Educating people on exchange traded funds and the impact they have on today's financial markets.
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The average expense ratio of ETFs launched in the past six months, many of which were leveraged index funds; sector, industry or niche funds (ophthalmology, for instance); or offerings tracking specialized or custom-made benchmarks.
The Federal Reserve will be meeting next week to determine the fate of interest rates in the US and whether or not they decide to raise rates or keep them at their current levels, the markets are set to act accordingly.
The case for not raising interest rates can be supported by the uncertainty that lies in the international markets, more specifically the emerging markets. Slower than expected growth in China’s economy coupled with the recent devaluation of its Yuan has already started to have a domino effect on other emerging markets such as Malaysia, Brazil and Russia indicating economic growth slowdowns in these countries. Furthermore, raising interest rates could potentially be a hindrance on the currency exchange rates of the emerging markets as that many of them will likely devalue their currencies to make their exports more attractive (to spark economic growth) which will result in more expensive US-dollar denominated debt. Continue Reading...
The price of crude oil has taken a huge hit over the last year, falling by more than 50% as a result of supply and demand fundamentals and continues to face an uphill battle.
Most recently, Goldman Sachs lowered its 2016 forecast by nearly 21% for both light sweet crude oil and Brent Crude. Light sweet crude is used to measure and track the US crude oil markets whereas Brent Crude is used to track and measure the global crude oil market.
This recent hit on the forward looking prices has come as a result of an oversupply of crude in the global market. With an economic growth slowdown in China and other emerging markets, the demand for crude oil around the world is softening while production remains intact. OPEC has recently indicated that it intends to keep its grip on its global market share by not slowing down on production which will eventually push inventories to all- time highs. With demand remaining lackluster and production remaining steady, it is basic microeconomics that indicates the supply and demand indifferences will likely have a negative effect on the price of crude. Continue Reading...