Testing Bank Strength

                     

Stress tests for banks, suggested by regulators, are poorly designed because they’re composed of too many arbitrary factors; each may have weightings with only indirect relativity to each other.

                       

Of the several factors, not one by itself is of predominant importance in reflecting bank safety. The ratio of doubtful residential mortgages to capital, for example, or commercial mortgages to capital, or types of capital, or what constitutes tier 1, or loan defaults, and effects of potential general unemployment, all add up to figures which become too vague,

                       

Experts ought to seek decisive answers on which to base banking decisions. Financial officials and boards must now make subjective decisions to act upon such stress tests.

                                           

And they can be wrong, as they have been in the past, in dealing with financial meltdowns.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Financial Advisers Can Still Employ Many Risks

                      

Are financial advisers always working on behalf of their investors?

It appears that they are doing what they have always done in the past; perhaps satisfactory only within certain standards and reasoning.

                       

Some are still resorting to alternative investments, which are being designed to offset weakness in stocks and bonds. These investments are suggested for clients in the form of currency trading, commodity futures and private partnerships.

                       

However, not only are these securities volatile, they are expensive; though fine for the advisers.

                                           

Larger accounts are getting the use of math models, which don’t always work, and so-called structured products, which gets back to the potential 2008-2009 financial meltdown problems.

                       

With big fees involved, many financial advisers employ risky business as usual. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Your Chances of Investment Success

                      

Here is a simple way to improve your investment odds, based on my experience on studies of now about 1,600 strategies, along with their pros and cons, and most

importantly, their discipline of usage.

To sum up a simple lesson that takes little effort: Once you learn the basics, turn off the constant noise and chatter that you get from the financial media.

                       

All that mostly repetitive nonsense, does more harm than any possible good. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Professional Traders Can Make Errors

                      

Market traders often earn big money in up and down markets. Can their method be copied by Main Street as well as others on Wall Street?

                       

Giant investment bank/trading groups have been specializing in high-frequency trading, and now account for a large segment of all computer-generated trading. Their mathematical model/codes often work for them. These math models generally do well, until you hear of an eventual foul-up.

                       

Mathematical formulas are not for Main Street. They are not even for many on Wall Street.

                       

Always remember pros who failed with collateralized debt in 2008, and at times, years earlier. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Problems for Small Landlords

                    

Many smaller would-be landlords consider buying rental properties as a means of making better investment returns.

                       

Diversified corporate bond funds of lower credit ratings, but without outlandish credit risks, still offer decent yields, as do REIT mutual funds, which invest in real estate equity trusts.

                       

Still, individuals who are familiar with small properties may find bargain real estate that will offer a decent return and possible capital enhancement.

                       

But there is a danger in holding real estate on a small scale. Problems may derive from local regulations which you should know intimately. And you must be prepared to do most of your own small repairs, which can be costly when assigned to outside mechanics.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

What’s FINRA Securities Protection?

                          

FINRA, or the independent Financial Industry Regulatory Authority, operates from Washington, DC, and New York City, with fifteen District Offices.

                       

It’s involved with registering and educating the industry It examines securities firms; along with writing and enforcing securities rules. FINRA also informs and educates the investing public, and provides trade reporting and other industry utilities. The Authority administers the dispute resolution forum for investors and registered firms.

                       

The organization performs market regulation under contract for the NASDAQ Stock Market, the American Stock Exchange, the International Securities Exchange

and Chicago Climate Exchange.

                                           

However, it’s of help only to those who constantly are aware of investment principles. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Future Stock Prices

                     

The Congressional Budget Office has indicated from its studies that U.S. economic growth will average a little more than 2% a year over the next 70 years. It had been about 3,5%, from the 1950s on.

                                       

There are many reasons why estimates for future economic growth are dismal, including our enormous debt which must be serviced. Moreover, it’s highly likely future interest costs will be much higher than they are today.

                       

The specter of inflation all this imposes makes stock market growth difficult. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)