Could the US stock market become vulnerable?

US stocks managed to bank significant gains during the 2018 summer, although this was considered to be a historically bad period for stocks. The S&P 500 managed to break above the January high and got past the 2,900 figure.

Tech stocks and the Nasdaq Composite had been leading the market in terms of gains, with the Nasdaq reaching the 8,000 milestone.

With share trading so hot in the US these days, some analysts are beginning to ring alarms, claiming that “dark clouds” can be seen on the horizon. With that being the case, let’s see what will be the challenges for the US stock market in the last quarter of 2018 and what needs to happen in order to see a continuation of the impressive bull run.

US-China relation in the first place

What seemed to be just a tossing around is getting more and more serious. With a deal already reached with Mexico, one already in negotiation with Canada, with the EU expected to agree on a series of trade measures as well, it seems like the purpose of this trade debacle had China and its massive trade surplus with the US in the center stage.

This isn’t just about trade at all, is about who will be the next world’s dominating power. Share trading could become more volatile if the situation will escalate further. The China 2025 program seems to be one of the greatest threats for the US dominance, so President Donald Trump is determined to take whatever measures will be required.

Source: pixabay.com

He recently stated that another round of tariffs on $267 billion worth of Chinese imports are “ready to go”. The next had triggered a short-term spike lower on stocks, showing that investors are really anxious about this trade dispute.

Almost two months ago, tariffs on $200 billion worth of Chinese imports were put under supervision, with the implementation date being expected this month. Which means those $267 represent other imports, bringing up the tariffs to almost all imports from China.

The US administration finds itself in a very delicate situation since the midterm elections are due to take place in November. A bad management could lead to the Republicans losing some seats in the Congress which will make it harder for the US president to go on with his agenda. Despite impressive corporate profits, politics and trade will again be on the center stage in the next few months.

Risk Warning

Trade Responsibility: 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high Risk of losing your money

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Tax Benefits of Real Investing in 2018

Is it any wonder the Tax Cuts and Jobs Act benefits real estate investors when the president-elect made his “fortune” in real estate? Is it any wonder he passed the bill yet failed to divest his business interests as legally required to do so? No matter which side of the political fence you’re on, if you’re a real estate investor or looking to become one, Donald Trump is your presidential dream-come-true. Experts argue the bill will not benefit those it claimed to benefit, and this bears noting for moral reasons alone, but it will give the following advantages to real estate holders, so take this into account, too.

Depreciation Bonuses

Kent Clothier of the Forbes Real Estate Council reports that one of the greatest advantages of the new tax bill is its depreciation bonus. When investors buy property from 2017 forward – yes, the bonus is retroactive – they can reap the benefits of a 100-percent, five-year depreciation deduction. As long as you invest in real estate prior to 2022, and as long as you purchased the investment property and had it up and running by September 2017, you can depreciate 100 percent of your property holdings. After 2022, the break will be reduced by 20 percent each year, so take advantage of this perk now.

Corporate Tax Deductions

Controversial as it may be, wealthy business owners will see a huge decrease in their corporate tax rate thanks to Trump and his Congressional backers. What was once a 35-percent corporate tax rate is now a 21 percent one – wow. For those whose business is real estate investment, such as Peter Foyo, the champagne corks must be flying. Open up a business entity exclusively devoted to commercial real estate investing, and then enjoy reduced corporate tax rates and cuts to taxation of your pass-through income. In other words, you’ll see more profitability from your real estate investments.

Free Diversification

If you already own real estate property, Section 1031 of the Internal Revenue Code gives you a reason to pop a champagne cork, as well. In this case, Clothier reports that the new tax laws allow investors to diversify their portfolios without an “immediate tax hit.” This means you can trade real estate to reduce your loss exposure and defer any related tax obligation to the future. Any financial expert will tell you that portfolio diversification is key to your success, and with the ability to diversify without consequence, it might be time to talk with Foyo or another expert and secure additional real estate.

Other Investment Savings

To go off topic for just a moment, the new tax law also benefits those invested in long-term savings plans. If you hold an ESA, HSA, IRA, and/or 401(k) – that’s a lot of acronyms – you might enjoy a reduction in your tax obligation each year. The new law includes “immediate reductions to taxable income and decades of tax-deferred gains or tax-free investment gains,” according to Clothier, and it’s even better if you roll your high-risk investments into more secure long-term savings plans. By the way, you can also use these accounts to invest in real estate, as some plans include those holdings.

The real estate market has made a huge rebound from the 2007/2008 financial crisis, and many investors have gotten over their fear of these holdings. A diverse portfolio includes numerous financial vehicles, and real estate is once again one of them. With new tax laws written to benefit real estate investors, it makes sense to enter into this lucrative market wisely. Don’t go crazy. Nonetheless, if the president sees his four-year term to fruition, you can rest assured he’ll continue to work to benefit real estate investing. After all, it benefits him, too, so dive in while the getting is good.

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Gold Investment During Tumultuous Times

Gold is proving its evergreen commodity status. Currently priced at $1,358 per ounce, it’s defying expectations by maintaining its price, showing consistency not found since July 2016. What’s more, gold is predicted to keep rising by Goldman Sachs, who have this week asserted that it will continue to outperform other commodities amidst fears over a market correction.

The shifting political landscape and rocky future outlook are creating problems for many markets, making securing a good investment a difficult proposition. Bucking the trend, gold is arguably profiting from global changes to its own benefit.

Trade wars and improving outlooks

The past month has been dominated by headlines concerning a trade war as hostilities ramp up between the USA and China over perceived transgressions. Typically, this would create uncertainty between the markets. Take the unexpected Brexit vote over in the UK; the result wiped $2tn off stock markets in panic. However, if you check the gold price at Money Metals Exchange it becomes apparent that gold continues to grow, never dropping under $1,000 since before 2010 and growing $5 per ounce on the back of the announcement of Trump’s China tariff. The reasons for this are varied, but Bloomberg have detailed how gold investors have out-thought hedge funds, demonstrating confidence in the commodity - despite political uncertainty.

The power of inflation

For the first time since late 2008, inflation is set to rise far above the 2% guideline in America. Reuters have explained the reasons behind rising inflation, and they shed a little light on the bullish price of gold bullion. With inflation rising, the price of the US dollar drops. In turn, gold - which is closely tied to the US dollar - becomes far more affordable, as do other related luxury markets such as tourism. If the dollar continues to fall amid inflation, gold will continue to rise in the absence of an interest rate lift.

The growth of related markets

Inflation is being driven up by increased employment, and generally speaking there is more money in the US right now. The result is growth in related markets, paired with increased global international connectivity. More people are able to purchase items more of the time, and in increased numbers. Retail consultants McKinsey have predicted a global growth in the jewellery market to $250bn by 2020, up from current sales of $148bn. This results in increased demand for gold, and particularly good quality gold as people have more income to spend. 

Gold is one of the oldest traded metals in the world, creating the foundations of many currency systems globally. Still today it creates a wonderful part of the portfolio of many canny investors.

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2018's Booming Commodities For Smart Investors

Commodities are perhaps the oldest and most durable of markets. After all, human beings will always need materials and always speculate on what the future might hold. The past few years and the rapid up-tech trend have seen what we understand to be the commodities market shift, with regulators even suggesting bitcoin should be traded as a commodity.

Bearing that in mind, you might be wondering what 2018 could hold. Which commodities are set to rise up the ranks again, like silver and gold ore- and which are set to fall? Will there be newcomers and disruptors, or more of the same?

Titanium

Titanium has found a niche in the past few decades for one big reason - paint. Titanium oxide, in its various forms, provides the basis and key ingredient of many of the paints you’ll see plastered on buildings globally. Whilst tubes and piping previously formed a big part of the market, they took a bit of a fall. However, as TMS Titanium have reported on, titanium has started to find new applications in medical and 3D printing. It’s even been reported, this week, that titanium is finding use in an exoskeleton for future warfare.

The strong and light qualities of the metal make it a decent bet when you’re looking for a new investment.

Copper

It might surprise you to see copper on this list. The much-maligned metal has faced a 5 year decline, reaching a 7-year low in March 2016. However, the metal is starting to pick up traction again and has made serious gains in the past year. The increase has led to exports booming the world over, including in Chile where copper has made a presidential candidate. With the trend set to carefully increase, it is worth investing - but keeping a close eye on, as copper can be a volatile market given the long time it takes to get production up and running. This is especially compared to…

Oil 

Oil has had a tough time in recent years, despite oils famous versatility of uses. This has largely been down to a glut of surplus supplies on the market, driving prices ever further down, despite the presence of embargos on Russia, Iran and other oil producing countries. However, that surplus has been forecast to come to an end in the coming year and as a result it can predicted for the price to rise a decent amount - though increased US production under the Trump administration’s policies mean that price might not be a huge booster.

So, those are some of the very best commodities for 2018. Not exactly new or crafty, but certainly worth looking at and diversifying into.

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Money Saving Tips You Can Use Starting Today

With the state of the economy in the country today, it is more important than ever that people learn how to manage their money, budget their finances, and control their spending. How to save money is one of the most commonly searched terms online. If you are looking for some easy and practical ways to cut costs and save a little more green each month, then check out these five tips:

1) Buy at local markets over big chain stores- Farmer's markets, local farmers, and flea markets can be a great place to get the things you need at a fraction of the price. Big named stores and chains have a lot of overhead that causes the cost of products to be much higher. Small mom and pop shops and farms do not have the big overhead and can often offer much lower prices for much higher quality product. It is the benefit of small business marketing and production.

2) Carpool or use public transport for commute - Driving your own vehicle every day not only hurts the environment it also hurts your wallet. The wear and tear on your vehicle, the cost of gas, paying tolls, and other expenses and quickly add up. If you have long commutes or you live near public transport, you can benefit form getting a ride to and from work on the bus system. Also you can look at forming a carpool group to share commute costs with your co-workers.

3) Off brand vs name brand- Today's advertising market is all about brand recognition. The big name brands have huge budgets for advertising which is why more people know about their products. However, the cost of that advertising gets attached to their products and passed on to you. It you can but store brand and off brand products that are the same as the big name products, you can save a lot of money every month on the things you use all the time.

4) Thermostat and fans over AC at home- Cooling your home during the hot summer months is one of the biggest expenses a homeowner faces. Instead of cranking the AC to 70 all the time, try to keep it around 75-77 and use fans to keep the air flow cool. Also keep window open in the cooler parts if the day and at night and close them during the sweltering parts of the day. This can help you save your AC system from driving your energy bill through the roof.

5) Cooking meals at home instead of eating out- Everyone loves the convene ice of fast food and the relaxation of eating out and being waited on. However, you pay a lot for that convenience and service, so if you need to cut back on spending and save money consider cooking at home and making your own meals. Save dinner out and those fast food stops for the special occasions or the true emergencies when you need a quick option for food.

These are just a few ways you can start saving money right now. There are many other easy and practical things you can do and many changes you can make to your daily routine that will help you save money, cut expenses, and have a happier and less stressful life.

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Mistakes To Avoid For First-time Property Investors

The real estate game is quite hard to navigate in these troubled financial times. Before, it was possible to make a property investment and to be sure that that investment is going to pay off. However, today, with the omnipresent shortage of money, the profit is by no means guaranteed, and there are many bad shortcuts that you can take.  These shortcuts can easily leave you lying naked in the bankruptcy bushes with multiple financial cuts and bruises.

Since there are so many articles on what to do when investing in property for the first time, here are some definite don’ts when it comes to investing. Doing these things is something that should be avoided at all costs, if you have plans to rise to the top of the property investment game.

Don’t let your heart cloud your judgment

When purchasing your first home, it is only natural that you will let your emotions decide what you are going to purchase. You will live there, possibly for the rest of your life, and because of this, you will need to make sure that the house has that real ‘feel’ about it and that you will be able to call it home.

However, when making a first-time investment in a house that is supposed to pay off later on, it is most definitely undesirable to let your emotions rule your purchase. You don’t want to end up with a house that you cannot rent or sell, just because you liked how the lawn was done or how nicely painted it was. Also, letting your emotions rule your purchase can lead you to over-paying for a house, thus going into red from the very beginning. 

This is why it is advised to perform thorough checks for the property that you are willing to purchase. Is the neighborhood right for attracting quality people to live there? Will the property provide the return that you require for the invested capital? When making an investment, always bear in mind that real estate business is governed by economy, not emotions.

Rushing in or procrastinating

There are three types of real estate investors, and these are: rushers, procrastinators and those who are in the middle. Of all these, only the last ones have a chance of making money in the real estate investing business. The other two groups usually never make it past their first investment, if they make one at all. And here’s why:

The rushers are the ones who attend one seminar and see this as an excellent opportunity for them to get rich over-night and get out of their financial troubles. This is why they jump the first wagon that is open to them, and buy the first property they hear about. After that, they are left with a property they can hardly sell, or can hardly recoup the money they invested. When this happens, they usually quit the property investment, and that’s the end of it.

The procrastinators are the ones who go beyond that one seminar. However, they have another problem. They go to too many seminars and get their minds overburdened with information. This abundance of information leaves them baffled as to what to do, and they usually pass up vital opportunities just because they are unsure of their further doings. They analyze things too much and end up doing nothing. This is called paralysis by analysis.

The best thing to do here is to find the middle ground. While the first group may overcome their mistakes and learn through their experience, the second group will never get into the property business. This is why it is essential to note that you cannot learn everything at the beginning. You should learn as you go, but be sure to learn quickly. Only this way will you succeed in the harsh game that is real estate investing.

In the end, all I have to say is to stress that these two of the most common mistakes should be avoided at all costs, because if you make them, you can count yourself out of the game before you have even joined properly. Avoid them, and there are great chances that you will prosper. Who knows, maybe in a few years’ time you will be the next big thing that happened in the real estate investment. 

Author

Damian Wolf is a writer and online marketer. He mostly writes about business opportunities and self development tips. Damian currently works  on advanced online strategy for Simple Home Invest website , great Australian property investment service.

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