange traded funds make that simple and easy.

The first is iShares Dow Jones U.S. Utilities: IDU. IDU tracks the Dow Jones U.S. Utilities Index. It includes electric (about 75% of the total), natural gas, water, and multi-utility companies. It includes regulated utilities, unregulated merchant power generators, and unregulated independent power producers.

IDU’s top holdings are Exelon Corporation, Southern Company, Dominion Resources Inc, Duke Energy Corporation, FPL Group Inc, American Electric Power, PG&E Corporation, Public Service Enterprise GP, Entergy Corporation, and Spectra Energy Corporation. It owns a total of 76 companies. IDU’s expense ratio is 0.48%. Its distribution yield is 3.75%.

Vanguard Utilities ETF: VPU tracks the MSCI (Morgan Stanley Capital International) United States Investable Market Utilities Index. This is made up of large, medium sized, and small utility companies in the U.S. It includes electric, natural gas, and water utilities, and companies that act as independent producers or distributions of power. It includes both nuclear and nonnuclear utilities. Its SEC yield is 3.74%. Its expense ratio is 0.25%. VPU has eighty-eight holdings in total.

PowerShares Dynamic Utilities: PUI tracks the Dynamic Utilities Intellidex Index. That includes thirty utility stocks. Its expense ratio is 0.6%. Its distribution yield is 8.13%.

PUI’s top holdings are PG&E Corporation, Southern Company, Edison International, Public Service Enterprise Group Inc., PPL Corporation, Exelon Corporation, Sempra Energy, FPL Group Inc., Southern Union Co., and CenterPoint Energy Inc.

Therefore there is a lot of overlap among the three funds. Therefore, there’s no need for investors to buy shares in more than one of these ETFs. IDU is the most diversified and has the lowest expense ratio.

However, PUI now has the highest yield. That can change, however, so investors much check on current yields when they’re ready to invest.

About the Author

Next, if you’re depending on “growth” stocks to grow, your portfolio could remain dead for another 11 years! Profit from the secrets of investors who make money during both bull and bear markets. Send today for free report on income Investing secrets . Learn more about passbook savings accounts right now.

Vanguard Total International Stock Index fund?

I own Vanguard Total Stock Market fund and it has been performing well I was thinking about investing in the International Fund for my ROTH IRA for the long term. Is this a good idea, or could I do better?

The standard (and good) strategy is to invest in US, international, and bond Mutual Funds. The ideal is to shift your allocation of each type over time to achieve strong gains with minimum volatility.

Vanguard lets you shift allocations quarterly. I put a chart out on the web for you showing 15-years of quarterly allocation shifting.

http://www.fasttrack.net/answers/vanguard.gif

The yellow line is the result. The detailed explanation is at

http://www.fasttrack.net/vanguard_trading_strategies.asp

Vanguard Total International Stock Market Fund

admin — Tue, 06 Apr 2010 04:05:13 +0000

vanguard Total International Stock Market Fund

Thomas Sowell on Intellectuals and Society

The Three-ingredient Recipe for Cooking Up Profits

Natalie’s Three-Ingredient Investment Recipe for Cooking Up Profits

1. Start with what you know and love.

2. Pick the leader in the sector (in real estate, it’s location, location, location).

3. Buy low; sell high (easy to say; hard to do).

Any time a potential investment seems too complicated and twists your mind into endless debates, go back to the simplicity of this formula. If it doesn’t pass this test, just say, “Not now.” You still need more information before you can make a well-informed decision.

Be disciplined about following the recipe. You need all of the ingredients, and if you take the steps out of order, you could end up with a brick that sinks your profits rather than a cake that rises light and fluffy to Cloud 9. Since we all want to vacation on Cloud 9 before we’re ninety, let’s sharpen your skills and start cooking.

Step One: Start With What You Know and Love

The first ingredient is easy enough. If you want to invest in infrastructure in India, and you’ve never been there, you have to commit to visiting India and doing a lot of research or be disciplined enough to just say no to the investment.

Warren Buffett, one of the most successful investors of all time, is notorious for not Investing in NASDAQ. He didn’t understand or care about technology enough to compete with his buddy Bill Gates (and conversely, Bill Gates is heavy in technology and lighter in insurance — one of Buffett’s fields of expertise). In the latter part of the 1990s, Warren was ridiculed for missing out on the rocket ship gains that the NASDAQ enjoyed. He missed the high and he missed the crash landing, and meanwhile, his returns chugged along for steady, reliable, strong gains.

What few people realize is that Trading individual Stocks is a tennis match. One person wins (buys low; sells high) and the other loses (buys high; sells low). A novice is a sitting pigeon for the master. Imagine stepping out on the tennis court with Roger Federer (who by the fall of 2008 had already won thirteen Grand Slam tennis titles) and expect to even see a ball coming at you. Very unlikely.

If you don’t know the first thing about a company or its product and you’re not excited enough to get savvy, why step on the court and humiliate yourself with a devastating loss to the pros? Instead, focus on long-term results and proper nest-egg diversification strategies, find the perfect broker (who is your second most important life partner), and tithe to the plan from every paycheck. The average returns of The Stock Market over the last twenty-five years have been over 11 percent (higher than real estate), so that discipline alone could make you a millionaire.

Over the years, I’ve come across a lot of people who say that they don’t know anything about anything, which is completely untrue. My police officer cousin found Taser International, my 2003 Company of the Year, which went on to earn up to 9,000 percent gains over the next three years. Whatever you do for a living gives you an insider’s view of something. Your cleaning lady or people on the janitorial crew where you work know why they like certain cleaning products over others. I use a carpet cleaner who has taken the trouble to become the expert on organic cleaning products. You have some passion and some expertise. I’m simply giving you a framework within which to use it.

Of course, just loving the product or the store doesn’t prove the stock is a good deal or that the company will continue to beat out the competition. That’s why there are two other steps.

Step Two: Pick the Leader in the Sector

The second ingredient is easy to come by when you line up the numbers in my Stock Report Card (see Chapter 6) and ask the Four Basic Questions for Picking Winning Stocks (Chapter 5).

For those of you who really have a taste for investing in individual stocks — and who hasn’t wanted to invest in some product that s/he loves! — picking the leader in a sector is not overly complicated. Picking the leader means that you have to take a devil’s advocate approach to the product that you know and love. There were people who were buying an interest in the leading maker of horse-drawn carriages just when Ford was releasing its first motor car. People were Buying Stock in Worldcom the year before Skype began giving away free long distance over the Internet. You have to determine whether or not the product, company or real estate will be valuable to buyers in the future.

Every month, I go through the exact same research and analysis on a different sector, employ this exact recipe, ask my four questions and inevitably there’s one company that’s leading the pack. And that company is usually pretty easy to identify because it shines in more than one category. Better yet: none of these strategies require earning a Ph.D. in economics or sitting at your computer watching the markets every day at the crack of dawn.

Interview your friends and neighbors on whether or not they like the product or service or prefer the competition. (Don’t ask your friends about the stock; ask them about the product. It’s their preferences as consumers/users of the good that you want to know, not their layman’s opinion on Wall Street strategies.) Ask them the four questions if you really want to get them to deeply consider their love of the product.

Remember: the CEO is the soul of the company. Get to know the CEO of the company you love and the competition a little better by researching some of her speeches online and/ or reading the CEO’s Note to Shareholders in the company’s annual report. (The annual reports should be available on the SEC.gov web site, as well as the company’s web site.)

Once you pick the leader in a sector, the final determination is simply whether or not you’re buying for a good price or paying through the nose.

Step Three: Buy Low, Sell High

The third ingredient in the recipe is largely a game of mastering your emotions as much as employing strategies for identifying the low and high prices.

Buying low and selling high is completely against human nature. Buying low means that when everyone is crying Apocalypse, you’re seeing Opportunity. Selling high means that you’re leaving the party at midnight (sober), while all the punch drunks are screaming that the party is going till dawn, and you’re going to “Miss out, man. If you just hang out a little while longer, imagine how much more fun you’ll have.”

No one has a crystal ball on when the low and high of an investment will occur, but there are a number of factors you need to consider before you make a buying or selling decision.

Calendar Trends
• Santa Rally
• Back-to-School Stock Sales
• Summer Doldrums
• Preelection Year Rally

Other Considerations
• Natural Disasters
• Small Caps for Performance
• Large Caps for Stability
• Exchange Traded Funds versus Mutual Funds
• Diversification and Asset Allocation
• Happy People Make Better Products Faster and Cheaper
• The Economics of Freedom
• Emerging Markets

Historical Performance

If you already have some market experience, you might be stunned to notice that I haven’t included P/E — price-to-Earnings ratio — on this list. Yes, price-to-earnings ratio counts, but the above factors can be as important to determining the optimum buy/sell time as P/E is. When you read the P/E discussion later in these pages, you’ll start understanding why.

If you don’t know price-to-earnings ratio from hieroglyphics, don’t worry. It’s not difficult to understand “Never Pay Retail” and “Buy Low, Sell High.” It’s pretty easy to find out what the 52-week high and low prices are or even what the five-and ten-year highs and lows are, to use as a gauge. Start now with what you understand and accept that you will continue to gain knowledge as you keep reading.

Mastering The Three-Part Recipe-Water Your Money Tree: Your Brain

Write out the Three-Ingredient Recipe on an index card and stick it up in your office — or wherever you do your investments — until thinking about investing this way becomes second nature. This recipe works every time — except in an apocalypse . . . and if one of those comes, you’ll have much bigger problems to worry about.

The Bottom Line

You already have the tools you need to become successful in investing. The reason you might have lost money in the past is that you didn’t trust your wisdom (you placed blind faith in someone else’s), or you didn’t tithe regularly, or you didn’t have a disciplined approach to profit-taking (like the recipe offers), or you didn’t ask enough questions before jumping in (like the four questions force you to do), or you didn’t have the fundamentals of a diversified, asset allocation plan in place that changes as you age.

Investments are like a mosaic. The more tiles you uncover, the clearer the picture. If you plunge your head in the sand and rely solely on the plan of a broker you hardly know, or on a single hot tip, or any other single piece of the puzzle, don’t be surprised if your nest egg lies broken in pieces, never quite assembled into the life of your dreams.

Following the ups and downs of a Stock Price is not educating yourself. It’s obsessing and may lead to an ulcer or, worse, a heart attack. Do your research and evaluation before you buy, and you’ll be able to sleep soundly when the markets are unruly. Many investments treat you to a jittery period of volatility before they go on to great gains. Successful investors almost always go through a price roller-coaster before the stock soars. The roller-coaster ride can be totally worth it in the end, if you’re not having a heart attack. (If you have confidence that your investment is a winner, the ups and downs of the market will seem more like a child having a temper tantrum than Apocalypse Now.)

If your potential investment passes all three criteria of the investment recipe, odds are in your favor to start getting rich the easy way — by following your heart and adding your brain.

Natalie’s Three Takeaway Tips

1. The path to investing wisdom is like learning a foreign language. The words sound like gobbledygook in the beginning, but as you keep talking, you start understanding more and more words, and soon enough you can master the language. There’s no shortcut. Just start talking.

2. Investments are like a mosaic. The more tiles you turn over, the clearer picture you’ll have of the health of the investment.

3. Picking the leader in the sector is the most difficult task. It pays to fill out a Stock Report Card and ask the four basic questions, which are outlined in Chapters 5 and 6.

The above excerpt is a digitally scanned reproduction of text from print. Although this excerpt has been proofread, occasional errors may appear due to the scanning process. Please refer to the finished book for accuracy.

Author Bio
Natalie Pace, is adding a splash of green to Wall Street and transforming lives on Main Street. She is the founder and CEO of one of the most respected independently owned financial news organizations in the world. She has been ranked as a #1 Stock Picker from TipsTraders.com and has partnered with Forbes.com. She has repeat guest appearances on Fox News, Good Morning America, Time Magazine, More Magazine, USA Today, NPR and Kiplinger’s Personal Finance. She currently lives in Southern California.

About the Author

For more information please visit, http://www.nataliepace.com/

What is Vanguard Asset Allocation?

The Vanguard LifeCycle funds invest in “Vanguard Asset Allocation” I was wondering what exactly is that fund, and what is its purpose when coupled with the Total Domestic Stock Market and Total International Stock Market?

Vanguard® Asset Allocation Fund seeks to maximize long-term total return (share price plus income) while incurring less stock market risk than a fund made up entirely of stocks.

In other words this is a balanced fund investing in blended stocks and long term Treasury and agency bonds

Total International Stock Market Fund

admin — Tue, 02 Mar 2010 10:10:53 +0000

total International Stock Market Fund

Inside Look – Alpine International Real Estate Equity Fund – Bloomberg

Stock Market in India

The bull-run in the Indian stock market came to a halt on May 18, as the Bombay Stock Exchange recorded its worst fall.

The benchmark index of the Bombay Stock Exchange closed at 11,391 down 826 points, which is the highest ever fall for the Sensex. The NSE Nifty closed with a loss of 246 points at 3388. Taking cues from both global and domestic developments, the markets entered their first correction mode in two years.

These were the figures on May the 18th when The Stock Market came down crashing. This was one of the biggest crashes that Stock Market had suffered over a long period of time. But this was speculated by most of the stock experts and largely by the investors at large. Foreign funds have invested huge amount in India’s stock market and are currently driving the stock market rally. Fears of further rises in US interest rates, increasing inflation and growing risk aversion among international investors are driving the Asian markets down and the Indian market has followed the trend. But currently The Stock Markets are running on a rampage bull kissing the magical figure of 20K a dream come true for most share Traders

It serves as the best investment option for the following reasons:

* Possibility of high returns

* Easy liquidity

* Unbeatable tax benefits

* Income from dividends

Bombay Stock Exchange is the largest, with over 6,000 Stocks listed. The BSE accounts for over two thirds of the total Trading volume in the country. Established in 1875, the exchange is also the oldest in Asia. Among the twenty-two Stock Exchanges recognised by the Government of India under the Securities Contracts (Regulation) Act, 1956, it was the first one to be recognised and it is the only one that had the privilege of getting permanent recognition ab-initio.Apart from the BSE SENSEX, which is the most accepted stock index in India, BSE uses other stock indicators as well. These are BSE 500, BSE 100, BSE 200, BSE PSU, BSE MIDCAP, BSE SMLCAP, BSE BANKEX, BSE Teck, BSE Auto, BSE Pharma, BSE Fast Moving Consumer Goods, BSE Metal, BSE Metal and BSE Broadcast. The BSE Broadcast is a large timepiece on the wall of the BSE, which constantly exhibits the most recent Stock Quotes from the market. It is also displayed on one of the foremost business-news channels in India — NDTV Profit. The Singapore Exchange (SGX) has already made a strategic investment in Bombay Stock Exchange (5%) for US$42

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About the Author

Peter Frank
SEO – Internet

Which of the following is a true statement?

A. The bank and thrift share of total financial assets has increased dramatically since 1980.
B. The vast bulk of investment in the major nations in financed, not from internal saving , but from funds from abroad.
C.The worlds financial markets have become increasingly integrated.
D.International stock and bond fund cannot be sold in the United States.

C is definitely true.

International Stock Market Size

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international Stock Market size

The Future of America: Predictions for 2009 to 2012

The History of the Eurodollar Market in the 1960s

THE HISTORY OF THE EURODOLLAR MARKET IN THE 1960s

(A CHRONOLOGICAL ACCOUNT)

Introduction

The Euro-dollar market* was in fact, and is indeed today, an international wholesale market in money, involving Euro-sterling and other national currencies such as Swiss franc and to a lesser degree the other major European currencies. This paper will briefly outline in a chronological order how the Euro-dollar market developed during the first five years of the 1960s. As these markets had one thing in common, the fact that they existed in centres foreign to the natural habitat of the currency concerned. US restrictions, such as Regulation Q of the Federal Reserve System limited the rates that may be paid to depositors, whether domestic or overseas, primarily in order to protect the great number of small US banks that constituted the American banking system. Hence, a banking business developed, involving borrowing and lending and, the evolution of an investment medium, in currencies outside the territory in which the currency is ordinarily regarded as domestic currency. This tended to produce a wider spread between the rate paid to overseas depositors and the rate charged to overseas lenders than was the case in London and certain other major centres.

For the second Labour government from 1966-1970, Labour’s taxation policy was important both for economic management and political strategy. This paper will briefly outline in a chronological order how the Euro-dollar market progressed during the second era of the 1960s. The UK position in the late 1960s required increases in financial capital (namely the Euro-dollar market) along with the restraint of domestic consumption. Business organisations had to be given incentives to borrow on the Euro-dollar market. Both the actual incidence of business taxation and its political impact, were going to play a part in Labour’s tax strategy. The environment of this strategy was shaped by a number of factors. The mid-1960s saw fresh hopes for the second Labour government to ending the UK’s chronic deficit in its balance of payments, which looked to be almost in balance. However, the late sixties also saw large amounts of the country’s reserves, being spent in order to defend Sterling. Euro-dollars proved to be a solution. However, the other side was how vigorously the business interest was going to respond to taxes levied against it. In the late 1940s-50s, it was criticised for being too defensive in its posture: “the attitude of industry, when EPT (Excess Profits Tax) was raised to 100% had been weak. Industrialists previously appeared to be unwilling on political grounds to fight for what they knew to be right” . However, both the Labour government and private industry were to some extent uncertain in their analysis of tax questions, and some of the issues involved in developing long-term business taxation received legislative enactment under Harold Wilson’s first government in 1965 .

1961 – “Introducing” the Euro-dollar Market

One can only guess at the amount of Euro-dollars and Euro-sterling outstanding between lenders and borrowers and, though the guesses of financial journalists have varied considerably, all of them fall in the range of $1billion to $2billion. Due to this and other market reports, it was clear that before 1961, the Euro-dollar market was well established in that not only were there large number of buyers and sellers, but that large sums could be transferred easily and without big changes in rates. Turnover in this, as in all the Euro-currency markets, was probably very big. It was also suggested that Euro-dollars constituted 90% of all Euro-currency, Euro-sterling another 5%, and all other Euro-currencies combined the remaining 5%. It was not clear as to the amount of Euro-sterling outstanding, but its turnover in the Paris market in 1961 had been estimated to have reached £10m a day at times .

The rate of expansion in the Euro-dollar market was due to two main factors: Firstly, the continuing balance of payments deficit of the USA which had put into international circulation a steadily increasing volume of dollars seeking the most profitable form of use. Secondly, the banning by the German and Swiss authorities of the payment of interest on foreign-owned balances which had caused holders of marks and Swiss francs to hawk their balances around the international money places with a view to earning any interest that can be obtained there. (The French also, followed the German and Swiss example).

This situation led to the development that depositors were able to find centres which offered a higher return, than offered at home. Also, borrowers were able to raise funds in this currency more cheaply than they would be able to do by going to the country of origin of the currency concerned or in their own currency. It was natural enough that London banks – and merchant banks in particular – with their expertise and international connections, participated actively in this business; since London was thought to be the largest market in Euro-dollars. The total of London’s liabilities in all currencies to non-sterling was a depositors was around the £1 billion mark in 1961, and after allowing for double counting it was not unreasonable to suggest that London accounted for well over half of the real total . However what was significant was the number of banking institutions in London that have been most active in the Euro-dollar markets which have increased their business enormously since the end of 1958.

The Public Archives shows that four groups of banks increased their deposits by £884m or 80% between the end of December 1958 and the end of March 1961. At the same time their overseas lending increased by £479m and their loans to UK local authorities by £119m in each case nearly a three-fold increase. Euro-dollar transactions was also reflected in changes in the net spot position of UK Authorised Dealers (these was unpublished). A net liability here can be taken as an indication of the extent to which Dealers have switched Euro-dollars, and to a lesser extent other currencies, into sterling.

The movements of highly volatile Euro-currency must make for closer integration of the world’s main money markets. This must tend to make domestic money market rates in different centres more nearly equal than they would be in the absence of Euro-currency markets. Movements of Euro-currency was certainly a significant factor in the determination of forward rates. Differences in Euro-currency rates can induce big movements of short-term funds and have to be considered jointly with interest differentials on Treasury Bills as main determinants of the size and direction of the international flow of short-term capital. So far this did not seem to have had any significant effect on the balances of payments either of the UK or of the US. Euro-currency may be used in ways that monetary authorities regard as desirable. For example, it must have reduced the cost of financing foreign trade – this must have benefited Japan in particular – and it may even have increased trade. On the other hand, it could be used to exaggerate speculative movements of short-term capital and a system cannot be without dangers where funds which was liable to be withdrawn at very short notice was used to finance hire purchase finance companies and local authorities. There were two points that was worth taking into account:

The first considers the view that “short-term capital movements will be bigger than they would otherwise have been” . This statement was true in the sense that a greater number of transactions were taking place and the total of the flows in all directions was greater. The UK tended, however, to be most concerned about the flows into and out of the United Kingdom; it seemed that Euro-sterling transactions did not, in general, add to the influx or withdrawal of sterling. In other words, for example, the fact that transactions were going on in sterling between Frenchmen and Japanese did not exaggerate the large reduction of sterling holdings in the hands of non-sterling countries in the first seven months of this year. It was possible, of course, that the existence of the Euro-sterling market resulted in the lenders holding rather larger amounts of sterling than they would otherwise have done, so that the scope for a withdrawal from sterling may have been increased. On the other hand, the fact the Frenchmen could lend sterling profitably to the Japanese, and possibly for a rather extended period, may have added some element of stability to the Frenchmen’s holding of sterling. The fact was that there was no evidence, however, to confirm either of these hypotheses.

The effect of the UK authorised dealers’ transactions in Euro-dollars was not easy to expound clearly. The limits on the authorised dealers’ operations were that there was a limit on the spot convertible currency assets which any one dealer may hold against future liabilities and furthermore each authorised dealers’ spot and forward commitments must match. Perhaps it is easiest to think in terms of the net spot position of the authorised dealers, which became increasingly minus towards the end of 1960, stayed at about minus £100 million from January to May and later declined somewhat. This minus spot position reflects the switch of Euro-dollars – and other currencies – into sterling. There can be wide variations in the gross liabilities and assets of the authorised dealers, but only the net position affects the reserves, as, each transaction is self-liquidating. Nevertheless, the reserves, reflecting as they do the authorised dealers’ spot but not their forward position, will have benefited from the growing switching of Euro-dollars into sterling and will have suffered when this switching was unwound .

1962 – Developments for the demand of US dollars and other currencies

There were considerable statistical difficulties in estimating the size of foreign markets for dollars and other currencies. Hence, any estimate was little better than a guess. Given this qualification, Altman estimated that the market in Europe for dollars, sterling and other currencies as of June 1962 was more than $3 billion. Leading to the assumption that a world total of dollars and other foreign currencies used in foreign markets would be of the order of $4 to $5 billion.

It was estimated that 85% of foreign market operations in foreign currencies during 1962 were conducted in US dollars. Continental European currencies, particularly Swiss francs and deutsche marks were held and used in larger amounts in 1962 than in 1961, but, since operations in dollars were also larger, they did not increase greatly in relative importance. Deposits of Euro-sterling continued to be relatively small. The greater use of continental currencies stems from the smaller forward premium on the dollar which made it possible to pay rates of interest on Swiss franc deposits which were closer to those paid on dollar deposits. This in turn made it possible to obtain and use more Swiss francs in foreign market operations.

Euro-money operations were conducted almost entirely by commercial banks although brokers had become an important mechanism for organising the market as the number of participants has increased. A large proportion of the dollars were dealt with in foreign markets, but a modest proportion of the other currencies, were directly or indirectly owned by central banks and other monetary authorities. Altman estimated that about two-thirds of all funds in European markets in the summer of 1962 were of this character. Official funds reached the money markets in three ways: Firstly, central banks and monetary authorities provide their respective commercial banks with dollar funds through swap operations, with a general or specific understanding that these dollars will be based to acquire foreign currency assets. (The Deutsche Bundesbank had swap transactions to carry out its monetary policy). Secondly, central banks deposit dollars in domestic commercial banks without requiring the surrender of the local currency equivalent (e.g. Italy). Thirdly, central banks in Europe, Latin America, the Middle and Far East deposit dollars with commercial banks in London, Paris, Canada and other money markets. The BIS had become an important intermediary between its members and the Euro-dollar markets .

The funds other than from official sources in the market represented deposits of commercial banks and business enterprises and individuals. Banks and other business enterprises used the major part of the dollars (etc.) in foreign markets, although governments and official agencies used significant amounts. Local authorities in the UK had been important borrowers in the London Euro-dollar market. Most of the funds, however, were used by the private sector. Interest rates on dollar deposits were determined on a highly competitive basis, arrangements being available for depositing any sum for any period up to 18 or 24 months. At any one time in the market there was a range of rates rather than any one unique rate. The effective floor to the rate on Euro-dollar was determined by rates paid by US banks on time deposits and by other comparable short-term investments in the United States. In 1961, the Euro-dollar rate in London averaged 3.58% compared with 2.35% on new issues of US Treasury Bills and 2.80% on prime bankers’ acceptances. In the first eight months of 1962, the Euro-dollar rate averaged 3.66% compared with 2.76% on new issues of US Treasury bills and 3.02% on bankers’ acceptances.

The demand for Euro-dollars was obviously determined by their profitable use. Pure interest arbitrage was a factor, though not the major one, in the demand for such funds. Rates on Euro-dollars had been consistently too high to permit covered interest arbitrage in UK Treasury Bills, though not too high for uncovered movements. During periods when confidence in sterling was high, it was possible that Euro-dollars were used to finance the purchase of Treasury Bills. Local authority and finance house deposits had been a profitable outlet for Euro-dollars. On average over the period 1961 and first eight months of 1962, the covered yield on deposits with local authorities, covered forward, was approximately the same as published rates on Euro-dollars. This follows, given that Euro-dollars was an important source of funds to the local authority market, and no arbitrage transactions would tend to even out disparities in rates. These averages, however, suggested that, smaller investment opportunities had in fact existed given the spread of rates on both Euro-dollars and local authority deposits.

For the blue chip industrial and commercial customers, the rates they have had to pay for borrowing funds from the market ranged between 5½ – 5. 7/8% (i.e. prime borrowing rate on the New York market). As the commercial banks were paying between 3½-4½% for three months dollar deposits, their gross interest margin would be in the region of 1-2½%. Euro-dollar operations, however, were not confined to channelling funds to those borrowers who may be entitled to the prime rate in New York with the result that the lending rate is often considerably higher than 5 7/8%. Thus with banks being able to work on margins of 1½ % upwards, the possibility of profitable business was great .

Rates of interest paid on deposits of sterling and other non-dollar currencies were closely related to those paid on Euro-dollars taking into account the cost of forward cover. This again illustrates the integrated form of the foreign currency markets, arbitrage transactions ironing out interest discrepancies. Most of the transactions in Euro-currencies was covered forward although banks may carry open positions for considerable periods. They have been known to carry short positions in particular currencies over a long string of weekends when they expected changes in exchange parities. Loans in dollars and other foreign currencies was listed or regulated in three ways: Firstly, that attempts have been made (e.g. Italy) to increase the rate of interest charged in loans in dollars etc. Secondly, agreements have been made in some countries (e.g. Germany) that loans in foreign currencies should only be made to the foreign trade sector. This, by making an artificial distinction between the domestic and foreign trade sectors in the economy results in a highly unstable situation. Thirdly, in many European countries (e.g. the UK) the competitive effect of foreign currency loans is restricted by exchange or capital control regulations.

The effect of the abandonment of interest ceilings on foreign deposits for US banks was not, it was thought, to have a considerable effect on the Euro-dollar market. It was not clear whether US commercial banks were prepared to raise interest rates selectively to any great extent, and even if they did and funds did flow out of the Euro-market, Euro-dollar rates would be adjusted accordingly.

The growth of the Euro-dollar market raised interesting problems of monetary management for the UK authorities. The short-term money markets of the major industrial countries had become considerably unified and internationalized with the emergence of this market. It was possible for the monetary authorities to use the market as an aid to domestic control by operating in the forward market for dollars, so facilitating commercial bank buying of foreign short-term assets. If it was felt that the domestic short-term market was too liquid, it was possible for the bank, by lowering the forward premium on dollars and pegging it for such transactions, to supply commercial banks with dollars for profitable use abroad and thus reduce their supply of sterling. The Deutsche Bundesbank had great use of the swap technique in its attempt to relieve pressure on the domestic market.

On the other hand, the Euro-dollar market imposed certain limitations on domestic policy. It was one thing to encourage banks to supplement their domestic assets with foreign assets, it was another to reverse the process. A tight money policy, by raising short-rates, attracts Euro-funds thus helping to defeat the object of control. Of course given exchange control in the UK arbitrage was not perfect but nevertheless there were considerable pressures which appeared when the UK’s short-rates moved out of line with those prevailing in other centres. A very strong reason for the control of Local Authority short-term borrowing stems from the use by that market of Euro-dollars when domestic funds were in short supply. Apart from a fool-proof exchange control, the only way to regulate the flow of Euro-dollars into the UK was for the official authorities to have control over all significant short-term interest rates.

The Times on the 13/09/1962 quoted that: “the bill to remove the ceiling on interest rates paid by US commercial banks on certain dollar deposits from abroad has now passed the House of Representatives. This is bound to raise fresh doubts about the future of the market in Euro-dollars” . If passed by Congress, the Bill would remove the Federal Reserve Board’s present ceiling, which ranges up to 4% according to the size of the deposit, on interest rates paid on time deposits of foreign governments, their central banks or other monetary authorities, and international institutions of which the US is a member. This, in fact, covered a large part – perhaps as much as 50-75% – of a total Euro-dollar market with an annual turnover now running in excess of $2,000 million. While the US move would undoubtedly serve to relieve the strain on the US gold stock, it must, according to The Times newspaper, ultimately be expected to diminish the size of the market in Euro-dollars to some extent. However, dealers in the market recalled the almost negligible effect of the liberalisation of the American Regulation Q, which from 1962 permitted a modest increase in rates paid on foreign deposits. It was pointed out that liquidity among US commercial banks was already running at a high level and that they would probably not be very keen in these circumstances to raise their interest rates further. Therefore, it was felt that any decline in the size of the market in Euro-dollars was likely to be a slow process.

So during the era of 1962, there was a view prevalent in the City of doubts whether there was a long-term future for the Euro-dollar market. This argument for supposing that the Euro-dollar market was a purely temporary phenomenon followed from the view that the market originated because of rigidities in the structure of interest rates in the United States. It was therefore suggested that the Euro-dollar market was born out of the banking legislation limiting the rate of interest American banks pay on foreign deposits. Similarly with Euro-sterling, the interest rates paid by British banks were so low as to encourage foreign holders of sterling to lend it to other non-residents at the higher rates that prevail in the free market outside the UK.

Given this view, the revision to Regulation Q, enabling US banks to raise their rates on foreign deposits, was regarded as the beginning of a movement to allow interest rates to reach their natural levels, which would destroy the Euro-market. This, however, was to take a rather facile view of the workings of the Euro-market. The existence of Regulation Q (or its sterling equivalent) was only a subsidiary reason for the market’s continued existence, and that market is likely to flourish so long as the American payments deficit continues to pump dollars into foreign hands. The Euro-dollar market was essentially an international money market and as such was a convenient source of credit for the borrower and a useful and profitable outlet for the lender. The market may well have been born out of interest rate rigidities, but given the apparatus of an international finance market with dealers willing to operate on small margins, the system would not be allowed to rust. As it was always useful to have a ready source of finance available.

Of the more immediate significance was the stimulus given to the market by the American operations in the forward exchange markets. During 1961, in Switzerland and Germany, the dollar stood at a substantial forward discount against Swiss francs and D. marks respectively. By contrasting to buy forward dollars against these currencies, the US authorities attempted (with some success) to lower the dollar discount. In this operation it was fairly certain that they had “cleaned-up” some loosely held Euro-dollars (mainly from European Traders worried about the exchange risk). The effects of this operation was best considered by analysing two distinct positions. Firstly, when the dollar stood at a substantial discount, holders of Euro-dollars i.e. traders, would hardly sell them forward for say D. marks because of the cost involved unless they were really panic-stricken. However, when the US authorities managed to lower the forward discount, such holders would take advantage of this in getting out of dollars and to the extent that this happened there would be a “gap” in the Euro-dollar market. This outflow from the Euro-market would be more than balanced by inflows from the United States as Regulation Q continues to exist and because European holders of dollars realised, seeing that the US authorities stood ready to correct disorderly forward exchanges, they could convert their dollar holdings into other currencies without great cost. It was this factor which was presumably acting as a stimulus to the market in that Euro-dollar holders can have confidence in the future value of their holdings. Therefore, one of the main features of the American operations has been to encourage the continued holdings of dollars in non-official sectors. The Euro-dollar market was only dangerous to the American balance of payments to the extent that holders sell their dollars to their respective Central Banks who earmark these for gold.

1963 – The “growing developments” of the Euro-dollar Market

The Euro-dollar market as a whole by 1963, amounted to $4-5 billion and was tending to grow. At 31st March 1963, there were about $3 billion outstanding in the UK market alone. A world total of dollars and other foreign currencies used in foreign markets was of the order of $5-6 billion . Euro-money operations were conducted almost entirely by commercial banks although brokers became an important mechanism for organising the markets as the number of participants increased. Central banks and other monetary authorities directly or indirectly owned a large proportion of the dollars dealt with in foreign markets. It had been established that about two-thirds of all funds in European markets was of this character.

The supply of dollars for the Euro-market came from American residents and non-residents. During 1963, it was the non-residents who supplied the vast majority of the dollars, generated by a continuing US balance of payments deficit on current and long-term capital account. The most important suppliers of funds by country were Canada, Western Germany, Italy, Switzerland and France, although other countries had contributed. American residents added to the market (and hence to the overall US payments deficit) by switching short-term funds to European banks in order to take advantage of higher interest rates than could be obtained domestically. In actual fact, most American resident funds reached the Euro-market via Canada, in which the residents switched short-term funds to Canadian banks, which had then placed them into European banks .

The process by which these dollars reached the Euro-market was as follows: As a result of the American deficit, foreigners build-up dollar deposits in American banks on current account. The foreigner could then invest the dollars in any number of ways, but assuming that they would lend the dollars to a European bank, as that bank would be willing to pay a higher interest rate than could be earned in the American short-term money market. The ownership of the deposit is then transferred, within the American bank, to the account of the European bank which is then able to use the funds to lend. When the new owner of the dollar deposit lends to a third party, the European bank’s account in the American bank is debited and the third party’s credited. The whole process is essentially a transfer of the dollar deposits in the American banks between accounts, the deposit never actually leaving the American bank.

As stated previously, official authorities were the most important suppliers of dollars to the market. This was presumably because residents in many countries surrendered (voluntarily or otherwise) dollar Earnings to their central authorities which then put the dollars back on to the market in three ways: Firstly, that central banks and monetary authorities provide their respective commercial banks with dollars through swap operations, with a general or specific understanding that these dollars will be used to acquire foreign currency assets. The Deutsche Bundesbank has over the past two years engaged in such operations. Also this operation had occurred in Italy. Secondly, central banks deposit dollars in domestic commercial banks without requiring the surrender of the local currency equivalent. In some cases this is because such deposits earn higher rates than in New York. In Italy, however, this operation was used to increase the liquidity of the banking system. Thirdly, Central banks in Europe, Latin America, the Middle and Far East, deposit dollars with commercial banks in London, Paris, Canada and other money markets. Members of the Bank for International Settlements deposit funds with it and the BIS has become an important intermediary between its members and the Euro-dollar market .

Although precise data was not available, Oscar Altman of the IMF estimates that the central monetary authorities of 20-25 countries have deposited dollars outside the United States . The non-official funds reaching the market represent the funds of commercial banks, largely in continental Europe, and funds of businesses and individuals in many countries including the United States. Corporations in the United States have made substantial time deposits in Canada and Europe in order to earn higher interest rates than can be earned domestically. The funds deposited in Canada were channelled into European banks, (particularly the UK) the Canadian banks acting as intermediaries for US dollars. Businesses and individuals in many other countries, e.g. Canada, Germany and Switzerland, can hold dollars and other foreign currencies without restriction as to time, amount or purpose. Some have themselves deposited funds in the Euro-market, or have placed them with domestic banks which have done so. In a number of industrial countries, where there is a residue of exchange control, as in France, business enterprises can hold dollars and other foreign currencies for limited periods of time through authorised banks.

The dollars emanating from the US current and long-term deficit remain deposited in the Euro-markets, and US resident funds was attracted, because of the higher interest rates paid on such deposits in these markets than in the USA. The effective floor to the deposit rate on Euro-dollars is determined for non-residents by rates paid by US banks on foreign time deposits and other comparable short-term investments in the United States. In 1961, the Euro-dollar rate in London averaged 3.58% compwasd with 2.35% on new issues of US Treasury Bills and 2.80% on prime bankers’ acceptances. In 1962, the Euro-dollar rate averaged 3.77% compared with 2.78% on US treasury bills and 3.01% on bankers’ acceptances .

The higher interest rate of dollar deposits in Europe was not the only “cost” factor determining the attraction of holding such deposits. The most favourable condition for non-American owned dollars was that the dollar exchange rate (spot) should be on the floor but that there should be no expectation of imminent dollar devaluation either in terms of foreign currencies or gold. European dollar holders did not then need exchange cover. If fears of a dollar devaluation become widespread, the supply of non-American dollars would tend to dry up as banks would sell their dollars to the central authorities which would convert into gold. If the dollar rose to the top of the range against European currencies, the possible 2% fall over three months could militate heavily against Europeans continuing to hold and lend dollars, although it would not of course affect deposits attracted from American residents.

European banks were willing to pay higher rates on dollar deposits than American banks because they could find a profitable use for them. The dollars were used in the following ways: without switching into another currency; with switching but without forward cover; and with switching and with forward cover. Any of these possibilities could lead to investment, which more than covered the deposit charge which led to a demand for Euro-dollars. The banks holding the dollar deposits lent to governments by Investing in government debt instruments and to commercial borrowers. The amount of borrowing by the banks to take advantage of pure interest arbitrage was a factor, although not the major one, determining the demand for Euro-dollars. Rates on Euro-dollars had been consistently too high to permit covered arbitrage in UK Treasury Bills, but when confidence in sterling was high there has been uncovered arbitrage. However, the rates on UK local authority and finance house deposits have been high enough to enable covered arbitrage transactions to take place at times. This process was usually short lived as the process of switching on any large scale removes the arbitrage advantage.

Most of the demand for Euro-dollars came from businesses and commercial enterprises. As, the dollars may have been needed to finance export-import operations. Commercial banks may use the dollars to serve as a money market instrument. A bank that temporarily needs additional liquidity may accept dollars (or other foreign currency deposits) instead of discounting with its central bank or selling assets in the open market. Moreover, since deposits can be accepted or placed in a wide range of maturities, banks can use then very flexibly. Likewise, businesses may be in temporary need of liquidity or may need dollars to finance overseas investments. For blue-chip industrial and commercial customers the rates that they will pay for borrowing from the market will range upwards from 5½% (i.e. from prime borrowing rate in the New York market). The maximum rate that can be charged in the Euro-market is the rate that the customers would have to pay in their domestic market. As the banks will be paying in the region of 3½% – 4½% for Euro-deposits, their maximum “turn” will be in the region of 1%-2% .

Switching out of dollars into European currencies can be profitable either for the Euro-banker direct or for the borrower who wants to finance in his own currency. In such a case the limit to such an operation would be where the cost of switching into the domestic currency and covering the transaction forward equalled the cost of securing funds on the domestic market. However, the business of switching is best regarded as a specialised concern operating in certain favourable times, but not essential to the functioning of the Euro-dollar market.

The growth of the Euro-dollar market has been basically the result of the difference in the interest rate structure of New York and European centres. Interest rates had been lower in the USA than in Europe and the deficit on trade and long-term capital accounts remained deposited in Europe rather than returning to New York, which had enabled European bankers to outbid New York for deposits (and deposit rates). Secondly, and of increasing concern to the American authorities, US residents have been attracted to the Euro-market, again because of higher rates, and this has added to the US capital outflow. Also, the widespread differences between borrowing and lending rates in New York and in most domestic capital markets had enabled the Euro-bankers to outbid their domestic counterparts for lending outlets by working on smaller margins, relying on a heavy volume of business to make their profit. The market had also been stimulated by certain non-interest rigidities in domestic markets, e.g. exchange control, credit squeezes etc.

The effect of the growth of this international currency had been: Firstly, to influence the structure and level of short-term rates in a number of countries. The Euro-market had tended to internationalise interest-arbitrage transactions. Secondly, to make it more difficult to carry out large changes of domestic monetary policy. Attempts to tighten liquidity would, by raising interest rates in the domestic market, lead to inflows of Euro-dollars. Thirdly to reduce the cost of foreign trade financing as the Euro-bankers have under-cut domestic charges.Finally, to increase the importance of the dollar as an international currency used in both trade and finance. As American non-residents were more willing to hold dollars because of the attractive interest rates to be obtained, international liquidity has been increased. The Euro-dollar market had been of help to the American balance of payments to the extent that non-residents have been willing to hold dollars instead of converting them into gold. However, higher deposit rates in the Euro-market had attracted US residents to invest in the market, and thus add to the US outflow. It had therefore been argued that it would be of advantage to the USA, if the latter could be reduced or eliminated without affecting the advantage to be gained by the former.

However, although the American authorities were concerned about the resident outflow resultant on the existence of the Euro-dollar market, there was evidence to suggest that the resident outflow was more than offset by a return flow of Euro-dollars back to the USA. Between December 1963 and March 1963, UK banks which were by far the biggest operators in the Euro-dollar market, increased their dollar claims on US residents by £147m while their US resident liabilities rose by only £4 million . These figures probably overstate the net inflow of dollars to the USA, as unknown quantity of resident funds reach the Euro-market via Canadian banks and were not picked up within the scope of these figures. Nevertheless, the amount of resident funds reaching the market was small and was probably offset by a substantial return flow. This return flow arose because of the wide-spread between the deposit and lending rates of US domestic banks which enabled European banks to outbid US banks for lending outlets in the US market. The existence of the Euro-dollar market certainly facilitated the lending by European banks to US residents.

American domestic banks were limited on the interest rates that they could pay on resident time deposits by “regulation Q”. The maximum interest rates payable varied between 1% on 30-day deposits to 4% on 360-day deposits . As a result, when they were short of funds, they often encouraged their European subsidiaries to enter into the Euro-dollar market and bid for dollars, the subsidiary then repatriated the dollars to its head office in America. To the extent that the European subsidiary attracted US resident deposits, this was a roundabout way of the US bank offering American residents a deposit rate in excess of that permitted by Regulation Q. The Euro-dollar market would cease to grow when rates in New York and in Europe for lending and borrowing were exactly aligned for all types of customers and when the differential between the lending and borrowing rates was small enough to make any banking operations unprofitable. Even if such conditions held, the dollars outstanding would still continue to be utilised for arbitrage operations and so there will always be some scope for Euro-dollar operations.

When the Euro-dollar market would be naturally curtailed, there were attempts to restrict the operations of the market in the following ways: The rate of interest charged on dollar loans was artificially increased. Italy is the clearest example of this. Agreements by Italian banks covering minimum rates on loans in lire were supplemented in 1961 by minimum rates on dollars and other foreign currencies. This agreement has been continually revised. Secondly, under the stress of competition, it was agreed or understood by banks in some countries (e.g. Germany) that loans in foreign currency should be made only to the foreign trade sector. Finally, in many European countries, the competitive effect of foreign loans was restricted by exchange or capital control regulations.

There was some concern about the relationship of the Euro-dollar market to actual or potential speculation against the dollar as the Euro-market was largely beyond the immediate control of the American monetary authorities. There was two sides of the argument. As the interest rates on dollar deposits was attractive, this gives an incentive for the dollars resultant on the deficit on trade and long-term capital account to remain unconverted into gold. The fact that dollars were placed in the Euro-market rather than used to buy gold, indicated that someone was not speculating against the dollar. On the other hand, the attraction of the market did induce American residents to invest short-term capital abroad and added to the funds in the market. However, there has yet been no evidence that the market for Euro-dollars had been unstable, although these dollars could be used for a speculative attack on the dollar.

It had been suggested that it would be preferable from the point of view of speculative pressure if the dollars resultant on the American payments deficit were held by foreign central banks. If there was a speculative attack against the dollar, the dollars held in Europe in private hands would be sold to the central authorities. Thus, it was the central authorities in Europe that was the holders of Euro-dollars “at last resort”. They were the focus of changing potential into actual speculation against the dollar – to the extent that they were willing to hold dollars speculation was curbed. The real point was that New York had become an international banking centre whether or not this was liked by the American authorities and it was difficult to see what could be done about this other than by changing the payments and interest rate structure of the USA or imposing exchange restrictions. If American banks could raise the interest rates they were permitted to pay on deposits to residents, this would tend to reduce the resident funds going into the Euro-dollar market – unless European authorities raised their own rates.

The “evolution” of the Market

By 1963, Euro-dollar operations were a particular form of banking whereby foreign banks, chiefly European, accepted deposits of dollar claims and in turn, lent these dollar claims to their customers. Typically, these deposits and loans were made for short periods. The supply of funds to the market came mainly from foreigners having dollar claims as a result of the US balance of payments deficit. The correspondent banks found that, operating with only a small interest rate spread, they could make a profit by lending these dollars balances at rates lower than those charged by traditional lending outlets in the United States. Other dollar holders soon found that they could engage in similar operations. Soon, British banks offered their customers and correspondents dollar facilities to take the place of the prohibited sterling credits, obtaining requisite balances in the European dollar market .

The demand for Euro-dollars came from a variety of sources, mostly in the private sector. The commercial banks of a large number of countries accepted and employed dollar deposits for use in both international and domestic operations. A substantial amount of Euro-dollars were used to finance firms engaged in international trade. These firms used Euro-dollar finance in preference to the more normal acceptance credits because of lower interest rate charges and because of the convenience of borrowing (given both the wide range of maturities available and the ready supply of funds in the market). Japan has figured prominently in the use of Euro-dollars for international Trading. The highest interest rate that a Euro-banker could charge for lending dollars would be what it would cost that borrower to raise dollars on the New York market. This does not mean however that the effective upper limit to lending charges is the New York prime rate, as relatively few foreign borrowers would be eligible for that rate .

Perhaps most of the funds provided in the Euro-dollar market were lent in the United States. Virtually since the market began, US banks, through their European branches, have been active in the borrowing side of the market. The European branches have actively bid for Euro-dollars and have then repatriated to the United States. To the extent that the subsidiaries have attracted US resident funds, domestic residents may have been paid, indirectly, rates on time deposits in excess of those permitted under Regulation Q.

A main feature in both the evolution of the Euro-dollar market and the revival of the London international capital market, was the issue of a Belgian Government loan in London during May 1963. The loan had a three-year maturity and was denominated in dollars. The subscribers were a group of British banks which, it is generally thought, financed the loan in Euro-dollars . This was a departure from the normal short-term lending prevalent in the market and was the first issue handled by British banks in currencies other than sterling since the war.

Also, by 1963, Euro-dollars were used as money market instruments by foreign commercial banks. In view of the fact that dollars could be loaned or borrowed for various periods they constitute an excellent medium for banks to adjust their liquidity positions. In these operations the market is analogous to the Federal Funds Market in the US. Often banks were trading on both sides of the balance sheet, both lending Euro-dollars and at the same time borrowing. As well as loaning dollars, Euro-bankers used the dollars to buy other currencies and lend in foreign markets. In such a case the bank will arrange to sell its foreign currency holdings for dollars at a future date, i.e. it will hedge against the exchange risk. Occasionally, dollar deposits in European banks was used to take advantage of interest arbitrage opportunities. For example, there is likely to be a strong relationship between the amount of dollars switched into sterling and loaned to the UK Local Authority Market and the margin between rates of interest on Local Authority deposits (adjusted for the cost of forward cover) and the rates on Euro-dollar deposits. At times, Local Authorities have borrowed substantial short-term funds from the Euro-dollar market. Although Euro-bankers will not usually ignore an interest arbitrage possibility, the main type of transaction is that in which dollars was loaned directly .

Selling dollars for foreign currencies can be profitable either for the Euro-banker or for the borrower who wants to be financed in his own currency. In such a case, the limit would be where the cost of borrowing dollars and switching into the foreign currency and covering the transaction for exchange risk equalled the rates charged on local funds. It can be seen that Euro-dollar operations was similar to normal foreign exchange operations. Therefore, the market can best be regarded as a supplement to normal foreign exchange operations whereby foreigners having claims on the United States sell their dollars for other currencies, and others, wanting dollars, buy them through exchanges.

It should again be emphasised that the whole complex of Euro-dollar operations was reflected in the transference of ownership of dollar deposits within the US. These dollar deposits will continue to be held in US banks unless: (1) at some stage, dollars was converted into a foreign currency, or (2) the dollars come into the hands of central banks, that, in turn, convert then into gold, or (3) the dollars were used to pay off a loan at a United States bank.

The three media articles at the back of this paper (Appendix 1 and 2 referring to The Times, and Appendix 3 referring to The Financial Times) indicates that the Bank of England underestimated the significance of the Euro-currency markets for the UK’s own problems of monetary management, internal and external. For example, in so far as short-term capital flows increasingly take the form of a movement out of sterling into the Euro-dollar market (and vice versa), what kind of offsetting action do we take? If the UK was not going to use short-term interest rates, can we in some way look to the market as a source of funds just as we have recently looked to foreign Central Banks.

The Euro-bankers were really worried by the growth of the negotiable certificate of deposit in the United States the interest rate on which has just risen so that it is now only at a slight discount on dollar deposits in the UK. UK bankers can of course increase the Euro-dollar rate (which I would suppose is inevitable) but the differential between the Euro-dollar and the time certificate of deposit rate is likely to be much less than we have seen in the past. This is because of the effective upper limit on the Euro-dollar rate of 4½%, i.e. prime lending rate in New York. If the Euro-dollar rate exceeded 4½% borrowers who previously used the Euro-dollar market would borrow direct from New York. The effect on the UK balance of payments of such a development is difficult to estimate as Europeans would still borrow dollars – switching from the Euro-market to the New York market directly.

In order to combat the increasing development of the time certificate of deposit there were ideas from the City of a “negotiable Euro-dollar deposit”. The advantage of this instrument to the Euro-bankers was that the necessary differential to attract funds would be less in the case of a negotiable dollar deposit than with the usual dollar deposit. It was thought that there was a real possibility of such a development in the Euro-dollar market. The UK should not worry about this any more than about the present state of the Euro-dollar market and in fact such a development might well be welcomed as it would avoid putting too much upward pressure on the Euro-dollar rate which could be embarrassing for domestic short rate policies. A differential between UK Treasury Bill rates (adjusted for the cost of forward cover) and the Euro-dollar rate, in favour of Euro-dollars, could lead to switching of funds previously held in the UK, by non-residents into the Euro-market. It is the general problem of separating outflows of sterling which is causing great difficulty. One can only arrive at an approximate answer by correlating relative interest rates against the outflows. However, the Euro-dollar differential appears to have exerted little influence on the switching of funds out of sterling balances. This of course does not mean that the Euro-dollar/UK Treasury Bill differential has not exerted an influence in the past – it simply means that as yet we have not proved it. As one would expect, sterling holders be tempted to switch their funds by an attractive premium in favour of Euro-dollars, (unless they was completely irrational).

The Euro-dollar market was composed of a very large amount of funds highly sensitive to relative movements in interest rates. If a position was postulated whereby UK interest rates fall relative to Euro-dollar rates, (US interest rates rise which pushes up the Euro-dollar rate and UK short rates do not follow), the effects on the UK balance of payments would be of two types: (a) funds invested in the UK directly by Euro-bankers (usually in Local Authority deposits) would be withdrawn; and (b) sterling balances of non-residents would be switched into dollars and invested in the Euro-dollar market . Funds invested in the UK directly by Euro-bankers will be shown up by changes in “Dealers’ net deposit liabilities in foreign currencies”. These liabilities reflect the extent to which banks have switched any foreign currency deposits lodged with them into sterling. In all cases, the initiative is in the hands of the banks themselves. By no means all of the switching done by the dealers is the reflection of relative interest rate advantages, but nevertheless this is bound to be a part. As a large part of the foreign deposits lodged with UK banks will be dollars on which the banks pay the Euro-dollar rate, and as generally speaking, all switching is covered forward, the banks will have usually found it unprofitable to have borrowed these funds and to have invested in UK treasury bills. However, there have been arbitrage advantages in investing in local authority deposits or finance house deposits .

1964 – “The New Labour Administration”

1964 was a significant era for the Euro-dollar market, as not only was there a change in Government, but it was at this time that Euro-dollars changed from being a new phenomenon into a prominent force in the market. The Labour Party had come to power, with Harold Wilson, as the new British Prime Minister. However, it was clear for the new Labour Administration that the UK was facing a deficit of £800m on its overseas payments for the year 1964. It was this inheritance from the Conservatives which was to dominate almost every action of the government for five years. The new administration was faced with three courses of action: devaluation of sterling, quantitative restrictions on imports (quotas), and a surcharge, in effect a temporary additional tariff, on a wide range of imports. At the time in 1964, devaluation was not an option, given the size of the new government’s majority, it was not a surprising decision. Also, the new incoming government did not fully know the true facts of Britain’s deficit. However, there was no option but to accept devaluation. In 1967, there was no alternative, central bank and governments accepted the decision as necessary. However, Wilson, had argued strongly (from 1964-67), that devaluation was not a easy way out, that by its very nature in cheapening exports and making imports dearer, it would require a severe and rapid transfer of resources from home consumption, public and private, to meet the demands of overseas markets. This would have meant, brutal restraints in both public and private expenditure over and above the domestic situation that the labour administration had inherited. Other considerations, were that devaluation could have started a competitive currency devaluations – similar to those of the 1930s, and could have led to stimulating economic nationalism and blind protection abroad .

Quotas were rejected, due to the damage it could have inflicted on industrial production, no matter how selective the system, and in particular, their effect in ossifying the industrial structure, penalising new or growing or efficient firms and “feather-bedding” the un-competitive. Tariff was the third proposition left. However, this was not an easy option either. As, it would be argued abroad that a sudden rise in the tariff over a wide range of commodities was contrary to the UK’s international obligations, particularly those of GATT, and EFTA. Other nations that had close economic relations with the UK, such as the Commonwealth countries, the Irish Republic, the USA, would have had strong grounds for protest. There was fear that once imposed, the surcharge would be difficult to remove. Other fears were that UK manufacturers that were enjoying a temporary protection against foreign competition, would slide into easy ways, instead of responding to the challenge by making themselves still more competitive. However, despite these anxieties, action had to be taken, so the import surcharge was recommended. It was decided that a rate of 15% would be imposed on all imports, except food, tobacco and basic raw materials. On the 26th October, ten days after taking office, a statement was issued underlying the “economic situation”. It concluded that the strength of sterling could and would be maintained, the underlying economic situation remained profoundly unsatisfactory. The balance of payments deficit for 1964 was most unlikely to be below £700m and might well reach £800m. While a considerable improvement was expected, in 1965, the deficit would still be at an unacceptable level. The position on imports and exports was surveyed together with the domestic economic situation, the problem of “continually rising prices” – and the position on public expenditure. The statement went on to announce the introduction of surcharges, at 15%, on all imports, except food, tobacco, and basic raw materials. In its first ten days in office, it was clear that the new Labour administration had to deal with an explosive economic situation .

The Economy – “Speculation against Sterling and the drain on reserves”

In London, there were a number of large international companies which held considerable amounts of working capital in sterling. There was a growing business in the speculation in sterling (based on selling sterling to obtain foreign currencies). These “players” held the future of sterling – particularly to the exchange rate itself – tend to move their money out, even at a relatively high cost in terms of interest, to some currency they regard as more secure. At the time of heavy balance of payments deficit there was, a large quantity of sterling splashing about in the markets of the world and, when confidence in sterling was low, dealers in many markets sold sterling for US dollars, German Marks, Swiss Francs, or anything deemed safer. The only way in which British citizens were able to take a position in sterling, (as they expected either a marginal fall or an outright devaluation) was by postponing receipt of the payments that was due to them in some foreign currency, since after the fall in the sterling rate such foreign currencies would be worth more in sterling terms .

However, importers who had to make payments in foreign currency tended to advance their payments, paying the bill beforehand. In difficult times, there was clear evidence that importers were increasing the physical qualtities of their imports, buying their raw materials 3-6, even 12 months ahead, and paying as quickly as possible for the imports thus ordered. These “Leads and lags” had the effect of running into hundreds of millions of pounds on the sterling position and thus on the reserves. On top of this, speculation grew to great proportions when a devaluation was expected. Such dealings were confined to foreign exchange dealers/speculators. These were in the form of dealers getting rid of sterling, they held or selling sterling they did not possess with the idea of buying it back some days later. This meant that, if these dealers had to pay bills in sterling, they had to borrow at extortionate rates of interest. Nevertheless, this speculation proved so severe that, it was becoming a threat to the balance of payments deficit. Indeed, it virtually disappeared as a threat once the UK moved into strong surplus, but that was after 1969. However, before the UK was in surplus, the government had to take actions against what the speculators might do, hereby looking at the “confidence factor”. So, things had to be rightly timed, in order to minimize possible speculative consequences, (this was also the case in 1969 when the UK were moving into a strong surplus). This meant that the City, closely monitored the actions of the Chancellor, the Governor of the Bank of England and the Prime Minister. One mistake the government admitted was always underestimating the power of the speculators. It was this understanding, that made the government more determined to strengthen the basic position of sterling, which meant strengthening the balance of payments – which in turn strengthening the competitiveness of British industry. This was the point of the Chancellor’s statement on the 11th November 1964. As, there was, a considerable surplus of highly volatile sterling in world markets because of the balance of payments deficit .

Since the Chancellor’s statement, both the PM and the Chancellor received a daily tally of the movements on foreign exchange markets, recorded not only by the exchange rate, but the amount of money which the Bank of England had to throw into the market to stabilise the sterling rate, together with payments on government account. This was regular right until 1969. Day by day, the government listened to demands for immediate cuts in government expenditure, and faced heavy drain on the reserves. It was a situation where 50 million pounds could have been lost, sometimes more, and the UK’s total gold reserves and convertible currency reserves barely totalled 1,000 million pounds. Short-term central bank assistance was near exhaustion, and there was no immediate prospect of the IMF borrowing on which the UK decided. The pound was at its support level. On the 25th November 1964, the Governor of the Bank of England stated to the PM that $3,000 millions was successfully raised by the central bankers. It seemed that sterling was safe, for a time. Long enough, to strengthen exports to the point where day-to-day speculation was not reinforced by a chronic balance of payments deficit .

Euro-dollars – “a prominent force in the market”?

It was clear in 1964 that a large international money market in short-term dollars had developed outside the US. These transactions were made possible because Americans and foreigners deposited dollars with banks outside the US, which had profitable uses for them. It was estimated with some assurance that dollar deposits come from at least 25 countries and that the final users of dollars reside in at least 35 countries .

About 400 commercial and private banks were in the Euro-dollar market. Many of these banks were in the market all the time, and they were on one side or the other, depending upon profits that may be earned from interest rate differentials and arbitrage possibilities. Other banks were in the market irregularly in order to deal with the financing needs or the savings accumulations of particular clients. The Euro-dollar market held no bar to politics. The two large communist banks in Western Europe – the Moscow Narodny Bank in London and the Banque Commerciale de l’Europe du Nord in Paris – were important components in the market, sometimes to place deposits with other banks (lend) but more often to accept them (borrow) . The states banks behind most of the countries behind the iron curtain were in the market, and many of these regularly circularize commercial banks in the West in order to obtain funds. Brokers play an important specialised role as intermediaries among banks, and two of them – one in Paris and the other in Lausanne, with their branches – do a large international business . The market in Euro-dollars was a wide and complicated one spread over six continents and bound together by a network of cable, telex, and telephone communication. The paper work in the market tended to confirm rather than to initiate transactions. The financial standing of the banks in the market was such that transactions were based on names and did not involve collateral and guarantees.

As the market progressed, the movement of Euro-dollars became an important financial activity and it was clear from the City that there were three major uses for Euro-dollars: First, a large part of these dollars was used to finance external commercial transactions, i.e. exports and imports. Indeed many countries in Europe and elsewhere tried to restrict Euro-dollar activities to those business enterprises that were engaged in foreign trade. These restrictions operated through systems of capital controls, or exchange controls, or moral persuasion by central banks. Even European countries with convertible currencies may restrict or prohibit business enterprises not engaged in foreign trade, e.g. hotels and department stores, from borrowing Euro-dollars, even though borrowing dollars may be cheaper than borrowing local currency. This was, for example, the situation in France. In 1961-63, with the expansion of issues of long-term securities denominated in dollars in European capital markets, underwriters and syndicate members have used Euro-dollars to finance their inventory positions. Italy made a large and noteworthy use of the Euro-dollar market in 1962-63, borrowing more than $750 million from abroad, of which about half came from the Euro-dollar market . These funds were used to finance external transactions and to make possible a continuing increase in domestic liquidity, which in effect, reduced the drain upon official reserves. Acting under instructions from the Bank of Italy, the commercial banks began to reduce their net external liabilities in the fourth quarter of 1963 and had gone a long way toward reversing their position.

Second, some Euro-dollar funds were used to finance commercial loans and other domestic transactions either in the form of dollars or in local currency purchased with dollars. There has been a large amount of such transactions in Germany, Italy, Japan and smaller amounts in many other countries, including Switzerland. In the UK, a substantial amount of Euro-dollars has been swapped into sterling and then placed with local authorities and instalment finance companies. The Kingdom of Belgium has, directly or indirectly, financed part of some of recent b

About the Author

Question about profit sharing retirement plan?

I work for Walgreens and have become eligeble for the profit sharing plan. I’m not quit sure what to invest in however I’m leaning toward the Total Stock Market Index fund. I’m 31…willing to take some risk…would like to put my investment on autopilot so I would have to worry about it everymonth, just maybe once a year to readjust it. Here are the funds….

Stable Value
Bond Fund
Conservative Stock/Bond
Moderate Stock/Bond
Total Stock Market Index
S&P 500 Index
Large Company Stock
International Stock
S&P Midcap 400 Index
Mid-Size Company Stock
Russell 2000 Index
Walgreen Company Stock

90% in S&P 500, 5% in Walgreen Stock and 5% in Stable Value fund. Using the Stable Value to offset the Walgreens should it drop….

However, given that 50% of equity market is now international…some say that it should be a large part of your portfolio… If you buy into that then 60% S&P, 30% Internation Stock, 5% Walgreens, and 5% Stable Value.

but that’s just my opinion.

Wall Street Stock Market Opens

admin — Thu, 17 Dec 2009 01:58:57 +0000

wall street Stock Market opens

Raw Video: Darth Vader Opens Wall Street

Online Stock Market Resource Provides Reviews for Investors and Stock Traders

The Wall Street in New York has always been the epitome of the American industry, but due to the usefulness and popularity of online resources, the internet is now, unofficially, the home of various stock trade tools and advice.

Bringing the Wall Street to the internet is Stock Market Trading website, Daily-Stock-Tips.com. The website is not a newcomer to the stock marketing world and it has assisted stock traders in the past with its extensive listing of helpful and recommended Stock Trading Tools and advice.

Daily-Stock-Tips.com features an updated list of recommended Stock Market Tools as well as product reviews of recommended online resources for trading and The Stock Market. These tools and resources are certified tools used in the stock market today and are one of the most reliable tools today.

From the roots and definition of the Stock Market to its analysis, Daily-Stock-Tips.com never fails to provide the product reviews as well as online resources to better understand the trend and technical aspects of stock trading.

On the website, you will find an updated list of product reviews which are categorized for Stock Analysts, Stock Investors, Stock Sharing as well as Investing. The easy and detailed categories make it easier for visitors and users to find the product they need to further help them with their stock market trading needs.

FOREX reports and tools can also be found on the website along with Day Trading, predictions, and market charts as well as other stock market related necessities. The website also features a quick sidebar where tools and guides can be found. The website ensures the convenience of its visitors by bringing the tools and strategies straight to them. Simply put, investors and traders are a click away from the best tools and reviews used by traders, buyers and brokers across the globe.

Other than programs and advice, users may also find E-books and manuals on the website. Product reviews of these e-books and manuals are also provided for free on the website.

Although the website sports a fairly simple website design, the features of Daily-Stock-Tips.com are “vast, reliable and safe.” A significant number of stock traders within the country have made Daily-Stock-Tips.com a partner in their daily stock market affairs.

The website caters mostly to stock traders, buyers, and investors but it allows free access to anyone willing to learn the latest trends and predictions for the stock market. It can be accessed freely through its domain URL Daily-Stock-Tips.com and is open to all IP locations across the globe.

About the Author

Marie Selibio writes extensively about stock market reviews and Stock market, tips, and tools are now a click away. To read reviews on the Best Stock market support tools, visit Daily-Stock-Tips.com today.

What date to we use to determine if Obama’s policies are killing wall street?

Obama opened the “Office of the President Elect” – a fictious office never before used in government. So he started spreading his message on November 9, 2008, which basically interfered with Bush’s policies at the end. So the market started to tank at that time under the conflicting messages.

When he opened his President Elect office, the Dow was at 8,870.54. When Obama’s policies bring the market back to that number, only then will we give him any credit. Right now the number for yesterday was at 7,600.

The real recovery will be when it it above 14,000. So until then, why do we keep getting these silly questions about if we love Obama’s effect on the stock market.

It will be at least a year before we realize the full impact of Obama’s economic policy. A temporary bump was to be expected. Whether or not it will be sustained remains to be seen. I doubt it. We’re in for more difficult times down the road.

Vanguard International Stock Market Index Fund

admin — Thu, 10 Dec 2009 17:49:01 +0000

Vanguard International Stock Market Index fund

Authors@Google: Ramit Sethi

Invest in a Traditional or Roth IRA?

A mutual fund, simply defined, is an investment vehicle which allows a group of many different investors to pool their money together with a clear financial objective – to make money. It consists of an extensive collection of Stocks and/or bonds, which is managed by a professional or group of professionals called an investment adviser. The mutual fund was created for those investors who feel Investing their money by themselves to be too risky or just not savvy enough, but who still want to take benefit of the shared market. And benefit they do.

Mutual Fund Shares

Shares in the plan are purchased for you according to the rules of the plan and many restrictions on investment and redemptions apply. The shares are issued or redeemed by the investment advisor(s) typically in large blocks. These professionals issue and redeem shares throughout the day to keep the mutual fund making money. Mutual fund share prices are determined at the end of each business day by adding up the current value of the securities in the portfolio (after any expenses) and then by dividing the sum by the total number of shares outstanding.

Mutual Fund Diversification

Diversification simply means that the fund in which you put your money is Buying Stock or bonds in many different companies across an industry, index, domestic / international / foreign locale, or some other classification. The beauty of the mutual fund is that it allows the personal investor to buy into a single fund without having to buy shares of each individual company included in the fund. There is one share price for the mutual fund, which is diversified over many companies. Most Mutual Funds even allow the personal investor to buy fractions of a share of the mutual fund, allowing you to buy in for just a few dollars.

For example, I have set my fund allocation with Vanguard to include a international mutual fund called International Growth Inv, with a 5% allocation limit. And with the small contributions I was making into the fund, I was buying less than 8% of 1 share each time I made a contribution. This is very good news to the small time investor, who wants diversification without giving up thousands of dollars. So, coupling the power and savings of pre-tax dollars in a Traditional IRA with a strong diversification model, we can all afford to participate in a wide range of companies, and their profits.

About the Author

Get more great finance and investing tips at Jeffry Evans’ personal finance blog. The Importance of Diversifying Mutual Funds is just one of many great articles you will find at Personal Finance Resources.

Is this a good Investment Strategy?

I’m a big fan of index funds, particularly Vanguard’s 500 Index and any EAFE (international) index.

I feel, however, that indexes like the S&P 500 could be “tweaked a bit” by excluding those sectors or industries of the economy that have traditionally not done well in a long time.

For example, I’d be interested in an S&P 500 index fund MINUS industries like food production (which have posted negative returns in profits AND shareholder value for the past 10 years!) and several others. Is this a sound strategy? Isn’t it easier to spot the losers rather than the winners in The Stock Market?

On a similiar note, is there any website that shows a COMPLETE history of economic sectors of the stock market? I’m interested in finding if any one sector has consistently beaten other sectors of the market over 20 or even 30 years of time (not interested in YTD, 3 or 5 year charts, though).

Thanks for your help.

First of all, congrats on the index-investing philosophy!

You could pursue a strategy like this relatively easily now that you can short sector ETFs while holding market indices long.

However, the short answer to your question is No: It is not easier to spot the losers than the winners. The reason is largely the same one that makes index-investing so attractive: At any given moment the market does a decent job of reflecting the potential for future returns in the current price.

Even if a sector has underperformed for a decade it could still turn around any time and start to outperform. Timing sectors is no more easy than timing markets.

If anything, there is a good amount of theory suggesting that sectors follow a 5-10 year business cycle, so you might want to OVERWEIGHT depressed sectors in anticipation of the cycle turning in their favor.

But a synthetic index (i.e., constructed by hand) like the S&P500 actually tends to do this for you. Standard and Poors puts out a bunch of subscription-only research on sector performance and business cycle correlations — you might be able to get copies for free from your broker.

But again, investors on the whole are very bad at Market Timing — and that applies just as much to sector timing.