Individual Retirement Accounts and Current Trends

IRAs are important as they undergird the future for the working class. What if your IRA company goes bankrupt? What will you do? Read on to find out more.

My Gold IRA company went bankrupt. What now?

It’s a nightmare scenario for most people, particularly those close to retirement: They’ve made investments all of their lives to secure a future, but suddenly the company keeping them says they have no money.

What happens now? Is everything going to be fine, or have you lost all your savings and have to start over again?

We’ll start with the good news: In most cases, your savings will be covered by government-mandated insurance.

Note how we say most.

How insurance works on IRAs

The US government mandates that all IRA accounts need to be covered for at least $250,000. This cover is expected to be used in cases of funds going missing, as could happened during massive disasters.

If your company closes and for some reason your investments aren’t there (but they’re in the books) you should be covered. You should also be covered if your company falls victim to a robbery that funnels its funds, including the retirement funds and investments of its clients.

The $250,000 number is also a baseline – many IRA companies have insurance for two, three, or even ten times that much. Even if it’s a gold IRA, that should cover your IRA savings. Plus, we have a small detail with gold bars: They’re physical, bullion bars that should still be there anyway.

How gold bars make it simple

Any decent IRA provider will also refuse to be the sole custodian. Instead, most gold bars are kept in secure locations under tight government regulation, such as the Delaware Depository.

As long as your gold IRA puts your bars there, you should still have your investment even if the company disappears. Gold, after all, isn’t liquid and can’t be spent by accident, nor would it be at all easy to funnel gold bars from the facilities where they’re stored.

In most cases, what would happen is that the government would contact you to arrange a transfer of funds towards different management. Another company would take over, and you would barely feel the change. Great, isn’t it?

Well, that’s only if the bankruptcy is due to lack of funds. Things can get much more complicated if there’s fraud involved.

What about IRA fraud?

Most people investing in their IRA never get to see their shares, valuables, or even savings in physical form. They just see numbers on a screen or paper representing them, and assume the company is keeping them safe.

In most cases, companies do keep those things safe and transparently. However, it’s not unheard of for the management of a company like these to get a little bit happy about how funds are managed and on occasion tap onto them. Sometimes, tapping onto them often enough to make the company go broke.

If that’s the case things get a bit more complicated, depending on your actual standing.

Is your IRA company legal?

This is the question that will drive what happens then. If your IRA company was legally registered with the IRS and followed with its regulations – that is, if the company was legal to the government’s eyes, – you’re in luck.

You should be able to retrieve your investments without more than a headache or two. If you’re a victim to IRA fraud in a company the government considered legal, government-backed insurance will kick in.

It’s more complicated if you put your money on an unregistered IRA.

Unregistered IRAs are by definition illegal, and therefore you won’t be covered by any laws that protect IRA customers in these cases. If you put your money on an unregistered IRA you have been the victim of fraud, as the money is gone and there’s no insurance to back it up – nor will there be trustable books to confirm what you had.

In this case, a very long investigation will likely take place, where the IRS will try to ascertain how much each of the victims had stolen from them and in what form. If you’re lucky, they’ll be able to salvage enough from the criminal’s assets to pay you back.

You’re not likely to get lucky.

In most cases, the criminal will have either already spent the money or funneled offshore into banks and investments that can’t be tracked or confiscated. In this case, it’s more likely than not that you will, in fact, have lost everything.

The takeaway: Avoid IRA fraud at all costs

One of the most important decisions you’ll make about your finances will be your IRA manager and custodian, precisely because of this. Your IRA money is only safe if your company is legal. As such, you must do your homework before signing up with anyone. Get references. Ask around. Investigate. Even calling the IRS to make sure the company is in the clear might be necessary.

Do all that, simply because that will give you peace of mind. Having a properly registered IRA manager will protect you against anything that could happen with that money. Don’t take risks with your future, and only put your investments in the hands of people who have the legal clearance to manage it.

The Burgeoning World of Private Equity Firms: What You Need To Know

Private equity firms are growing by the numbers in today’s world. What do they do? How can they make a difference? Read on..

Private Equity Firms: What are they?

The investment market isn’t immune to trends. While most trends come in the form of specific stocks, values, or markets to invest in (for example, cryptocurrencies,) there are always outlier trends, trends that aren’t so much expectations about the market but tricks and methods to optimize investment.

Sometimes, these trends are sold as ways to make people rich quickly with a minimal amount of work.

Private equity firms are one of the trends we see currently. The concept itself has been in the news often, usually blaming them for people getting laid off or praising them for creating new jobs, with most people unable to understand just what equity firms do.

How do these firms work?

A private equity firm is, to put it simply, a conglomerate of investors who get together to purchase companies or businesses in a private manner – that is, outside the stock markets. The earnings these businesses receive (i.e., the equity) is then divided among those investors who chipped in to take over the company.

Although simplistic, that’s basically how it works: A bunch of people with money get together, pool their money into a private equity firm, and share both the risks and the proceeds of such venture.

Usually, this is done through already existing private equity firms, although it’s not uncommon for individuals to start their own.

Are they good or bad?

As with everything in business, this will depend on who you ask – and the specific private equity firm you look into. In theory, a private equity firm taking over shouldn’t be any different than having a new board of investors for publicly traded companies. After all, that’s literally what such takeovers mean.

However, the experience many workers have had with these firms is quite different. While it’s no secret that public investors often try to get the most money they can out of businesses, there are two sides to the stock market that keep these attitudes relatively in check.

First, who owns how much of each company is known. And second, the most valuable companies in the stock market (say, Amazon or Apple) are mainstays and it’s in the investors’ best interests to sacrifice short-term gain for long-term stability.

This is not necessarily true of private equity firms. The relative anonymity these firms give allows certain savagely capitalistic players to act in ways that, were they to be made public, would likely damage their images – and those of their companies.

Private equity firms effectively lessen this, because it’s often impossible to know who is behind the company.

There’s a second issue, although closely related. Private equity firms are known for often acting in extreme ways once they take over, sacrificing long-term stability for short-term earnings, often forcing companies to cannibalize themselves and their own market.

 This leads these companies that have been taken over to end up bankrupt, its employees laid off, all to fill the pockets of people who already had much more money than the company’s workers.

Is there an upside?

One might argue that the operating strategy that these firms use could lead to better economic development, as many of the pressures of public trading, such as stock price variations, don’t exist.

And that is true. A properly managed private equity firm can indeed help a company, or a whole industry, flourish under the guidance of leading experts.

However, this doesn’t always happen – partly because some of the biggest actors in the market are only in it for the money, with little interest in making things better.

Conclusion

The fact that some firms are there to drive companies to the ground doesn’t mean they all will. Some private equity firms will indeed act in ways that will better the market, and we can hope with time the good companies will outweigh the bad.

Trading ETFs: Strategies You Need To Know

ETFs belong to a growing sphere of investment that hugs the headlines in financial markets around the globe. Here are important strategies for trading in them.

ETF Strategies for Traders

ETFs usually track the bonds, stocks or index, and other securities. These can be extensive market indexes like Nasdaq or Bloomberg Barclays US Aggregate Bond Index, targeted regional indexes, or niche indexes.

ETF might have hundreds of securities in their portfolio that tend to create prompt diversification to help in reducing the risk, as compared to owning individual stocks.

There is also some chance to further expand by structuring a basic portfolio with multiple ETFs. Each of these ETFs will hold a different type of security across asset classes.

ETF adoption is growing fast due to being a tax-efficient mode to continue with your investment ideas and through providing a low-cost and flexible mean to enter the potential of the markets.

At the start of the 21st century, the ETF assets were even less than $100 billion. Now, by 2018 the ETF assets have exceeded $4.7 trillion around the world and are still increasing its number of products.

According to an estimation by BlackRock, by 2023, ETF assets will rise to more than $12 trillion.

Let’s have a look at each of its characteristics in detail.

  • Choice

First of all, you need to determine what you are looking for. Whether you are a retiree that is shopping for funds to have some speedy source of income, or you are a Millennial who has just switched his job and now trying to find a way to roll over your assets so that they could help them after retirement.

There are almost 1800 ETFs that are enlisted in the US, and BlackRock’s ETF business, iShares have about 300 to offer just in the US, and more than 800 around the world, which represents a huge range of geographical regions and asset classes.

You have the option to select an ETF portfolio that is most suitable for you, your passion and your goals.

Do you want to reflect your value through your money? With viable iShare ETFs, you don’t need to go against your personal beliefs while investing.

 For example, if you are an environmentalist, you can always invest in companies dedicated to providing positive environmental, governance and social business practices.

Or if you want to invest in some long-term future-shaping forces, like rising technology, various ETFs are there offering collaboration with companies that work in technological advances and also working to shape our global society and economy.

  • Value

Investing in mutual funds that are being actively managed can be a bit costly as their professional asset managers and all the researching staff has to be paid for their working and the decisions they make.

iShares ETFs usually charge a very small amount of fees. It can be said that iShares ETFs charged fees in on average, one-third of an active mutual fund, and still they generate half the tax compared to the average of an active mutual fund.

The value keeps adding up. By 30 years, hypothetical investment of $10,000 made in an active open-end mutual fund with a fees of 0.96%, the monthly assistance of $1,000 and an expected compounded rate of 8% for return, will be likely to grow to an amount of $1.2 million and is going to lead to $270,000 in the fees.

Keeping every other calculation same for an ETF charging 0.34% fees, it will be likely to rise up to $1.4 million and leading to just $100,000 in fees.

  • Accessibility

Get in the game without any hassle. One of the major benefits of ETFs is that you can sell and buy them all day round, similar to stocks. What you need for that is just a brokerage account.

For a mutual fund, you need to buy and sell typically through a mutual fund broker. You will get your reimbursement three days after you place your order, but according to the net value of the asset of the day when you placed your order.

But with ETFs, you don’t need to wait that long. Markets are open all the time and you can sell out whenever you want and get you to cash at the moment.

For some mutual funds, there is a limitation of buy-in or minimum amount that you have to invest. But there is no such limitation with ETFs. Buy your shares just as you buy stocks for individual companies without any minimum share. If you can afford the share price, you can buy it without any condition.

These differences make ETFs for young investors worth considering. You can also use ETF as a modern-day gift to cherish major events in your life like wedding, graduation, communions, etc.

iShares ETFs gives you the opportunity to choose from various options and make the most suitable choice to assist in your needs, with the transparency and assurance that you are getting right value for your money and investing in the easiest way that suits you.

But look at the bigger picture, you can use the iShares ETFs not only to help you to reach the goals of your life but also assist you to keep up with your personal passions.

Risks Involved in Investing, Including the Risk of Loss

The environmental, social, and governance investment strategy restricts the form and frequency of the investment choices available to the fund. It usually results in underperformance of the fund as compared to other funds that do not focus on ESG.

The ESG strategy of fund results in major investments in the industry of security fields that lead to overall market underperformance or underperformance of other funds that are selected for ESG standards.

Those funds that tend to concentrate their investments in specific sectors, industries, asset class or market might underperform or can be more volatile compared to other sectors, industries, asset classes or markets than the general securities market.

Conclusion

Technology companies tend to be more affected by product obsolescence and excessive competition. ETFs as well as shares’ transaction lead to commissions of brokerage and ultimately generate tax. Every investment company has to distribute portfolio returns to shareholders.

The fees related to funding investment are not just borne by the investors in individual bonds and stock. The investment comparisons are only for explanation. To have a better understanding of the differences and similarities between investments one must read the product prospectuses.

The Emerging World Of Cryptocurrencies: Behaviors, Patterns, and Paradigms Every Investor Must Know

The cryptocurrency industry is still relatively new, and as such, concepts and patterns are still emerging. As an investor, here are some vital insights you need to know.

Presently, cryptoassets’ price co-movement is quite high, most probably due to the launch of the cryptoassets market and the participants’ weak pricing ability.

Almost 7% of these cryptoassets are held by the institutional investors, which makes an almost one-thirteenth portion of the U.S. stock market’s institutional holdings ratio.

The high turnover rates of cryptoassets as compared to the traditional markets indicate that the crypto asset industry participants are either more active or reactionary.

But the UTXO (unspent output from bitcoin transactions) metric indicates that due to HODLing, these members becoming active only when the prices recover.

Reasons for Correlation

Studies have found that the low internal correlation between some of the cryptoassets can be due to three major reasons:

  • Idiosyncratic factors: These are the project-specified catalysts and news that can affect the level of correlation between cryptoassets.
  • Binance Effect: Usually the digital assets that are listed on Binance have a high correlation between them, whereas, the assets that are not listed have low correlations compared to the former.
  • Consensus Mechanisms: The consensus mechanism of cryptoassets can have a high impact on its correlation with the other cryptoassets return.

The overall correlation in the cryptoassets market has observably increased. It can be due to the gradual decrease of the market’s Bitcoin dominated trading pairs reliance or the simultaneous rise of the volume of stablecoins across all cryptoassets markets.

The correlation cycle among cryptoassets and the effect that market structure can have on this cycle is discussed further in the following:

1.Cyclic Moments and Turning Points

One of the factors responsible for the continuous fluctuation of the correlation among the USD price of cryptoassets is market irrationality. The market rationality has a similar effect as the co-movement phenomenon or herding effect.

Studies show that when the correlation among altcoins reaches a specific point, the Bitcoin trend for USD either reverse or comes to a halt at the previous price. This indicates the emergent market’s inherent traits as well as the irrational behavior of the market participants.

However, it is very early to say that there is some causal relationship between market reversals and peaks in correlation.

2.Disproportional Percentage Of Retail Investors

The frequent extreme correlation periods of cryptomarket are related to the highly retail-driven participation of the market. According to the recent data, almost 700 crypto funds are operating in today ‘s cryptomarket, but the January 2019 asset was thought to be $10 billion only.

Assuming that all of them hold only Bitcoin, the total upper bound of the Bitcoin market value will be 14% only. But if Altcoins are also included, the overall institutional proportion for the cryptoassets market can become even less than 7%.

It can be said that non-professional investors can become overtly cynical or overconfident while reacting to market trends. And that can lead to a high potential transactional volume and more volatile prices.

Whereas, crypto investors are more attentive and active towards new developments in the market, they have a significant impact on the success of their participating crypto networks and promote their voice to get heard, even through simple price action.

3.HODLing by Crypto Investors

HODLing refers to the phenomenon of the crypto investors where they prefer to HODL their assets when there is a decline in price until the prices are recovered.

And they become active when the high prices are restored. Most crypto investors tend to HODL the currency in bear markets that lead to moderate changes in UTXO cap.

But the UTXO cap decline can go steeper if the individuals transact with Bitcoin at comparatively low USD value prices. Not to ignore the fact that after a certain bear period, the rate does not go up that quickly, until at least the underlying rates reach the previous heights.

Herding behavior effects are situation specified. The initial correct information will cause a herding effect to reflect the information more quickly in the price.

Comparing this to the traditional market, the cryptoasset market has faced several issues during tits small lifetime, like:

-There is a lack of popular trading instruments of the market, an absence of a compulsory mechanism of disclosure that should be followed by all the market participants, and inadequate protection measures. All these factors lead to a reduction in the enthusiasm of the investors.

-The highly complex blockchain industry has a high barrier for new entrants. Also, there is a lack of professional and reliable media sources that leads to slow transmission of information and even extensive fake news dispersal.

-The limited arbitrage channel is another problem. The inherent limitation of cost of the mainstream coins or speed of transfer, temporary paucity of appropriate derivatives and an in-depth, and regulatory restrictions imposed by many countries lead to asset prices stymieing for a long time period in an unreasonable state.

However, the cross-exchange arbitrage chances were seen to be decreased during 2018, resulting in a higher price efficiency.

Takeaways

Because of the above-mentioned aspects, the effect that quick reacting market participants have become more distinct, making it more difficult to price the individual cryptoasset accurately.

Therefore, the herding behavior or so-called irrational attitude must not be blamed only on the inexperienced participants, but the market immaturity and infrastructure should also be on the front burner.

Especially after 2018, many regulatory bodies, media outlets, and research institutes have started to pay more attention to the blockchain industry. Also, there is a wave of crypto-native research and coverage growing with every passing day.

This rapidly developing industry has been able to attract new support and funds from various traditional and governmental capital sources and seems to continue doing so with every new step of improved data, news reliability, regulatory clarity, and less usability friction, which leads to a market with more efficient price discovery as a whole.

Various ongoing and completed researches and studies provide enough data to analyze and assess the progress of the space during the last few quarters.

As many mature financial products get rolled out, which covers the industry, there is a clearer worldwide regulatory framework, which means a rapid maturing of the crypto market than ever.

Gb Adolph Obasogie is the CEO of Harrison Global Capital

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7 Funding Options You Can Explore To Make Your Business Dreams Come True

A funding nod is a business newbie’s dream come true. With funding, you can get your business off the ground and make things happen.

Funds are the livewire of any business, and a failure to generate any could spell doom for many. There are many ways to raise funds in today’s world, and not the least, crowdfunding is a unique option to explore.

What is Crowdfunding?

Crowdfunding is a fundraising strategy for entrepreneurs and it serves to authenticate the demand for their unique ideas in the market before even starting the production.

The candidate presents his idea to the crowd who, if interested in it, invests in that idea collectively through pre-order buying, investments and even donations.

Crowdfunding is different from the traditional fundraising methods as it doesn’t focus on a single entity for the sake of investment rather multiple small amount investments are contributed by a large group of individuals.

In exchange for this support, these investors, also known as ‘Backers’ are provided with various benefits including:

  • The opportunity to pre-order the product and have the authority to give their opinion in its development.
  • A personal link to the founding team of the project.
  • The chance to become one of the early adopters of the upcoming product.
  • Exclusive offers, like a massive early discount at the product launch.

Every crowdfunding site has different features, like user base and fee, etc. but the core concept is same. You submit your proposal with a goal and deadline and then do online promotion of your campaign, usually through social media.

There are various crowdfunding sites, but we have shortlisted the 7 best of them. Take a look and it will help you to decide which site to choose for the fundraising of your next project.

1.Kickstarter

Launched in 2009, Kickstarter is the most popular and reliable crowdfunding platform to get support for your innovative ideas.

Till now, this platform has funded more than 156,000 successful projects and raised almost $4.1 billion.

It supported different projects like movies, physical products, games, etc. This is basically a reward-based platform where backers are offered exclusive incentives in return for their support. The more a backer invests, the better is the reward for them.

Kickstarter has an all-or-nothing strategy that means you are given access to your raised funds only when you achieve your first fundraising goal.

In case of failure, all the money stays with the backers. Therefore, you will find only unique and high-quality projects here.

2.Indiegogo

Another highly reliable crowdfunding platform is Indiegogo. It supports all types of projects just like Kickstarter but is different in certain aspects. Above all is its feature of the flexible funding goal.

It is up to you whether you choose a fixed funding goal or a flexible funding goal. With flexible funding goal, you will continue to get your funding even if you have not achieved your goal within the deadline.

Another unique and beneficial feature is the Indiegogo InDemand that allows you to raise funds even after your campaign has ended when you are getting ready to complete the order or are in the production phase.

3.Patreon

This unique platform is especially focused on modern creators like bloggers, musicians, cartoonists, YouTubers, live streamers, etc.

This site is specially designed for Internet personalities to run their campaigns and get support from the loyal audience through paid memberships and generate revenue.

You can choose your customers to pay on per month and get special community perks, or on per project basis so that they could give you more incentives for your creation.

If you are a regular creator and have a considerate number of online fans, then you must not delay creating a Patreon page.

4.Crowdfunder (Shopify app)

The Crowdfunder app helps you to raise revenue in its simplest form, i.e. by taking pre-orders as a method to keep your idea validated side by side and fund the production.

The platform can not only be used to raise fund for new product ideas but also help generate money for a cause, and even helps to launch old limited run-products.

If you already have a Shopify store and are willing to launch a new product, then it will be easier for you through this app.

5.GoFundMe

This crowdfunding platform is completely free but is limited for individual supports and generating money for a cause.

As the platform is used usually for personal causes so the backers tend to choose projects of their interest or within their personal networks or to which they are quite familiar.

Though this platform is not for commercial campaigns if you are a small business owner and are going through hard times, you can start a campaign to get help on a personal basis.

6.Fundable

The Fundable is associated with Startups.co and is one of the top sites that has allowed startups to provide equity or reward in exchange for funding.

Startups either offering rewards or equity is highly beneficial for fundraising purpose, as long as you have a solid business plan, a track record of growth and a pitch deck.

It charges a fixed amount of $179 per month in the duration of active campaigns, instead of a specific percentage of the funds.

7.Crowdfunder

At this equity crowdfunding platform, to create a public profile and deal room in order to invite investors you need to buy a per month plan, starting from $299 per month.

But to create a non-public profile you don’t need to pay anything. The network has more than 12,000 capitalists and investors with whom you can connect and raise the capital you desire .

Summary

Crowdfunding is just the first step towards a whole new process of convincing people and raising money for your project.

It takes a lot of effort, preparation, and luck to achieve your goals. With the options presented here, you a breath away from your funding goal.