Tuesday, June 12, 2012

Hedge funds betting on U.S. housing market

The smart money, having already shorted the euro, hoarded gold and loaded up on Apple stock, is now placing large bets on the housing sector. ...Five years after the US housing market started to melt, at least several hedge funds have decided that the bottom is near and the Fed is on their side so they are moving back into the residential mortgage-backed securities market in a big way.

Read more at GARP - Story


Saturday, June 09, 2012

How to calculate Annual Percentage Yield – APY


Bank savings accounts grow your money. When you have money in a bank savings account, your money earns interest. This is a nice feature. Your bank savings account pays a rate of return on all the money in the account (your Annual Percentage Yield). That means that you get "paid" for keeping your money in the account. If you were not going to use the money anyway, then getting paid a little is better than nothing.

Calculating Annual Percentage Yield (APY) is not as difficult as you think.  Justin Pritchard in his About.com Guide explains that Annual percentage yield (APY) is a tool for evaluating how much a deposit earns you. Why would you look at an account’s APY? This is because it is a standardized way of comparing investments. Your job as a consumer is to put your money where it will get the highest APY.
What is APY?
As the name suggests, APY is the yield you earn on a deposit over a year. It refers to your earnings – how much money you’re making. Because we all want our money to work for us and grow, it is important to get a good APY from the bank.
What is Unique About APY?
APY is notable because it takes compounding into account. In very simple terms, compounding denotes that you are making earnings on your earnings. This means that the quoted APY is telling you how much you’re really making on your money. Other ways of quoting a rate do not necessarily show you the whole picture.
·         See a Visual Example of Compound Interest

How to Get the Best APY
In general, you’ll find that the APY is higher for more frequent compounding periods. Ask your financial institution how often they compound. If your money is compounded daily as opposed to quarterly, you will be able to earn a better APY.
You can also pump up your own “personal APY”. Justin Pritchard always urges people to look at all of their assets as one. In other words, don’t think of one Certicificate of Deposit(CD) investment as separate from your checking/current account – they all go together and should be considered one. Think of yourself as the Chief Financial Officer of You, Inc.
To pump up your personal APY, find ways to make sure that your money is compounding as frequently as possible. For instance, If 2 CDs pay the same interest rate, pick the one that pays out interest most often (monthly instead of at maturity, for example). Then, you can reinvest your interest payments and start earning interest on that payment.


How to Calculate APY With Ease
Calculating an investment’s APY can be tricky. If you want to just find out what an APY is with Excel, here's the function:
=POWER((1+(A1/B1)),B1)-1 where A1 is the Rate and B1 is compounding frequency.
Try pasting this formula into any cell on a spreadsheet (except A1 or B1). In cell A1 you’ll put the stated annual interest rate – in decimal format. For example, if the stated annual rate is 6%, you’ll type “.06” in cell A1. Then, you put the number of times you’ll compound each year. For example, for daily compounding you would enter “365” (or 360 depending on the institution) in cell B1.
In the example used, you will find that the APY is 6.183%. In other words, if you get 6% annually with daily compounding, your APY = 6.183. Try changing the compounding frequency and you’ll get an idea of how the APY changes. For example, you might show quarterly compounding (4 times per year) or the unfortunate 1 payment per year (which just results in a 6% APY).
The APY Formula
If you like doing math the old fashioned way, here is how to calculate APY:
APY = (1 + r/n )n – 1 where r is the stated annual interest rate and n is the number of times you’ll compound per year.
Finance people will recognize this as the Effective Annual Rate (EAR) calculation.
Now that you are up to speed on APY and how it works, go out and find the best APY you can get!


Monday, May 14, 2012

Useful investment options











In my blog titled ‘simple investment tips, I explained that after you have gained sufficient knowledge on investment strategies and determined your risk taking capability based on your investment goals, various investment options are available in the market on basis of these goals. One of the options I mentioned is investing for safety (high liquidity) – like bank deposits, money market mutual funds etc. They are also referred to as short term investment options because of their duration which can range between a day and 12 months.

Thursday, February 16, 2012

Investment and Wealth Management tips

Guidelines to creating own Forex trading system

There are several things we want to achieve when creating Forex trading system:

1.  Find entry points as early as possible.

2.  Find exit points securing maximum gains.

3.  Avoid fake entry and exit signals.

If accomplished, these three goals will yield a profitable trading system.

Charting your way to trading profits
According to Craig Drake, with a grasp of these four basic patterns, you will have a better idea of the direction to trade
REVERSAL
DOUBLE TOP
DOUBLE top and double bottom chart patterns are straightforward to spot and can be seen across a range of different time frames, both in long and short-term charts.
“Double tops are important to look out...
Read more..........


Wall St steady as shopping stats flat
US stocks erased losses to end little changed yesterday after a Greek government source said the conservative party leader was expected to deliver a letter of commitment to the country’s international lenders.

And US retail sales fell...

Hope you found the information very useful.


To your success.


Ayodele Ojo




Friday, December 30, 2011

Simple investment tips




Investment tips are often the simplest ones - and yet, it's amazing how many people overlook the basics.











Understand why you want to invest

Investment is not an option it is a necessity. People do investments to meet their financial goals. Everybody has their own personal financial objectives of life.

Investing is a way of using money to make more money. Investment purpose mainly centres on financial security since you cannot be assured that you will be able to work forever, and more people don't want to. It is a way of making sure that even after retirement you still have a source of income that will sustain your way of living. There are risky as well as risk-free investments, and with any investment where risk is involved, you'll either loose or gain money.

There are many types of investment that you can choose from, and one example is stock investment. Investing in stocks is preferred by many people because it may give higher returns much quicker when compared to bonds and real estate. If you hold a stock for a year or more before you decide to sell it, instead of paying your standard rate, you'll only be taxed 15% which is a long term capital gains rate. It is also easy to diversify provided that you invest in a variety of stocks. This way, it will not create a very big impact if only some of those investments go down.

Sunday, December 04, 2011

Personal Development Self Help



One of my friend forwarded to me an article written by Jim Rohn titled ‘The Miracle of Personal Development. It was such a very interesting and thought provoking piece and I hope you will enjoy it.

One day my mentor Mr. Shoaff said, “Jim, if you want to be wealthy and happy, learn this lesson well: Learn to work harder on yourself than you do on your job.”