Value of Credit Default Swaps

Credit Default Swaps (CDS) are back from the infamy of 2009. Except when left-leaning politicians in Washington are looking for scapegoats.

They’re an insurance policy in the event an issuer of a bond or note defaults. They come in handy in volatile markets. Credit Default Swaps make it easier to sell bonds and notes because traders are then willing to trade in them to facilitate the bond/note market.

Default Swaps were the type of obligations that became well-known in the past financial meltdown. So they became the targets of official abuse. Underlying causes of the meltdown could be attributed to government policies directly, as I have noted before, in my comments.

CDS’ reputation got scapegoated. But they are a valid and useful investment vehicle when traded in open markets. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Money Adviser's Real Costs

Avoid money advisers  if you can. You pay them a fee of 1% to 2% of your assets which amounts to about 20% or more of your earnings a year. If you invest with them in a hedge fund, you pay 20% or more of earnings off the top, plus that percentage management fee.

Only a tiny number of money managers prove to be frauds, but you will sleep better by staying away from them all because of their annual cost that adds up to a large chunk of what you’re left with.

Hire an accountant, or a CPA, and if you have considerable funds, a tax attorney. But avoid expensive money managers by sticking to plain, low-management-cost funds.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Money Adviser Costs

Avoid money advisers  if you can. You pay them a fee of 1% to 2% of your assets which amounts to about 20% or more of your earnings a year. If you invest with them in a hedge fund, you pay 20% or more of earnings off the top, plus that percentage management fee.

Only a tiny number of money managers prove to be frauds, but you will sleep better by staying away from them all because of their annual cost that adds up to a large chunk of what you’re left with.

Hire an accountant, or a CPA, and if you have considerable funds, a tax attorney. But avoid expensive money managers by sticking to plain, low-management-cost funds.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Choose ETFs Wisely

 

Look closely at the exchange traded funds (ETFs) you buy because they are not all alike. Some may be managed when the original idea for their growth has been for them to follow indexes, unmanaged.

ETF funds that trade infrequently will have big differences between bid and asked prices. And also their net asset values. You want to avoid those losses and discrepancies.

Also, ETF charge fees will vary and may be way too high in many instances.

Then there are ETFs that don’t follow their chosen index too well. Focus may be poor, just to suit a current market. That will defeat the original purpose you may have had for investing in them.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Detecting Ponzi Schemes

It’s not easy to protect against Ponzi frauds. Despite what the media tells you, after they are revealed. The SEC often fails to discover them in time.

But there are basics you can follow to reduce odds of falling into traps that entice scams.

A basic way to avoid investment frauds: Stick to plain vanilla investing vehicles from low-cost, investment funds. They are the ones with the lowest-cost management fees, who have been in business for years.

Avoid those who appear to pay off far better than the plain vanilla, low-cost investment funds; hotshots who get publicity from ignorant or complicit “friends” or from media public relations.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Silkscreen Prints Aren’t Truly Original

Sometimes referred to as screen printed or silkscreen prints, these works of art have gotten lots of attention since their use by famous artists.

I have paid attention to the question of originality as this is a factor in determining value. After all, when collecting, you must ask yourself what is true art?

One of the several cogent factors has to do with the way prints are created by the artist.

Each copy of a print made in multi-copies can be original only if done according to established standards.

I have always felt, along with experts on the subject, that the silk screen process did not produce a genuine original because the artist had no complete control over the finished work, as is the case with other print processes.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Special Investment Goals

Consider your personal investment goals when investing, not media suggestions.

General media advice can be totally misleading because they invariably disregard individual circumstances. Namely. the investor’s age and ability to take risks.

You can afford to take losses in your youth when you have time to recoup any errors that you cannot afford, when you are older or retired.

Investors must also consider risk by taking into account their knowledge of the securities markets and other distinctive personal situations; in addition to age; such as number of dependents, financial status and investing-comfort.

Therefore, much media advice and commentary is universally misused by ambitious gurus we encounter. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)