The Collapse of Oil Price

After around 5 years of stability in the market of oil, the prices have been on a drastic decline, dropping roughly 40% in cost, since June. In the time period of about 6 months, the price of a barrel of oil dropped from $115 to below $70 and continues to decrease!

The price of oil is configured by three main factors: demand, supply and expectation. Demand is arguably the most significant factor in the price of all, because if there is high demand of something, more of it is supplied and the expectations are raised.

However, all of these factors can be upset or affected easily; for example, the levels of demand can vary, depending on economical statuses, the time of year, as more energy is used in the winter, due to it being cold and heating being required.

Supply on the other hand, relies on the demand, but also is affected by the weather. There is also a limited supply of oil and in the long future, as there becomes less of it, it will become more valuable.

The reason why the price of oil is currently collapsing, is because there is weak economic activity, more alternative and efficient ways are being discovered to create energy, like shale oil, which are sedimentary rocks. Also, factors such as restricted trading and political issues are also contributing towards to collapse of oil price.

Firstly, Iraq and Libya, two large oil producers, producing over 4 million barrels a day combined, are not safe to trade with, because of risk due to terrorism and political instability. Furthermore, the Saudi Arabians, along with several other countries located near them, have refused to sacrifice their own market share to restore the price.

This is a big issue, because combined, they produce about a third of all oil produced in the world. Their reasoning for this is that some countries that they particularly hate, such as Russia, would benefit from this the most, as they rely on a high oil price to pay for costly foreign adventures and other things. Besides, Saudi Arabia has over $900 billion worth of oil reserves and it is cheap for them to get it out of the ground, so they wouldn’t be too negatively affected by lowered oil prices.

Overall, countries which are reliant on large amounts of oil to carry out foreign advantages, such as Russia and Iran, will suffer the worst from this. Also, western oil companies which have made big investments and have high-cost projects under way are being negatively affected.

However, the Saudi Arabians and their gulf allies benefit quite well from the drop of oil price, due to their mass reserves. The Chinese also have a massive influence in the change of oil price, as they are one of the biggest oil importing countries in the world and have many overhanging investments in the industry of oil.

Nevertheless, they are starting a big project to extract 30 billion cubic centimeters worth of shale oil from their own land, believed to be one of the biggest shale oil resources in the world. As a result, they needn’t to worry about the drop in oil prices at all.

Best short term stocks to buy

share pricesIf you aren’t aware of what short-term investments are, they are basically high-risk financial instruments which can realize substantial gains or yields over a short period of time.

Stocks typically fall into this category of investments as they can be very volatile yet yield huge returns on that investment. For all practical purposes, the hopes and dreams of numerous educated investors have come true whenever they have invested in the stock market for short-term financial gain.

Considerations regarding the best short-term stocks to purchase

Keep in mind that where the modern day world and its economy are concerned, stocks have often times been the foundation of that economy. This is the allure of many investors as well as the possibility of realizing a sizeable financial gain in a short period of time. However, this has also been a place where many investors have experienced considerable financial loss and where their life savings have crashed and burned.

Remember to consider the fact that numerous dangers exist whenever you are investing for the short term in the stock market. Something you definitely need to consider is the fact that if the company you invested in goes “belly up” (i.e. bankrupt), you lose everything that you invested.

On the other hand, you could receive a sizeable gain on that investment as well. So you really need to have some knowledge of the stock market and the many shortcomings involved. It would be wise to talk to a broker or your financial advisor.

Four steps to choosing the best short-term stocks

For many of us, the Internet has provided us with a very convenient method of shopping. You can price shop and make your purchase online while avoiding the hassles of the traffic and the crowds you encounter while shopping outside the home.

The same holds true with online investing, but you do have to be careful when you engage in this investment activity. Here are 4 steps you should consider when searching for the best short-term stocks to buy:

• Step #1: Develop the method you want to use for choosing short-term stocks
• Step #2: You should investigate some of the more popular online brokerages and do some comparisons of fees and rates of interest income if that is involved. Consider optionbit if you want to use binary options.
• Step #3: Educating yourself by subscribing to a publication that offers advice and tips on short-term stock investment picks is also recommended. Reading The Economist is a good start.
• Step #4: Take advantage of any investment software applications available

One thing to consider is that one of the best tools for short-term trading is digital options. With such an options you can make a bet that a stock will rally in the short-term without buying the stock itself. Instead you buy the binary option and if the share price goes higher you can almost double your money.

One thing to take into consideration is the tax implications of using such and such a trading vehicle. And it depends in which country you live. Often short-term capital gains are taxed higher than long-term ones, so do your homework to determine what fits your case best.

Trading software

charting softwareStock charting freeware is basically a free internet download which enables you to chart the particular stocks you have invested in or are considering investing in.

There are literally hundreds of these offered online today so you do need to choose those downloads wisely. Some freeware is considerably better than others, while other types only scratch the surface of stock charting activities. Despite the fact that all of these downloads are free of any fees or charges, most will urge you to purchase an upgrade.

Features and Benefits to look for

When you are searching for stock charting freeware online it is important to look for certain features and benefits before downloading the application. These include:

  • ease of installation
  • free real-time streaming
  • a huge selection of trend indicators
  • capability of drawing trendlines
  • real-time stock news
  • intuitive design and ease of navigation
  • integrated personal portfolio and stock watch tracking

Additionally, you need to consider the fact that this is a valuable tool for serious stock investors. Thanks to the internet, stock charting is now easier than ever to obtain when investing in the stock market.

Stock charting areas to become familiar with

There are basically 4 key areas of stock charting freeware that you want to become familiar with before going any further:

  • “X” and “Y” axis – the “X” axis located on the bottom portion of the stock chart and runs horizontally from left to right.
  • Identification section – this section displays key information about the company stock and other aspects of the actual stock such as:
    • company name
    • trading symbol
    • the current date
    • price changes for the current day
    • trading volume
    • change in value.
  • Time Frame – this refers to the length of time that you are tracking the stock’s trends such as 90 days, 6 months, or 1 year. Once you have established your trading style, it is recommended that you change the time frame to facilitate the way in which you purchase and sell your stocks. For short-term investing, use a 3 to 6 month time frame. Use 1-year to 5-year time frames when investing for the long term.
  • Volume bars – oftentimes referred to as the “heart” of the stock market, this is your best supply and demand indicator. This will help you get a feel for the strength which is behind that stock’s price movements.

How to protect your investments

YOUR INVESTMENTS AND THE EFFECTS OF INFLATION

investments

Most people who have just started investing are not always aware of the many things that will impact the value of their investments either positively or negatively.  It’s no surprise that when the global economy is as unstable as it currently is that there are more possibilities for your investments to be negatively impacted.  The main thing that you need to be concerned with is inflation and how to protect your investments from it.

WAYS TO PROTECT YOUR INVESTMENTS

There is really no right or wrong way to look at inflation.  However there are things that you can do to protect your investments from it.  The following are 4 different ways for how to protect your investments so that inflation does not negatively affect that nest egg too badly:

Protect your cash first – nothing hurts a family more from a financial standpoint than an interrupted cash flow.  You can protect yourself against this by investing in what are called TIPS or Treasury Inflation Protected Securities.  TIPS are an excellent way to offset the risk involved with your investments.  Offsetting investment risks is referred to as hedging and it is always recommended that you find something to invest in so as to protect yourself and your investments.

Put some money into gold or gold bullion – gold has always been considered a great investment, regardless of where the value is at when you purchase it – for the most part.  There are a number of economic and other aspects that investing in gold protects you against, besides hedging against inflation.  These include:

• wars
• social unrest
• declines in the investment market
• currency failures
• burgeoning national debt

Consider dabbling in the commodities market – resource-based investments (i.e. commodities) are another hedge against anything that can negatively impact your portfolio.  Typically, the commodity market is less susceptible to these downturns compared to other investment vehicles.

Shorting the dollar is another way to hedge and protect those investments – if you consider the fact that the US dollar could fail at any time based on the unstable state that the economy is in, there’s a lot to be said about planning ahead and hedging against this.  Considering this fact, it makes sense that there are flaws in the currency of the US and you should always underestimate where your investments stand against the value of the United States dollar.