Saturday, 8 July 2017

Container Investing is an Alternative You Haven’t Considered

Because of the poor performance and increasing risk associated with traditional investments, a growing number of investors are considering other alternatives.

Investors’ steadily decreasing tolerance for risk has them moving away from bonds with poor returns and the risky stock market, to the safety of income-generating assets like shipping containers and real estate. Revenue-producing investments, particularly those alternatives which deliver a monthly return, offer investors the opportunity to supplement their fixed-income or reinvest profits for compounded returns. Those investors who invest in containers and real estate understand this well.

The tangibility of these investments is also very appealing to the investment community. Historically during times of crisis, conflict, and war, investors have sought the safety of hard assets to protect their wealth against financial threats, like inflation. That said, amateur and experienced investors alike are allotting a portion of their investment portfolio to alternative assets that enjoy a lower risk and consistent demand. For more than fifty years shipping container investments have met this criteria.

The fact that shipping containers are needed in every region of the world, ensures that there will be a strong demand for them for decades to come. Even during times of economic uncertainty, government officials must constantly encourage growth in their economy. To be successful, this requires important contributions from shipping containers, the container shipping industry, and the investment community.

Transport and logistics companies appreciate the value of cargo containers. Thus, to capitalize on opportunities across the globe, they are repeatedly making investments to maintain and improve their shipping container fleet. This continued investment demonstrates their commitment to meeting the demands of their clients and facilitating growth in the global economy. In much the same way container lines do, private investors can invest in containers and profit from steady economic growth and prosperity around the world.

Monday, 29 May 2017

War And Conflict Affects Investments And Investment Returns

There is more than just a cost for the military when there is war. Conflicts in areas across the globe are affecting investments and investment returns.

Conflicts in areas across the globe are affecting investments and investment returns. There is more than just a cost for the military when there is war. Shipping and logistics can be interrupted, and disrupt the regular flow of goods to key economic  regions. This can have an adverse effect on the performance of businesses' profits, and hurt economies across the globe. In turn, this affects investments and investors’ returns.

Because most of the world's conflicts are focused in developing and emerging markets, where manufacturing can be done more cheaply, there is the possibility that a war could affect the supply of important products; and thereby cripple any number of key industries. For example, a conflict with North Korea could prevent the flow of goods from manufacturers in South Korea, China, Malaysia, The Philippines, and/or Vietnam. Such a disruption would certainly damage the performance of the world’s leading businesses - like Sony and Samsung. This will create instability and uncertainty, and further hurt international stock markets.

Aside from the disruption in manufacturing, shipping, and logistics sectors, the collapse of international trade deals and the rise of protectionism will certainly contribute to the threat of inflation around the world.  You can expect that when the existing global supply chains are altered to accommodate protectionist policies, the cost of goods will rise shortly thereafter. With the price of things rising because of inflation, this means that an investor's dollar will not go as far when investment returns are paid.

The deterioration in the value of investment returns will be most worrisome for those investors who are investing and saving for retirement. This is unless investors have prepared for the volatility by investing in income generating investments that supplement their earnings while retired. These investments often pay a monthly dividend at a higher rate of return, to help investors recoup losses incurred from inflation and/or conflict. Because of their important contributions during times of war and conflict,, investors should consider including investments that produce income, as part of a well-balanced, diversified portfolio.

Thursday, 4 May 2017

With Brexit at Forefront of UK Vote Investors Watch Closely

With Brexit at the forefront of the 2017 UK election, investors across Europe are watching the conversation closely. At stake is $240 billion in trade, and approximately 44 per cent of the UK exports, which comprised almost 12 per cent of the value of the British economy in 2015. That figure has been at around 13 to 15 per cent over the last decade. In 2016, 53 per cent of imports into the United Kingdom came from countries in the European Union.

The share of UK goods exports going to the EU has been trending downwards for the past 15 years as the rest of the world has grown at a faster pace than Europe – yet the share going to the Continent seems to have stabilised at about 45 to 48 percent since 2014. For example, according to the Office for National Statistics, total goods exported in May 2017 were £23.7 billion. Of those, £11.4 billion (48.4 per cent) went to the European Union.

When goods and services are sold across borders they can face barriers including tariffs (taxes applied only to imports), limits on the amount, and standards that are different from those in the seller's domestic market. This does not mean countries cannot trade. However, it does make doing so more costly and more challenging.

The rules on trade in the future will depend on the agreement the UK is able to reach with the EU following its departure from the union. Trade in services will be of particular importance, given that approximately 80 per cent of the United Kingdom's economy comes from providing services. If no new trade deal is negotiated and trade takes place under World Trade Organisation rules, the United Kingdom would have to pay tariffs and face other barriers to trade. For 2015 as a whole, services exports to the EU were worth £88.9 billion – 40 per cent of all services exported.

Pro-Brexit advocates argue that the UK’s chronic goods trade deficit with Europe will put pressure on the European Union to do a rapid trade deal. This is especially true given that the United Kingdom is a major sales market for European goods and they will want to safeguard their own exporters’ interests. In the first quarter of 2016 it is estimated that UK services exports to the EU amounted to  £23.5 billion.

Aside from markets in the European Union, retailers and manufacturers in the United Kingdom will have to also look overseas to discover additional markets to sell their goods/services. This is strongly recommended regardless of whether there is a soft or hard Brexit for the UK.

Wednesday, 26 April 2017

What is an Exchange Traded Fund or ETF?

An exchange traded fund, or ETF, is an investment fund managed by a professional money manager and traded on domestic or international stock exchanges.

Much like traditional stocks, an exchange traded fund - often referred to as an ETF - is an investment fund managed by a professional money manager and traded on domestic and international stock exchanges. An exchange traded fund is an investment fund that owns underlying assets, such as shares of stock, bonds, oil futures, hard assets, foreign currency, etc., and divides ownership of those assets into shares. The fund's shareholders do not directly own or have any direct claim to the investments in the fund; rather they indirectly own these assets.

An exchange traded fund seeks to track the performance of a particular index by holding in its portfolio, either the contents of the index or a representative sample of the securities in the index. The first and most popular exchange traded funds track stocks. ETFs can also be sector funds which invest in broad sectors, like finance, container shipping, and technology, or specific niche areas, like green power. Most exchange traded funds are index funds, but some ETFs do have active management.

Exchange traded funds have been available in the United States since 1993 and in Europe since 1999. By 2013, ETFs emerged as the most popular type of exchange-traded product.  Between 1993 and 2015, more than US$2 trillion was invested in exchange traded funds in the United States.

ETF shareholders are entitled to an investment income from the profits, such as earned interest, dividends or capital gains. Unlike many mutual funds, exchange traded funds do not reinvest an investor’s cash distributions in more units or shares. That said, investors can expect to pay commissions and management fees to invest in exchange traded funds. As well, there may be costs associated with setting up an ETF investment account.

Exchange traded funds typically have higher daily liquidity and lower costs, as well as tax efficiency and stock-like features, which make them a great investment alternative for individual investors. By owning an exchange-traded fund, investors get the diversification of an index fund, with the ability to sell short, buy on margin, and purchase as little as one share. Because ETFs can be economically acquired, held, and sold, some investors invest in exchange traded fund shares as part of their long-term investment strategy.

Wednesday, 19 April 2017

UK Election Will Bring Much Needed Support For Brexit Talks

Through the election in the UK the government will earn the support of the population and determine a concrete Brexit position before EU discussions begin.

The recent decision by Prime Minister May to call an election in the UK has caused the British Pound to rise sharply alongside domestic and international investor sentiment. Both the markets and investors have displayed their confidence in a stronger, possibly even more cooperative Britain. It is believed that an undivided United Kingdom will be in a better position to negotiate a favorable exit from the European Union.

The move by the British government to call an election, forces the nation's other political parties to establish and articulate their position on Brexit. This will help the country work through points of contention and craft a deal that benefits the people of the UK, Britain's economy, and worldwide investors who have invested (or plan to invest) in the country. Determining a concrete position before EU discussions begin will earn the support of the population, and thus make establishing policy much easier going into the Brexit negotiations.

From the viewpoint of investors, a clearly unified Great Britain - going into and coming out of talks with the European Union - will make a great destination for investment dollars. In particular, the UK's shipping and finance industries are two well-established sectors that already appeal to the investment community, and stand to lose the most from a hard Brexit. If the British government is to continue to profit from these key areas, a deal with the EU will have to ensure that UK trade and investment are able to continue to make valuable economic contributions.

The most important thing that the United Kingdom needs in its divorce from the European Union is support. Prime Minister May, or whoever wins the election, will need the support of constituents and members of parliament to navigate a course through the dangerous waters ahead. Only with all hands on deck will Britain's government keep its ship from sinking, and bringing down the UK's economy with it.

Monday, 3 April 2017

For Investors Brexit More of an Inconvenience Than a Barrier

While the biggest impact of Brexit will be felt in the UK, it is more likely to be an inconvenience for investors, rather than a barrier to investment or trade.

As Article 50 is triggered, what will be the consequences for your investments? Most analysts expect the triggering of Article 50 will have little immediate effect on the UK investment market and exchange rate. As well, it is probable that the impact of Brexit on trade will be relatively small too.

Although the UK's economic performance since the June 2016 vote has been described as "incredible", the negotiation portion of Brexit is expected to be "troublesome." Many are attributing this to the tight two-year time frame for the negotiations. Analysts forecast that markets could suffer if Brexit discussions prove difficult. While the biggest impact of a hard Brexit will be felt in the UK, there can be little doubt that there will also be a significant impact on the rest of the European Union.

It is highly probable that a favorable trade agreement will be reached after Brexit, as there are clear advantages for both the UK and the EU in continuing a close commercial relationship. But the worst-case scenario, in which Britain faces tariffs under ‘most-favored nation’ rules, would still not prove to be a disaster for the UK. These factors are more likely to be an inconvenience for UK exports, rather than a major barrier to trade. After all, post-Brexit outcomes which reduce trade or increase the cost of trade between the UK and the rest of Europe will be damaging for both sides.

With the Brexit vote comes much political, economic, and financial uncertainty, both for the UK and Europe. Although the impact of Brexit on the British economy is uncertain, Britain’s long-term economic outlook is not solely dependent upon the outcome of negotiations. This is in part because Britain has pulled ahead of the European Union in recent years, and economists expect the gap to widen.

Because of the depreciation of the British pound, and the fact that fundamentally the UK is still a large market with 65 million affluent consumers, many investors are seeing more opportunities to invest in the UK after Brexit. Regardless of what happens though, maintaining a diversified investment portfolio is an essential strategy for investors.

Monday, 27 March 2017

An Income-Producing Investment to Supplement Retirement

Choosing the right income-producing investments can help retirees generate money to pay bills, and continue living the life they've grown accustomed to.

Supporting your lifestyle during retirement may be more of a financial challenge than you realize. The cost of things like rent, taxes, utilities, and groceries can quickly eat through a pension check. Retired people need more money to match inflation and the rising costs of daily living.

Choosing the right income-generating investments can help retirees generate more money to pay their monthly expenses, and continue living the life they have grown accustomed to. Ideally the choice of income-producing investment will pay retirees regularly, be a hard, tangible asset, and carry very little risk. I discovered that an investment in shipping containers closely matches this criteria.

Shipping containers are the large, steel cargo boxes you see on ships, trains, and trucks. For more than 50 years they have made shipping more efficient and affordable, and made enormous contributions to globalization. Currently, 90+ percent of world trade is shipped in containers. For manufacturers and retailers, they are an intricate part of the global supply chain.

With the help of a container leasing company like Davenport Laroche, investors can purchase their own fleet of shipping containers and begin earning an income to supplement their retirement. Similar to owning an income-producing property, shipping container investors - like landlords - earn rent money each month. Unlike rental properties though, shipping containers need very little upkeep and maintenance.

The containers invested in are leased to logistics and shipping companies, and generate a monthly income for transporting cargo. The revenues from the lease of the containers are shared with the investor as a return on investment. Over the lifetime of a container, which is a decade or more, this can add up to a significant amount of income.

As the world economy continues to grow, the demand for shipping containers will increase as well. With each country in the world working toward increasing their GDP, more and more containers are needed to support imports and exports. From highways to railways and seaways, these income-producing assets are generating wealth for countries and investors alike.