REPOST: Will geopolitical tensions derail markets?

Global equity markets had been bouncing back from early April’s lows as investors shifted their attention to the still relatively strong world growth outlook bolstered by favourable economic tailwinds such as the US corporate tax cut and rising employment.

However, the markets are now slumping again as new geopolitical risks emerge. Disruptive counterforces, including an escalating trade war, political showdowns in Europe and currency devaluations in Latin America are beginning to work against the synchronised global growth scenario which appeared to be in intact earlier this year.

The major averages are up slightly on the year, but that masks considerable variance between regions and sectors. For example, the tech-heavy Nasdaq market is up 9.5 per cent year-to-date, easily outperforming the broader S&P 500 stock index which has advanced by just 1.9 per cent as of this writing.

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Geography affects a country’s economic activities but can it determine growth?

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It’s not a coincidence that most of the highest-earning countries with progressive economies come from regions ideally located on the Temperate Zone. The US, Canada, Australia, Japan, and Europe dominate the world when it comes to economic development.

Indeed, the climate of a particular country and where they are located on the globe may have a huge impact on their income levels. This is because other aspects related to a country’s geography such as transport costs, productivity, availability of specific natural resources and raw materials, accessibility to major distribution hubs, the burden of diseases, political stability, also come into play – and the same aspects make underdeveloped countries located in geographically disadvantaged setting, less competitive.

While geographical factors can easily determine economic growth and the types of economic activities that countries take part in, experts argue that these are not constant determinants of economic performance. A country, despite its geographic disadvantages, can still push progress forward by focusing on the resources available to them.

Middle Eastern countries, despite in the middle of a desert and experiencing dry and hot climate follow a similar reality. The abundance in petroleum fields and the richness in natural gases necessary to sustain the international industrial life force make these nations competitive players in the global economic stage.

Developing countries as well as developed countries in Asia, on the other hand, despite being set in regions bombarded by different environmental hazards such as earthquakes and typhoons, have their own resources that have helped them stand out, and one of the most important is this: knowledge in technology. Meanwhile, tiny countries and territories such as Asian Tiger Singapore, leading offshore financial center Bermuda, and Mediterranean island-nation Malta all have very little resources yet were able to succeed and become significant global players.

A skilled and educated population can be a huge asset to their workforce. The creation of globally competitive human resources can topple down even the most stubborn obstacles that connects geography and economic development.


How the world’s biggest Sovereign Wealth Funds are financed

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Sovereign wealth funds (SWFs) are state-owned and are characterized by a heavy focus on long-term investments on foreign assets like bonds, stocks, precious metals, and even real estate. Most of these funds are created by export-oriented countries rich in natural resources. As of 2017, the world’s total sovereign wealth fund has reached over $7 trillion in assets.

While objectives of creating a sovereign wealth fund may vary among nations, almost all of them focus and have these general goals in common: diversification of their revenue base, protection from market volatility, and accumulation of savings for their country’s future generations.

Currently, the world’s biggest sovereign wealth fund is owned by Norway, followed by oil-rich countries in the Middle East like Kuwait and Saudi Arabia. Perhaps the primary reason why these nations always make it to the top of the rankings has something to do with their access to the most important capital sources of a sovereign wealth funds: commodities, in the form of oil and gas-related funds.

Primarily financed by exporting commodities, commodity sovereign wealth funds rely on the growth of both gas and oil prices – and these resources fund a majority of funds, accounting for more than 50% in 2015 alone.

Sovereign funds can also be financed by non-commodity assets, and usually created from an excess of the country’s current account surpluses’ currency reserves, privatization proceeds, resource exports as well as fiscal surpluses. These make up the over 40% of the world’s sovereign wealth funds.

On a smaller scale, private investment portfolios function almost on the same way as SWFs—except that they are personal accounts. Wealth management firms and offshore portfolio management companies like LOM Financial work with clients to build customized investment accounts that are powerful enough tap into the world’s biggest and newly emerging markets.


Exclusive Caribbean beach destinations for luxury travelers

Tourism is one of the most important sectors in the Caribbean region – and the island-destinations scattered throughout this part of the world are popular destinations for luxury travelers from various countries. The most admired Caribbean beach destinations among high net-worth individuals offer more than just a laid-back tropical lifestyle. Luxury travels within this region promise privacy, five-star services, and exclusive access to the most lavish travel experience there is.

Here are the top beach destinations in the Caribbean for luxury travelers:

Seven-Mile Beach, Grand Cayman, the Cayman Islands

Image source: caymancompass.com

When it comes to luxury family vacations, the Seven-Mile Beach in the western side of the Grand Cayman is an easy choice because of its selection of the most sophisticated and exclusive accommodations in the entire Cayman Islands—one of the world’s most important jurisdictions for offshore investments. Popular hotel brands offer the most lavish holidays especially for wealthy guests who want to spend quality time with their family. Aside from hosting one of the largest luxury penthouses in the Caribbean, Cayman hotels offer exclusive facilities such as private elevators, outdoor terraces, a libraries, and movie theaters.

Platinum Coast, Barbados

Image source: tropicalsky.co.uk

This Caribbean destination is known as the “Platinum Coast” because of the long line of luxury hotels located along this western coast. It includes the sophisticated first-class accommodation, Sandy Lane – the most luxurious beachfront property built on the island. In Barbados, you can pretty much enjoy everything that a dream tropical experience is all about: fine dining, water sports, shipwreck diving, golfing, shopping, sightseeing, and many more.

Gregory Town, Eleuthera, Bahamas

Image source: cruisegourmet.com

Luxury suites, fine dining, private boat and plane, hilltop infinity pool, indoor and outdoor recreations…you name it. This Bahamian paradise has everything that a luxury holiday has to offer – and it is set in an exceptionally beautiful high-end beachfront location: the Eleuthera. This place is a characteristically long and thin island in the Bahamian territory and is popular for its turquoise waters and pink beaches. It’s also the location for the archipelago’s five-star hotels and exclusive resort-boutiques popular to European and American luxury travelers. In addition to being a prime offshore investments center, the Bahamas is indeed a luxury traveler’s paradise.


The busy parents: Tips on how to achieve work-life balance

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Being a parent is a lifetime commitment, indicating that parenthood is the toughest job ever invented. However, it is also often considered to be the most rewarding and exciting experience for any person, especially among women. Such job has no one-size-fits-all formula as every family has its own unique needs and dynamics.

Having a family life is full of surprises and struggles especially if you are a working parent. It’s never easy to juggle and maximize your time between your kids and the demands of work. If you are like most parents, who have experienced difficulties in dealing with your daily routines and child-rearing responsibilities, here are five simple and helpful tips you might want to consider:

 

  1. Leave work at work

Transitioning your work mode to home-life is a bit challenging and stressful, both physically and mentally. Parents who are working long hours outside are less likely to spend time with their children. Family bonding is extremely important, no matter how busy and dog-tired you are after a long workday. When you get home, it is better to let go of work and spend quality time with your family.

 

  1. Find quality childcare

Most parents today are both working for a higher income to support their family needs. Nowadays, there are many independent couples who have lived on their own with no relatives around. Paying for a quality childcare provider may cost money, however, the peace of mind it provides is priceless. Thus, hiring someone to look after your child can be the best option and solution for you.

 

  1. Create a family calendar

When you have so much work engagements outside home, there may be times you tend to forget your family commitments such as children’s school activity, regular health check-up, a family event, or even celebrating your wedding anniversary. As a busy parent, creating a family calendar is an effective strategy that will help you organize your entire schedule for both family and work.

 

  1. Spend quality time with your partner

Beyond all the duties and responsibilities as a parent, you should also learn to prioritize your relationship with your husband or wife even when you’re both busy. Regardless of your grueling schedules, make sure to establish a daily routine and activities with your partner. Showing love and affection to your partner sometimes isn’t enough to strengthen you relationship–it’s about the constant communication, shared quality time together and appreciation.

 

  1. Improve and enjoy your social life

You have to realize that being engaged full-time in parenting and in your career doesn’t stop you from having a social life. Try to step out of your comfort zone and explore new things every day. It will make a significant difference to your life as a parent and as an individual. Everyone needs a “me time” for us to free ourselves from all the worries and anxieties of life.


The ultimate Caribbean spring break destinations

While your home country offers a long list of Spring Break destinations that can definitely make the best time of your college year unforgettable, the Caribbean promises you a vacation of a lifetime that can easily be summarized in two words: paradise and fun.

If you’re still looking for the ultimate getaway itinerary for your Spring Break vacation, you’ve come to the right place. Here are the best Caribbean destinations that you should consider:

Nassau, the Bahamas

Image source: flyingandtravel.com

Aside from being a popular cruise-ship stop and a major offshore investments center, Nassau, the capital of the Bahamas offers long lines of crystal clear beaches and a rich underwater paradise of offshore coral reefs. In fact, it’s a famous diving destination for Western tourists seeking the ocean life adventure. The city’s downtown area is also lined with chic hotels, restaurants, and boutiques. If your idea of fun is partying, it has a vibrant nightlife hosted by several local clubs and casinos.

 

Grand Cayman, the Cayman Islands

Image source: LOM Financial

The British Overseas Territory is known as a primary cruise-ship destination because of its rich colonial-era ruins and attractions. In addition, the island’s beaches and colorful coral reefs also make the region of one the most preferred spring break destinations for those who want to experience both culture and underwater adventure.  The Grand Cayman is the best location where you can interact with nature, thanks to its calm waters in its beaches and shady trees around its old-growth forest.

 

Punta Cana, Dominican Republic

Image source: dominicantraveling.com

One of the emerging travel destinations for spring breakers is Dominican Republic’s Punta Cana. While it still can’t compete with other Caribbean locations in terms of popularity, the island’s all-inclusive resorts offer the ultimate and overall fun-travel-party experience. The adventure does not stop there. The neighboring tropical rainforest offers the best outdoor activities from hiking, ATV adventure, and zip-line rides.


REPOST: Steel and aluminum tariffs trigger sharp stock market sell-off in US and Asia

While China only accounts for a small portion of US steel imports, its massive industry expansion has helped produce an excessive supply of steel that has pulled down prices. Read more on The Guardian:

 

World stock markets have tumbled after Donald Trump said the United States would impose tariffs of 25% on steel imports and 10% on imported aluminum next week.

The threat of a trade war with China and higher goods prices led to a sharp sell-off in Wall Street on Thursday, causing Asian markets to take fright on Friday.

The Nikkei index in Japan fell 2.4%, Hong Kong and South Korea were down 1.6%, and the ASX200 in Sydney was off 1% in early afternoon trading. Asian steelmakers bore the brunt. South Korea’s Posco fell 3% and Japan’s Nippon Steel 4%.

Michael McCarthy of CMC Markets in Sydney said it was a “sharp reminder of the initial negative reaction to the election of Mr Trump … An explanation may come, but the initial market interpretation of the move is rank populism. The lack of structure makes anticipating further measures and possible responses to retaliatory moves difficult to predict.”

The Dow Jones Industrial Average had initially fallen more than 570 points, with heavy losses for manufacturers like Caterpillar and Boeing. The index closed down 420 points and the S&P 500 and Nasdaq both dropped on the day.

Trump campaigned on the promise of protecting the US steel industry but until now has done little to make good on those promises.

At a meeting with US industry officials at the White House, he vowed to rebuild American steel and aluminum industries, saying they had been treated unfairly by other countries for decades. The move is likely to increase tensions with China, whose top trade official, Lui He, is in Washington for trade talks.

“People have no idea how badly our country has been treated by other countries, by people representing us that didn’t have a clue,” Trump said at a White House press conference attended by executives from the steel and aluminum industries.

“Or if they did, then they should be ashamed of themselves because they’ve destroyed the steel industry, they’ve destroyed the aluminum industry, and other industries, frankly, when you look at all the plants, the car plants, automobile plants that moved down to Mexico for no reason whatsoever, except we didn’t know what we were doing. So we’re bringing it all back.”

His comments followed an early-morning tweet that said the steel and aluminum sectors needed protecting from unfair trade, which drove shares in domestic industries sharply higher.

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REPOST: Does Real Estate Belong In Your Investment Portfolio?

Real estate is a tricky investment. As a whole, the market is still not very reliable but on the micro level, it can actually provide investors some decent and relatively secure return. More insights from Forbes:

In the ideal world, the perfect investment is one that has a high rate of return year after year coupled with a low risk of losing money. Here in the real world, perfect investments don’t exist.

Investments that generate the highest returns, like stocks, also carry the highest risk that you’ll lose the principle you invest. Those that carry the lowest risk, like government bonds, pay the lowest rates of return.

Year-after-year stellar performance also doesn’t exist. The investments that skyrocket one year can plunge the next. We can all look back and say a single asset type did really well in a single year, as stocks have lately. But, it’s impossible to say with certainty which asset class is going to pay the best returns next year.

In short, there’s no one ideal investment. The key to investing success is to spread your investments over a range of assets. Over long periods of time, a portfolio of mixed investments will typically out-earn an investment in any single asset type.

The most common tactic investors use to create a balanced investment portfolio is to spread their money across three classes of assets:

1. Stocks: Rise and fall in value rapidly, offer high returns coupled with high risk.

2. Bonds: U.S. Treasury bonds, notes and bills are low-risk and low-yield, while corporate bonds and private debt funds offer higher yields at higher risk levels.

3. Real estate: Low-risk, high-return investment when held long-term. Real estate hedges against inflation but has a high entry cost and can’t be sold quickly.

Each of those assets plays a different part in balancing an investment portfolio. Stocks can deliver quick bursts of gains or losses — you can make a bundle or lose it all. Bonds deliver steady income and are prized by older investors who don’t have decades to recoup investment losses, as younger investors do. Real estate can be the most challenging investment and for that reason, it’s sometimes overlooked by investors, even though it’s a useful portfolio diversification tool. Real estate offers a slow, predictable rate of return over the long run and can be a great way to build long-term wealth.

Investors who have the money, expertise and time to deal with property maintenance and tenant selection and the capital to cover acquisition costs will find direct investment in real estate makes a great hedge against inflation that can deliver steady income once the mortgage is paid off. A 20-something who buys a rental property with a 30-year mortgage sets up a nice retirement income stream that starts at age 50.

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Advantages of choosing the franchising business model

Image source: whichfranchise.co.za

A good business model offers the advantages that do not only help a company sustain itself but also promote ways to generate enough revenue to succeed even in the most competitive environment. Franchising business model is one of the most popular methods that have helped many companies conquer the global market. The likes of McDonalds, 7-Eleven, and Starbucks are just some of the planet’s most popular franchises. They have grown so big that became public companies and staples to many offshore investments.

Basically, a franchise is an official agreement between two parties: the franchisor (owner of an established brand with an already proven business format) and the franchisee (pays the rights and license to use the brand and its related operations), where both enjoy the benefit of this proven and tested business model.

There are several reasons why entrepreneurs and business owners prefer this particular business model. Here are some of them:

  1. Business growth and brand expansion

Entrepreneurs who have already succeeded in establishing a brand and an effective business format can further grow their ventures through franchising—and the good thing about this option is they don’t have to spend their own money in order to do so. This is probably the most cost-effective way to build “branches.”

  1. Reduce risks and possible failure

Since the franchisee is the one who provides the initial capital, franchisors don’t have to be afraid of possible failures in the first stages of the business since it’s now the former’s job to make sure that they generate reasonable revenue? The franchisee’s success is also the franchisor’s, and the other way around.

  1. Offers beginner-friendly business ventures

Franchisees don’t have to obtain a business degree nor an extensive business experience to run a franchise. All they have to do is to consult the franchisor’s fail-proof and already-tested business model as their guide. Depending on the type of business, trainings can last from a few weeks to a few months.

  1. Provides several business options for franchisees

The franchising business model is applicable to almost every type of business venture. With this, you can choose from a variety of options of products and services depending on preferred business interest. Brands can range from small booth-type food stalls to internationally known hotel chains.


REPOST: Architecture in 2018: Look to the streets, not the sky

This year, how will contemporary living influence architectural styles? Will the importance of public spaces be more emphasized? Here’s an interesting read from The Conversation:

In Los Angeles, the architecture firm KTGY is repurposing shipping containers to build a transitional apartment complex for the homeless. KTGY

A decade after the global economic collapse, urban development is booming.

This is good news for architects. Indeed, 2018 promises to be a favorable year for the profession: A spectacular array of sleek museums, posh hotels and some of the world’s tallest towers are slated for completion.

But income inequality is on the rise in the United States, with many city dwellers reaping few benefits from the current economic upturn.

The same could be said for the colossal scale and visual theatrics of high-profile buildings. Residential towers for the super rich are transforming the skylines of cities and public spaces are increasingly being privatized. As a result, cities are being shaped according to the desires of the elite.

This is particularly troublesome as many cities are also grappling with the ongoing politics of austerity – less and less investment in public services, infrastructure and public housing. Yet some architects have dedicated themselves to addressing these very problems.

The architecture of social engagement – the idea that buildings should address inequality and improve the lives of all dwellers – first started gaining steam during the Great Recession. It’s important to continue moving this work out from under the shadows of the glossier buildings that tend to receive the most media attention.

Three projects to be built in 2018 – a library in Brooklyn, a low-income housing project in Chicago and transitional housing for the homeless in Los Angeles – demonstrate architecture’s unique power to build, sustain and forge communities.

Read more HERE.