Investors Are Also Taking a Brief Respite Early This Week

The speculative length has been pared back as the robust NFP print caught investors leaning far too dovish. So, the moderate unwind is consistent with US rate cut expectation now intersecting with the economic realities.

But with Chair Powell critical Monetary Policy Report to the Congress slated this week, and after a bullishly breathtaking performance during the past four weeks, Investors are also taking a brief respite early this week. And rightly so as the swift and sudden change in market views, from no hike to 50 bp cut in and now back to 25, is enough to exhaust anyone.

In the meantime, Investors will turn focus to this evening FOMC minutes where they could get a glimpse into the Fed thinking and at a minimum, the report should provide appreciably more insight on exactly what risks the FOMC sees and the amplitude of policy needed to neutralise those risks.

Oil prices

Oil markets had remained supported overnight on heightened Geopolitical risk, but prices erased earlier gains during the NY session.

The weaker global economic outlook is keeping oil prices under downward pressure, but tensions in the Middle East are enhancing awareness to possible supply risk and should keep a floor under oil in the medium term. But the fact that Iran tension is not boosting prices more considerably continues to emphasise the markets singularly focused nature on the demand side of the equation.

It is challenging to hold a strong bullish conviction when the markets continue to overplay lousy economic news into the demand side of the equation.

Gold Markets

Demand from the official sector continues to underpin gold prices. The PBoC reported earlier on Monday that their gold reserves rose by 10.3 tons in June, making it the seventh consecutive month of inflows. This news follows on from Poland’s announcement on Friday that it had bought a chunky 100 tons YTD

But the robust US payrolls data suggests there is more than enough gas in the tank to keep the US economic firing through 2019 which has investors paring back dovish rate cut bets, strengthening the USD which are both weighing on gold sentiment.

However, with global economic risk skewed downward and should keep central banks in a dovish mode so Gold markets should continue to benefit from a shift in policy from the Fed and other central banks.

But eventually the money drip runs dry, and the central bank “PUT only gets the economy so far before we will need to consider longer-term trends such as recession, so look for strategic buying to remain dependable on any extended dips.

Currency markets

Funding pressures remain at the start of the week, which continues to work in the USD favour.

G-10 traders had shifted into USD buy on dip mode in the wake US employment data on Friday. Given the recent ECB developments and the convincing break below 1.1250 last Friday, the EURUSD sees the lion’s share of the flow so far. But with no joy below 1.1200 traders have turned to wait and see mode ahead of the FOMC minutes as EURUSD options have a deadly quiet start to the week.

This article was written by Stephen Innes, Managing Partner at Vanguard Markets LLC

Part II – Are Real Estate Etf’s The Next Big Trade?

In part I of this research post, we highlighted how the shifting landscape of the US real estate market may be setting up an incredible trading opportunity for technical traders.  It is our belief that the continued capital shift which has been driving foreign investment into US assets, real estate, and other investments may be shifting away from US real estate as tell-tale signs of stress are starting to show.  Foreclosures and price drops are one of the first signs that stress exists in the markets and we believe the real estate segment could be setting up for an incredible trade opportunity.

SRS, the Proshares Ultrashort Real Estate EFT has recently completed a unique “washout low” price bottom that we believe may become an incredible trading opportunity for technical traders.  If the US Fed pushes the market into a panic mode, sellers will become even more desperate to offload their homes and buyers will become even more discerning in terms of selecting what and when to buy.

If SRS moves above the $25.50 level, our first upside Fibonacci price target and clears the $24.25 previous peak set in April 2019, it would be a very clear indication that a risk trade in Real Estate is back in play.  Ideally, price holding above the $21.65 level would provide a very clear level of support negating any future price weakness below $21.50.

This weekly SRS chart highlights what we believe to be the optimal BUY ZONE and the upside price targets near $28 to $29.  Since the bottom in 2009-10, after the credit market crisis, we have not seen any substantial risk in the Real Estate market for over 8+ years.  Now, though, it is our opinion that this risk trade is very real and that technical trader should be aware of this potential move and what it means to protect assets and wealth.

If our research proves to be accurate and any future move by the US Fed will prompt a “rush to the exits” by home sellers, then there is really only one course of action left for us to consider.  Either the Fed will reduce rates, buying some at-risk sellers a bit of time before a rush to sell overwhelms the markets and prices begin a fast decline in an attempt to secure quick buyers; or the Fed will leave rates at current levels where at-risk sellers will continue to attempt to offload their homes to any willing buyers before declining prices and panicked sellers start the “race to the bottom” in terms of pricing.

CONCLUDING THOUGHTS:

Real Estate has already run through the price advance cycle and the price maturity cycle.  There is really only one cycle left to unfold at this point – the “price revaluation cycle”.  This is where the opportunity lies with our suggested SRS trade setup.

We believe this bottom in SRS will result in a few more weeks of trading near price support (above $20 and below $22.50) where traders will be able to acquire their positions.  The bigger move will happen as risk becomes more evident – very similar to what has recently happened in Gold. Once that risk is visible to traders/investors, the upside potentials ($28+ to $42+) won’t seem so illogical any longer.

I can tell you that huge moves are about to start unfolding not only in real estate, but metals, stocks, and currencies. Some of these super cycles are going to last years. Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye-opener. PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime

Chris Vermeulen
www.TheTechnicalTraders.com

 

Investing in Champions as Quarter Finals Start

Several famous football clubs are publicly traded on the stock market

Of those teams who made it to the Top 8 in Europe, you can become a shareholder of Amsterdam’s Ajax (AJAX NA), Juventus (JUVE IM) and Manchester United (MANU US).

The most important question is whose shares are more attractive. After all, you will have to choose between personal preferences and the opportunity to earn money. Anyway, I know people who make bets at bookmakers on the opponents of their favorite teams so as not to be very upset because of head-to-head games.

I would not call AJAX NA a dark horse, though, at the previous stage, they drove out of the tournament none other than Real Madrid, after which the club’s asset prices jumped by 8%. Besides, AJAX NA looks quite convincing from the financial point of view. It is the only profitable one among the three clubs (see the table).

The asset prices of teams are primarily influenced by specific results rather than financial statements. The first quarter-finals with Juventus started on April 10. I believe that Turin’s team led by the great Christiano Ronaldo has more chances to reach the semi-finals. In response to Juventus’ previous success in the match against Atletico Madrid, the asset prices rose by 18% in the market.

In terms of market capitalization, Manchester United is the most outstanding among our “triplet”. In the quarterfinal, Manchester United stands against Barcelona led by the genius of world football Leo Messi. I still believe that the Spanish club has chances to victory in the two-legged tie.

You can probably guess that football’s representation in the stock market is not limited to these three clubs. There are not many of them but they do exist. The table below presents the largest European teams in terms of capitalization. There is a European stock index, STOXX Europe Football Index that includes all football clubs (except for Manchester United). This is not an ETF, but a simple index that tracks stock performance.

Ajax Juventus Manchester Borussia AS Roma

How should an investment banker assess the attractiveness of such an asset?

A creative question, indeed. Very often, people who own or buy a club do not view this component of their activity as a business, but rather an expensive trendy toy that may not even bring any profit. On the other hand, the owner of a large football team is always in the spotlight, receives the constant attention of the media and has access to “the high and mighties” who are interested in football… If we apply the traditional approach, I would look at the profitability (EBITDA margin) and leverage (Net debt/EBITDA). From this point of view, Manchester United, AJAX:NA, and Borussia Dortmund (which only falls behind the leading United by revenue) are the most attractive ones.

Any club has its own accounting. How do teams make money? They basically make money through the sale of broadcast rights and sponsorship income. I chose Manchester United, the largest and most famous club, and examined the structure of its revenues (see the diagram) and operating expenses, including salaries and other payments to the staff (more than 50%):

Revenue of Manchester United for 2018
Revenue of Manchester United for 2018

Interestingly, the players of the club are recorded as intangible assets on the balance sheet. As of the end of 2018, the cost of players was estimated at about 800 million pounds ($ 1,125 million) on the balance sheet for Manchester United. This means that the purchase/sale of players is taken into account when changing intangible assets and is not reflected in the P/L.

If you want to have a little fun and “play” with the assets of football teams instead of a sweepstake, I believe Juventus will be the most logical choice for you. Juventus steadily walking towards the first place in the championship of Italy and has good chances in.

The unpredictability of football is one of the reasons we love it. The possible victory of a dark horse can be more profitable than the desired win of the favorite.

The article was written by Evgeny Kogan, Ph.D., investment banker, the author of the telegram-channel Bitkogan.

Words Every Trader Should Know

Bear or bearish

A “bear” is a trader who believes that a price of a currency pair will move downwards. The strategy of such trader is to sell this pair or any other instrument. Why bear? Imagine an angry bear that leans on the price chart with its paws and pulls it down. The adjective “bearish” can refer to a declining trend.

Bull or bullish

A “bull” is an opposite of a bear. It’s a nickname of traders who believe that a price of an asset will rise. The term is based on the idea of a bull that raises an asset with its horns. There’s also a word “bullish”: an uptrend is called a bullish trend.

Bretton Woods system

This is an international monetary system started in 1944 in a place called Bretton Woods. It replaced the previous financial system based on the gold standard. The main idea of the Bretton Woods system is that the US dollar played the main role in the world finance. It was converted to gold at a fixed rate of $35 per ounce. Other national currencies were fixed to the USD. The International Monetary Fund was launched to control this system. You can still come across the name “Bretton Woods” when you read articles about currencies. Simply remember that it is the synonym of the US dollar’s hegemony.

Central bank

A central bank is an independent national authority that is in charge of a country’s currency, money supply, and interest rates. This institution conducts monetary policy, regulates commercial banks and provides financial services. The main goals of a central bank are to stabilize the domestic currency and support economic growth.

Central bank intervention

Sometimes a central bank needs to influence exchange rates by buying or selling currency in the Forex market. Usually, that happens when its national currency either rises too high and too fast or, on the contrary, when it collapses.

There are two kinds of interventions:

A central bank tries to weaken a domestic currency by purchasing a foreign currency. This way is used if the central bank wants to support exports.

A central bank wants to strengthen a domestic currency by selling a foreign currency in the market. As a result, domestic customers will pay less for imported good.

When a central bank intervenes, the Forex market usually reacts with big swings. That’s why traders have to be aware of risks related to central banks’ currency interventions.

Cheap money

This is the name of a monetary policy when a central bank sets low-interest rates. As a result, credits become cheaper and borrowing becomes easy for business. It stimulates investment and expansion of operations. In the medium term, cheap money can encourage economic growth. At the same time, if the central bank maintains such monetary policy for long, there is a risk of a spike in inflation.

Cross rate

An exchange rate that doesn’t include the US dollar. The calculation of cross rates is carried out via the ratio of each of the two currencies against a third currency – as a rule, the USD. For example, pairs EUR/USD and USD/JPY are used to calculate a cross rate of EUR/JPY. So, while the US dollar is not involved in a cross-currency pair, it has some indirect impact on it. Examples: EUR/JPY, EUR/GBP, EUR/CHF, GBP/JPY, GBP/CHF, and AUD/NZD.

Currency basket

A set of currencies used to establish a value of a national currency in relation to other currencies included in the basket. For example, the US dollar index is a currency basket that tracks the dynamics of the US dollar versus the currencies of America’s 6 trading partners.

Dovish

This word comes from a bird “dove”. “Dovish” refers to an attitude of a central bank towards interest rates. When you hear the word “dovish”, it means that a central bank aims at a low-interest rate to encourage economic growth. When you hear that a central bank was dovish in its report, it means that it won’t increase the interest rate in the near future. As a result, a domestic currency will decline.

Hawkish

The word “hawkish” comes from the bird “hawk”. It’s an opposite of “dovish”. When a central bank sounds hawkish, it means that it has an anti-inflation stance and aims at a high-interest rate. When you hear that a central bank was hawkish in its report, it means that it plans to increase the interest rate soon. As a result, a domestic currency will rise.

Gold standard

The gold standard is a monetary system, in which the value of banknotes and coins is linked to a certain guaranteed amount of gold. Nowadays, the gold standard is not used. It was replaced by the so-called fiat money that is used and accepted as means of payment only because a government ordered to do so. For example, lira is fiat money in Turkey.

Pump and Dump

It’s a fraud when a price of an asset rises because of false, misleading or greatly exaggerated statements. The aim of those who make such statements is to heat up the market so that they could sell the asset at a higher price. This practice is illegal.

Quantitative easing

Quantitative easing (QE) is an extraordinary type of monetary policy when a central bank aims to lower the interest rate and increase the money supply. To do that, it buys assets from the market. By doing so, it creates additional money. Increased money supply makes the national currency lose its value.

Tight monetary policy

It’s a type of monetary policy. Its main feature is that a central bank plans to reduce the demand for money and limit the pace of economic expansion. For this aim, it increases the interest rate. The national currency appreciates.

Key Factors for Trading EUR/USD

To understand what factors affect the EUR/USD, let’s start with a description of the currency pair.

EUR/USD also has two other nicknames such as the Euro and Fiber. The name Euro is quite simple when there are two opinions why the name Fiber appeared. Some claim the currency got the name Fiber because of the GBP/USD pair that is called Cable. It is like traders made an upgrade of the old telecommunications cable that was used to connect the UK and the US to a newer fiber cable. Others decided that the Fiber name appeared because the Eurozone has the best optical fiber network in the world.

The Fiber belongs to the group of “Majors”, that also includes another six pairs such as GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD.

The power of the pair is incredible. The US dollar is the most traded and widely held currency and the euro is the second most popular currency in the world. The EUR/USD covers two main economies: European and American, so it has more than half of the total trading volume in the world on the Forex market.

So let’s move to the key factors.

Sessions

The first factor is sessions. Traders should know when the pair can have the highest volatility and when it is nearly not traded. Usually, the pair is slightly traded during an Asian session because the most important economic data and events for EUR/USD are released in European or US sessions. The activity slows down at noon when traders have lunch and rise again later when the US session starts. Liquidity leaves the market again at 5:00 GMT when traders in Europe close out their positions.

Institutions and personalities

The most important institutions that affect the pair are the central banks of Europe and the US. The European Central Bank (ECB) under the guidance of Mario Draghi and the Federal Reserve Bank with Jerome Powell as its chair regulate the monetary policy, money supply, interest rates, and the strength or weakness of the currency as a result.

The market follows every meeting of central banks and speeches that the president and the chairman give. It creates volatility in the Forex market.

Political instability

Any political issue can affect the EUR/USD pair. For example, Brexit, crises in European countries, elections in countries with the biggest economies in the European Union.

We can mention the claims of politicians as well. For example, the US Treasury Secretary Steven Mnuchin said that “a weaker dollar is good for the US”. This statement caused the immediate fall of the USD.

Economic Reports

Every week the economic calendar offers a huge amount of data. We will mention the most important, that every trader should take into account.

We have already mentioned central banks of the EU and the US and their monetary policy.

The next significant factor is CPI – Consumer Price Index – that measures inflation, the most important indicator of the economic health.

Another crucial data is GDP. It shows how much the economy is strong and healthy.

PMI is another way to estimate the economic health that affects the strength of a currency. The survey shows whether purchasing managers are optimistic or pessimistic about the economy in the medium-term. This survey is highly important because central banks use data when formulating monetary policy.

The balance of payment is not the last in the list of important economic reports. It shows how much money a country receives from abroad and how much it pays to other economies.

There are a lot of other economic reports, however, these ones are the most important and should be taken into the consideration firstly.

Interest rates

According to economic theories, there is a correlation between interest rates and exchange rates. It is called the International Fisher effect. And indeed, in most cases, it is so. Usually, currencies rise and fall according to interest rates of economies. For example, when US interest rates are higher than the European Union ones, the US dollar strengthens versus the euro. Conversely, the higher Eurozone interest rates, make the dollar weaken.

To sum up, it is important to say that the EUR/USD pair is the main pair at the currency market because it gathers two major economies. If traders want to trade it successfully, they should take into account a lot of factors such as sessions during that the pair is traded more, institutions and personalities whose comments and decisions create volatility, political instability, and of course, economic reports that display growth and health of the economy.

This article was written by Daria Bobrova, a senior analyst at FBS

How to Trade with Trailing Stop Orders

Prudent risk management is the hallmark of every robust trading strategy. Developing a trading strategy that includes dynamic stop loss levels, allows you to generate strong returns without experiencing undue risks. By incorporating a trailing stop into your trading strategy, you can capture gains that develop with a trend, without giving back what you have already earned.

What is a Trailing Stop Order?

A trailing stop order is a risk management technique where your stop loss level trails the current market level by a specific percent or value. Instead of using a fixed stop price, a trailing stop is a conditional order, that trails an assets price. You can incorporate a sell trailing stop order or a buy trailing stop order which is determined by whether you are long or short a position.

Your broker might allow you to place a trailing stop order that is based on a percent decline in the price from the current price. For example, you can place a sell trailing stop on XYZ stock if the price falls 3% from current levels. Once your trailing stop is triggered it will become a market order that is executed immediately. Since your trailing stop is likely to be a market order, there is no guarantee that you will receive a specific price or price range.

How to Trade with a Trailing Stop Order?

There are several ways to trade a trailing stop order. These types of orders are most effective when you are using a trend following system. Your goal in a trend following system is to capture as much of a trend as possible, without giving back gains when the trend turns.

There are several steps that you should take prior to entering your trade. Prior to initiating a trade with a trailing stop, you should determine your stop loss level. Your stop loss and your trailing stop loss can be at the same level. For example, if you are attempting to generate 6% in returns on a trade, you might initially have a stop loss that is 3% lower than where you purchase your asset.

A trailing stop-loss order works in the following way. If the price of the asset you are trading moves in your favor, you should increase your trailing stop to be 3% lower than the price or exchange rate. For example, if you purchase the USD/JPY at 110, your initial stop loss level could be at 106.7 which is 3% below the entry price. If the price increases to 111, your trailing stop loss would increase to 107.7.

It is important to make sure that your broker not only activates your trailing stop-loss order during liquid trading hours.

There are issues that could occur if you trade when the markets are illiquid. For example, if you have a trailing stop loss in equities during premarket hours, other traders might try to take advantage of the illiquidity and run your stop loss. This would mean your security would trade lower, triggering the loss and then run it the security up again. You can avoid this by only activating your trailing stop during certain trading hours.

In addition to using a percent level to determine your trailing stop loss level, you can also use a currency value or price. A currency value could be the number of dollars or euros you are willing to lose on a trade initially. In the example above, you might be willing to risk $200 to make $600. If this is the case, you would need to back out the price that would act as your initial stop loss and then increase or decrease the price level to generate a trailing stop. You can also use an automatic trailing stop that follows every price level or only use a closing price to calculate the trailing stop trigger.

How do You Calculate the Trailing Stop?

The goal of the trailing stop is to make sure that you catch a trend but do not give back gains that you have already accumulated. The stop can be calculated off the high of a session (if you are long) or the low of the session (if you are short) or the close of the prior session. For example, if the price of USD/JPY increased to a high of a trading session to 115, then your trailing stop should increase to 111.55 (115 * 0.97). If the price on the next day moves down to 114, you would not lower your trailing stop, if you are long USD/JPY. A trailing stop should only move in one direction.

trailing stop loss

A chart of the USD/JPY shows an example of how to use a trailing stop with a trend following strategy. The strategy generates a sell signal when the 20-day moving average crosses below the 50-day moving average. The entry price is 112.50, and the initial stop loss level is 3% higher than the entry exchange rate which is 115.87. As the price of the USD/JPY declines, the trailing stop loss of 3% is moved lower. There are times such as in early February when the exchange rate of the USD/JPY rebounded, pushing the trailing stop price up. The low price in March was at 104.62, and the trailing stop is triggered at 107.76.

Summary

A trailing stop order is a risk management tool that you can use to follow the trend of an asset. By using a trailing stop instead of a targeted take profit level, you can stay with a trend until it begins to reverse. A trailing stop loss replaces a fixed stop price. You can incorporate a sell trailing stop order or a buy trailing stop order which is determined by whether you are long or short a position. You can calculate your trailing stop order using either a percent pullback in prices or a value pullback in prices. You have to find a broker such as FSMSmart that provides to trade with trailing stop-loss orders and instruct your broker as to when your trailing stop is active. Having a trailing stop during illiquid trading hours is not recommended.

Speculative vs. Regular Cryptocurrency Trading

The cryptocurrency market might be stuck in a seemingly endless bear market, but that doesn’t mean that the interest in trading cryptocurrencies has disappeared. In fact, there are still thousands of traders trying to make the best of the current market conditions.

What many of these investors have realized is that regular investments might not be the best option in a market that seems unable to find support. So let us take a look at some of your options.

Regular Cryptocurrency Trading

When we talk about regular cryptocurrency trading, we are referring to the buying and selling of digital currencies from an exchange or a wallet. This is the “traditional” way of trading cryptocurrencies, and it’s a great way to benefit from a rallying market or a falling one. It’s also the best method for long-term investments.

When you buy a cryptocurrency from an exchange such as Binance, those assets belong to you. That means you can spend them as actual currencies or hold on to them until you feel like selling them for a profit. The same goes for cryptocurrency wallets and other services that sell cryptocurrencies in their actual form.

The only downside to this type of trading is that it requires the assets to increase in price for you to make a profit and for the past few months that hasn’t been the case.

There are a few exchanges that allow you to short trade assets and even use margins, but generally speaking, you won’t make a profit unless the asset you bought increases in value.

Speculative Cryptocurrency Trading

Speculative cryptocurrency trading is trading with derivatives based on underlying assets. That means you don’t buy the actual token or coin but instead you speculate on its price.

There are several ways one can buy cryptocurrency derivatives. For example, in 2017, the first ever Bitcoin futures was launched, and now you can buy similar products on a handful of cryptocurrencies including Ethereum, XRP, and Litecoin.

Another popular derivative is ETFs which aren’t available for cryptocurrencies yet – the SEC is currently evaluating several ETF applications, and they might become a reality soon.

With that being said, both futures and ETFs are designed mostly in the same way as regular trading and investors expect to make money from increasing prices.

Enter CFD trading, a speculative investment opportunity that can easily be used for increasing as well as decreasing prices. A CFD is a derivative that mirrors the price of an underlying cryptocurrency. They are usually only open for a few minutes to hours and are always traded with leverage which increases your potential profits.

The best part about CFDs is that you can make a lot of profit from falling prices very easily.

If you want to start trading CFDs, you need to first find a regulated and safe broker to use. When it comes to cryptocurrencies, their fluctuating nature creates perfect conditions for day trading, especially for CFDs. In 2017, eToro launched cryptocurrencies as CFDs which then led to them launching an exchange function a few months later according to review of eToro. In the same year IQ Option and few currently major players on the market decided to join in on the hype as well. Regarding IQ Option, it offers cryptocurrency CFDs as well as actual assets, meaning you can invest in two different ways with the broker.

What Type of Cryptocurrency Trading is the Best?

That’s a very good question, and ultimately the decision is up to you. However, in order to benefit from as many opportunities as possible, you should combine different types of trading.

For example, when the market turns bullish again, you can buy a set of assets from an exchange and maybe even invest in some futures. Then you’ll hold on to these investments until you think it’s time to sell and pocket your profits.

At the same time, you can use CFDs to day trade on price swings and make regular profits on a daily or weekly basis. And when the market turns, you can short the prices and keep making a profit.

It’s a win-win situation when combining different trading styles and instruments.

Final Words

Most professionals would agree that cryptocurrency investments on exchanges and with wallets are the safest option, although not necessarily the most lucrative. And let’s not forget that cryptocurrency exchanges aren’t regulated meaning your funds might be lost and the exchange can turn against you since you have no support.

Derivatives trading, on the other hand, is a little more risky in terms of potential losses. However, that risk is compensated for by the potential profits as well as the fact that the services offering futures and CFDs are all regulated and operated under strict requirements.

As mentioned, it’s up to you to decide how you prefer to trade your cryptocurrencies, but it’s advisable to look into all of your options before you get started.

Vintage Investing, Vintage Profits?

Anything vintage is widely regarded to be the best in its class. For instance, when talking about vintage stocks, the first thing that comes to mind is blue-chip companies that appreciated in value. The likes of Apple Inc. (NASDAQ: AAPL), Alphabet Inc. (NASDAQ: GOOG), Amazon.com Inc. (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT) and the list is long, and a lot varied than the few names mentioned above.

These stocks, among several others quality companies, also make up the list of CFD-tradable stocks on many brokerage platforms. Brokers are traditionally stricter on smaller companies being part of their list of available CFDs. Quality attracts more investors meaning that blue-chip stocks are highly liquid, which makes them ideal for CFDs.

But what really is vintage investing?

Vintage investing does not stop with buying blue-chip stocks. It encompasses a far wider market than just stocks. For instance, Etsy Inc. (NASDAQ: ETSY) describes itself as an e-commerce marketplace for vintage goods. Such include archaic artworks, handmade goods and many more.

However, over the years, vintage investing has been more about buying things that stand out from the rest rather than investing in quality stocks. Supercars, for instance, have historically been among the best vintage items to invest in while others prefer wearable items like jewelry and watches.

So, supercars

This may not sound like something that you would associate with investments because the general view out in the world is that people who buy these expensive products, sometimes popularly referred to as ‘collectors’, buy them for luxury. However, some of these items as mentioned in the previous paragraph, supercars, tend to appreciate in price with age. So, the older they become, the more expensive they get.

And just to illustrate how profitable investing in supercars can be, this article published by The Telegraph a few years ago puts things into perspective. Investing in rare cars, in this case, supercars can result in huge profits. For instance, the article notes that the price of a Ferrari LaFerrari more than doubled between the years 2014 and 2015. This clearly shows why investing in collectors’ items could be one of the best forms of investing.

Luxury watches?

The same thing applies to luxury watches. In this case, one type that stands out from the rest is the Rolex watch. Some people believe that if a person reaches the age of 50 years without ever owning a Rolex watch, then it is probably a sign of failure in their life. However, many vintage watches have emerged over the years, some even more expensive than the traditional Rolex watch. Brands like Hublot, Michael Kors, and Patek Philippe have launched their own vintage watches that cost a lot more than their Rolex counterparts.

Some watches cost millions, but that is mostly down to the number of diamonds and gold used in them. This does not necessarily lock out those who are not wealthy enough to spend millions on a watch. Top brands like Seiko, Armani, Diesel, and Rotary, among others, provide interested investors with varied options that fit their budget. For instance, a quick search for these brands at Tic Watches shows that investors can buy their preferred brand from as low as a few hundred US dollars while those looking for a little bit of class there are some that cost a few thousand.

One interesting fact about luxury watches is that most of them never depreciate in price. The price always goes up even when the global market is experiencing a recession. For instance, this article published on Business Insider, shows the price appreciation of the Rolex watch over a 60-year period, dating back to the 1950s. During this period, global markets experienced recessions causing major crashes in the stock markets. However, the price of the Rolex watch and many others continued to climb, rising from $150 or ($1,265-inflation adjusted) in 1957 to $7,500 in 2014.

And just for comparison, the S&P 500 gained about 177% between 1996 and 2014. In 1996, one Submariner (No-Date) Rolex watch model 5513/14060/14060(M) cost $2800 according to the Business Insider article, which implies a gain of about 168% during the same period.

Conclusion

It is correct to say the difference isn’t that much. However, when you factor in the stock market crashes and the fear, stress, and anxiety that comes with it, it could have been better for some investors to opt for the steady returns presented by investing in vintage products. After all, how many investors get it right in the stock market? It could be a good time to consider putting some money in vintage products. It is hard to predict when the next recession will hit the market.

The Relevance of Cloud Mining Investment

Cloud mining permits users to purchase mining power of the equipment set in remote data centers, rather than utilize their own machines. All the mining is carried out in the cloud, with no offline issues like electricity, hosting problems, or installation and upkeep inconvenience.

It can be defined as streamlined mining of cryptocurrencies which assuages you of power costs, 24-hour observing, programming design and the various complexities related with the exemplary production alternative on your hardware.

Cloud mining encompasses various kinds of cryptocurrencies including the likes of cloud Bitcoin mining, cloud Ethereum mining, cloud Litecoin mining and a host of others. There have been countless opinions about the relevance of cloud mining – with some parties being unsupportive of it for one reason or the other.

Well, I want to reassure you that cloud mining is here to stay and it promises enormous benefits for those who are ready and willing to roll with it. Most importantly, it takes most of the work away from mining and delivers the same if not more output as the conventional form of mining.

Why Is Cloud Mining Relevant?

Some of the core reasons why cloud mining has always been relevant and will continue to remain so are addressed in the bullet points below:

  • Low Cost of Entry and Minimal Risks

Cloud mining offers a mining framework which allows easy entry, negligible dangers, and costs. It is distinct from customary models of mining that require procurement, constant upkeep, and configuration of exceedingly specialized equipment.

  • Quick Return on Investment

Given the present system complexity, you can earn a return on your investment within a period of one year. You will have mined 1.71 Bitcoin. Besides that, if its value rises, the client will get extra income from that development, as occurred in 2017. For miners who would prefer not to manage or to purchase and set up equipment or having to deal with waste heat, cloud mining is an excellent solution.

  • High Profitability

Most individuals who have entered into a cloud mining contract have enjoyed services that allow them to receive as much as 60% of revenue for the year on their investment. Not only that, they also get a consistent increase in the rate of the cryptocurrency.

  • General Convenience

It’s very hard to set up a miner in your own flat. Indeed, even a solitary S9 ASIC miner would heat up your apartment so much that you would need to kill the warmth in the winter. Attaching, say, 3-5 to miners would require more than 5kW limit. However, an average two-room loft doesn’t get that much at the outlet. Also, the noise level would be high to the point that remaining in the flat would be insufferable.

  • Easy to Set Up and Maintain

To set up a card-based mining farm, you will need to possess certain aptitudes in gathering and setting up equipment. The most widely recognized choice is a mining farm made of six GTX1080 graphics cards. What’s more, the costs for those graphics cards can fluctuate substantially, from 550 to 1100 Euros. You would likewise need to always screen that sort of mining farm, agonizing over keeping it cool and free of residue.

  • Legally Reliable

The companies who deal in cloud Bitcoin mining, cloud Ethereum mining, cloud Litecoin mining, and any of the other respective altcoins all have a legally registered status. They are in geolocations with transparent legal norms (predominantly in Europe) and are very much reliable. For instance, Hashtoro has its data center in Norway and Finland.

  • Predictable Profit

Unlike trading stocks and shares, where there can be a decline in prices as a result of reduced demand, cloud mining contracts are protected from such market forces. It owes its immunity to the average complexity of the network and the exchange rate. Utilizing this service enables you to earn money, and a fixed amount of remuneration and recognizable pointers of the multifaceted nature of computations allows you to effortlessly predict the profitability and use the BTC cloud mining (SHA-256).

Are You Ready to Invest In Cloud Mining?

From the points outlined above, you will no doubt agree with me that cloud mining is still very much relevant today. It has also maintained its position as a great alternative to the conventional form of Bitcoin mining and other cryptocurrencies.  

Cloud mining basically follows the same process of earning digital currencies but without the investment in computing power, constant monitoring of the mining process and paying electricity bills. With cloud mining, Bitcoin miners, Ethereum miners, and Litecoin miners all have their equipment leased from service companies that have powerful data centers with farms for mining cryptocurrency.

ABOUT THE AUTHOR

Alexander Petersons, product director of cloud mining service Hashtoro.com. IT specialist, serial entrepreneur.  Started his professional career in small IT companies in Europe, then moved to America for several years. Worked on the development of mobile processors in Telecommunications equipment company Qualcomm (USA).

Since 2012, with a team of like-minded people been working towards creating their own cryptocurrency. Crypto-enthusiast, author of articles on IT and blockchain. Education:

Riga Technical University and  Cass business school (The UK), MSc in Corporate Finance.

Investing in Smart Cloud Mining: Benefits to Society and Private Capital Growth

Crypto-gold rush

After Bitcoin’s explosive growth in 2017, a fever similar to XIX century’s gold rushes embraced the world. Thousands of crypto enthusiasts turned to mine in pursuit of huge profits it promised. Many built their own home-based farms, facing and fighting such challenges as:

  • The high price of the equipment,
  • Specific mining software configuration,
  • The danger of wire overload,
  • Huge amounts of heat produced by the farms,
  • High level of noise,
  • A constant need to upgrade equipment and increase power, as the difficulty of hash calculations increases,
  • 24-hour monitoring.

There were some who turned them into advantages – for example, using servers for heating their houses during winter months. Still, building and maintaining a home-based mining farm remained a tricky business. In answer to the community’s demand, cloud mining providers started to appear to help new players try mining at a fraction of cost, time and effort.

Cloud Mining = More Profit?

Cloud mining services lease the equipment to miners according to the contract they buy. As a rule, mining in the cloud offers higher profitability. What are the reasons behind this? The equipment is more reliable, and the provider performs all the maintenance and monitoring, cutting the entry costs for new miners. Additionally, these systems use smart algorithms to choose the best strategy which would yield the highest dividends.

Still, the volume of energy consumption is colossal. This translates into a high cost of mining, up to the prospect of it becoming totally unprofitable in future – and into a serious ecological issue. Economist Alex de Vries estimates that in 2018 Bitcoin network alone will consume about 0,5% of the world’s electricity. It may not seem much at first glance, but according to Bloomberg, it is as much power per day as 30 nuclear power reactors would produce.

Given all the efforts we have put into protecting our environment in the last decades, it’s a huge throwback. The numbers above clearly show that we need to address the negative impact of mining on our ecology. And as the crypto community becomes aware of this, a new trend of smart mining services arises.

The New Age of Smart Mining

What is smart mining? In a few words, it is mining made most effective, with the help of the following strategies:

  • Optimizing the mining equipment;
  • Taking advantage of the local climate to reduce energy consumption;
  • Using sources of renewable energy instead of fossil fuels.

Many developed countries are currently in the process of switching to ‘clean’ energy sources, fully or partially. Such countries as Canada, Iceland, Norway already offer very low prices for electricity from renewable sources. Sometimes even the smart location choice will allow cutting electricity costs at least twice from the world average. So apart from the evident benefits that smart mining brings to the ecology, it also helps personal enrichment, allowing for faster profit.

Our cloud mining service, Hashtoro, is also fully powered by renewable sources of energy. It makes us one of the most eco-friendly mining services of our time, and also gives our clients the benefit of paying the lowest prices for cloud mining contracts without losing the quality of service. Hashtoro’s team believes that while blockchain is the future of many industries, renewables are the future of mining.

In addition to that, we use miners with ASIC chips, which allow us to increase productivity substantially. By the end of this year, we also plan to start creating our own, fully optimized ASIC chips.

With the help of smart mining, we can be long-term efficient and aware at the same time – and nowadays being ecologically aware is a must. It is necessary for our personal wealth, our society and the world we all live in”.

About the Author

Alexander Petersons, product director of cloud mining service Hashtoro.com. IT specialist, serial entrepreneur.  Started his professional career in small IT companies in Europe, then moved to America for several years. Worked on the development of mobile processors in Telecommunications equipment company Qualcomm (USA).

Since 2012, with a team of like-minded people been working towards creating their own cryptocurrency. Crypto-enthusiast, author of articles on IT and blockchain.

Education: Riga Technical University and  Cass business school (The UK), MSc in Corporate Finance.

Three Ways to Build a Winning Portfolio with Alternative Assets

Consider Gold/Digital Gold

Gold, which has been around for hundreds of years, has cultivated a reputation as a reliable alternative asset. A physical commodity in limited supply, gold cannot be printed endlessly like paper, making it a valuable hedge against inflation.

In addition, gold is a decentralized asset that is not tied to any governmental entity, making it a hedge against stock market fluctuations and global turmoil. If you look at the data, you will see that the price of gold has increased in the following many turbulent historical events, including the Brexit vote in 2016 and in the midst of tensions United States and North Korea in 2017.

It perhaps goes without saying that there is a lot of global turmoil happening now in 2018 as well, especially in light of the United States’ active trade war with China. Given all of the volatility in today’s economic and global landscape, adding reliable alternative assets such as gold to your portfolio, in my opinion, is a proactive move.

Furthermore, since gold in its traditional form can be difficult to hold, and the purchasing fees for a retirement account can be very high, Bitcoin IRA has created a solution called Digital Gold, which combines the stability of traditional gold with the speed and security of blockchain technology.

Diversify your portfolio

Everyone has heard the saying “don’t put all your eggs in one basket,” I believe this adage definitely applies to build a winning portfolio as well. Building a diversified portfolio is a noted hedge against risk and boosts the potential for a higher return on investment.

Two crucial components for portfolio diversification include investing in different securities within the same asset type and investing in assets that are not significantly correlated with one another. According to research compiled by ArkInvest and Coinbase, Bitcoin is the only asset class that maintains consistently low correlations with every other asset, which I think makes it a strong candidate for a diversified portfolio.

In his article “How to Avoid a Retirement Disaster,” author Barry Ritholtz suggests many people do not understand the value of having a broadly diversified portfolio because they are concerned it will show a lack of corporate loyalty to their employer. “But every worker who gets company stock also gets a salary from that same employer. That is a very intense concentration of financial risk. For these workers, diversifying their company stock into broad indexes is the prudent approach,” Ritholtz adds, and I am inclined to agree. In my opinion, a balanced, diversified portfolio with a variety of asset types that are not correlated to one another is the smartest long-term strategy for boosting returns and managing risk.


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Don’t put all your savings in crypto 

This may seem intuitive, but it’s worth repeating. I believe Bitcoin and the blockchain technology powering it will continue to revolutionize retirement and the way businesses run today. That said, crypto is still very volatile, and I believe it is prudent to do extensive research beforehand and to never invest more than you could comfortably afford to lose.

2018 has marked a year of amazing regulatory progress and widespread mainstream acceptance of cryptocurrency. For those interested in building a portfolio with digital currencies as well as other alternative assets, I hope that my opinions provide additional clarity as to how to build a successful portfolio that mitigates risk and maximizes the potential for a strong ROI.

This article was written By Chris Kline, Co-founder, and COO at Bitcoin IRA