What is a Japanese Candlestick?
Although it sounds like an item you would use in the house when the power goes out, a Japanese candlestick is actually a term for a real investment technique. In fact, it’s a chart that displays the highs and lows as well as the opening and closing prices of a particular security for a specific period of time. The wide part of the candle is known as the “real body” and this lets investors know whether the closing price will be higher or lower than the opening price. The colors white or green indicate that the stock closed at a higher price. Red or black on the other hand indicates that the price was lower at closing. When comparing prices from open to close, the candlestick's shadows show the highs and lows of the day. Further, the shape of the candlestick will vary depending on the relationship of the highs and lows and opening and closing prices. It essentially reflects the sentiment of investors and is often used by technical analysts to ascertain when to enter and exit trades. Developed in Japan in the 1700s, the candlestick charts have been used historically to track the price of rice. It’s an ideal technique to trade liquid financial assets like futures, foreign currency, and stocks. White or green candlesticks indicate strong buying pressure and long red or black candlesticks indicate strong selling pressure. Trading Patterns - Two-Day Candlestick There are several short-term trading strategies that are based on the candlestick patterns. The engulfing pattern of the Japanese candlestick suggests that there’s a potential for a trend reversal. In this scenario, the first candlestick with a small body is completely engulfed by the second candlestick. This is often called a bullish engulfing pattern when it shows up at the end of a downward trend. The bearish engulfing pattern, on the other hand, appears at the end of an uptrend. Then there’s the harami which is a reversal of the pattern where the second candlestick is entirely contained within the first candlestick. Trading Patters - Three-Day Candlestick The bearish reversal pattern is known as the evening star. This happens when the first candlestick continues on an uptrend. The second candlestick, in turn, gaps up and ends up with a narrow body. The first is long with a red or black body where the other is gapped lower and is long-bodied in white or green. Although it may sound strange in the digital age, the Japanese candlestick is useful and is still an effective investment technique.
What are Equity Funds in the Stock Market?
Equity funds can be described as mutual funds that principally focus on investing in stocks. These can be both actively managed funds or passively managed (index) funds. Sometimes an equity fund is also referred to as a stock fund. Normally stock mutual funds are set out in categories based on the geography, company size, and the investment style of the holdings in the portfolio. The actual size of the fund is determined by market capitalization. The investment style will be reflected in the fund’s stock holdings and it can also be utilized to categorize equity mutual funds. This type of fund is is also categorized by whether it’s domestic (as in the U.S.) or international. These funds can be regional, single-country funds, or broad market funds. There are also some speciality funds and these are focused on business sectors like real estate, commodities, and healthcare. Why is an Equity Fund Considered to be an Ideal Investment Vehicle? If you’re not a veteran investor who is well-versed in financial trading, equity funds will be an ideal investment channel for you. The same rules apply if you don’t have a large amount of capital to invest. More often than not, it’s perceived as a practical investment option. It’s ideal because of diminished risk for small individual investors. This is because of the fund’s portfolio diversification and only a small amount of capital is required to purchase shares. However, if you’re an individual investor looking to achieve a similar degree of risk, you will need a large capital investment to diversify your portfolio of direct stock holdings. By pooling the capital of several small investors, you can effectively diversify the portfolio without burdening each individual investor with large capital requirements. The price of the fund will be calculated by subtracting liabilities from the fund’s net asset value. Further, the fund will be managed by experienced professionals with their past performance on public record. Most Popular Type of Mutual Funds Equity funds are very popular among investors, it’s so popular that there are an enormous number of options for you to invest in. Last year alone there were more than 4,500 funds available on the market. Further, there are funds that cover every industry (technology, pharmaceutical, agricultural) with every characteristic available to match your investment profile and risk objectives. So if you’re thinking of putting some money away for retirement, an equity fund may be the way forward.
Bull Market 101: Here’s What you Need to Know
A bull market can be described as a financial market where a group of securities in which prices are rising are expected to continue to rise. Although the term is used most often to refer to the stock market, it can also be applied to anything that’s traded like currencies, bonds, and commodities. Unlike the bear market that is clouded in pessimism, the bull market is characterized by optimism. This means that investors are highly confident and expect the market to keep producing strong results. The trend in the market is difficult to predict, although you can make some sound speculations, it’s hard to be consistent. Further, it’s also believed that psychology also has an effect and sometimes speculation can play a significant role in the markets. How Does it Compare to a Bear Market? The bear market is the complete opposite and is characterized by pessimism and falling prices. The main reason why the word “bull” is used in this context is that it describes how animals attack their opponents. The bull will thrust its horn upward while a bear will swipe its paws downward. This is the metaphor that describes the movements within the market and how investors react to it. The economic cycles often coincides with both the bull and bear markets. The cycles consists of four phases: Expansion Peak Contraction Trough Expansion and peak are leading indicators of a bullish economy while contraction and trough exemplify a bearish economy. Advantages and Disadvantages of a Bullish Trading Environment How the public feels about future economic conditions is a key driver of stock prices. Even before broader economic measures like the gross domestic product (GDP) start to indicate an upturn, it can already be seen in the stock market. The advantage to investors in this situation is that the risk is lower and there’s a higher chance of things taking a positive turn. However, like the bear market, you can’t accurately predict how long the bull market will last, so there lies the danger. The most prolific example of this is from 1982 to 2000 when the dotcom bust occurred. That’s a long time spent in a bullish upward trend. This would have been a huge benefit for those interested in investing and for the economy as a whole. With optimism comes high prices, so this isn’t a great time to enter the markets if you’re looking to buy stocks inexpensively.
Bear Market 101: Here’s What you Need to Know
A market condition where securities prices drop and widespread pessimism causes the stock market to go on a downward spiral to remain self-sustaining is known as a bear market. In this type of environment, selling increases as investor anticipate more losses. Often, a downturn of approximately 20% or more from a peak in various broad market indexes like the Standard & Poor's 500 Index (S&P 500) or the Dow Jones Industrial Average (DJIA) over a couple of months is considered to be an entry into a bear market. What’s a Correction Period? However, you should be careful not to confuse it with a correction which is a short-term trend. A correction period lasts less than two months. This a good time for value investors to look for an entry point into the stock market. A bear market on the other hand usually doesn’t provide a suitable opportunity to enter the market. This can attributed to the fact that it’s impossible to predict the bottom of the market. As a result, attempting to recoup losses can be a un uphill battle unless the investor is a short seller or has other strategies to have a positive result. Over the past 115 years, there have been 32 bear markets with one happening approximately every 3.5 years. The last one of course coincided with the great recession and lasted from October 2007 until March 2009. Advantages and Disadvantages for Investors The main advantage of this type of market conditions is that you can gain by short selling. It’s a technique that can be described as selling borrowed shares and buying them back at a lower price. So the short seller has to borrow the shares from a broker before an order is placed for a short sell. The advantage of doing this is that it provides a way to speculate if the value of the market is going to decline. As a result, you will be able to add value to your portfolio even in a bear market. You can also have a put option that will give the owner the right but no obligation to sell the stock on or before a certain date, at a certain price. This method can also be used to speculate on declining stock prices and hedge against it to protect long-only portfolios. The greatest disadvantage is that you don’t know how much the market will drop or for how long. Further, if you don’t engage in short selling, it will be difficult to conduct positive trading in a bearish environment.
All you Need to Know About Index Funds
Index funds are part of the mutual fund family where a portfolio is constructed to track or match components of a market index like the Standard & Poor’s 500 Index (S&P 500). So if you want broad market exposure with low portfolio turnover and low operating expenses, an index mutual fund is a good option. Like most things in investing, these funds are governed by certain standards and rules. These rules are set up to help reduce tracking errors or for efficient tax management. Regardless of whether the market is up or down, the rules always stay in place. When it comes to fund management, “indexing” is a passive process. However, it has been successful in outperforming mutual funds that are actively managed. As stated before, the S&P 500 is the most popular, but it’s only one of several index funds. If you’re interested in investing in small companies, there’s the Russell 2000. For the total stock market, there’s the DJ Wilshire 5000. The MSCI EAFE gets you access to foreign stocks in Australasia, Europe, and the Far East. To access the total bond market, you’ll have to go with the Barclays Capital Aggregate Bond Index. Actively Managed Funds vs. Index Funds Following a passive strategy to investing has the advantage of being cost-effective when it comes to the management expense ratio of the fund. Further, as most mutual funds don’t beat broad indexes, investing in an index fund is considered to be the best option for retirement accounts. These can be anything from individual retirement accounts (IRAs) to 401(k) accounts. Another advantage is that since the fund manager will be just replicating the performance of a benchmark index, they won’t need to hire research analysts and others to help with the selection process. This is the opposite of actively managed funds that require an efficient research team. As a result, actively managed funds will have additional costs associated with the management of the fund and will be reflected in the expense ratio and passed on to shareholders. This makes indexing much more attractive as an investment option. Why do Actively Managed Funds Struggle? As the expense ratio is directly reflected on the performance of the funds, actively managed funds often have higher expense ratios. As a result, many actively managed funds struggle to match their benchmarks. Further, index fund products also have a significant flow of assets and most of the time, the money comes at the expense of actively managed funds.
Singapore Economy – An Example of Free Market Success
The Singapore economy has consistently ranked as being among the freest economies in the world. Coinciding with this ranking as a free market bastion, the tiny island has maintained a positive trade balance for decades. Positive trade balances lead to greater prosperity and stronger currencies. Critics of the tightly held island might suggest that the Singapore economy is a managed one controlled by a few large corporations without freedom for entrepreneurs. Attempting to start a business in the major industries like shipping and banking one would certainly run into the mega companies controlling the sectors. However, more entrepreneurial sectors like biomedical sciences and tourism are wide open for new businesses in Singapore. Playing a Key Role – The Singapore Stock Exchange The Singapore stock exchange is far more than a small island exchange without ties to the outside world. Architects of this relatively new exchange planned early on to make it unusually open and accepting for foreign companies and foreign traders. This prescience set the Singapore Stock Exchange up for international growth of the as a core financial center for companies and fund managers worldwide. Nearly half of the companies trading on the exchange are headquartered outside of Singapore. This kind of diversification has brought huge inflows of foreign capital into the SGX, allowing it to diversify from Asian influence alone. Bank of Singapore – Representing Chinese Financial Interests Though the Bank of Singapore (BOS) sounds like it would be a central bank for Singapore, it is more representative of foreign interests in Singapore than national interests. The overseas Chinese bank now controls the Bank of Singapore. The influence from China does not seem to be overwhelming the main Singapore focus of the bank. Considering the close ties between China and Singapore, their interests are largely aligned. With its focus on high net worth individuals and premier customer service, BOS has established itself as one of the outstanding private banks in the world, but especially for wealthy Asians. The banks within Singapore are partly responsible for the economic miracle and the free market status of Singapore. Without the banks supporting entrepreneurs like Li Kai Shing, and other capital-intensive industrialists, Singapore would not have the robust infrastructure and modern logistics to grow with international commerce.
Important Facts You Should Know about the Pound vs Rupee
The British pound and the Indian rupee have been intimately tied together for several hundred years. As India was a colonial territory of the Great Britain from the 19 th until 1947, much of India’s currency and coinage featured British rulers, like William IV, Queen Victoria and George V. The pound was exchanged on the gold standard and because of the rupee’s association with the pound, it was tied to the gold standard. Though, traditionally, it was a silver coin. The rupee was officially pegged to the pound in 1926, a pairing which lasted four decades. In 1966, the exchange rate was too weak, particularly since the value of the UK’s currency declined dramatically in 1949 due to the financial pressures facing the UK after World War II. Departure from the Pound In 1966, Royal Bank of India devalued the currency and then pegged it to the dollar. The rupee exchange rate at the time of the pegging was 7.5 Indian rupees to one US dollar. Meanwhile the pound vs rupee rate was one rupee to 11.4 pence. The currency remained pegged to the dollar until 1971. Since then, the exchange rate has continued to climb and currently floats between 66 and 68 rupees to the US dollar. Historic Exchange Rates: Pound vs Rupee India’s national currency has grown against the pound since the 1940s. Its pace picked up dramatically around the turn of the century. In 1996, the pound vs rupee rate was 55.389 rupees per pound and by 2000, the rate jumped up to 68.119. The rate reached a peak of 83.064 in 2004 before declining again, reaching 71.3313 in 2008. However, from 2009, the rupee was back on the move and, the 2015 exchange rate was 98.13 for one British pound. Factors Affecting the Exchange Rate Foreign exchange in India is affected by four primary factors. Relative price levels play a distinctive role in the exchange rate, particularly if a lack of trade restrictions between the UK and India allow the two currencies to adjust themselves freely. As a result, inflation can also impact the value of the rupee compared to the pound. Interest rates also play a role because they impact the amount of investment capital flowing into the country.
Everything You Need to Know About the Indian Rupee
The Indian rupee is the official Indian currency; however, it is also officially used in the Kingdom of Bhutan. Its ISO 4217 code is INR and it is pegged by both the Bhutanese ngultrum and by the Nepalese rupee. Other countries that use the Indian rupee, albeit unofficially, include Nepal and Zimbabwe Naming the Indian Rupee The rupee was named after the rupiya, a silver coined issued in the 16 th century by the Sultan Sher Shah Suri. When the Mughals took over India, the empire continued the use of the coin and the name. Indeed, Hindi and English speakers both continue to refer to the currency as the rupee. The name is recognized on the front of bank notes minted by the Government of India. However, the rupee is known by other names in different parts of the country. In regions like Assam, Odisha, Tripura and West Bengal, the rupee is known as the toka, which derives from the Sanskrit word meaning money. However, the toka is not the only other accepted word for the currency. In fact, there are 15 different words for the rupee. These names are all listed on the back of the notes, written in the Latin alphabet and in alphabetical order according to the English language. Legal Tender: Indian Rupee The rupee is printed in both bank notes and coins. The bank notes are printed in 1, 2, 5, 10, 20, 50, 100, 500 and 1000; though, coins are also issued for 1, 2, 5 and 10. The rupee has also been subdivided into paise. There are 100 paise in one rupee; thus, every paisa equals 1/100 of one rupee. Indian Rupee Rate The official rate depends on the Indian economy, customs regulations, and the capital controls exercised by the Reserve Bank of India. The historical rate saw the rupee on par with the US until the beginning of the First World War, when both the rupee and the British pound began to decline against the dollar. In 1966, the Indian government devalued the currency and pegged it to the US dollar.
Singapore Dollar (SGD) Offers a Stable Currency Hedge
The Singapore (SGD) dollar is among the world’s strongest currencies. Backed by the surety of the Singapore economy and a generally well-managed government, the value of the Singapore dollar has steadily increased over the past 20 years relative to the US dollar. This increase is particularly significant because the US dollar has been the world reserve currency. Unfortunately, the Singapore economy has suffered somewhat due to an unnecessarily high debt to GDP ratio along the same lines as the US level at 104%, according to tradingeconomics.com Yet, with an unemployment rate below 2%, the Singapore currency has a far stronger economic back drop supporting it than almost any other economy in the world. Even the most optimistic version of the US government statistics still places unemployment at levels three and four times that of Singapore. Singapore Exchange Rate Shows the Rising Power of Asia With Singapore’s key position as a major financial center for the Asian region, the relative strength of Singapore exchange rate versus the major currencies like the euro, the US dollar, the Swiss franc, and the Chinese Yuan shows how important Singapore is in the region. Singapore currency trading has become one of the central financial instruments throughout Asia. Singapore has overtaken Japan in terms of currency trading and could eventually displace even China because of a more open market structure. Among many reasons for Singapore’s economic strength that backs its currency, is that Singapore maintains large positive balances of trade. Compared to the United States with decades of negative trade balance, devaluing the currency along with producing excessive credit and money creation by the Federal Reserve, Singapore deserves an increasingly valuable currency. Singapore currency trading is one of the rare forms of currency arbitrage where the long-term trend is well-defined. The island city-states currency will continue rising against all competitors as long as it continues sound fiscal policies and maintains a positive trade balance.
The Pound Sterling Purchasing Power
The pound sterling purchasing power is based around the important United Kingdom economic indicators compared with import costs and relative currency valuations. The big picture on any currency’s purchasing power involves the critical factor of the government’s burden on the economy as well as the central banks financial controls. The trend for the pound sterling has been down for decades and is likely to continue moving down. When the British Empire ruled the world, the pound sterling purchasing power reflected the strength of the British economy. Now that those days are long gone and there is nothing within the British economy other than financial engineering, the island’s currency is under constant stress. Pound Exchange Rate Varies with Europe The pound exchange rate is tied intimately to its neighbors in Europe. Even though the countries do not share a common currency and the government runs its own treasury, the behavior of the continent is closely linked through trade and relative values. Where England was once a major industrial exporter and had mines as well as advanced financial markets, the only major financial flow into England is largely based around financial markets. This means that as the financial markets go, so goes the valuation of the British pound. In the past, England’s currency was overvalued to the extent that it attracted contrary currency traders. These traders bet heavily against England’s currency staying at its previously high-value. One famous trader made over $1 billion in one day betting against the UK currency. A Case of False Value: The UK Currency The only major export that was holding up UK currency had been the oil from the North Sea. Without this black gold providing export currency, the value of England’s pound would be compromised. England simply does not have the export base nor the industry to support a strong currency. Among the other factors that contribute to holding up the pound are the interest rates charged by the central bank. As long as England continues maintaining high interest rates with limited currency production, then the comparative value of the pound will remain high against other currencies.