Where To Keep Your Savings?

Savings are an important component of our financial life. This is because no person in the world makes money in the exact pattern that he wants to spend it in. For instance, when you are young and single, you might be making more money than what is required. On the other hand, when you are retired, you are making no money at all and require some to survive. Savings and investments are the key here. They help you avoid starvation and gluttony and live a predictable financial life.

Here are some maxims to remember when it comes to your savings:

Cash Is Trash: Keeping your holdings in cash and bank balances is simply unadvisable. You need to keep a certain amount to meet immediate liquidity requirements. However, keeping all of your money there at a single point in time is counterproductive. The interest rates offered by banks on savings accounts are always less than the inflation present in the market. Hence, you may be losing purchasing power. Your $100 may grow to $105, but it will buy goods worth less than $100 today. Hence saving in cash should not be your objective.

Invest In Real Assets: The best hedge against inflation is real assets that have a tangible existence, such as your house. Real estate grows in value over years. Even if it does not, it does provide you with stable passive cash flow. Gold and silver are known to be the best hedges against inflation. However, ensure that you hold them in physical form.

Invest In Paper Assets: Also ensure that you are well invested in the markets. Invest in a portfolio of stocks, mutual funds and bonds. Keep varying the percentages of asset allocation at different stages of your life.

It is important to save. However, it is even more important not to lose the purchasing power of your money when you save it.

Read More On :  Where To Keep Your Savings?

There are Many Opportunities in Japan, says Warren Buffett

Warren Buffett, who became the world’s third-richest person through long-term value investing, remains in favor of investing in Japan, even after the March 11 disaster and the country’s biggest corporate scandal at Japanese Camera maker Olympus Corp. “There are lots of opportunities in Japan”, Buffett, 81, said in Iwaki city. He said he is interested in “businesses that will be around for many, many decades.”

Warren Buffett, chairman of Berkshire Hathaway Inc., is visiting Japan for the first time to see the plant of tool maker Tungaloy Corp., which is owned by the Berkshire subsidiary Iscar, headquartered in Israel. The factory is located approximately 40 kilometers (25 miles) from the Fakushima Daiichi nuclear power plant, from which the radiations are leaking continuously since it was wrecked by the March 11 earthquake and Tsunami.

“The tsunami does not change Japanese people and Japanese business” the chairman and Chief Executive of Berkshire Hathaway said at a news conference. During his later news conference, Buffett also said that the corporate governance scandal that has swallowed up the Olympus Corp., does not affect good businesses.

Read More : There are Many Opportunities in Japan, says Warren Buffett

S&P Capital IQ Reiterates its BUY Rating on Boeing

Analyst Richard Tortoriello of S&P Capital IQ reiterates his BUY rating on the shares of The Boeing Company (NYSE: BA). The 12-month target price is set to $86.00.
In a research report published this morning, analyst Richard Tortoriello mentions that the company announced an $18 billion deal of supplying 50 777-300ERs to Dubai-based Emirates Airline. This deal is the biggest single order in Boeing’s history in dollars, the analyst says. The analyst believes that this deal will enable BA to solidify its lead over its competitor Airbus in the attractive wide-body market, as 787 has already surpassed Airbus’s A350-XWB. The outlook for BA stays healthy as emerging market airlines continue to raise their fleet size to accommodate more travelers while Middle Eastern countries expanding into commercial aerospace, the analyst adds.

Read More : S&P Capital IQ Reiterates its BUY Rating on Boeing

S&P Capital IQ Reiterates its BUY Rating on DISH Network

Analyst Tuna Amobi of S&P Capital IQ reiterates her BUY rating on the shares of DISH Network, while raising her estimates for the company. The 12-month target price is set to $28.

Analyst Tuna Amobi, in a research note published this morning mentions that with the pending approvals for $1.4 billion Terrestar and $1 billion DBSD deals, Chairman Charlie Ergen recently offered the clearest strategic signal on the potential long term spectrum deployment for mobile video. The analyst believes that DISH Network would go for a JV rather than a solo wireless build out. As the Blockbuster is in the mix increasingly, the new CEO Clayton seems keenly focused on marketing revamp, the analyst adds. The EPS estimates for 2011 and 2012 have been raised from $3.17 to $3.37 and from $2.60 to $2.66, respectively.

Read  More : S&P Capital IQ Reiterates its BUY Rating on DISH Network

SEC Says Citigroup ‘Misconduct’ Led to Investors Losing $700 Million

The Securities and Exchange Commission (SEC) stated in a court document filed Monday that at the start of the mortgage meltdown, investors were misled by Citigroup about a housing-related investment and as a result they lost more than $700 million in the deal. SEC also said that all the investor losses were “not necessarily” the result of misconduct and as such it would accept $285 million from Citigroup to settle their cases against the company.

SEC said that the Citigroup made profits of at least $160 million on the transaction. As per the settlement, Citigroup will have to give up its alleged ill-gotten gains of $160 million and pay interest of $30 million in addition to a $95 million penalty, making a total payment of $285 million. However, Citigroup neither admits nor denies wrongdoing under the proposed settlement. Only one mid-level employee at the subsidiary has been charged in the case and he is fighting the charges.

Better Markets, an advocacy group, has asked for rejection of the Citigroup settlement. Dennis Kelleher, the group’s president, said in a statement that “Unfortunately, the SEC seems more interested in issuing press releases and wrapping up its investigations than punishing Wall Street for its massive frauds. Such settlements don’t deter crime. They reward it.”

Although the settlement is modest in comparison to Citigroup’s third-quarter profit of $3.8 billion, SEC has defended it as “fair, adequate and reasonable.”

Read More :  SEC Says Citigroup ‘Misconduct’ Led to Investors Losing $700 Million

Fed Forecasts Weak Growth and High Unemployment in the Years Ahead

A gloomy outlook for the coming years has been forecast by the Federal Reserve as it downgraded its projections for the US economy Wednesday. The Fed warned that high unemployment and weak growth of the economy are here to stay for years.

The unemployment rate has been forecast by the Fed to be around 8.6 percent at the end of next year, slightly down from the current 9.1 percent. Even by late 2014, it is expected to be between 6.8 and 7.7 percent. Fed’s forecast in June had projected unemployment to be around 8 percent by the end of 2012.

The Fed’s policymaking board, during a two day meeting that ended Wednesday, did not initiate any action to boost the economy and left the interest rates at their current low levels. Central bank leaders have now reconciled to the idea that the economy is not likely to grow as before because of the consumer debt and a depressed housing market. As such, they feel that employment figures are not likely to improve given the expectations that economic growth will be stunted in 2012.

Fed Chairman Ben S. Bernanke said that “Evidently . . . the drags on the recovery were stronger than we thought,” and added that the problems in the housing market were more severe and stubborn than analysts had thought.

Read More :  Fed Forecasts Weak Growth and High Unemployment in the Years Ahead

BofA Abandons Monthly Debit Card Fee Plan

Bank of America (NYSE: BAC) has finally abandoned its plan to impose a $5 debit-card fee in view of customer resentment and the decision of its rivals to move away from such a controversial step. The second-largest bank of the U.S. has had to forego earnings of between $500 million and $1.4 billion annually which would have accrued to its income by imposing the debit-card fee.

Bank of America had imposed the fee in September because the Dodd-Frank Consumer Protection Act demanded transparency in bank charges and banned certain juicy fees. Customer protests along with criticism from President Obama created uproar against BofA’s decision and its position became weaker as rival banks like Wells Fargo and JPMorgan Chase refused to impose the fee.

Nancy Bush, an analyst at SNL Financial said, “It was a reality smack in the head for these companies and in my view it was much needed.” Chief Executive of the bank, Brian T. Moynihan had defended the imposition of the fee saying that everyone realizes that the bank has a “right to make a profit.”

After widespread demonstrations and a show of resentment among the customers, the bank decided to abandon its plan. In a statement, David Darnell, co-chief operating officer at Bank of America said that the bank had listened to their customers and recognized their concerns and “as a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”

Read More On :  BofA Abandons Monthly Debit Card Fee Plan

Oil Falls after Biggest Monthly Gain since May 2009

Oil fell in New York in the wake of a surge in the U.S. dollar after Japan intervened to stem the rise of the yen for the third time this year and on the basis of speculation that demand is set to slow down. Brent’s premium to U.S. crude slid to a four-month low and futures dropped as much as 1 percent after the weakening of the yen and a technical indicator signaling prices may have risen too fast. Oil surged 18 percent in October, the biggest monthly increase since May 2009.

The former head of the International Energy Agency said that crude prices at $100 a barrel would be unsustainable. A stronger dollar typically curbs demand for commodities from holders of other currencies. Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, said, “My anticipation is that prices will consolidate,” and added that prices at $93 to $95 a barrel are “expensive.”

Crude for December delivery dropped as much as 92 cents to $92.40 a barrel in electronic trading on the New York Mercantile Exchange and was at $92:56 at 12:02 p.m. Singapore time. Prices slid 0.7 percent on Oct. 28 to $93.32.

Brent crude for December settlement was at $109.02 a barrel, down 0.8 percent, on the London-based ICE Futures Europe exchange. The contract traded at a premium of $16.46 a barrel to New York futures, which would be the lowest close since July 4. It closed at a record $27.88 on Oct. 14.

Read More On : Oil Falls after Biggest Monthly Gain since May 2009

Apple Loses out to Samsung in Smartphone Business

Samsung surged past Apple (NASDAQ: AAPL) and usurped its position as the world’s top smartphone maker, in the third quarter with a 44 percent jump in shipments. It has also forecast strong sales in the current quarter. Whereas Apple had introduced its first iPhone in 2007, Samsung is comparatively new as it entered the smartphone market only last year. However, its sales soared mainly because of a sleek production system that is capable of rapidly bringing new products to the market.

Kim Hyun-joong, a fund manager at Midas Asset Management, which owns Samsung shares, said that “In the handset division, Samsung has no real rival models to challenge its products except for the iPhone 4S. Apple and Samsung will continue to dominate the market in the fourth quarter.”

On Friday, Samsung posted more than double profits for its telecoms division, which stood at $2.2 billion and accounted for 60 percent of Samsung’s total profits. Its shipments of smartphones increased by 44 percent from the previous quarter and stood at 27.8 million units, up nearly four times from a year ago. On the other hand Apple’s iPhone sales dropped by 16 percent to 17.1 million units in the third quarter.

Samsung’s share of the global smartphone market stood at 23.8 percent, 9 points higher than Apple. Its shares were up 1.6 percent by 0500 GMT, versus a 0.6 percent gain in the wider market.

Read more on : Apple Loses out to Samsung in Smartphone Business