Risks of Forex Investment

Risks of Forex Investment Currency market Introduction The foreign exchange market is a very liquid market; everyone can trade and sell, everyone has access to it 24/7. Unlike the stock exchange, where its centralised at a particular area, such as the New York Stock Exchange. But the currency market is an over the counter market; it can be traded in any geographic location. There is no broker fee, only a low-cost transaction fee, which makes it more accessible for people to invest in. To answer the assignment question, we will need to look at the risks associated with currency market, the potential returns and finally how to manage these factors. Risks When an organisation makes the decision to engage in international financing activities, the company also take on additional risk as well as opportunities. The most common risks are associated with businesses engaging in international finance which includes foreign exchange risk and political risk, such as Trump being elected the new president of United States of America. The dollar increased, and will continue to increase, depending on what political decision he makes, as Donald Trump plays a huge part of influencing the value of the dollar. These political risks may make it difficult to maintain constant and reliable revenue for the firm or could be a potential to make a profit. An investor could also invest in Forex, but there is always a risk that occurs when the value of investment vacillates. This is due to changes in a currencys conversion rate. When a native currency appreciates against a foreign exchange, profit or returns earned in the foreign country will decline after being exchanged back to the native currency. Numerous points of investment risks are inherent in overseas investing: political risk, local tax inferences and exchange rate risk. Exchange rate risk is particularly significant since the earnings associated with a foreign stock must then be transformed into U.S. dollars before an investor can spend the profits. Breaking down risks: The political environment of overseas countries generates portfolio risks because governments and political systems are continuously in change. Naturally this has a very direct influence on economic and business divisions. Political risk is considered a type of disorganised risk linked with specific countries, which can be spread away by capitalising in a broad range of countries, effectively accomplished with broad-based overseas mutual assets or exchange-traded assets. Foreign taxation poses another problem. Just as overseas investors with U.S. securities are subject to U.S. government taxes, foreign investors are also taxed on foreign-based securities. Taxes on overseas investments are typically withheld at the source country before an investor can understand any advantages. Returns are then taxed again once the stockholder exiles the funds. Finally, theres currency risk. Variations in the value of currencies can directly influence foreign investments, and these fluctuations interrupt the risks of investing in non-U.S. assets. Occasionally these risks work in the firms favour, other times they do not. For example, In the wake of Donald Trump winning the US election, the real 10-year Treasury yield climbed to a 2016 high of 0.74 per cent by mid-December. It has subsequently retreated since to about 0.4 per cent, and weighed on the dollar. (Khan, 2017). As Donald Trump won the election, the price of the dollar improved, this generates opportunities for investors, so they can make a profit.    Figure 1 Trump victory. (Cox, 2017) By looking at figure 1, since the Trump election victory, the dollar has increased by 4.46%, from 97.06 to 101.39 over a period of 55 days. The last time it happened, in January 1987, the Dow dropped 11 percent over the next year as the market endured one of its worst crashes. The previous occurrence in March 1964 saw the index climb 9.3 percent over 12 months. (Ciolli and Wang, 2017). This political event was one of the crucial days for investors in the currency market, but history suggests that the market might endure a bad crash. Thats one example, the Brexit event is another political example: If Britain stops sending money to the EU budget, they lose access to the single market. But they save  £350m every week, and they can easily renegotiate a trade deal with the EU for goods, as Britain already complies with the current regulations and there are no tariffs currently. (Cadman and Tetlow, 2016) After the decision to leave the EU, there have been several initial effects caused by Brexit. The FTSE 100 shrugged off a brief post-referendum dip and is now at levels that havent been seen since August 2015. The FTSE 250 suffered an 11.4 per cent fall just after the vote. (Belam, 2016) Figure 2 FTSE 250 The other effects of the Brexit vote were on the pound, on 23 June, it was worth $1.50. It is now trading around $1.30, down about 13%. This is the lowest it has been since the mid-1980s. (Belam, 2016) As the pound weakens, international companies with businesses both domestically and outside of the UK make profits this is due to the foreign currency being converted back into sterling. An additional effect of the Brexit was the PMI report submitted by Markits, and it shows that the UK economy is shrinking at a quarterly rate of 0.4%. (Belam, 2016) Services output and new business both fall at the fastest rates since march 2009, and the month-on-month decline in the index in the latest period, at 4.9 points, was the largest observed since the survey began in July 1996. (Martin, 2016) (Belam, 2016) By looking at the initial effects, we can undoubtedly see that the UK economy is suffering cause of the Brexit decision, and is shrinking its economy by a quarterly rate of 0.4%. Potential Returns The long-term returns of the currency market are engrossed in a few days. Javier Estrada of the IESE Business School showed that over a period of 40 years, missing only the best 10 days would have cost investors about half their capital gains, while avoiding the 10 worst days would have led to 2 ½ times the capital gains. (Authers, 2017). This tells the importance of being active and decisive in the currency market, missing a few crucial days can cost dearly. The clue behind this process is making fewer transactions that yield larger individual gains. Thats the long-term returns, the short term return however, is decided in seconds and minutes, quick thinkers and experienced stock investors make the quick decision, deciding whether it is worth investing or not.   Looking at political opportunities that can benefit both long term and short term returns, the example of Donald Trump winning the presidential election and Britain invoking article 50 are good examples that explain the impact the political decisions shaped on the currency market. Missing an event like that can cause the investor to lose a lot of capital. In a real scenario that should not happen, as the economists working for the investment firm shouldve predicted a jump in the dollar matrix due to the election and a drop in sterling after Brexit. Looking ahead to 2017, our experts argue a new investment phase has begun as the yield curve finally turns upwards. Flattened by years of ultra-low interest rates and monetary stimulus, world economies are gradually being weaned off quantitative easing. (Barret, 2017) Recommendations for investors Managing the risks of investing can be hard, but not if you take certain precautions before the investor makes the investment, such as carefully considering his investment objectives, the level of experience, and risk appetite. If the investor makes a loss, the investor/firm needs to have enough capital to invest in something else, rather than spending all the assets in one investment. A different way to manage risk is diversification and it is the most important component in helping the investor reach a long-range economic goal while diminishing the investors risk. At the same time, diversification is not a bulletproof assurance against a loss. No matter how much diversification you employ, investing includes taking on some risk. An additional way to manage the risk is hedging, but its not free, and if the investor isnt experienced enough about investing then it could have a really bad input to the investment, but it does reduce the risk of the investment. A question that often confuses investors is how many stocks should be bought in order to reach ideal diversification. According to portfolio theorists, adding about 20 securities to the investors portfolio reduces almost all of the individual security risk involved. This assumes that the investor buys stocks of different proportions from numerous industries. Conclusion The conclusion of this essay tells that, investing in forex is full of risk, but there are several ways of limiting the risks. But limiting risks can also create more risks, such as using hedging to reduce the risk. References: Authers, J. (2017). Timing the US market a big challenge for passive investors. [online] Ft.com. Available at: https://www.ft.com/content/090e22ec-fa56-11e6-bd4e-68d53499ed71 [Accessed 26 Feb. 2017]. Cox, J. (2017). What is going to happen to the dollar under Trump, according to experts and investors. [online] The Independent. Available at: http://www.independent.co.uk/news/business/news/donald-trump-dollar-pound-value-what-will-happen-rise-fall-currency-exchange-experts-economists-a7537041.html [Accessed 26 Feb. 2017]. Belam, M. (2016). One month on, what has been the impact of the Brexit vote so far?. [online] the Guardian. Available at: https://www.theguardian.com/politics/2016/jul/22/one-month-on-what-is-the-impact-of-the-brexit-vote-so-far [Accessed 20 Feb. 2017]. Martin, W. (2016). Every part of the UK economy is suddenly shrinking. [online] Business Insider Australia. Available at: http://www.businessinsider.com.au/markit-services-pmi-for-the-uk-in-july-2016-8 [Accessed 20 Feb. 2016]. Cadman, E. and Tetlow, G. (2016). The EU single market: How it works and the benefits it offers. [online] Financial Times. Available at: https://www.ft.com/content/1688d0e4-15ef-11e6-b197-a4af20d5575e [Accessed 22 Oct. 2016]. Cadman, E. and Tetlow, G. (2016). The EU single market: How it works and the benefits it offers. [online] Financial Times. Available at: https://www.ft.com/content/1688d0e4-15ef-11e6-b197-a4af20d5575e [Accessed 22 Oct. 2016]. Ciolli, M. and Wang, M. (2017). Trump Is on the Verge of His Own Bull Market. [online] Bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2017-02-24/trump-at-brink-of-his-own-bull-market-as-dow-flirts-with-history [Accessed 28 Feb. 2017]. Khan, M. (2017). US 10-year treasury yields enjoy biggest monthly jump since 2009. [online] Ft.com. Available at: https://www.ft.com/content/157e9c79-c708-3527-963d-58d918165261 [Accessed 28 Feb. 2017]. Barret, C. (2017). Where should I invest in 2017?. [online] Ft.com. Available at: https://www.ft.com/content/df00d4da-c117-11e6-9bca-2b93a6856354 [Accessed 28 Feb. 2017].

Economic growth in Botswana :: essays research papers

I recently had the pleasure of listening to Dr. Scott Beaulier speak on his research on the reasons why the small and desolate country of Botswana has had such drastic economic growth in the last 30 years. Dr. Beaulier partook in what is called an analytic narrative, which is the act of learning about a country by going there and totally immersing ones self in their economy and way of life as to experience it all first hand. This helped him with his research. Botswana is a small country roughly the size of Texas with 1.7 million inhabitants. Nearly 80 percent of Botswana is the Kalihari desert. This makes Botswana a sub-Saharan, land locked country. Many economists believe in the geography hypothesis, which states that countries that are northern and near water will prosper, while those that are southern and land locked will most likely struggle. Botswana broke this hypothesis, being both southern and land locked. Botswana, unlike many neighboring countries, pursued a sound economic policy, favoring free trade, a free market, and a limited government. There was no military presence in Botswana till 1976. With no military presence, Botswana could grow without the need of military spending. Botswana also relied on their traditional customs, even in post colonial periods. Botswana had a pre-colonial institution called the Kgotlas that consisted of chiefs from various regions of the country. These chiefs would hold basically what was consider ed a town council with all the tribesmen to discuss issues. The chiefs took complaints constructively and worked to better the situation. This form of government set Botswana aside from many other African countries. Botswana was colonized by Great Britain in the 1880’s in an attempt to prevent to German, who had colonized neighboring Namibia, from tapping into South Africa’s diamond source. Great Britain was reluctant to colonize Botswana, due to its lack of favorable geographic qualities. In 1965, Botswana was established as an independent state. A major leader that emerged to lead Botswana was a man by the name of Comma. He married a white woman by the name of Ruth Wilson. He was a very lenient ruler, and tried to establish a successful country. He allowed refugees in from neighboring countries. He believed that no defense was the best defense. He figured that if his country was invaded, one of the major world powers would come to his aid. Therefore he had no military to spend money on. Economic growth in Botswana :: essays research papers I recently had the pleasure of listening to Dr. Scott Beaulier speak on his research on the reasons why the small and desolate country of Botswana has had such drastic economic growth in the last 30 years. Dr. Beaulier partook in what is called an analytic narrative, which is the act of learning about a country by going there and totally immersing ones self in their economy and way of life as to experience it all first hand. This helped him with his research. Botswana is a small country roughly the size of Texas with 1.7 million inhabitants. Nearly 80 percent of Botswana is the Kalihari desert. This makes Botswana a sub-Saharan, land locked country. Many economists believe in the geography hypothesis, which states that countries that are northern and near water will prosper, while those that are southern and land locked will most likely struggle. Botswana broke this hypothesis, being both southern and land locked. Botswana, unlike many neighboring countries, pursued a sound economic policy, favoring free trade, a free market, and a limited government. There was no military presence in Botswana till 1976. With no military presence, Botswana could grow without the need of military spending. Botswana also relied on their traditional customs, even in post colonial periods. Botswana had a pre-colonial institution called the Kgotlas that consisted of chiefs from various regions of the country. These chiefs would hold basically what was consider ed a town council with all the tribesmen to discuss issues. The chiefs took complaints constructively and worked to better the situation. This form of government set Botswana aside from many other African countries. Botswana was colonized by Great Britain in the 1880’s in an attempt to prevent to German, who had colonized neighboring Namibia, from tapping into South Africa’s diamond source. Great Britain was reluctant to colonize Botswana, due to its lack of favorable geographic qualities. In 1965, Botswana was established as an independent state. A major leader that emerged to lead Botswana was a man by the name of Comma. He married a white woman by the name of Ruth Wilson. He was a very lenient ruler, and tried to establish a successful country. He allowed refugees in from neighboring countries. He believed that no defense was the best defense. He figured that if his country was invaded, one of the major world powers would come to his aid. Therefore he had no military to spend money on.

Sneaking Out: a Personal Memoir

It wasn’t the first time I had felt that crisp breeze hit my face. I closed the door behind me hoping my parents wouldn’t hear it squeak as it sealed off my family room. I took a deep breath in letting the adrenaline run through me, and letting out the anxiety of getting caught. What would happen if they had? I have only been grounded once my whole life and that was when I was five years old. I’m not saying there wouldn’t be any repercussions but nothing more severe than a warning to be careful, but neither parent would say â€Å"You are forbidden to sneak out of this house. I hoped my dogs hadn’t woken from their snoring slumber. I imagined Lincoln clamoring down the stairs, his collar jingling, to investigate the disturbance.It didn’t matter the consequences, my parents knew I was a responsible young adult. I heard Drew’s mustang coming down the street and I stepped off the old deck. The anticipation of getting away with this mischi evous act was enough to propel me over the fence. Drew and Randall were waiting in the cul-de-sac, the car’s engine purring me from the side yard and into the backseat. â€Å"Will your parents wake up? Drew asked, I replied with a shake of my head no, and he drove the speed limit back to his house. Even though it was just a mile down the road I was too scared to walk there in the dark by myself. I let the wind hit my face and the music hit my mind and enjoyed the presence of two guys who don’t care when I wear my glasses, men’s boxers, and look like a wreck. Drew’s garage was open as we pulled into the driveway, with three chairs lined up waiting for us. Drew and Randall smoked their cigarettes and talked about fast cars, races, and other automotive topics.I pretend I’m listening, but I tuned them out the moment my legs stuck to the black leather. Yes, I liked spending time with them, and that’s why I always called them up, but sneaking out had become so much more for me. Sneaking out was sitting in a garage and just letting my mind wander. It was Nothing crazy like TPing someone’s house, drinking, or a chance for me to be a crazy rebel. It was more than just â€Å"fun†, it was that adrenaline rush, the anticipation of getting caught, and a retreat for my over worked mind.On this particular night Randall and Drew were hungry for some â€Å"4th meal. † I being a Taco Bell virgin just went along for the ride. We drove along, and after seeing the fast food restaurants down Main Street, my tummy started rumbling. We pulled into Taco Bell’s drive through. The boys were anticipating some greasy delicious food. By this point I was too. I was advised to go with something original. I chose to get two soft tacos with lettuce. It was one of the best life decisions I had made. The juicy meat and melted cheese had my taste buds yearning for more.Randall and Drew will forever be credited for taking my Ta co Bell virginity. None of us wanted to go to sleep after our glorious food rendezvous. Instead we went to a local park to relive our childhood moments on the swings and playground. Drew pulled in, and I dashed to my favorite swing. It was the best because it was in the middle, never squeaked and I always thought it was longer than the others, giving me the most height. I realized now that it was the same length, but somehow I always flew higher.The swings, like sitting in the garage and driving around, let the world fall away. I pumped my legs harder and harder all three of us making the swing set jump a little out of the ground. I threw off my sandals allowing the wind between my toes. When it came to hopping off the swing, I landed farthest away from the play- set. After we relished our memories, we all calmly swung and talked about cars and the girls in their lives. They asked for my advice on what a romantic date would be and about boys in my life, I said â€Å"nothing, really . That was one component of my life that I didn’t want to think about didn’t matter. After about an hour and a few cop look – a – likes we headed back home. Drew dropped me off, and asked, â€Å"Do you want to come again tomorrow? † I answered sarcastically, â€Å"Is that even a real question? † As I snaked back through my side yard I relived the past few hours over and over again in my head. I relished the moments of laughter, complete confusion, and successfully not getting caught.After many nights like that one I realized that â€Å"sneaking out† has a negative reputation. Yes, some teens decide to do stupid things that could end very badly. But, why did they sneak out in the first place? They, like me, wanted to escape, wanted to feel that adrenaline pumping through their veins and the wind in their hair. Now in college, I don’t really have to sneak, but just go. Though â€Å"the guys† aren’t here with me, and there are no swings or cars to drive, walking around seems to satisfy any craving for private reflecting.Sometimes I walk with another person, other times it’s just me. It’s not necessarily, what I’m doing or who I’m with as long as I get to reflect on my life and let myself de- stress and relax. Then again, that’s all sneaking out has ever really been, not a rebellious act, but a therapeutic session. subject of the paper is your personal memory, not anyone else’s not about anything else, it is only about you sneaking out how you felt, why, who with. Self: this is not about history, this is about story. Extraordinary not boring. Smithmag. net/sixwords

Writing and Tim O Brien Essays

Writing and Tim O Brien Essays Writing and Tim O Brien Essay Writing and Tim O Brien Essay Essay Topic: The Things They Carried Annotated Bibliography Brosman Savage, Catharine. The Functions of War Literature. South Central Review. Vol. 9, No. 1, Historicizing Literary Contexts (Spring, 1992), pp. 85-98 This article talks about how this type of war literature is related to Tim OBriens story of The Things They Carried. It relates how soldiers use different kinds of items to make themselves fell secure in the time of war. It was very useful because it gives us another point of view in order to what pertains of what is really going on in a war and ow our soldiers react to it. It was useful to find other perspectives on how writing about war fiction can have different ways of being written. Chen, Tina. Unraveling the Deeper Meaning: Exile and the Embodied Poetics of Displacement in Tim OBriens The Things They Carried. Contemporary Literature, Vol. 39,No. 1 (Spring, 1998), pp. 77-98 This article explains how its trying to find the deeper meaning of the story The Things They Carried. It tries to reveal the authors point of view of how the ar has affected the soldier s and how they are trying to make themselves safe and how most their men are dying by enemy surprise attacks. This article tries to unravel the real meaning of why OBrien wrote about a war fiction and about soldiers having different things during the war so that they can feel safe and secure. Its trying to explain why OBrien writes in way that remarks people about war. Naparsteck, Martin. An Interview with Tim OBrien. Contemporary Literature, Vol 32, No. (Spring 1991), pp. 1-11 . This article is about an interview with Tim OBrien and talks about his literacy work and how his point of view of a war has change a few people minds on how a war can change a soldiers life. It talks about how his life work has become famous for his various writings, especially when it comes to fiction about war or action. Silbergleid, Robin. Making Things Present: Tim OBriens Autobiographical Metafiction. Contemporary Literature. Vol. 50, No. 1 Spring, 2009, pp. 129-155 This article talks about the way OBriens way of fiction has made readers mind, be part of the writing he has made. It tells us how OBrien is very interested in action fictions and it one of his various way of writing. I found it to be useful because it goes into detail of OBriens type of writing and it challenges readers mind to go into further detail of what is happening in the story. Writing and Tim O Brien By eJtrilla14

Light Rare Earth Elements (LREE)

Light Rare Earth Elements (LREE) The light rare earth elements, light-group rare earths, or LREE are a subset of the lanthanide series of  the rare earth elements, which are themselves a special set of transition metals. Like other metals, the light rare earths have a shiny metallic appearance. They tend to produce colored complexes in solution, conduct heat and electricity, and form numerous compounds. None of these elements occurs in pure form naturally. Although the elements are not that rare in terms of element abundance, they are extremely difficult to isolate from each other. Also, the minerals that bear rare earth elements are not uniformly distributed across the globe, so the elements are uncommon in most countries and must be imported. Elements That Are Light Rare Earth Elements Youll see different sources site slightly different lists of elements classified as LREEs, but the US Department of Energy, US Department of the Interior, US Geological Survey, and national labs use a very specific set of criteria to assign elements to this group. The light-group rare earth elements are based on the configuration of  4f electrons. LREEs have no paired electrons. This makes the LREE group consist of 8 elements with atomic number 57 (lanthanum, with no unpaired 4f electrons) through atomic number 64 (gadolinium, with 7 unpaired 4f electrons): lanthanum (La) - used in high-end optical lenses and in  lanthanum nickel-metal hydride (NiMH) rechargeable batteriescerium (Ce) - the 25th most abundant element in the Earths crust (so not rare at all), used in catalytic converters and the oxide as a polishing powder  praseodymium (Pr) - oxide is used as a catalyst in plastic manufacturing and is combined with zirconium oxide to produce a vivid yellow pigment used in ceramicsneodymium (Nd) - used to make super-strong magnets; neodymium-iron-boron (NeFeB) magnets are used to make cell phones vibratepromethium (Pm) - used to make a phosphorescent pigment and to make the starter switch for fluorescent lampssamarium (Sm) - used in high strength magnets and to make servo-motorseuropium (Eu) - used to make phosphors, notably the reddish-orange color of screens and monitorsgadolinium (Gd) - used in a reactor to control rods to control fission reaction and as a contrast agent to improve magnetic resonance imaging (MRI) Uses of the LREE All of the rare earth metals have great economic importance. There are many practical applications of the light rare earth elements, including: lasermagnetsphosphorsluminous paintscatalystsmetallurgysuperconductorssensorsflat panel displaysmedical tracersmicrophones and speakersrechargeable batteriesfiber opticsnumerous defense applications The Special Case of Scandium The element scandium is considered to be one of the rare earth elements. Although it is the lightest of the rare earths, with atomic number 21, it is not classified as a light rare earth metal. Why is this? Basically, its because an atom of scandium does not have an electron configuration comparable to that of the light rare earths. Like other rare earths, scandium typically exists in a trivalent state, but its chemical and physical properties dont warrant grouping it with either the light rare earths or the heavy rare earths. There are no middle rare earths or other classification, so scandium is in a class by itself.

Imperialism in the nineteenth century Essay Example | Topics and Well Written Essays - 750 words

Imperialism in the nineteenth century - Essay Example Some countries and corporations within this system accumulate a lot of power and wealth. However some states recorded failure both politically and also economically. The European nations which had become industrialized gained dominance in the world systems. This was contrary to the fact that these nations were weak and marginalized on the few centuries before. The rapid industrialization gave these European countries a rapid growth and they also acquired great military power. Discussion Competition control in the nineteenth century There are different methods that different people used to gain success in business in the nineteenth century. Andrew Carnegie for instance employed the use of the vertical integration. This method involved the use of control on every step in the manufacturing process of the product. This method dominated the market in that century. The vertical integration method had the advantage of saving cost as a result of the integration. This allowed the business to sell products at a cheaper cost compared to those that had not been integrated. An example to this was that the horse company could be the owner of the food farm, Saddle Company and other related group of companies (Hobson 30). Other groups of people such as John D. Rockefeller employed the use of horizontal method of integration. This method involved the control of the entire market in the process. An example was to buy every steel producing company in the region. The idea behind the purchase of all the producing companies was to create a monopoly in the market (Hobson 32).

Infantilization of women in advertising Essay Example | Topics and Well Written Essays - 500 words

Infantilization of women in advertising - Essay Example This essay "Infantilization of women in advertising" outlines the reasons for infantilization of females in commercials and how it affect the perception of women id advertisement. Infantilization is not a new concept but has been in existence for quite a long time. Many advertisers edit or sexualize bodies of younger girls and use them for advertisements. An example of female infantilization is the assumptions that beauty entails getting younger. Most advertisements make this assumption when they use exaggerated pictures of young girls when advertising beauty products. They thus use images of young girls or those of women but with childish behaviors (Wade Web). The women are postured in childish ways with empty stares, hands in mouth, or adopting seductive postures. Additionally, the skin texture is exaggerated. The postures make women appear submissive and not in control of their lives. The advertisements appear to be creating children out of women. This is contrary to the upright w ay men are postured demonstrating adulthood and being in control (Carlson 2-4). The erroneous infantilization defines women as weak and unintelligent. This is a block to celebration of femininity. Instead of encouraging girls to grow into strong women, advertisement in magazines and other media inspire girls to develop into women with childishness. Some advertisements appear to be inspiring women to act like children to be considered feminine and sexy. The antifeminist image below from maxim is an example of such appeals.