Trade Forex or Invest in Real Estate

Most people who want to establish a financially-secure future choose to invest or trade in real estate. Indeed, if you take a look at the list of names of the wealthiest people in any category, most of them have allocated major portions of their assets in real estate. Donald Trump, who made his fortune in real estate is very popular and his success story is an inspiration to all of us.
Books like Rich Dad, Poor Dad , by Robert Kiyosaki and other property investing books written in the last fifteen years, introduced the average person to real estate investing. Thanks to these books, many people have opened their minds to new possibilities which they can now envision for themselves.
This article will not dispute the validity and the wisdom of investing in real estate. However, it might not be the best option for everybody. Each of us has different limitations and our circumstances vary. At the start -- for most of us -- we have to choose which area to specialise in since there is only so much money to go around. What I can do, is to at least highlight a few aspects of trading and investing in both areas. I then leave it to you to decide what you would like to focus on.
I should let you know that I have not yet invested in real estate myself, but I have considered it and I have asked myself the same questions you might be asking yourself now. I have read a lot on the subject matter and my assessment is purely based from my readings. Individuals using real-estate as their vehicle to create wealth may have different perspectives and I strongly advise you to seek their counsel to gain a more balanced outlook on this issue.
PASSIVE INCOME OR CAPITAL GAINS
If you like the idea of buying property to receive rent revenue, then the real estate market maybe better for you. You can structure your properties and contractual agreements to maximise the passive income you get from your tenants.
However, if you prefer to buy a property mainly because you think you can resell it at a higher price later, then you want to make money mainly from capital gains. If this is your philosophy, then forex could be a better trading vehicle for you than real estate because exchange rates fluctuate faster than real estate prices. Furthermore, transactions are easier and they are instantaneous to complete.
CAPITAL
To buy real estate, you need have at least 10% of the acquisition cost of the property, if your bank is willing to lend you the other 90%. If the house costs $350,000, you will need to cough up $35,000. That is a year's gross income for many people.
If you want to start trading forex, most brokers allow you to open a trading account for just $200. With $50, you can trade 10,000 units of a currency, if you have a margin ratio of 200:1.
LIQUIDITY
Whenever you want to buy or sell currencies, there is always someone willing to buy from - or sell to - you at the most competitive price. The forex market is the biggest market in the world and if you have hundreds of thousands of dollars you want to exchange for another currency, you can do so within a couple of seconds. To buy or sell a house or an apartment, you expect to wait for weeks, if not months.
PRODUCT HOMOGENEITY
In the real estate market, one house is not the same as another. Each property is unique. One might have a better foundation, a worse design or a prettier garden than another. Knowledge of these strengths and weaknesses become a significant factor if you are to make money from a transaction. Therefore, if you enjoy or if you are good at selling, promoting, negotiating and bargaining based on these differences, the real estate market is for you. Further, your lawyers, accountants, advisers, real estate agents and consultants play a significant role in your success.
If you want to trade currencies, there is no need to negotiate the price with the other party. If you are a seller, there is no need to educate potential buyers as to the benefits of your product. If you are buying, you have piece of mind that you are getting the best possible price for the currency from your broker at that particular point in time.
TRANSACTION COSTS
Buying and selling real estate is much more expensive than buying and selling currencies.
'SHORTING' MARKETS
When you have a property and you suspect that its price will go down in the future, your options are limited: hang on to the property or sell it now. In forex, if you suspect that a particular currency will depreciate in value, then you can exchange it for another currency. You buy it back again after it has already reduced in value to realise your gain.
MEDIATED TRANSACTIONS
In real estate you are dealing directly with the other party, taking on the other side of the transaction. This is why you need to go through a lot of paperwork and consult your lawyers to ensure that you know about the options available to you when the other party fails to fulfil his or her end of the bargain.
In forex, you do not have to worry about whether a buyer or a seller is going to fulfil his or her end of the bargain for whatever reason, because you are not directly dealing with that particular person. You are dealing with the broker who ensures that somebody will always take the other side of your trade.
CONVENIENCE
The forex market is open 24 hours a day. You do not have to meet the buyers or sellers in person. You do not have to conduct meetings with lawyers, accountant, bank representatives and so on. You can buy and sell currencies in your pyjamas at midnight if you like and the transaction will be complete before you go back to bed.
CONCLUSION
All in all, if you are an investor looking to make money from a combination of rent revenue and capital gains, you may want to invest in real estate for the long-term. If you are a trader wanting to profit purely on capital gains, then trading forex is probably better for you than trading real estate because you can start with a small fund and your rate of return is limited only by your ability to trade well. The transactions are mediated, it is more convenient and transaction costs are a lot smaller. The market is also more efficient due to product homogeneity and liquidity. Lastly, there are opportunities to profit regardless if the prices are going up or down.
I believe that if done right, neither venture is more or less riskier than the other. The risks are up to you to manage. With this article, I hope I helped you make a decision appropriate to your circumstances.

Have a great week... Global Financial Partners

Nice Visit to ASX Yesterday!!

 

THE Australian Securities Exchange has warned of increasing risks of sharp swings in the stockmarket with the rise of ultra-fast trading technology taking place on dark pool trading venues.
The comments come just days after Wall Street was hit with another high-tech trading glitch when a series of errant trades triggered sharp swings in stocks across the New York Stock Exchange.
The ASX raised the risks of the trading in its submission to the Australian Securities and Investments Commission review over rules to regulate the flow of trading away from the public exchanges into so-called ''dark pools''.

Dark pools are orders to buy or sell shares set up by brokers or specialist firms that are not submitted to transparent ''lit'' markets, such as ASX and Chi-X.

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Dark pools already account for about 30 per cent of total Australian trading volume, and ASX has said the high-frequency computer-based traders operating inside them are effectively operating under limited regulation.

In its submission, ASX also said the increased level of trading that takes place in dark pools is resulting in higher costs for investors and resulting in widening spreads between buy and sell orders.
''There is clear evidence, both in Australia and overseas, that an increase in dark execution results … in higher costs for investors and a negative impact on price discovery,'' the ASX said in its submission.

''Moreover, the proliferation of trading venues and algorithmic trading significantly increases the risk of unexpected market movements or disruptions, which can undermine investor confidence.
''There are now numerous examples of this in the USA, which today is one of the most fragmented markets in the world.''

Last week, a glitch in a trading algorithm run by just one large Wall Street trading specialist, Knight Capital, led to a cascade of faulty trades that engulfed 140 New York Stock Exchange-listed companies.
ASIC is considering limiting the migration of trades to dark pools by allowing only large trades - ones of $1 million or more for the 26 biggest and most actively traded shares, trades of $500,000 or more for a group of 28 shares and ones of $200,000 for others.

ASX said the $1 million threshold was ''too low'' for some of the largest stocks on the market and called for a review of the limit. It also urged a minimum $25,000 threshold to be imposed on any dark pool trades.
Dark pool trading has grown significantly in recent years. ASX figures show the proportion of dark trades over the past year has varied between 14 per cent and 43 per cent of total turnover.
Story By Eric Johnston

Global Financial Partners Team Up With AVA Trade

AVAFX is becoming more and more a sexy product for young and new traders to use as a starting place in the Trading Game. We have teamed up with them and the future is looking fantastic. We have already expanded in to several countries from our little office in Sydney Australia.

If you would like to see what all the fuss is about then take up one of our $100,00.00 Accounts and trade in Real Time on a Demo Account FREE! Its the easiest way to play around without losing, we hope you enjoy it.

Global Financial Partners Team

Global Financial Partners attend Australian India Business Cocktail Party NSW Parliament House

Friday night a select group of NSW business people gathered at Parliament House to award Indian businessmen that have invested huge amounts of money in the Australia.

The event also was honoring one of Australia’s greatest ambassadors to India, cricketer Brett Lee. Mr. Nirmal Singh Bhangoo Chairman, Pearls Global Group was honored as well.

The Awards were presented by the Honorable Barry O’Farrell MP, Premier of NSW (In Photo with Chris H. Global Financial Partners)

with special guest Mr Amit Dasgupta Consul General to India & Dr. GK Harinath Chairman Cricket NSW.

After the presentations there was plenty of time to mingle and that is just what we all did. We thought it was so amazing that all the big banks were there LOL but overall it was a fantastic evening.

Looking forward to future meetings with all the great guests we met.

Chris Henderson Global Financial Partners

After CEO Andrew Mason gave an IPO death stare to Kara Swisher at D9, looks like Groupon has filed an S-1 to IPO, looking to raise at least $750 million. According to the form its 2010 revenues were $713 million and revenues grew 22.7X in 2010. Quarter 1 2011 revenues were at $644 million. The company lost $456 million last year and lost $146 million last quarter.

Groupon has 83.1 million subscribers, 15.8 million of which have purchased a Groupon. There have been over 70 million Groupons sold as of today with 30 million sold in 2010 and 28 million bought in the first quarter of 2011.

The round is being underwritten by Morgan Stanley and Goldman Sachs.

Cleverly worded press release below:

LETTER FROM ANDREW D. MASON

June 1, 2011

Dear Potential Stockholders,

On the day of this writing, Groupon’s over 7,000 employees offered more than 1,000 daily deals to 83 million subscribers across 43 countries and have sold to date over 70 million Groupons. Reaching this scale in about 30 months required a great deal of operating flexibility, dating back to Groupon’s founding.

Before Groupon, there was The Point—a website launched in November 2007 after my former employer and one of my co-founders, Eric Lefkofsky, asked me to leave graduate school so we could start a business. The Point is a social action platform that lets anyone organize a campaign asking others to give money or take action as a group, but only once a “tipping point” of people agree to participate.

I started The Point to empower the little guy and solve the world’s unsolvable problems. A year later, I started Groupon to get Eric to stop bugging me to find a business model. Groupon, which started as a side project in November 2008, applied The Point’s technology to group buying. By January 2009, its popularity soaring, we had fully shifted our attention to Groupon.

I’m writing this letter to provide some insight into how we run Groupon. While we’re looking forward to being a public company, we intend to continue operating according to the long-term focused principles that have gotten us to this point. These include:

We aggressively invest in growth.

We spend a lot of money acquiring new subscribers because we can measure the return and believe in the long-term value of the marketplace we’re creating. In the past, we’ve made investments in growth that turned a healthy forecasted quarterly profit into a sizable loss. When we see opportunities to invest in long-term growth, expect that we will pursue them regardless of certain short-term consequences.

We are always reinventing ourselves.

In our early days, each Groupon market featured only one deal per day. The model was built around our limitations: We had a tiny community of customers and merchants.

As we grew, we ran into the opposite problem. Overwhelming demand from merchants, with nine-month waiting lists in some markets, left merchant demand unfilled and contributed to hundreds of Groupon clones springing up around the world. And our customer base grew so large that many of our merchants had an entirely new problem: Struggling with too many customers instead of too few.

To adapt, we increased our investment in technology and released deal targeting, enabling us to feature different deals for different subscribers in the same market based on their personal preferences. In addition to providing a more relevant customer experience, this helped us to manage the flow of customers and opened the Groupon marketplace to more merchants, in turn diminishing a reason for clones to exist.

There is more but you get the picture hey all you need is 83.1 million subscribers, 15.8 million actually buying and it's in the bag..

Have a great week

Chris Henderson Global Financial Partners

Zuckerberg Can Rest Easy at China’s Challenge

Mark Zuckerberg shouldn’t lose too much sleep about China’s Facebook beating him to Wall Street.

Renren Inc. is the first social-networking website to go public in the U.S., raising $743 million with which founder Joseph Chen can tap China’s 1.3 billion people. China is a market Facebook Inc. has yet to friend and the U.S. equity market is a place Zuckerberg has yet to tread.

Here’s the thing, though. Renren investors are paying a huge premium for future spoils -- the belief that China will grow 10 percent indefinitely. To do that, the country will have to upgrade its economic software.

This vital bit of re-engineering isn’t unfolding on schedule and China’s undervalued currency is partly to blame. It stifles incentives for the Zuckerberg and Chen wannabes out there, imperiling the nation’s outlook.

It sounds counter intuitive that the anchor of China’s success in raising living standards over the last three decades now is holding it back. As China enters the age of an Internet it obsessively censors, the yuan has lulled officials who must move the economy away from manufacturing that relies on cheap labor. The longer the currency is artificially weak, the more difficulty China will have nurturing the innovation vital to its future.

Stay tuned for more on this one..

CJ Henderson Global Financial Partners

Saving and investing – make your money work harder

Investment Tips:

The first step towards a secure financial future is to clarify your
investment goals. Once you have identified your goals, it is
important to set a plan to ensure you save while investing wisely
to make sure you can reach them.

One of the easiest ways to keep your saving plan on track is to
‘pay yourself first’. What does this mean? Set aside a part of your
pay packet for yourself, before you pay anyone or anything else
such as bills, groceries, shopping, car, phone, rent or mortgage.

By setting aside an amount straight from your bank account
when your pay goes in, you can make sure that you get paid
regularly… and on time. But how much can you afford to pay
yourself? Start by making a budget. List all your expenses and
then work out how much you can afford to save each month.

Stay tuned here each week for more investment tips.
Have a great day!
Chris Henderson Global Financial Partners