Business, economic development - the unofficial Chamber of Commerce

Did you know that newborn children get a free £250 voucher from the the State to deposit in a Child Trust Fund. The money can be invested in any one of three sorts of CTF account, Stakeholder - a shares-based account that changes into cash, a savings account or a shares account.

Scottish Friendly is an authorised provider of the Child Trust Fund. The Government is keen for the public to have access to Stakeholder accounts and this is the type of account that we offer. This means that:

• Investments are saved into our Managed Growth Fund, which aims to provide good growth potential.

• It invests in part in shares to take advantage of potentially higher returns over 18 years, compared to a cash deposit account (although the value of shares can fall as well as rise whereas capital would be protected in a deposit account).

• It is available with a low ‘Stakeholder’ funds charge of just 1.5% per year

• When attaining the age of 18 the young person will receive a lump sum, totally free of Capital Gains and Income Tax under present law.

• It’s affordable - additional payments can be placed from as little as £10

Anyone - parents, grandparents, aunts and uncles, friends - can add to the Child Trust Fund to increase it to a maximum of £1,200 per year (once added, that money cannot be withdrawn). All this means that our Stakeholder account provides a good balance between possible high returns and a reduced level of risk. There is also the extra assurance that our account is in accordance with the Government’s stakeholder criteria. Nevertheless this doesn’t mean that returns are guaranteed or that Stakeholder accounts are for everyone. Remember that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is invested) can go up as well as go down and is not guaranteed.

Only children whose birthday is on or after 1st September 2002 are entitled to start up a Child Trust Fund. If you have older kids who are not qualified you could look at investing for them with a Child Bond - it’s a tax-free savings plan for long-term growth.

Have you ever heard the term REO? Or bank owned before? These terms refer to the bank foreclosure list kept by any bank and lists all properties the bank owns due to mortgage note defaults. This list could be a great place to find inexpensive, fixer upper type properties for the budding flipper; but beware, flipping homes is a risky business and if you do not do it properly the bank will just end up owning that house again, and that certainly would not make you any money now would it. All you have to do is a little research on the internet to find these lists.

I recently completed my first house flipping investment and made money! I started by calling area banks and obtaining a copy of their bank foreclosure list. I then viewed prospective properties and bid on one. My bid was accepted by the bank and we were able to close the deal ten days later. I was then able to remodel the house, add an attached garage and landscape the entire property. I spent approximately $35,000 on renovations and sold approximately six weeks later for a profit after fees and mortgage payments of $125,000! Now that is a very nice pay day!

As GuruFocus updates the stock buys and sells of gurus, Wal-Mart (WMT), the discount retail giant, stands out as the stock with a high ValueRank (7 out of 10). Just recently, Clipper Fund’s James Gipson and T. Rowe Price Equity Income Fund’s Brian Rogers bought Wal-Mart.

Oakmark’s legendary fund manager Bill Nygren was the first guru that bought Wal-Mart. He bought at price of $53 a year ago. Bill Ruane, the Graham-and-Doddsville superinvestor recognized by Warren Buffett, bought about 700,000 shares Wal-Mart at similar price in the fourth quarter of 2004. As the stock price drifted down, he added another 380,000 shares, bringing his total holdings to 1.1 million shares. In the last quarter, James Gipson purchased 2.8 million shares of Wal-Mart for his famed Clipper Fund, and Brian Rogers bought 4 million shares of Wal-Mart for his $19 billion T. Rowe Price Equity Income Fund.

The price of Wal-Mart did not go up, not yet. If an investor buys Wal-Mart today, he pays a lower price than what Bill Nygren and Bill Ruane had paid. If he is patient enough and holds the stock until the price appreciates (finally), he will beat these best investors on this investment.

Is Wal-Mart a good buy? It is certainly a much better buy than it was 5 years ago, when the stock was priced at $70 and a price/earnings ratio of 55. During the last 5 years Wal-Mart’s earnings have doubled, but the stock has fallen to $49, giving it a P/E of 18.

This is what Bill Nygren has to say about Wal-Mart’s P/E ratio: “That’s the same earnings multiple as the market average, that only makes sense if you think Wal-Mart is an average company.” And he doesn’t. Wal-Mart is rapidly gaining market share in its grocery business, and profit margins for its Sam’s Club are improving. Bill Nygren also likes Wal-Mart’s share-repurchasing plan: “We expect to see an increase in share price on a decreasing share base,” he says. “And obviously, the company believes that the stock at this price is an attractive investment.”

Going to Wal-Mart for its “Everyday Low Prices”? Check if its stock is also low priced!

Source: http://www.gurufocus.com/

Dr. Charlie Tian, Director of Research of http://gurufocus.com, the website that tracks the stock picks of Warren Buffett, George Soros and other guru investors like Bill Nygren, Mason Hawkins, Ken Fisher, David Dreman, Martin Whitman, James Gipson, Robert Rodriguez, Ronald Muhlenkamp, Wallace Weitz, William, Ruane, Edward Lampert, Edward Owens, Richard Aster, Jr, Robert Olstein, John Keeley, Brian Rogers and Tweedy, Browne.

Uncle Sam and his band of merry-men, better known as Congress, have been pushing snake oil on the unsuspecting public in the form of retirement plans. But wait, isn’t a pension plan one of the perks we look to when shopping for an employer? Well, not all pension planning is created equal and in most cases, quite disastrous.

Distributions from all qualified plans must begin no later than April 1st of the calendar year following the year that the participant attains age 70 1/2, or the calendar year in which the employee retires. Special rules apply if the distribution is made to a 5 percent owner of the business. The purpose of minimum distribution rules for retirement plans is to force the owner or participant of the pension plan to withdraw money from the plans, thus triggering an income tax on these monies. On April 16, 2002, the Internal Revenue Service issued final regulations as to these distributions.

Generally, the idea pursuant to the regulations is to have the owner or participant of the pension plan begin taking the money out of the pension plan beginning at the later of when he finishes working or age 70.5. One purpose of this is to insure that these monies will be subject to income tax prior to the death of the owner.

Based on the current system the government has created with pension plans, the average retired couple will pay eight to twelve times more in taxes on their IRAs and 401(k)s during their retirement years than they saved during their contribution and accumulation years. Generally, it is understood that you put money into your pension plan and tax is deferred and this is a great thing. Unfortunately, you may well be in a higher tax bracket if your pension accumulation is done right.

In addition to a higher tax bracket upon reaching retirement, many people find themselves with a free and clear home; they no longer have mortgage interest deductions to offset income tax. Many Americans find they are now paying back everything they saved in taxes during their accumulation and contributions years within the first two years of distributions. Therefore, there is an insidious income tax awaiting most people and if they didn’t plan their estates, double taxation in the form of both income and estate tax.

Many postpone the transfer of their qualified funds until age 59 in order to avoid the 10% tax penalty. Sometimes by delaying the payment of taxes, retirees will find themselves in a higher tax bracket after age 59 because Congress could raise tax rates because of a political change. Inevitably, one must pay the piper now or later.

What is the answer? Simple, investment grade life insurance. This type of life insurance is not the same as the one you get countless letters about in the mail. This is life insurance that is focused on building up a triple compound because it is tax deferred. The difference between the deferral that life insurance experiences and pension plans is that when it comes time for payout, life insurance is received as a loan. This is a powerful concept because the proceeds will not be taxed; loans are not a form of taxable income. However, as a loan you will have interest on the payments. Most people mistakenly think they are going to pay interest on their own money with life insurance. While in theory that is true, the best insurance carriers provide for zero wash loans where the interest basically is forgiven or taken out of the death benefit when a person passes on. We are talking about real life insurance not the typical death insurance that most people have because you use it while you’re alive.

The best candidates for creating amazing wealth with investment grade life insurance are those in the age rages of thirty to fifty. Once committed and in the proper product it is foreseeable they will retire wealthy and without the annoying taxation that surrounds a pension plan. There are even strategies to start a contribution plan to your investment that only requires repositioning your current finances. To see a presentation on ways to finance your retirement go to www.abundantmoney.com.

If you are over fifty, I’m sorry we missed you. If you have children don’t let another day go by without them starting a plan because 79 million people are heading for the social security hand out in the next few years. Despite Social Security getting a 2.7 percent boost next year (2005), Medicare will eat up much of the increase and when the 79 million qualifying Americans sign-up - look out below.

James Burns, Esq.

Law Office of James Burns

18662 MacArthur Blvd., 2nd Floor

Irvine, CA. 92656

Jambur64@cox.net

(949) 440-3243

James Burns is an attorney with 2 law degrees one in tax and has trademarked financial concepts to assist individuals in creating wealth, protecting it and eventually transferring it to loved ones.

Each and every day “fifty-something’s” throughout our nation come to the cold, hard and often sudden realization that not only is retirement, gulp, merely a decade or less away, but also that they are not as financially prepared for their golden years as they had hoped to be. Far too many middle aged Americans are approaching senior citizenship without any financial nest egg to speak of - an understandable concern for those intending to maintain the same standard of living they had prior to retirement.

If you are retired, or getting close to retirement, your goals are likely shifting away from asset and wealth accumulation. Now your needs are asset and wealth preservation and income generation. To achieve those goals and live the retirement lifestyle you want, you need to evaluate your financial resources in a very different way than you did during your working years.

For those in the worrisome predicament of having relatively little time to get their financial ducks in a row before retirement is upon them, here are five approaches for late retirement planning success and, as importantly, five distinct pitfalls to avoid:

Late Retirement Planning Strategies:

o Take stock. Assess where you are - financially speaking - right now. What is your current income? What are your current expenses? What assets do you currently have and what, if any, debt? This information is imperative for mapping out your financial future, as you won’t know where to go if you don’t know where you are.

o Dig deeper. Next, attempt to identify income-generating opportunities and potential risks you may face. How can you eliminate any debt as quickly as possible? Do you anticipate any major increases or decreases in income or expenses? Are there any specific medical issues to deal with and/or plan for?

o Forecast. Look ahead to where you intend to be based on your current path or plan. What can you count on in ten years? Will you have pension, Social Security and/or other income and, if so, how much? How much income will be needed from investments to cover living expenses and when?

o Develop a financial game plan. Discern what available investment vehicles will improve the likelihood of having the lifestyle you desire with the least amount of risk? What is the minimal amount of return on our investments necessary to attain your goals? If you can attain your goals without, or with very little, risk, why put your retirement funds in jeopardy to chase higher returns? The best plan will account for inflation and taxes while preserving principle.

o Pull the trigger. Once you have developed a solid financial game plan, implement those strategies ASAP and stay the investment course - with just 10 or fewer years until retirement, time “is” of the essence, after all, and looking for greener grass is a sure-fire hazard. Monitor your investments regularly to ensure all stays on track toward your goal.

Late Retirement Planning Pitfalls:

o Failing to make a plan. Any plan is better than no plan at all, even if it’s somewhat minimal and won’t necessarily get you where you had intended to be. In the end, it’s ultimately about survival, and having no retirement financial plan at all put your fate in the hands of others who may or may not share your same views on “quality of senior life”.

o Chasing the “golden carrot”. Chasing high returns at all costs, taking unnecessary risks, and speculating as opposed to investing - all sure-fire ways to watch your retirement dollars dwindle. Far too often we hear of those who lost their retirement nest egg and had to get back into the work force to survive. When done correctly, the high risk, high reward stock market is one good investment resource, but by no means should one put their retirement nest egg in that basket alone.

o Not foreseeing the unforeseen. Plan ahead for potential risks, such as high medical, insurance, prescription medication, and long term care expenses. Know what your options are with respect to Medicare and otherwise, which will be critically important once employer-based benefits are no longer available.

o Thinking a Will will suffice. Beyond the will, it’s also important to have a durable Power of Attorney to protect you from potential financial hardships of living probate. In addition, a Healthcare Power of Attorney and a Living Will can help you avoid heartache such as that publicly witnessed with the Terri Schiavo case.

o Going it alone. Those who have ten or less years before retirement and have not made any notable strides in securing their and their family’s, financial future should seek the advice of a credentialed investment expert who can create a solid and often custom-tailored financial plan. Optimally, choose a financial advisor with multiple designations who specializes in retirement-based investing and is expert at safely preserving, protecting and proliferating retirement assets.

Senior Financial Coach Hank Parrott, ChFC, RFC, CEP, CSA is President of Estate & Financial Strategies, Inc. (EFS) - a financial services firm dedicated to helping seniors safely preserve, protect and proliferate their assets. He can be reached through his Web site at http://www.SeniorFinancialCoach.com or via toll-free telephone at (800) 492-8102.

In my previous message about investing for beginners, I tried to convey some of the realisations that a new investor needs to make to help him or her become successful.

This time, I am going to offer a few thoughts on what I believe helps me to be successful and a few examples of what can and may go wrong. As ever, I hope that this isn’t below your level of either confidence or competence as I don’t wish to insult. However, I have found that there seem to be far more people that want to understand finance ‘a little better’ than there are people who can lecture on the subject.

Firstly to an example. Back in the mid 90’s I joined an Investment club in the UK. I knew a couple of the members from a local health club I was a member at. Knowing that I was (a) keenly interested in investment and (b) more knowledgeable than most of them, I was invited along.

Suffice to say that on the first evening, I realised that I had been invited along to do all the work! I enjoyed the work so that didn’t actually bother me. I also could purchase some additional investment tools ‘for the club’ which I couldn’t justify for myself.

The main work of analysis was carried out by myself and another member who is a long-time friend and no mug in the world of shares and investment himself. We were using as our template a theory offered by Jim Slater which centred around price / earnings growth ratios. In short, it was highly successful.

At the end of the first year, we were ‘up’ by around 80%. Admittedly, this was during the tech-boom bull and any idiot could get 30% pa without trouble or effort, but still we were very impressed. The second year started well too and within 6 months of year two, our small company growth share portfolio (the only portfolio) was up comfortably over 100%. Nice work if you can get it.

For those of you that haven’t been a member of an investment club and don’t know, they are a democracy. Every opinion counts equal in a vote to buy or sell, whether they understand investment - or not. Here was our trouble. If you can believe it, making an enormous profit was ‘boring’ and they needed ‘excitement’. To me, making money as quickly as we did was not merely exciting - it was thrilling!! But, when we wanted to sell they wouldn’t and when we offered rock solid buy predictions they disliked something and again, we wouldn’t.

I think our lowest point was not buying shares in a UK pizza delivery firm (that was growing very quickly and would have turned into a great investment) because (and I kid you not) one of the founding members didn’t like ‘Italian food’. Who cares?

The club ended rather badly with arguments and falling outs. Several years later it still has a couple of holdings in shares that might ‘one day turn around’. Fat chance!!!!

So here is the tip: why do you want to invest? This needs analysis.

My friend and I invested because we were willing to put in the effort, wanted to increase our holdings, make money and frankly, we like winning in a global market against the nation’s smartest minds!!

Our other members however, were there to gamble. It was just fun. Who cares about the result? We all meet in a pub, have a meal, chat about shares and throw some money at the market. We wanted profits, they wanted a social group.

After being up by over 100% after 18 months, we closed the club at a loss of both money and friendship. Ridiculous.

What about you? Why do you want to invest? If you want to gamble, take up sports betting. You get to watch a game as well as be financially involved - that sounds much better.

Do you plan to follow the market? If you don’t, best to keep away.

I’m not the world’s greatest at tracking a market - I can admit it. Each day, I look at the shares in my portfolio, funds I advise clients about, prospective investments I am mulling over, general financial news and read a few posts by other advisers / analysts online. And yet, if I’m honest, I worry that don’t pay enough time each day to the markets.

If you want to make serious decisions, with serious amounts of money and (hopefully) make serious amounts of profit, you need to be - SERIOUS!!!

Personally, I don’t like the idea of gambling much. I consider myself to be either a speculator or an investor, not a gambler. When I first started investing, I didn’t know the difference (though I started at 18 and had no-one to guide me). That meant that all my investments were gambles. Mostly, they weren’t so hot.

These days, I assess and analyse much more. I avoid ‘turnarounds’, since I don’t think they turn around too often. Greater life experience has taught me to recognise that most companies that need to turn, or might turn, are already dead - they just don’t know it yet.

I also have learned my lesson with ‘development’ companies. You know the thing, one great idea that ‘if’ they get to market will make ‘tens of millions’. I own shares in a couple that I bought years ago. Broadly, I was right to buy. Of all the development stocks I could have bought, these actually did develop and do make products. They just don’t make profits yet - years after I bought.

One of my development picks actually dominates the bluetooth market. That’s right, I invested in the company that developed much of the bluetooth technology we use today! How could it not make a bundle of money? Am I a genius or what? Years later, I am still down 65%.

Another has an amazing fuel saving device for gear boxes in cars, lorries and off-road vehicles. In this age, you’d think that fuel saving technology would be all the rage. Over the years, I have bought more shares in the lows and sold them in the highs to make some ‘trading’ profits. But still my initial investment (I think 8 years ago) is down.

Though I may not have realised it at the time, these were not investments, they were gambles. So is the stock exchange really a place for beginners?

An investment is in a company that has products, a defined market and notable market share, profits, a track record and much more. Remember that. Think about Warren Buffett - he makes investments, good ones at that.

I’m also quite traditional about investing. I have never spread bet, used an option or future or sold short. I don’t use leverage. If I can’t figure out what might go wrong, FOR CERTAIN, I’d rather not do it. I buy, I hold and I sell. That’s it.

I have no doubt that these admissions mean that I miss out on all sorts of possible investment opportunities. There are all sorts of weird and wonderful investments out there, but I invest and I don’t like to gamble.

If you think about it though, what I just said doesn’t really hold me back. I own some coins, stamps, comics, unit funds, shares, books and art - I did mention that I speculate didn’t I? And if the world suddenly has a crisis, it means that I own actual, physical assets as well as just share certificates.

So that brings me to another point … can you focus?

Ideally, you need to know quite a lot about certain areas and use that knowledge for your investment benefit. The art and books I own are mostly related to cricket. I love cricket and know a lot about the game and it’s history - which means that I know when I see something of value. If it has value now, it probably will have for some time to come. Whether I buy at a good price or not, value and scarcity count.

Who’d imagine ME telling you that the stock market isn’t everything?

Investment risk is lowered by knowledge. Every time. If you are buying shares on the stock exchange, what does the seller know that you don’t? What do you know that the seller does not? You can bet your life that the buyer or seller opposite you in any transaction has done some serious research. If you don’t do yours, who do you think will win? You or the market?

So of all the things that I might have said about investing, I haven’t really made it sound ’sexy’ yet. Have I? The truth is, investing isn’t really very sexy. Pop stars are sexy. Carmen Electra is sexy. Investing is graphs, moving averages, annual reports, company statements, calculators and work. Not so sexy. It’s kind of like being an accountant but with marginally more life and a few graphs.

But the great thing about investment is that in the long run, you decide whether you’ll be successful or not. The harder you work at it, the luckier you will be. If you are just starting out, think about YOU first, not the market or companies. Decide on what you want to specialise on, whether the stock market for beginners is a place to invest and how you will approach it.

It might help to find areas in which you have useful knowledge already. Either that or decide on an area and slowly become an expert. What do I mean? Well, if you worked in a bank for 10 years, you must know something about banking. When you read an annual report from a bank, do you laugh and see through the waffle or does it make real sense? If you can see through the waffle of some far off CEO and CFO, you can start to compare the relative prospects in the same market of competing firms. Hey - that could be an opportunity!

If you really know about banking, you can compare the product offerings and service as well as the annual reports. You might still know some bank staff that are happy to tell you honestly that they are being ‘creamed’ in the market or whatever. Before you know it, you have a picture building of a competitive market. Before long, you will REALLY understand the investment potential of several companies. That will put you far ahead of many other investors.

As I said earlier, investment risk is lowered by knowledge - EVERY TIME.

Stuart Langridge is a financial and investment adviser and an investor. He works with expatriates in the Benelux region. For more of hi insight into the world of finance and investing, please visit his site at http://www.StockExchangeSecrets.com

The definition of penny stocks, also known as micro-cap stocks, varies. A stock is termed as a penny stock based upon its market capitalization and share price. According to the US Securities and Exchange Commission (SEC), a stock is termed as penny stock if its share price is below $5. However, many in the investor community believe that a penny stock is one with the share price of $1 or less. As junk bonds are compared to investment grade bonds in fixed income market, penny stocks are compared with blue chip stocks in stock markets. Trading in penny stocks are far more riskier and speculative than trading in blue-chip or other mid-cap or large-cap stocks. Several investors believe that investing in penny stocks is like gambling, that one has to be prepared for losing money. Moreover trading penny stocks can be more expensive. Penny stocks are usually traded in the Over-the-Counter exchange or on the pink sheets.

If you intend to invest in penny stocks you should know the differences between penny stocks and other stocks, such as blue chips and mid-caps. While the performance of mid-cap and large-cap stocks is driven primarily by fundamentals, several analysts believe that the performance of penny stocks is driven primarily by investor speculations. If you analyze the fundamentals of 100 penny stocks, perhaps only two or three would be generating superior returns.

Despite the issues associated with penny stocks, several investors intend to invest in penny stocks, since they believe many of today’s blue-chip stocks, such as, Microsoft (Nasdaq: MSFT) and Wal Mart (NYSE: WMT) were once penny stocks. However, the share prices of these companies were almost never trading for pennies, however it appears that way when one looks at the price adjusted for stock splits. Many investors ignore this fact.

Since many penny stocks are traded on the pink sheets and are not scrutinized by the SEC, you will find it more difficult to find credible information about them.

Penny stocks often lack liquidity, which means investors would find it difficult to buy or sell. A lack of liquidity often helps fraudulent investors to manipulate the share prices. The SEC itself in Schedule 15G states “Investors in penny stock should be prepared for the possibility that they may lose their whole investment”.

A penny stock traded on the over-the-counter exchange has a higher chance of being delisted for lack of compliance. If the particular company is unable to list its stock on another exchange or become re-instated, you may lose 100% of your investment. You should consider this seriously, if you intend to take long positions in a penny stock.

Several new investors are attracted to penny stocks, given their low price and potential for substantial gains. There have been instances where penny stocks rose more than 1000% in a few days in the past, but this is extremely rare and often the price is not sustained. There are historical evidences that most penny stocks lose their entire value. If you are a new investor, you need to be aware of the risks involved.

If you still want to invest in penny stocks, do the relevant research into the company’s fundamentals and ignore the pre-conceived theories about the successes of the penny stocks in the past.

Joel Arberman is the Managing Member of Stock Aware, LLC. We publish a free investment research and analysis newsletter and offer investor awareness services. Learn more at
StockAware.com.

This is a true story from my own experience that illustrates how buying assets for wealth creation works.

Just over 3 years ago I found myself with $75,000 to spend or invest. My wife and I needed a new car as the old one was 8 years old and not as reliable as it used to be, so we spent $40,000 on buying the latest model.

Our $75,000 was now reduced to $35,000.

We now made the wisest financial decision we have ever made (apart from buying our own home) and used the remaining $35,000 as a deposit on an investment property to help provide for our eventual retirement. The investment property cost a total of $178,000 including mortgage, conveyancing, and stamp duty costs.

Three years have gone by and this is what has happened.

The car has dropped in value by at least $10,000 and possibly more, but is providing good reliable transport.

The owner of the neighbouring property to our investment has put his identical property on the market for $319,000 which compares favorably with other properties in the area. As a conservative guess I would expect it to achieve a sale price of $300,000 or thereabouts.

This means that we have made around $122,000 on our original investment in the house and lost $10,000 on the car. It’s actually worse than that. By buying the car instead of the neighbouring house we have forgone a possible $122,000 profit, so the car has has actually cost us $162,000! The old car is still running and in daily use.

The end result is that we have a paper profit of $122,000 on the house and a technical loss of $132,000 on the new car ($162k - $30k residual value).

The moral of this story is to put your money into things that increase in value (assets), and NOT into things that decrease in value (liabilities). You may not have a large sum of money to invest in real estate but there are other asset classes like art, antiques, coins or stamps where there are plenty of smaller investing opportunities.

If you can remember this story of buying a house versus buying a vehicle next time you make a major purchase, you can evaluate how the purchase is going to affect your future wealth. Do you really need a new vehicle or a wide-screen TV? Would a low-mileage second-hand car, and keeping the existing TV be sufficient? Making the right decision now will have a huge bearing on your retirement.

Learning to distinguish between wants and needs, and investing in assets is the key to wealth creation and a comfortable retirement.

Copyright 2005 by Robert Scott, LoanSense.com.au

Check out Robert’s Home Loan Australia website that is dedicated to helping borrowers get the best possible deal on a Home Loan in Australia.

Trading in the uranium market is done by a very small number of players. After all, there are about 440 nuclear reactors worldwide, a few dozen trading firms, fuel managers, and a relatively small number of utilities who participate in the actual buying of uranium. It’s the front end of the nuclear fuel cycle. Without it, nuclear reactors shut down. The uranium price has been skyrocketing since Christmas week 2000, with no end in sight. Forecasts range from $50/pound to well above $100/pound. Few believe the spot uranium price will go lower in the near future.

It’s become a fun game. Every Tuesday night (Monday afternoon, if you are a subscriber to the Ux Consulting), you will see the spot uranium price posted on the company’s front webpage. Moments later, the Yahoo and other Internet chat boards light up with commentary about the current uranium price and where it might head next. The spoiler is that TradeTech LLC issues its spot uranium price on Friday to subscribers and to the general public on Sunday night. Investors have been betting on the price swings of their favorite junior uranium stocks (more leverage, more risk/reward) by trying to second-guess the uranium spot price. Now, you can find out exactly how Ux C arrives at their weekly spot uranium price, from the president of Ux C, himself: Jeff Combs.

StockInterview: How does Ux Consulting arrive at your weekly spot uranium price?

Jeff Combs:
We have a pretty specific definition. What we’re looking for is the lowest offer of which we are aware, at around the time we publish the price. The quantity being offered has to meet certain parameters. It has to be a certain size transaction within a certain timeframe. So we’re not really trying to cover transactions, per se. Obviously, where there is a transaction that takes place, there’s an offer embodied in that. We’re really trying to capture where the market is going based on current offers, rather than where it has been.

StockInterview: So is your published spot price more of a predictor than an actual trade?

Jeff Combs:
It’s a predictor only in the sense that the next deal is likely to be done at the lowest offer price if the market is working efficiently. It’s like in the stock market where the lowest offer price will be taken first, although the stock market is a lot more efficient than the uranium market. Thus, we aren’t predicting the price of the next deal per se, but reporting the lowest offer price, which is an indication of where the sell side of the market is at that point in time.

StockInterview: So the weekly published spot uranium price is not based upon an actual sale of uranium that took place that past week?

Jeff Combs:
Since it’s more of a forward-looking concept, the sale - that is, the coming together of buyer and seller - hasn’t necessarily taken place. But the level of the lowest offer indicates where the market is at that point in time. The sale itself shouldn’t deviate much, if any, from the offer price. This is especially true in a sellers’ market, where buyers don’t have much negotiating power. But it’s also true in a buyers’ market, as sellers are looking to offer an attractive enough price to encourage the buyer to take the material.

James Finch contributes to StockInterview.com and other publications. Read the rest of this interview and sign up for your free subscription to articles by James Finch by visiting http://www.stockinterview.com You can write to James Finch at jfinch@stockinterview.com
You can visit http://www.uxc.com for the weekly spot uranium price.

It is common for investors to express uncertainty over their ability to manage their portfolios during prolonged periods of market volatility. But prudent investors understand that making sound investment decisions shouldn’t be based on the market’s twists and turns. Rather, these decisions should stem from an understanding of investment fundamentals and an awareness of the mistakes others have made. Keeping a few common mistakes in mind and steps to avoid them may help you as you work toward your goals.

Mistake #1: Maintaining unrealistic expectations

There’s nothing wrong with hoping for the best from your investments it’s human nature. However, you could encounter serious long-term cash flow problems if you base financial plans for the future on unrealistic assumptions. According to an August 2004 Gallup poll, nearly one third of 800 investors surveyed expected to generate profits of 10% or more in their portfolios during the next year. How does that anticipated return compare with actual historical returns? Based on data from Standard & Poor’s and the Federal Reserve, from 1926 to 2003, a hypothetical portfolio divided equally among stocks, bonds and cash would have had an average total return of 7.3% annually*. While the composition of your portfolio may be different from the portfolio in this example, it is important to maintain realistic expectations in order to have the best chance at reaching your goals. Although past performance is no guarantee of future results, familiarize yourself with the historical performance of appropriate investment indexes or appropriate benchmarks and use their average long-term returns to help maintain realistic expectations for your own investment returns.

Mistake #2: Chasing “hot” investments and overtrading

Investors tend to convince themselves that recent investment performance represents the future. The problem with chasing today’s winning stocks or mutual funds is that by the time you hear about the latest “hot” performers, you may have already missed out on all or most of the opportunity to participate in that price appreciation. Chasing past winners is closely correlated with another potential investment mistake overtrading. Shuffling your investments too often increases the chance you’ll buy high and sell low a worst-case scenario for investment success. Overtrading also generates more transaction costs and fees that cut into investment gains. One potential solution: work with a financial advisor. An experienced professional may be able to help you stay focused on your goals and avoid the urge to trade frequently. In fact, studies have found that investors who work with a financial advisor tend to hold on to their investments longer and realize better returns than do-it-yourselfers.

Mistake #3: Failing to keep your balance

You might be surprised to find that strong or weak returns in one area have caused a shift in your overall investment strategy that could affect your ability to reach goals or manage risk. Work with your financial advisor to review your asset allocation once or twice a year to make sure that it remains in line with your investment objectives.
Of course, investment mistakes do happen, but many are avoidable. Learn from the missteps of others, start applying these lessons to your investment strategy and make a point of working with a qualified professional.

Leveraging Your Investments

One of the best vehicles for your money is real estate. In St. Louis, we are experiencing an average return of 9 - 12%. Because there was not the fast and explosive growth that other cities experienced, the correction that the market is undergoing currently will not be nearly as volatile and will provide a much safer investment for home buyers. St. Louis real estate can also be much more affordable that in other parts of the country because it enjoys a relatively low cost of living. Many of the residents who have relocated to St. Louis have done so because of the affordability factor. Because of this, St. Louis is poised to enjoy a steady and comfortable growth over the next 20 years.Then the question remains - what to look for and how to know what to purchase. That is where you will need the experience of a proven real estate professional who knows the market, can demonstrate to you a proven track record of success. The real estate process can seem complex and daunting but working with an experienced agent can make all the difference. Currently in St. Louis, the downtown neighborhoods are turning over and experiencing a strong urban renewal. Neighborhoods to watch include Benton Park, Tower Grove East, and Old North St. Louis.

Tim Leeker is a Missouri Mortgage specialist who works with real estate agents that handle investment properties, rehabs and second homes. His site contains many tools and resources to help you get started on your home search including full MLS access to search for Saint Louis Real Estate. Tim can be reached at 314-628-2099 or visit him online at www.getmepre-approved.com.