Is it at the right time to buy real estate?

Until two years ago, nobody thought it could be much lower real estate prices. This time, it seems almost incredible that so many developers to discounts and gifts on the properties. Nevertheless, it finally sold.

There is a large drop in demand among the buyers of real estate of all types are the steps to create greater demand. The developers are equipped with a large drop in prices and discounts on the properties and small developers offer gifts, together with the properties.

DLF has recently announced a price reduction of 20% residential projects Gurgaon. The company announced this disappointing failure of the buyer to pay and buy again. Not only that, companies, prices in Bangalore, Chennai and Hyderabad, almost 20%. In Bangalore, prices were at the R 1, R 850 per m ² 2, 750 square feet

While the price cuts were announced Biggie on the market, developers offer unusual gifts as a trainer of one of the houses. For example, the developers of RDB in Calcutta, the recent proposal for a free nano with its new housing project. The company has decided that the car is "free" with the word for the first 50 buyers. The company ordered 50 cars from the Tata Motors Nano for free you from their homes in a residential project in Sonarpur, South 24-Parganas. Even the real estate in Kolkata is similar to the measurement of space and offers free car floors.

In addition to developers, government, the same interest in the development of housing demand. Not only are interest rates fell, and prices by 10%. The largest lender in India, as the State Bank of India (SBI), HDFC Ltd., LIC Housing Finance etc. have their interest rates on loans.

With falling property prices and the temptation, the buyer has the right time to buy real estate or not?

According to experts, in fact, no.
Unlike traditional, experts are of the view that this is not a good time to invest in residential real estate. His advice to first-and second-time home buyers. According to a recent report PropEquity, a company that keeps the property in the first quarter of this fiscal year in Mumbai at an average correction of 42.84 per cent compared with the corresponding quarter last year. And a report by brokerage Centrum Maharashtra Chamber of Housing, said that the exhibition, major developers such as Kalpataru, Lodha, Rustomjee Acme Group and quoted prices of 20 per cent lower than the rate card for six months. Godrej Properties has dropped the price for your project Mahalaxmi (Planet Godrej) by 34 percent.
Not only in Mumbai, according to the report PropEquity the price of basic meters, also has a significant correction in the last six months. These areas include Gurgaon (24 per cent correct), Chennai (13 per cent) and Hyderabad (10 percent) over the same period. According-Hitungshu Debnath, executive director, distribution and asset management, brokerage angel ", first, provides for the residential real estate is limited. You are only between 3-5 percent." He added that if you have a loan from the bank expects that revenue and will contribute to strengthening the equated monthly installment (EMI), led to a rethinking of mathematics. "The rent, as well as the appreciation of real estate will not be able to include the interest that an investor pays for the mortgage loans in the first year. This is called opportunity costs in real estate. For good returns, the buyer will have to for a long time, perhaps until the loan is paid off, says expert in real estate.
They also pointed out that the property, as a rule, prices remain stable for at least two years, that is, when the correction is over. But if you're still not convinced, and wants to continue the purchase, only to wait another six months. The view that at this moment of clarity on the economy and real estate industry in this period.
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Tips on how to make your home sell faster

House seems big, but not as great as it seems. In fact, selling the house is as easy as selling something else. All you need to have their strengths focused on their properties and perform their best. Sale of residential or commercial, that is not much easy.Here 'S, how to do it.

• Remember the rule of thumb - the first impression the last impression
Make sure that the door to the house is clean and presentable. Note also that if the door does not complain.

• Pay attention to the timber and the background
If the house does not seem to please the customer, then he should change his mind. In short, faded wooden walls and use them to their homeland. However, the small investment in paint or wallpaper necessarily help.

• Make sure that the sun
Open blinds and curtains in the house. Make sure that windows and crystals perfectly clean. So, turn off the lights in the house that shines, like home buyers bright, cheerful interior.

• Call a plumber and electrician
If you have any problems with the valves, piping, worn out or proposed service neglected. Clean rust stains from sinks, kitchen and bathroom. So, make sure that all drains in the house free and clear. In addition, loose electrical wires, broken plugs, and consolidated with the bulbs, the flickering tube lights big no-no.

• Details about your home too much
Things like losing your keys and door handles, locks the door does not close zerbrechlich well, sticking drawers, wobbly hinges and jammed Windows can be more disabling. This can cost a potential buyer. To get these problems fixed and then sell.

• Safety sells more than all the rest
It is important that all corridors and stairways clean and free of obstacles. Saturated zone is looking for a house, they are also evil and dangerous.

• Make your house look presentable enough
As all potential buyers to see the picture. Make sure the attic is presentable, clean the garage and basement is fully organized. Furthermore, in pure space with paint.

• All major buyers like closets and cabinets
We all know that buyers prefer larger rooms and walls, and costumes, even more if they are clean, neat and organized. Get rid of a bunch of clothes, old boxes and other clutter in the closets and cabinets.

• Bathrooms say a lot about the house
Make sure bathrooms sparkling enough to find a buyer. Clean sinks and basins of the fund. So, make sure towels and bath mats are freshly washed.

• Clean your bedroom
In the bedroom, you can definitely have an impact on buyers. Remove furniture from their rooms. While home buyers to the places were clearly defined and attractive colors and bed spreads. Open blinds and curtains and let the light come into effect, taking into account in the bedroom, where people spend a third of their lives.

• Avoid the crowds at home
Those who are looking for a house that I hate crowds. If your agent shows your home, send children to the neighbors do not annoy consumers.

• Try to relax at home
In spite of their houses to the purchaser, turn off the radio, TV, stereo or any other noise source. There is no doubt that his agents work much easier.

• Always ready
Always ready to provide you with at home. You never know when you need your agent for your home. Thus, only if your bed every morning and clean up.

• No need for apologies
We all know that no one is perfect. It is therefore no need to apologize for the appearance of your home. Let your agent negative comments area.

• For sale only in the home
Try not to sell the customer the old furniture, appliances, lamps, or anything other than a home. Save it for the period after the sale.

• Let the professionals do
Things like price, terms, tenure or other details should be provided by the broker. The agents carefully prepared and know how to negotiate on their behalf.

Therefore, follow these tips and you sell your home in the twinkling of an eye.
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Private House Sales to grow in February

In February, with the exception of housing for sale has the largest amount of nearly six years. This was, as a result, the first time buyers, taking advantage of large discounts on the properties of insulation around the country.

Economic analysts say that, although not at the level of sales since May 1997, done at last, is returned if you are after the economic collapse last fall. However, assuming that prices will continue to decline until in this year. There are more than ten thousand households excluded are still for sale. Moreover, as the recession worsens, and the loss of jobs, many buyers are not protected by the home mortgage.

Director, Joint Center for Research on Housing (Harvard University), Mr. Nicolas Retsina said people would probably not buy a new house if they are concerned about future work. National Association of Realtors reported that it closed the sale of housing at 5.1 percent with 4.49 million units in January to 4.72 million units in March. It was the biggest increase since July 2003. For the first time buyer contributed to this growth, with more than half of the homes sold.

More and more people are buying homes for the exception, as we see some signs that prices are rising. For example, ask the seller's price in Orange County and San Diego, California, began to grow. Against this background, the majority of investors rushing to buy things before you stabilize. Moreover, it seems fair, since the majority of buyers at home to participate in the financing of its budget to serve. In February, the number of households in advance that they will not sell 3.8 million, an increase of 5.2 percent. This means that people are still in the homes for sale has the opportunity to buy before prices start to rise.
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Top 10 blogs on real estate

For agents and brokers, especially in the economy, strengthening the brand, new marketing strategies and their implementation, the Internet has become a virtual wealth of information. Thanks to the Internet, real estate broker in the world, have the opportunity to exchange views, ask questions and discuss relevant issues.

Blogs, in particular, is a source of news and information market. There are numerous real estate blogs on the Internet, but by their nature, blogs can quickly become obsolete or outdated. This may take a long time to sift through to find blogs worth reading to keep yourself in trouble, are 10 blogs that valuable real estate information, advice and entertainment at the same time.

Bloodhound Blog - BloodhoundRealty.com / Bloodhound Blog

Bloodhound Blog is a "real estate and technology blogs, industry news, the National Association of Realtors, as real estate agents, and web marketing. The authors of different specialties, such as mortgage brokers, optimizer, and agents shall have the right and the Bloodhound Blog nervous. New record: "Can a true representative of consumer advocate" and "Criminal NAR idea? Who cares? "

Inman Blog - Inman.com / blog

From the people Inman Blog Inman News' Real Estate and Technology News for Agents, brokers and investors. " The contributions of social marketing, marketing campaigns, as well as the latest technologies for web sites related to real estate. In addition, there are tests and examinations on the pulse of the real estate arena. Key questions "The truth about real estate awards and recognition in the NAR economist.

The Real Estate Tomato - RealEstateTomato.typepad.com

Known for providing "Juicy tips on real estate blogs, Real Estate Tomato-based technologies with real estate experience, the importance of blogging for Web site traffic, attract new customers and become a power. In addition, blogs, tomatoes also talks about social networking sites like twitter , search engine optimization techniques and the latest trends in Internet marketing. A recent topic was "an honest look at the impact of video in your blog, Real Estate".

Real Estate Investing in real - BiggerPockets.com / RENewsBlog

This blog is a continuation BiggerPockets.com, a popular web site devoted to real estate investments. Key questions: "Is your real estate website conversion transfer these murderers?" And "How can an effective program for the social networking business profile." Information and relevant, this blog is very educational tools for investors and intermediaries.

Future of Real Estate Marketing - FutureOfRealEstateMarketing.com

As the name implies, "The Future" Blog about e-marketing and web site with the latest technologies. "Photosynth could spark Virtual Earth return" is at the bottom of the page.

Real Estate Blogs - TheRealEstateBloggers.com

In the "real estate, mortgage, real estate development news and bloggers focused on various topics, such as creative marketing techniques. New contributions" $ 1 million bond Real Estate - Thinking outside the box "and" Why GM and Chrysler Offers mortgage rates to rise " .

Think Realty - RealtyThoughts.com

In order of "Why do real estate on the iPhone is equipped" and "Delicious Real Estate: Dwellicious", claimed RealtyThoughts agents and brokers in the forefront of real estate marketing, technology, and lead conversion.

CopyBlogger - CopyBlogger.com

Although not specifically designed for real estate professionals, CopyBlogger required reading for all content on the Internet. If you are writing your web site or publish on my blog, CopyBlogger very useful in terms of attracting and converting leads. Recent topics as "transition from the number 1 killer in the copy (and how to improve) and" Why Social Media Marketing. "

Seth's Blog - SethGodin.typepad.com

As CopyBlogger, Seth blog on the real estate industry. Nevertheless, Seth refreshingly honest commentary on the methods of marketing and sales can be more resources for agents and brokers. Customer Service, Marketing and sales philosophy will be discussed. Individual contributions "As household name and Web communications." Seth's blog is a great place to find out how your brand and services.

She is beautiful! I guess! - LovelyListing.com

Even supporters have to laugh, a lovely! I guess! is a blog that is fun, the importance of promoting a good selection of photos. In the blog shows pictures of poor people in the world list. Select the graffiti on the walls, blurry photos, bathroom corners, abstract houses, photos of family and pets. There are also wonderful photos of Nazi memorabilia, and a toilet full of naked people in the background. How fantastic (apart from the bite of the author's comments) is that the recordings were made by real actors, and to use their properties. Learn how not to market, after the announcement of the fun in this blog. You learn a lot.
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Identify and analyze how investment house 2

The study of the properties, collecting information, data in Excel spreadsheet and analyze it carefully.

It is important to pay special attention to clean effective "rent" for sale at market rents. For example, if the collection of comparable rental Citation # 1 and the market of € 500 per month rent for one-bedroom/one-bathroom facility, but offer potential residents a free month after the signing of a lease agreement for 12 months, the real effective rent is $ 458 per month, not $ 500 a month. The formula to determine net cash income is as follows: $ 500 per month, divided by 12 months of the lease is $ 41.67 per month discount for new residents during the duration of the lease. Another possibility for the calculation is too simplistic a free month for 12 months of the lease are as follows (1 month/12 months = 8,33% X $ 500 = $ 458). In principle, the tenant pays 11 months, however, that the costs within 12 months of rent. Now you have an idea, is not it? Excellent!

Fill out the rental network of each floor in the properties investigated. This will take some time to learn, but how do you call the most complete and exercises will be second nature. The most important thing is that you are now a more complex level of analysis, and this will give you a competitive advantage in the marketplace. In addition, a great benefit to you when you use the procedure for subscription, you can more accurately predict cash flows and capital gains. In the past, that he wants to do as an investor is heavier on the basis of ownership of inflated figures.

Research product competition, web design, interior and exterior package prices, offers, or concessions (free rent) and the net cash price and location, to "understand" the situation on the market.

Step 4 - Evaluation of the operating conditions
After market research, addressing the issue of ownership and rental income rolls. It is best if they are several years of historical data. This allows you to properly assess the historical performance and stability of income, which gained power. If you speak directly with the owner of the building, ask for statements of operations for a further 12 months (the so-called T-12) format. One of the main advantages of this format is that it "detailed monthly numbers, so you can analyze the operation of each month in detail.

A T-12 format, you can specify a time anomaly, or income and expenses. For example, if you look at the 30-unit apartment building and a list of brokers, as long as a year before the date (the beginning of the year), the statement by June 2007 (six months of operating data). In many novice investors an annual productivity of the application and use of operating income to determine the purchase price. We analyze this scenario one step further. "What if" other income was $ 20,000 in the game? In that the annual amount that the property valuation, from $ 40,000 per year and other revenue (cable television revenue, the overdue payments are not enough funds, fees, and monthly fee, Carport rental, rental of storage, etc. .).

Well, you said the final statement of income for 12 months, compared to the year format date format. The monthly distribution, the ability to recognize that in April, reported income to $ 15,000, which is only on the "Go" for the resumption of the cable 10. This is a very common practice of providers of cable from the owner of the apartment, premiums in advance for extension of long-term contracts. If the investor for the seller to pay $ 30,000 for this one from the income from 8.0% cap rate implies a value of $ 375,000. In fact, the investor will have a surplus of $ 375,000!

Do not be fooled into believing only in one year from the date of the message on the stock a certain amount of income actually generated this amount each year. Make sure to view the statement in operation 12 months after the format for the analysis of one month after month. This is absolutely essential!

Smart Housing investment of patience, hard work and attitude to a very detailed analysis of competition and the rental income. It became a basic rule to ask important questions, and do not invest any penny unless you can find a full report on each investment taken into account.
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Identify and analyze how investment house 1

Buying rental apartment buildings is one of the strategies for the development of more wealth for real estate investors. Real Estate offers investors the opportunity to purchase a property with minimal cash and enjoy great leverage, which increases the benefits of using OPM (other people's money). The apartment building a profitable investment, and it should be considered as an effective strategy for creating wealth in real estate.

In this article we will discuss the various steps in the process of buying an apartment building. Let's roll our sleeves and have fun!

Step 1 - learn the basic formulas
Before you buy your first block, are important to you that a profound understanding of the basic terms of mathematical formulas and strategies for housing finance for investment in the industry. After a solid foundation for significant improvement in their chances of success. Visit your local bookstore and browse the real estate section of books on housing investment.

Step 2 - Multiple Real Estate Search
Probably the most difficult problem, with one place to the law, investment property offers a solid financial returns. These investments are sound, which many Real Estate Investors. The assumption that you are a beginner looking for investors to buy their first home, regardless of whether it makes sense to see in their local communities and / or area. Search in the vicinity of their homes allows you to manage your investments closely. Start your search by filling out the document in the context of local ads. This is one of the best sources for housing, but also covers a large part of the eye and lead to greater competition. Nevertheless, this is a good start. In addition, the search for other online ads, such as LoopNet.com cityfeet.com and offer a variety of homes for sale. Please contact a local real estate agents to match your search. If you decide to go this route, you will see, in collaboration with renowned and experienced "buyer" agents. In addition, view a contact list and start calling family members and friends if they know any accountants, attorneys, banks, etc., who know the owners of residential buildings. The aim was to start, expand its network and promptly inform them that you are actively looking to buy apartment buildings. You'll be amazed how this strategy will create new contacts. Publication of a notice in local newspapers under the heading "Wanted - Apartment house."

Perhaps the best and most cost-effective search strategies to "Off market" of the more motivated sellers. "There is no market" properties are not officially on the market for sale. This strategy is usually the most experienced investors. Teams with most of the time, energy and effort, but it is also one of the most profitable, if it properly. The great advantage of this strategy is to find that they have directly with the owner, and the mediation of the same properties, 100 active investors. Imagine, 100 suggestions from investors, on the same property that you want to buy! A mass sale of the property creates a hyper bidding environment (as it should), this leads to higher prices. Higher prices lead to lower yields, as they are forced to devote more capital to invest.

Keep yourself and work, and smart as the experts in the definition of "off market" because its one of the most dynamic real estate to create wealth.

Step 3 - Implementation of a detailed market research
Now you've got a number of homes for sale, his time, careful analysis to understand the normal market rents, rates, and calculates the location of every property on the market. As a first step for you Top-3-5 competing apartment properties in the area, which has a similar size (total units) and vintage (built in). Once you've determined the rent directly comparable with each property and to conduct market research. Ask any of the following questions:

Q: What is the age of the property?
Question: What was the property built?
Q: How much of the property contain?
Question: What is the current capacity utilization?
Question: What is the average use over the past 12 months?
Question: What is the monthly rent for each floor?
Q Are you satisfied with rent concessions (free rent)?
Question: If so, what benefits are provided for each word?
Q: units offer full size washer and dryer in unit? Stacked sets? Or, washer and dryer connections?
Q Do all the community to offer convenience in the street? If so, what are they?
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Candlestick Charting - bullish and bearish reached Map

Investment structure Sumida

What is a template Sumida? What are the rules for Sumida structures and what are the consequences?

Sumida model may be bearish or bullish. There are certain rules on the use that they believe that the most comprehensive source on the candlestick charts - Steve Nison rules of supply and the effects of

Labeling requirements
Steve Nissan, the Japanese Candlestick Charting Techniques, Second Edition, New York Institute of Finance, 2001.

- The market must be clearly defined in the uptrend (bearish pattern with a spread) or low (for a hike Sumida model), although this trend is not enough

- Two candles include Sumida scheme. The second real body should sink to the real body (it should not be the shadow).

- The second figure is the real plan is to be reached the opposite color of the first real body. (The exception to this rule, when the first real body of the scheme is covered Doji. Thus, after a long fall, a Doji, wrapped in a large white real body can be changed on the merits. This tendency to increase Doji surrounded by a large black real body can be bearish reversal pattern).

Factors increasing the likelihood

Some factors that determine the likelihood that the spread pattern could be an important signal of the rotation are:

- If the first day of the spread of a small real body (eg, gyroscope), and the second day is a long real body. Light the candle first real body represents the dispersion of the previous development of strength, and the second real body shows a strong growth of the new movement.

- If the scheme is sunk after a more or move very quickly. A move or expand too fast creates a market (or perekuplennosti and pereprodannosti) and makes them vulnerable to profit.

- If there is a large group of the second real body of the spread pattern.

What does it mean to fail?

So, now we know that surrounds them, and a pattern that increases probablities success in the structure, which means that the model does not it?

- High (bear covered Plan) is opposed to any further progress (based on the close price). In other words, prices should not trade above the height bar and the nearby Sumida days. If they do, the picture is violated. In the opposite case for a hike Sumida scheme.
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General Electric: Toxic assets?

General Electric (NYSE: GE) continues to be used over several generations, one of the main foods in stock too many investors. As one of the main components of the driving and the S & P 500, only 2 percent of their weight and 76 percent of the S & P 500 Index Industry Company, and as the main engine of Dow and other indexes - retail fund managers - GE has become need to be.

But why is the debt itself, and investors will get whacked?
This year, the population increased by more than 16.5 per cent, compared with only a few ticks on the S & P 500 during the year.

And over the past 12 months, a similar story with GE as a whole loses more than 61 percent. And if we go back to 5 years and 10 years, GE has continued this trend of dramatic loss of more than S & P 500 by almost 247 per cent of traffic 5 years and 97 per cent over the past 10 years.

Not surprisingly, therefore, if the fund shares in the United States, Vanguard, Dodge and Cox,
T. Rowe Price, Fidelity and many others in their portfolios GE, and not just loss of money - but lose the common market.

GE is toxic for your portfolio.

But look at what lies ahead.
Over the next 3 years, starting in a few months, GE has made about 250 million of bonds, government and bank loans. Bad, as compared with its current market capitalization of only 143 million U.S. dollars.

Worse still, of course, the company's debt is nearly 500 percent of their net capital in general - in fact, if the bank or it is too small for U.S. Fed. Bank of stress test that they took of you know that this company.

And if you need to know what is the main reason for this supposedly well-diversified industrial companies fare so badly, you can look at the composition of revenues from GE.

The largest portion of revenues for the fiscal year, capital and consumer lending. Add to your entertainment unit, as well as a combination of unrest in more than 46 percent.

Then, with the help of lower advertising revenue and the wandering eyes and ears - at the top of the known difficulties in the credit market - it is not surprising, GE deeper problem, which remains beyond the facade of its industrial plants and other products and divisions.

The increase of 250 billion just to extend the current debt is very disappointing - especially given the fact that its cash position was about 15 million people. And with its current operating obligations by more than 23 billion, which makes you kind of wonder how they manage their accounts in the quarter, even before you refinance its debt in the long run.

Sell and stay away. And check your stock investment funds. If you have a GE - more than a few really stellar performers for this operation. Otherwise, the time to sell, should be encouraged.
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Financial Location: better than many

Perhaps the government is the best judge of whether a bank or other company is in good condition, or sad. This new school of thought that are still safe to enter a market in mind.

I urge you to oppose this idea, and their own assessment.
Yes, the old school of investments: own four walls and see the shares, and companies that really what you buy and invest in.

Here are a few simple steps, how to find a bank.
First, let me look at the operation. Banks really boils down to a fairly simple business model. Disposal of tanks (which are liabilities) to finance the loans that they invest in (asset). Then I simply manage, as the obligation to pay their deposits in exchange for payment of their loans.

So, firstly, if a bank, and look at the deposit and loan growth rates. For example, Regions Financial (NYSE: RF). Today, after the growth of deposits, which more than 4 percent. This means that if the bank can reverse this trend, the need to reduce borrowing and to reduce the size of assets.

Meanwhile, credit growth of more than 2.5 percent. This is good because it shows that the Bank continues to maintain its core business, rather than just pull their horns.

Next, we need to understand how the margins of their operations running. We can do this by dividing the net interest margin - to make the difference between the amount the bank pays on deposits, given the fact that they think about their assets. In the regions, the figure is more than 3 percent. Good - but could be better.

To see the relative performance of the bank, we can succeed. This is an indication of whether the costs of IT in profit from ordinary activities. The smaller the number, minus the cost of one U.S. bank earnings. A significant number of about 40 beats, with some doubtful that between 60 and 70 levels.

The region is currently working on 66 - which is understandable, given that many significant changes in current market situation.

After the vote on the utility by clicking on assets and return on capital. Regarding ORA, banks tend to be above 1.0 percent - to 1.25 very good. Especially now, when charge-offs, the region is on the ROA of -3.90 percent.

And have the resources, a list of the best banks, if a young man - but in the compromise, in the regions are currently limited to the loss of return on capital by 33 percent.

So, we have reviewed the activities and benefits of action. But to see how a bank, can they survive, we must clarify the balance.

First, we need to look at loans as a percentage of all loans and assets. Once again - in better times - with the NPLs should be at least 40 with a series of 25 in good condition. The region is currently at 1.3 percent for loans - not many - but far better than many of his peers in the group. And with respect to total assets falls back to 89 percent - not much - but better than many others.

But what we can see that the reserves in violation of the greatest potential profits and losses of NPLs in bad loans. Regions reserves credits run at 1.8 per cent of total assets in the current operation in 1.4-fold on loans - and a good mattress than others - but more.

But when it comes to capital and ability to losses - we are at the heart of the capital, and the actual impact of capital to finance their loans and other assets.

Fixed capital at the bottom of the double-digit pace well - the higher the better for security, the less the better for the current financial performance. The region is more than 10 percent. And, for operation around 8.5 percent - could be in better times - but it is more or less in line with the bank promising a reduction in difficult times.

The last review of the bank should apply to all businesses - for debt and risk that the debt the company will break.

Regions, what accounts for the majority, the duty - as lines of credit and bonds for many years. Nevertheless, it is already loaded in the next 2 to 3 years. This is where the real RUB in. If so, the Bank continues to slowdown in deposits, reducing the growth of credit. And if so, then its actual reserves against the loan, the proceeds of the suffering - to the attractiveness of lending to the Bank on the bond market or in other parts of the market.

And with the nominal debt in 2010 to 2012 means, the regions, with one game to issue new debt or new shares to rotate or remove their debts. This amounts to approximately 6.2 million people who are not shy, almost twice the market capitalization, but it is less than half of total assets - that is, they should be able to adapt to the new creditor / buyer should bond even if it means that the decline in the bank a little more in the coming quarters.
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Coverage - What is it, and their use Risk Management

Before the discussion on the use of hedge is not of this world, we must understand the role and impact reporting. In the modern history of futures trading in Chicago, started in early 1800 - Chicago is based in the Great Lakes region, the plants and animals in the U. S. West, which is a natural center for transportation, distribution and trade in agricultural products. Excesses and deficiencies of these products caused chaotic fluctuations in price. This led to the development of the market of grain merchants, processors, business and agriculture to trade contracts to isolate the risk and give them an opportunity.

The first commodity exchange was the creation of the Chicago Board of Trade CBOT in 1848. Since then, modern derivative products have more of the agricultural sector. Products also stock indices, interest rates, currency, precious metals, oil and gas, steel, as well as several others. The origin of the goods and Futures Exchange was designed to support. The role of speculators is useful to add trading volume and volatility is important because otherwise the small market and liquidity risks.

A bona fide hedging is someone with the products you can buy or sell. Hedging is the transfer of positions in the futures or commodity exchange, resulting in a fixed price for their products. Anyone who buys coverage are considered "long" and "to accept delivery. Someone sold accounts are called" short "or" surrender. "These elements, also known as" contracts are legally binding and apply to the Exchange.

Enter a trade or speculation or hedging being the broker or consultant on trade in commodities. And futures exchanges differ from the stock markets, although with the same directors. Various bodies such as the Board of Trade commodity futures, which are responsible for the regulation of retail brokers in the United States, but also as a consultant on trade for portfolio management.

Let's now a few examples from real life, hedge or reduce the risk of exchange-traded derivatives.

Example 1: The manager of the fund portfolio of $ 10 million, S and P 500 Index. Portfolio Manager believes that the economy is worsening deterioration of the economic benefits. In the next two to three weeks from the date of the quarterly corporate reporting. Until the report showed what the company had income of the poor, it is the result of short-term correction. Without the privilege of future research, not sure if the amount of income production. Now you have an impact on market risks.

The Director, in the opinion of their choice. The biggest risk is doing nothing, if the market falls, as expected, the risk is, until all past achievements. If you sell your portfolio early, but the danger of false and lacking in most of the rally. She also sells large additional brokerage fees to buy it later.

And he acknowledged a hedge is the best option for reducing risk in the short term. Please enter your CTA (Trade Advisor), and after a brief consultation of places selling a sum equivalent to $ 10 million of the S & P 500 index at the Chicago Mercantile Exchange CME. "As a result, is currently on the market, as expected, the losses are deducted in the results of portfolio coverage. If the report is that the result was better than expected, and his portfolio continues to grow, it becomes profitable.

Two weeks later, the fund manager calls his CTA and closes on the purchase of a new cover for the number of contracts at CME. Whatever the outcome of events in the market, Fund Manager protected during short-term fluctuations. There was no risk to the portfolio.

Example 2: ABC Electronics Company has recently launched a 5 million dollars of electronic components in the model for the future of foreign retailers in Europe. These components will be in 6 months, for two months after that. ABC to immediately realize the impact their two risks. 1. high and volatile prices of copper for 6 months, could lead to losses for the company. 2. fluctuations in currency, you can easily add to the losses. ABC is a young company can not cover losses due to strong competition in the market from others in that area. Losses from this order will lead to layoffs and closures may be.

ABC Phones of TCU and after a hearing on the two covers, like after 8 months at the time of delivery. Number 1 on the purchase of coverage to 5 million U.S. dollar for copper effectively locking in the price of today's rising prices. ABC eliminated all price risk. The threat of closing the plant more profit, that the continued decline in copper prices. In the end, ABC is not in the business speculating on copper prices.

# 2, respectively, short-sale reporting currency Euro Dollar U. S. ABC starting with the EU in payment, the increase in dollars - and the weak dollar and the EU will continue to undermine profits. As a result of hedging, which is not surprising, ABC, either in cash or copper levels. And without the risk of the transaction and full transparency of the result. With 8 months to complete and the customer takes delivery, ABC, at TCU, the coverage of copper on the sale and purchase of foreign currency to the euro contacts.

There are many examples in order to reduce the risk to the financial institution or a portfolio. New products are constantly created and the two counters and currency markets. It would be useful to a consultant or a broker of commodity trade, the analysis of rate risk management solutions, or a coating.
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