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Ultimately, investing in yourself is what is going to lead to success. Here are some easy ways to invest in yourself so that you can run a successful business.

Take Online Courses

Learning is a lifelong process and even if you have been to college, there is still plenty you can learn. You are going to be constantly learning when you are starting a business. In some ways, you will be entering uncharted waters. You can prepare yourself for this task by taking online courses. Investing in your own education will help you be a better business owner. There are lots of options online and they are accredited so that you can obtain a certificate. With the right skills, you can learn ways to improve your business for the long term.

Enjoy a Holiday

A lot of business owners, especially in the early days of the brand, will not take a holiday. They focus all of their time in building their company. However, everybody needs to take time off work from and this includes the owners. This means that you need a holiday to avoid overworking yourself. If you continue to work long hours and feel stressed, this can lead to burnout. Taking a holiday allows you time away from a busy environment so that you can relax and recharge. When you return to work you can feel reenergized and refreshed, ready to take on the next challenge.

Work on Your Relationships

Personal relationships can often be neglected when you are trying to build a business. But spending time with your loved ones is a good way to relieve stress. You can also use this time to network and build good working relationships too. This will allow you to find the right partners and those who are going to benefit your business. Relationships with clients are also important and time should be spent interacting with them. This can make you feel good too.

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Look After Your Health

When you are spending a lot of hours in the office, it is easy to neglect your health. You may grab takeout food when you get home or skip meals without noticing. But this will take a toll of your health after a while. You may start to feel tired and lack energy. Not eating the right foods can affect your mental health too. Therefore, you have to invest in your overall health so that you can feel good and do the best for your company.

Start by enjoying a nutritious diet, making healthier choices when it comes to meals and snacks during the day. In addition, cut down your coffee intake and stay hydrated. You will be surprised how good you feel. Exercise is also important in this equation and a simple walk everyday can release endorphins to improve your mood.

Do not forget to visit the doctor and enjoy regular health checks. Even if you are investing all of your money into your business, you can use vision care loans online to help you look after yourself.

However, it can be difficult to know the aspects that are best to invest in. Here are five things your business should put their profits into in order to be successful.

Marketing

One of the most important elements of your business is going to be marketing. This is how you sell your products and services. Do not wait until you have built up a good customer database. From the beginning, you have to be investing in marketing so that you can grow. In particular, internet marketing is vital in the digital age and will attract new people to your business. If you do not know a lot about this, it is imperative that you outsource or hire employees that do. Having a marketing team will be highly benefit for your success.

Training and Education

If you want to continue to grow as a business, you need to invest in your workforce. Your staff are going to be responsible for the daily running’s and tasks at your company. It is essential they know how to be efficient and productive. Therefore, regular training is going to be important so that new skills can be learned and updated, depending on the field you are working in. There should also be a general opportunity for education so that your employees can progress.

Outsourcing

As your business builds momentum, there are going to be simple yet time-consuming tasks that need to be done. This could be anything from accounting to sorting the payroll. A good way to invest in your company, but save money at the same time, is to outsource some of this work. This can be a good way to find experts with the relevant skills and experience and only pay them for the work completed. Take your time and find professionals that are going to help your business grow and do not rush into decisions. Always seek testimonials before hiring third parties.

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Yourself

While many businesses owners remember to invest in their premises and their employees, they often forget to invest in themselves. There are still a lot of skills you can learn, whether this is taking online courses or attending conferences. After all, you are in charge of everything when it comes to your business. You want to stay up-to-date with the latest discoveries and technology so that you can stay ahead of the competition.

Equipment

If your business is doing well, you may see no need to change the status quo. However, it is essential that you continue to invest in your technology and equipment. This is going to allow you to keep up with innovations and trends in your industry. While you do not have to change your setup completely, every year you should be looking for ways to boost your efficiency. If you are worried about money, you can always look into equipment financing online. This can give you access to credit options.

Foreign exchange (forex) accounts for the world’s largest financial market. In fact, it was valued at $6.6 trillion (£5.3 trillion) last year, with London reigning as the largest forex market with a 43% share.

Here are some things that you need to know before making your very first trade:

Learn the basics

Forex, or the world of finance in general, can be very intimidating for the average person. The first step to breaking that barrier is to learn the fundamental aspects as well as common forex trading terms. Here are a few key terms that should be in your vocabulary:

• Currency pairs - Forex is always traded in a pair of currencies, which represents the value of one against another. For example, GBP and USD is represented by GBP/USD or vice versa.
• Base – The first currency in a pair. For example, GBP in a GBP/USD pairing.
• Quote – The second currency in a pair. For example, USD in a GBP/USD pairing.
• Exchange rate - The amount of quote currency needed to buy 1 unit of the base currency. For example, GBP/USD = 1.2252.
• Bid - The price at which you’re willing to buy the currency pair.
• Ask - The price at which you’re willing to sell the currency pair.
• Pip - The smallest price changes given an exchange rate.
• Spread - The difference in pips between the Bid/Ask prices.
• Leverage - A trader’s borrowed capital from a broker’s credit. This allows traders to fund their trade without having to pay the full value upfront.

Understand the factors that affect forex

Knowing the right words is only the first step. You’ll need to have a working understanding of what moves currencies in the first place. This allows you to make an educated trade and minimise the risk of incurring any losses. These are some of the most important factors that increase trading risk:

• Interest rate - Rising interest rates generally correspond to a stronger exchange rate, while falling interest rates can result in a depreciation in currency value.
• Country - Take note of the country’s economic stability, especially for developing or third world nations.
• Counterparty - It refers to the broker or trading platform used which come with their own risks.
• Leverage - The more leverage you acquire could potentially lead to a bigger loss.
• Transaction - Communication or confirmation errors that can lead to a loss. For instance, significant time difference between markets leave plenty of room for market fluctuations, which can impact the trade made.
• Politics and Economy - Both have significant impacts on a country’s performance in the forex market. For example, the expected 25% downfall in the economy of the UK during Q2 will likely lead to a weaker performance of the GBP against other currencies.
• Liquidity - The high liquidity of the forex market means the demand and supply can vary wildly, which can affect market prices.

Choose a reliable forex broker and trading platform

To start trading, you need to find a reliable broker and the right trading platform. A broker is an individual or a firm that facilitates your trade. You buy or sell through a broker, who also gives you the leverage needed. When choosing a broker, find out whether they are regulated by The Financial Conduct Authority. See if they also offer a trial period so you can sample their services before committing to a certain brokerage firm.

A trading platform, on the other hand, is the software that allows you to access and trade in the forex market. Most offer demo accounts, which enable you to experiment and practice trading under real market conditions. Understand that trading forex is not without risk. However, knowing basic information, such as industry terms, allow every kind of trader to make more favourable decisions.

 In the medical profession, Dr Rodney Peyton OBE, MD has been called the World’s #1 Surgical Coach. But that’s not all he focusses his time on - he is also an international speaker, author, entrepreneur and investor, who has shared the stage with other investors and entrepreneurs including Hugh Hilton, Steve Wozniak, Nido Qubein, Stedman Graham, George Ross and JT Foxx. We spoke with him from his beach home on the Gulf of Mexico in Treasure Island, Florida about the five fundamental success strategies for ensuring life-long, robust financial health which will allow investors and entrepreneurs, not just to survive the next inevitable downturn, but to also be in a good position to profit from the myriads of business opportunities which arise during these cycles when market sentiment is low.

For most business owners, entrepreneurs and investors, the COVID-19 pandemic was a salutary experience. With minimal warning, their wealth bucket sprung a very big leak and they watched many years of growth and investment rapidly disappear. Attention turned from Return on Investment (ROI) to survival mode and many may well never recover, despite various government bailouts. The warnings were there. This time it was a pandemic, a decade ago it was a banking crisis. With both scenarios, there was a radical clear-out of those whose underlying physical or financial wealth was not robust. This situation will be repeated, and there is no better time than right now to ensure good health in both your personal and business life.

The key objective of the five fundamental wealth strategies is to take back control and gain the freedom to fulfil your life goals. Increasing your financial intelligence allows you to move from your present reality to a future well rounded and wealthy life that you, and those close to you, desire and deserve. The goal is to develop, grow and maintain diverse passive income streams to achieve what is termed financial independence, where passive income covers all the routine living expenses which suit your lifestyle. The ultimate objective is financial freedom - your lifestyle will remain secure and free of any market forces or changes in the general economic environment.

Regardless of where the audience is from, when asked from stage about their main focus in life, the vast majority of responses fit into five categories:

Ultimately, most would argue that lifestyle is the most important category to them and that in order to achieve and maintain their standard of living, the underlying financial situation has to be stable and robust. I invite audiences to take a moment to set some goals for their own lifestyle - both in the present and post-retirement. What are their actual living costs at the moment including household, general insurance, medical, transportation, entertainment, and holiday costs? What would happen to these if they had to stop working for any reason and if the situation was to continue for three months, six months or a year into the future? Would they be able to sustain even their present lifestyle without alternative sources of income? What would happen with ill-health or after retirement?

I have found that many people, particularly professionals, would have great difficulty in maintaining their present lifestyle - especially if inflation is added to the equation. I am not a financial adviser. What I am is someone with more than 30 years’ experience, not just as a medical professional, but as an entrepreneur, investor and business owner, who has learned from personal experience. I have also had the opportunity to study and discuss wealth strategies with experts from around the globe and make them relevant for professional colleagues. This is what helped me to develop the following five fundamental wealth strategies for promoting and maintaining passive wealth.

“Multiple Streams of *Cash *Protected * by Active* Review”

Let’s explore each one of these strategies in more detail.

Multiple Streams

Controlled diversification of passive income streams is fundamental. In my experience, the main opportunities for passive income from investments are:

Commercial property such as retail centres and office buildings are, as evidenced by recent events, much riskier and should be left to professional investors.

Of all of these investments, the most secure over time is real estate. Just about every investment is linked in some way to assets, particularly property, and most successful entrepreneurs, investors and businessmen have an extensive real estate portfolio. Apart from having shares in real estate investments such as Real Estate Investment Trust (REITs), there are two main categories of real estate holdings – ‘buy to sell’ and ‘buy to hold’.

‘Buy to sell’ is analogous to buying beef cattle. Beef farmers buy stock low, spend time and energy fattening them up and hope to sell at a considerable profit. This is, however, speculative, and depends on market circumstances when the cattle come to be sold. Similarly, buying a property off-plan, or making improvements with the hope that it can be sold with a substantial profit, is also a speculative risk. Over time there will be many cycles in the value of real estate and these occur at different phases in different geographical locations. The challenge is not to get caught with a property that cannot be sustained, due to mortgage and maintenance costs, through any downturn in the cycle. A forced sale can result in considerable losses, which is exactly what happened to many investors in 2007/8 and is happening again in the recent downturn. In order to speculate successfully, significant financial backing to cover market variations is required and therefore, for most, this type of real estate investment is not a secure method of developing ongoing passive income.

By contrast, dairy farmers buy cattle which produce milk daily. He still has to feed and look after them but he has a regular supply of product to sell. Over time, profits may not be as great as with speculative investment, but there is rarely a total loss unless some disaster completely wipes out the herd. In property terms, these are called ‘buy to hold’ properties which produce rental income. Provided you buy well, the rental income covers the mortgage and maintenance costs to produce a monthly net income. Higher-end properties are higher risk as vacancy rates cause significant loss of income which will make it difficult to cover the costs. As a rule of thumb, I like all my properties to cash flow independently of each other. Often the best types of properties are those for low to middle-income groups. Even when there is a downturn in the market, property runs in cycles and providing they were bought well, short of a natural disaster or war, residential property will generally remain a good source of income in the long-term. Commercial property such as retail centres and office buildings are, as evidenced by recent events, much riskier and should be left to professional investors.

The stock market can give good returns, particularly with index-linked shares, but does require careful monitoring. For most busy professionals, such monitoring is not realistic and most rely on a company to manage their investment portfolio. Unfortunately, commission charges may have a significant negative impact on the compounded long-term gain, so be sure to negotiate rates and to be aware of high turnover, known as churning. Additionally, although the various indices eventually go up, the basket of the top companies within the index may change dramatically. The numbers may therefore increase, but an individual company may fall completely out of the index so that investing in today’s ‘top 10’ may not be the same as investing in next year’s ‘top 10’. There is a similar situation with the success record and reputation of particular fund managers who may have a good reputation in the press but remember - the past does not always equal the future.

Short-term lending for asset-based investments may produce a healthy return, often around 15 to 20% per annum. Neither the investment itself nor the success, or otherwise, of a specific business venture may be of particular interest to the investor who is generally backing the people involved, covered by the security of an asset or an insurance contract. These investments can vary between assisting builders to buy, develop and possibly flip properties to working with the film industry, not to invest in a movie itself, but to provide bridging loans between the time stars have been contracted and the banks and other institutions fund actual movie productions.

There are many other groups of assets, most of which are highly speculative. This includes everything from investing in commodities such as oil, gas, or precious metals to more specialist investments in coins, stamps, antiques, vintage vehicles or works of art. The challenge with these is that they may not be easily realisable into cash and would not, therefore, help create financial independence.

There is no such thing as a self-made millionaire – everyone has benefitted from the experience of others.

Another form of trading is in foreign exchange - or FOREX. There is great fluidity in the currency markets, and they can give high returns over even a short time span. Again, an individual wishing to undertake this form of trading would require a lot of training and these trades demand a considerable amount of time on an ongoing basis. Investing with a company with a good track record can produce a return upwards of 20% in today’s market.

Intellectual property is intangible or created in the mind. Examples would be a book, an invention, a design, a piece of art or a symbol and all intellectual property should be protected by copyright, patents, and trademarks. For professionals, one of the most frequent returns on intellectual property is in royalties which can be from book sales or the use of portions of a book, for instance when chapters are used for teaching in a university. It may also include income from subscription podcasts or webinars.

The goal is to create a balanced and diverse portfolio with multiple streams of passive income so that a downturn in one sector can be offset against upturns in others.

Cash

Cash is king. The front of the American dollar states “In God we Trust”. That is fine, but everyone else pays cash. Every month there has to be actual, passive, spendable income from investments or all the work in setting up your portfolio comes to nothing. I, along with many others, have found myself at times supporting an under-performing investment and the learning is not to become so emotionally attached to any investment that it is difficult to let go of it. It is essential to be realistic about the returns being made on any investment, which goes back to what I said earlier - cash flow is king. Is there an actual profit after every expense associated with it has been taken into account? With property, expenses include not just mortgage payments, but also the cost of maintenance, management, advertising, employees, insurance as well as any legal expenses. Will the mortgage costs change over time? What are the tax implications for any perceived profit, especially if there is a payback of mortgage principal from the rents?

It is therefore vital to have, not just book-keeping, but proper accountancy where the provided information is not just in terms of “stats” but in terms of “stats that count”. It is important that numbers are not simply crunched, but that the full story behind the numbers is evaluated in terms of quarterly and annual Profit and Loss (P&L) so that advice can be accessed in relation to the most cost-efficient way of managing any investment. There should always be two pairs of eyes on any set of accounts as well as your own.

Just about every government encourages individuals to invest in a pension, and while building up a pension fund has advantages, especially in terms of tax savings, a pension often does not provide financial independence, let alone financial freedom. Normally it will produce some level of income on which to build, but this can vary considerably if the value of the pension return is dependent on market forces.

Protected

Once a passive income stream develops, profits have to be protected and a robust tax strategy must be employed. In any jurisdiction there are mitigation strategies, such as acquiring and keeping holdings within a tax-efficient legal entity. Expert advice from those conversant and experienced in dealing with such strategies is essential. It is also important when developing these entities to include an exit strategy, both for the profits generated and for the holdings themselves.

While it is obvious that insurance has to be in place, particularly public liability, it is also important to have insurance for the principals involved in any company in case untoward events prevent them from functioning in their role. This should include full medical cover and in particular, cover for critical illness. Term insurance contracts are a relatively inexpensive method of covering the heavy loans which occur during the growth phase of a portfolio. Another vital insurance is a succession strategy in relation to how holdings may be handed over to another generation with minimal tax implications.

Finally, many investors have fallen foul of company regulations, especially with smaller entities. With corporations or companies, particular rules have been set in various jurisdictions for these to be regarded as entities in their own right and not as a simple ‘flow-through’ for investors. These companies, therefore, must follow the rules including having annual general meetings, a proper election of officers, the keeping of regular company minutes and regular filings of their status with appropriate government regulators. Failing to do so could render their company structure null and void.

Active

While these income streams are termed passive, they require to be actively supervised and managed. Even if a reputable team is in place, be it internal or external to the organisation, the ultimate responsibility and control must remain with the investor/business owner. This requires regular and frequent analysis of the figures and validated projections against agreed goals. In other words, you need to “mind your own business”.

There is, therefore, no such thing as a truly passive income. It is a true saying that no-one takes care of your money like yourself and, to a greater or lesser extent depending on the business or investment, principals need to be actively involved. For instance, if a property is being looked after by a management company, are they keeping up with the maintenance, are the tenants content? If not, the value of the property may decrease and may lead to civil or even criminal charges, for example, if a tenant is injured because gas or electrics have not been regularly checked. Poor maintenance and management may also result in difficulties with licensing authorities. Control of these entities is generally a team sport and detailed records of any major changes must be maintained.

Review

Benjamin Franklin said that two things in life are constant - death and taxes. There is a third - change. Whatever happens, life circumstances and the context of investing will change, requiring regular and frequent analysis of all the figures and validated projections against agreed goals with the investment strategy being altered, dependent on circumstances.

Tax laws change and therefore mitigation strategies which were appropriate at one time may no longer be available, for example, loss of tax relief on mortgage interest payments or a tax authority’s view on liability of particular legal entities.

In terms of real estate, some areas will ‘gentrify’ and increase in value whereas others will be in decline, so the value of any particular asset may vary, particularly in relation to the ability to bring in rent. Good commercial tenants may suffer in a market downturn or be affected by changes in the environment. For instance, in one of my own commercial properties, the creation of a new highway virtually destroyed the business of several tenants for more than a year. Other business owners may decide to retire and buildings may have to undergo modernisation and reconfiguration to meet market demand, or indeed be replaced in order to obtain the highest and best use of the land.

Finally, investors, entrepreneurs and business people themselves have a life cycle and what may have been appropriate when growing assets in their 40s, may not be appropriate at later stages in life when, for instance in retirement, they require a higher financial return to maintain their lifestyle.

Continuing education in relation to investments and the business environment is an absolute requirement of successful investing, as is working with appropriately experienced coaches and mentors. There is no such thing as a self-made millionaire – everyone has benefitted from the experience of others. Every investor should identify a group of successful, like-minded individuals with whom to share, compare and seek advice.

Unfortunately, when starting the process of building their portfolio and with little money to spare, many people rely on “financial advisers” who either work for a particular company (so they often do not have a personal background of entrepreneurship and investing) or are perhaps more academic and theoretical in their experience. It is important to seek advice from those who have been there before, who know, understand and have proven success in a particular business environment.

To quote Tony Robbins: “If you want to be successful, find someone who has achieved the results you want, copy what they do and you’ll achieve the same results”. To conclude, it is essential to follow a good, well thought out ‘SYSTEM’ which stands for: Save YourSelf Time, Energy, Money.

The five fundamental wealth strategies is a proven system used by many of the world’s richest entrepreneurs to grow and develop their passive income and to protect their wealth in the long-term, no matter how personal or market conditions alter. They will work for you, provided you become financially educated and build a team of experts to support your investment strategy.

The six clear principles to follow are:

For more information, go to www.rpeyton.com

As the stock markets fluctuate and countries head into recession, we're starting a series looking at the stocks with the most potential for good returns with analysis and expert from the Finance Monthly team.  This week, we're looking at Countryside Properties and Royal Dutch Shell:

Countryside Properties

Covid-19 has severely hit the housing market in the UK and this morning FTSE 250 company Countryside Properties PLC (CSP) reported that it lost completions and land sales in March which has impacted profit by £29 M and increased debt by £83 M. As of writing the share price had dropped 10% at the opening. With the housing market key to any economic recovery I would expect to see developers to do much better in the coming months as the lockdown is eased.

Royal Dutch Shell

With the world’s economies grinding to a halt oil prices have hit new lows in recent weeks. Royal Dutch Shell Plc (RDSA: LON) has seen its share price drop by over 52% from its 12 month high but there is no doubt that oil will be in great demand once the economic recovery finally gets underway. It seems to me that the world’s biggest players in the energy/petrochemical sector have enough in reserve to weather the storm and Shell, in my opinion, did the right thing but cutting its dividend – the first cut since WWII. No doubt it will be a bumpy ride ahead, but Shell stock looks like good value as things stand.

Please invest responsibly. Views expressed on the companies mentioned in this article are those of the writer and any investment undertaken should be independently investigated by the investor. Finance Monthly accepts no responsibility for any investment. For more information visit our stock disclaimer 

Although many would advise you against leveraging, it is actually a very useful method that could help you gain a lot of cash in return. As long as you know how to do it, it can be effective and you could earn a lot out of it. As such, maybe you have been considering it, yet you don’t know for sure how it works and how other investors use it to their advantage. Don’t worry – you will find out below.

What Is Leverage and How Does It Work?

Leverage is not that difficult to understand. It is a way of using borrowed money for investments. This could greatly help you if you want to increase your returns. For instance, if you choose to borrow $400 from your online brokerage instead of purchasing $100 of stocks, you could use those 400 to purchase $500 of stocks. Therefore, you will make a $50 profit if the stock then goes up by 10%. This is more than you would have made if you settled for the $100 investment.

So, leverage is an investment tool offered by Forex brokers to help boost your returns. Still, while it is helpful, that doesn’t mean that it’s always a successful method. If the stock declines instead of going up, then you would lose money from the original amount you had even before you accounted for the interest you will have to pay.

Ways to Use Leverage Properly

Leverage has to be used smartly if you want to be successful with it. Many investors have used it successfully, but if you’re a newer investor with less experience, you may wonder if you could become just as successful.

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Well, take an example from sophisticated investors. They selectively use leverage, so they don’t overdo it. To be more specific, leverage is only a great method if you do it now and then, and not all the time. Doing it all the time will put you at risk of losing cash when the stock declines. So, make sure to use leverage for selective sets of opportunities, only when you understand the situation and are certain about it.

You should also start doing it while you’re young. It is more advisable to use leverage while you’re in your 20s, rather than when you’re in your retirement. As a young person, you don’t have as much capital able to deploy so you’re not as exposed to the stock market. You would also be able to tolerate it in a better way than if you were in your retirement.

Lastly, you should use various leverage tools too. That being said, you could trade with CFDs or margin, which are great for the longer-term. If you use multiple options, you have better chances of increasing your returns as long as you’re sure about specific events that will happen in the short term.

Conclusion

If used correctly, leverage can be a great way to boost your returns. Look at how the big investors are doing it and learn from them – it will be much easier that way.

Income Analytics today announces the launch of its tenant income risk indices and benchmarks – a new and unique set of indicators for quantifying tenant income risk using data on over 355 million global companies from leading global provider of business decisioning data and analytics, Dun & Bradstreet.

Income Analytics redefines how the global real estate industry can access, analyse and deploy company credit data on tenants, real estate assets and investment portfolios, enable real estate professionals, investors and lenders to receive ‘real time’ analysis of underlying tenants creditworthiness and, with confidence, appraise anticipated future performance and ultimately likelihood of default.

Income Analytics reports and dashboards incorporate new proprietary analytical tools and scoring (INCAN scores) alongside the existing credit report data including:

As a global institutional asset class (US$30.2trn1), real estate requires the same analytical analysis as equities and bonds. As stated by Andrew Baum, Professor of Practice, Said Business School, University of Oxford: “The value of real estate investment is ultimately determined by the level, duration and quality of the rental income paid by your tenants.”

Income Analytics provides a range of tools comprising:

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Matthew Richardson, Co-founder and Chief Executive Officer of Income Analytics commented: “At Income Analytics, we have created a truly unique and much needed set of tools and analytics for the global commercial real estate industry. No industry specific product for investors and lenders to assess and monitor the changing quality of their tenant income over time currently exists. More worrying is that very little has changed since the sub-prime crisis of 2008 and the recent global crisis caused by Coronavirus makes the need to access accurate and current income data more important than ever before. Our aim is to provide the real estate industry with a critical tool in which to assist investment decisions and investor reporting.”

Maxwell James, Chairman of Income Analytics stated: “Income Analytics has created a new and world class set of indices and benchmarks for the commercial real estate market. The insight that these measures bring is already resulting in better informed investment decisions by our existing clients. The application of these analytical methods offers the potential for investors and lenders to greatly enhance transparency and risk appraisal of portfolios or loan books at this critical time.”

Edgar Randall, Commercial Director UK & Ireland, Dun & Bradstreet commented: “Dun and Bradstreet is delighted to be partnering with Income Analytics to provide commercial data and analytics that support innovation and digital transformation across the real estate industry. Our aim is to provide a comprehensive risk solution for commercial real estate teams by combining our data with Income Analytics’ expertise and new platform to deliver actionable insights to drive business performance.”

Income Analytics was founded by and is led by an award-winning management team with unique experience and a strong track record in data monetisation and analytics in the commercial real estate sector. Biographies can be viewed at the company's website.

In light of the current COVID-19 situation the formal launch event has had to be postponed but details will follow in due course.

A‌ ‌time-tested‌ ‌asset‌ ‌ ‌

Historically,‌ ‌gold‌ ‌has‌ ‌maintained‌ ‌its‌ ‌value‌ ‌over‌ ‌time‌ ‌and‌ ‌built‌ ‌its‌ ‌reputation‌ ‌as‌ ‌a‌ ‌“recession-proof”‌ ‌asset‌ ‌class—largely‌ ‌uncorrelated‌ ‌with‌ ‌traditional‌ ‌market‌ ‌movements‌ ‌and‌ ‌economic‌ ‌fluctuations. ‌

Despite‌ ‌this,‌ ‌in‌ ‌the‌ ‌current‌ ‌period‌ ‌of‌ ‌pandemic,‌ ‌panicked‌ ‌investors‌ ‌are‌ ‌placing‌ ‌bets‌ ‌on‌ ‌cash—the‌ ‌US‌ ‌cash‌ ‌market‌ ‌funds‌ ‌experienced ‌$87.6‌ ‌billion‌ ‌of‌ ‌inflows‌ ‌in‌ ‌seven‌ ‌days‌ ‌while‌ ‌the‌ ‌Bank‌ ‌of‌ ‌America‌ ‌‌reported‌ ‌that‌ ‌investors‌ ‌plowed‌ ‌a‌ ‌total‌ ‌of‌ ‌$136.9‌ ‌billion‌ ‌into‌ ‌cash.‌ ‌It‌ ‌has‌ ‌gotten‌ ‌to‌ ‌the‌ ‌point‌ ‌where‌ ‌some‌ ‌banks‌ ‌were‌ ‌cleaned‌ ‌out‌ ‌of‌ ‌‌$100‌ ‌bills‌ ‌as‌ ‌consumers‌ ‌took‌ ‌out‌ ‌large‌ ‌amounts‌ ‌of‌ ‌cash‌ ‌in‌ ‌a‌ ‌bid‌ ‌to‌ ‌protect‌ ‌them‌ ‌from‌ ‌the‌ ‌ongoing‌ ‌stock‌ ‌market‌ ‌crash. ‌ 

‌While‌ ‌some‌ ‌believe‌ ‌that‌ ‌“cash‌ ‌is‌ ‌king”‌ ‌during‌ ‌a‌ ‌recession,‌ ‌over‌ ‌a‌ ‌longer‌ ‌period‌ ‌of‌ ‌time‌ ‌the‌ ‌nature‌ ‌of‌ ‌gold‌ ‌is‌ ‌more‌ ‌stable‌ ‌than‌ ‌cash.‌ ‌As‌ ‌‌banks‌ ‌are‌ ‌now‌ ‌slashing‌ ‌interest‌ ‌rates‌ ‌to‌ ‌encourage‌ ‌spending‌ ‌and‌ ‌boost‌ ‌the‌ ‌economy,‌ ‌so-called‌ ‌‘idle‌ ‌cash’—is‌ ‌earning‌ ‌less‌ ‌interest.‌ ‌In‌ ‌addition,‌ ‌with‌ ‌inflation,‌ ‌idle‌ ‌cash‌will‌ ‌not‌ ‌generate‌ ‌as‌ ‌much‌ ‌return‌ ‌in‌ ‌the‌ ‌long‌ ‌run‌ ‌as‌ ‌its‌ ‌purchasing‌ ‌power‌ ‌may‌ ‌depreciate‌ ‌over‌ ‌time.‌ ‌

‌This‌ ‌does‌ ‌not‌ ‌apply‌ ‌to‌ ‌physical‌ ‌commodities‌ ‌like‌ ‌gold‌ ‌as‌ ‌it‌ ‌cannot‌ ‌be‌ ‌printed‌ ‌like‌ ‌money‌ ‌and‌ ‌its‌ ‌value‌ ‌is‌ ‌not‌ ‌impacted‌ ‌by‌ ‌a‌ ‌government’s‌ ‌decision‌ ‌to‌ ‌change‌ ‌interest‌ ‌rates‌ ‌or‌ ‌to‌ ‌increase‌ ‌the‌ ‌circulation‌ ‌of‌ ‌a‌ ‌particular‌ ‌currency—making‌ ‌gold‌ ‌a‌ ‌more‌ ‌enticing‌ ‌choice‌ ‌for‌ ‌investors‌ ‌during‌ ‌times‌ ‌of‌ ‌volatility. ‌

‌Even‌ ‌prior‌ ‌to‌ ‌the‌ ‌COVID-19‌ ‌pandemic,‌ ‌gold‌ ‌performed‌ ‌exceptionally‌ ‌in‌ ‌economic‌ ‌volatility‌ ‌with‌ ‌an‌ ‌ approximate‌ ‌‌20%‌ ‌increase‌ ‌in‌ ‌2019‌ ‌alone.‌ ‌This‌ ‌is‌ ‌attributed‌ ‌to‌ ‌decreased‌ ‌investor‌ ‌confidence‌ ‌in‌ ‌traditional‌ ‌markets,‌ ‌stretching‌ ‌from‌ ‌stocks‌ ‌and‌ ‌equities‌ ‌right‌ ‌through‌ ‌to‌ ‌government‌ ‌bonds‌ ‌and‌ ‌investments‌ ‌which‌ ‌mere‌ ‌months‌ ‌ago‌ ‌appeared‌ ‌“safe”.‌ ‌This‌ ‌uncertainty‌ ‌is‌ ‌the‌ ‌result‌ ‌of‌ ‌a‌ ‌series‌ ‌of‌ ‌economic‌ ‌and‌ ‌political‌ ‌volatility‌ ‌which‌ ‌unfolded‌ ‌last‌ ‌year—from‌ ‌Hong‌ ‌Kong’s‌ ‌political‌ ‌situation,‌ ‌confusion‌ ‌around‌ ‌Britain's‌ ‌future‌ ‌within‌ ‌the‌ ‌European‌ ‌Union‌ ‌and‌ ‌Brexit,‌ ‌ as‌ ‌well‌ ‌as‌ ‌unsettled‌ ‌US-Sino‌trade‌ ‌ties,‌ ‌and‌ ‌deteriorating‌ ‌relations‌ ‌between‌ ‌Japan‌ ‌and‌ ‌South‌ ‌Korea. ‌

Historically,‌ ‌gold‌ ‌has‌ ‌maintained‌ ‌its‌ ‌value‌ ‌over‌ ‌time‌ ‌and‌ ‌built‌ ‌its‌ ‌reputation‌ ‌as‌ ‌a‌ ‌“recession-proof”‌ ‌asset‌ ‌class—largely‌ ‌uncorrelated‌ ‌with‌ ‌traditional‌ ‌market‌ ‌movements‌ ‌and‌ ‌economic‌ ‌fluctuations. ‌

Looking‌ ‌beyond‌ ‌2019,‌ ‌historical‌ ‌data‌ ‌has‌ ‌also‌ ‌shown‌ ‌a‌ ‌similar‌ ‌pattern‌ ‌during‌ ‌the‌ ‌2008‌ ‌financial‌ ‌crisis‌ ‌ where‌ ‌gold‌ ‌had‌ ‌a‌ ‌small‌ ‌slip‌ ‌during‌ ‌the‌ ‌initial‌ ‌market‌ ‌turmoil‌ ‌but‌ ‌rebounded‌ ‌and‌ ‌outperformed‌ ‌other‌ ‌assets‌ ‌in‌ ‌the‌ ‌following‌ ‌months.‌ ‌We‌ ‌could‌ ‌very‌ ‌well‌ ‌see‌ ‌the‌ ‌same‌ ‌pattern‌ ‌in‌ ‌2020‌ ‌as‌ ‌gold‌ ‌prices‌ ‌are‌ ‌now‌ ‌stabilising‌ ‌and‌ ‌rising‌ ‌after‌ ‌the‌ ‌Federal‌ ‌Reserve‌ ‌System‌ ‌(FED)‌ ‌‌introducing‌ ‌new‌ ‌liquidity‌ ‌injection‌ ‌facilities‌ ‌and‌ ‌the‌ ‌recent‌ ‌drop‌ ‌in‌ ‌‌interest‌ ‌rates‌.‌ ‌

Surging‌ ‌demand‌ ‌

Betting‌ ‌on‌ ‌gold’s‌ ‌performance‌ ‌as‌ ‌a‌ ‌safe-haven‌ ‌asset,‌ ‌panicked‌ ‌investors‌ ‌around‌ ‌the‌ ‌world‌ ‌are‌ ‌rushing‌ ‌to‌ ‌purchase‌ ‌this‌ ‌shiny‌ ‌metal,‌ ‌causing‌ ‌‌gold‌ ‌dealers‌ ‌to‌ ‌suffer‌ ‌shortages‌ ‌as‌ ‌a‌ ‌result‌ ‌of‌ ‌the‌ ‌surging‌ ‌demand‌ ‌and‌ ‌supply disruptions. Three of the world’s largest gold refineries – who together produce one-third of the world’s gold supply – have recently reopened and will continue to operate at 50% reduced capacity after being suspended for two weeks. It means that the supply for gold is now lower than before – making it more difficult for investors to access this precious metal.

Even before the pandemic, the process of purchasing and owning gold traditionally has proven prohibitive for some individual investors. Gold has traditionally been a negative-yielding instrument where investors have to pay to store, insure, and secure the asset, meaning that the purchasing and holding gold has historically been in the exclusive domain of traditional financial institutions and high-net-worth individuals (HNWIs) who can afford to pay for custodianship.

While there is now an increased demand for gold worldwide, the challenges to acquire this shiny metal have also increased.

Putting gold in the digital realm - a new, better form of gold

 With the surging demand for this precious metal, the gold industry has evolved alongside technological advancements and the mass digitisation of the financial sector. The emergence of digital assets has given gold a new channel to shine in this digital space and has presented investors of every kind with a new way to purchase gold. One way is through “digital gold” - a digital token that is backed by actual gold bullions.

In light of the ongoing outbreak measures, the issues of physical gold are becoming apparent and extending beyond a lack of supply to deeper logistical nightmares - with gold dealers being unable to move gold across borders - or even out of the vault - as gold doesn’t come under essential items, causing delivery delays and gold funds to come to a complete halt. Mobility limitations can be solved by placing gold on the digital realm - allowing anyone with an internet connection to trade gold online without the inconvenience associated with storing, carrying, and moving gold. Digital gold enables gold to be transferred across international borders as easily as sending an online payment or a bank transfer - opening up the gold markets to globalisation and providing investors with greater utility and liquidity by reducing the barriers of entry to the gold market, allowing anyone to trade, spend, hold, and microinvest their savings into the world’s most time-tested asset class.

Even‌ ‌prior‌ ‌to‌ ‌the‌ ‌COVID-19‌ ‌pandemic,‌ ‌gold‌ ‌performed‌ ‌exceptionally‌ ‌in‌ ‌economic‌ ‌volatility‌ ‌with‌ ‌an‌ ‌approximate‌ ‌‌20%‌ ‌increase‌ ‌in‌ ‌2019‌ ‌alone.

However, anything placed in the digital realm opens itself to hacks, and the number of cyber threats has risen by 37% in March 2020 - with the average daily number of hacking and phishing attempts increasing by up to six times than the period before the pandemic. Trust, security, and data management remain a huge concern as there is a chance that sensitive data stored in centralised servers may be altered, misused, or stolen by malicious parties.

One way to combat cyberattacks is through blockchain, as the decentralised and immutable nature of the technology ensures that data remains unalterable and tamper-proof. A decentralised ledger system allows information to remain transparent while also maintaining a high level of data integrity. In essence, the distributed nature of blockchain provides no “hackable” entrance or point of failure that detrimentally exposes entire datasets. By applying this to digital gold, asset holders can maintain full visibility over their assets, transaction history, and even track inventory records while this data remains unalterable and tamper-proof through blockchain technology.

As COVID-19 exposes issues of mobility, convenience and accessibility in the traditional gold market, it opens an opportunity for the market to reinvent and future proof itself for the years to come. Although digital gold remains a new concept for many, it has the potential to not only help the gold industry evolve but also open up new possibilities across the financial ecosystem in a “post-COVID-19 world”.

Shaun Djie, COO & Co-Founder of Digix

Shaun Djie is the Co-founder of DigixGlobal and the Founder of the Ethereum Singapore meetup group. Shaun is currently a Technical Committee Board Member at the IT Standards Committee, organised by IMDA and Enterprise Singapore for Blockchain and Distributed Ledger Technologies, ISO/TC 307. Shaun is also a Regional Partner at Kenetic Capital, an institutional platform for blockchain advisory, technology and investment. He’s the co-author of Cryptocurrency Wizards (2018), a first of its kind book that covers the testimonials of movers and shakers in the Asian cryptocurrency ecosystem.

Equinox Russian Opportunities Fund is well-positioned to benefit from some of the new trends in the country and maintain its outstanding performance for the years to come.

Improvement in Corporate Governance

Until recently, Russian state-owned companies were not managed for the benefit of minority shareholders. Some practices are now starting to change. Several oligarchs are beginning to invest directly in the shares of state-controlled companies, rather than benefiting from ownership of the subcontractors billing these companies. This phenomenon has the effect of improving corporate governance, boosting share prices and protecting minority investors. That’s one of the reasons why Gazprom performed so well in 2019. On June 24th of that same year, a new dividend policy was introduced by the Board of Directors. From that point, the dividend distribution is to gradually attain 50% of net profit over the next three years. As a result, Gazprom share price soared from US$ 4.66 to US$ 8.25, an increase of 77% in one year. There is a good chance that other state-owned companies will now follow the same path.

The Race to Artificial Intelligence

During a conference in September 2017, Vladimir Putin declared: “the one who becomes the leader in Artificial Intelligence will be the ruler of the world. It would be strongly undesirable if someone wins a monopolist position”. This intervention highlights the government's awareness of new technologies and, more generally, the digitalisation of the economy. It approved an investment plan (“Digital Economy”) in 2018 with a budget of US$ 25.5 billion. The idea is to accelerate the improvement of legal regulation, digital infrastructure, personal education, information security, digital technology and digital state administration. We are already witnessing real successes in Russia. One example is Yandex, the largest web search engine, which has triple the revenues of Google in Russia.

Until recently, Russian state-owned companies were not managed for the benefit of minority shareholders.

National Projects

Introduced in 2019, the National Projects program constitutes a series of spending priorities in 13 policy areas, including education, health, housing, science, infrastructure and demography. The main objective of the plan is to accelerate economic growth by improving social welfare and modernising Russia's outdated infrastructure with a focus on roads, railways and waterways. The allocated budget represents 2.8% of GDP, which is higher than the estimated military spend (2.7% of GDP). Over the period 2019-2024, the total amount of funding is reported to be approximately US$ 400 billion. These developments are very impressive and should lead to value creation for shareholders in selected companies. The appointment of Mikhail Misuhstin as Prime Minister in January 2020, should bring credibility to these projects. He earned a solid reputation as an effective administrator as head of the tax service, enabling the Russian state to significantly increase the levying of VAT thanks to the adoption of one of the most advanced digital systems in the world.

Russia is changing and evolving at a rapid pace. Exposure to the Russian market offers investors diversification and great growth potential. Equinox Russian Opportunities Fund is well-positioned to profit from these trends.

For more information, contact Equinox on info@equinoxmgt.com 

Many people jump into swing trading or day trading without doing a personality assessment. Having technical knowledge of the markets, enough capital to get started, a computer, and an account with a reliable brokerage platform won’t solely guarantee success. There are virtually no guarantees for your success, but you’re taking a huge risk unless you do a psychological self-assessment before committing to your new venture.

What is a day trading personality and how do you know whether you possess the key components of one? Here’s a comprehensive list of the core personality traits that most successful day traders have. Maybe you weren’t born with all of them. So, if you find that you’re a bit short in one or two categories, consider doing at least a few weeks of simulation trades before putting your real money on the line. When you feel as if you’ve incorporated the traits, you’ll have a better grasp on what it takes to make steady profits as a day trader.

Patience

Without a strong dose of patience, you’re apt to fail very quickly if you try to make profits on intra-period price swings. In fact, if you find yourself making lots of buys within a short time frame, you’re probably already deep into the dangerous marshes of impatience. The ability to wait for attractive opportunities is one of the central characteristics of a winning day trade personality. When you do your simulation work, try to write down some of the emotional factors that cause you to jump into deals too quickly. By catching yourself at these telltale moments, it’s possible to amend your habitual behaviour and train your emotions to avoid impatience.

A Constant Willingness to Learn New Things

It’s tempting to feel as if you know it all after a few successful, profitable days of making live trades in challenging markets. Avoid this temptation if you want to enjoy long-term success. Read books by some of the industry pros and find out what they did in the early years of their careers. One thing most of them have in common is a lifelong desire to learn new techniques, concepts, and theories. They never stop learning and never reach a point where they feel as if they have the securities markets all figured out.

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Emotional Distance

Keep in mind that this new venture is not a hobby, but it’s your way of making a living. Work from your intellect rather than from your emotions. One bit of advice you’ll hear repeatedly is to avoid buying or selling if you feel angry, elated, sad, depressed, or vengeful. For some reason, these emotions tend to cloud the human mind and impede our ability to see reality. The translation is only entering into transactions when you are in a relatively balanced mood. If you’re not, step back and take a few minutes to calm down.

A Disciplined Approach to Homework

Never neglect due diligence. It’s easy to get caught up in technical charts and numerical analysis. If you are able to do research consistently, even for a half hour or so before the opening bell, you’ll be training yourself to learn all the factors that affect the price of a given security.

Selecting a forex broker isn’t easy. When doing this, you need to be aware of many things:

Apart from checking these, keep in mind the forex market is uber-competitive. And high competition can offer both advantages and disadvantages. On one hand, you have got brokers lowering their prices to nearly zero just to fetch more customers. On the other hand, not all these forex brokers are trustworthy.

So, is there a way to choose a good broker? We’ll answer that in this article.

There’s no “Perfect Broker.”

Right off the bat, there’s no such thing as a “perfect broker.”

There’s always something. For example, a broker might offer you cheap services. But the same broker has a not-so-good reputation among traders. Maybe it’s not regulated. Or maybe it doesn’t have sufficient fund protection policies. Maybe it’s a scam.

On the other hand, you might find a broker that’s regulated, trusted, and highly popular among traders. Its platforms and trading instruments are excellent. Additionally, customer service is super accommodating and friendly. It has everything you need. But the prices will drain your pockets. Maybe the transaction costs are high. Maybe the trading instruments aren’t cheap.

So, when choosing a forex broker, remember to keep a balance between reasonable prices and excellent services.

Importance of Regulation

Now, you might be looking at hundreds of forex brokers at the moment, and you just can’t choose which one’s right.

To help you narrow down your choices, check their regulatory status. This step is the first and most crucial step you need to take. Regulated brokers typically offer the best policies and security clauses for traders.

But you should not go for just any regulator. There are top tier regulators, and then there are those that just don’t cut.

So, when choosing a forex broker, remember to keep a balance between reasonable prices and excellent services.

Top Forex Regulators Around the World

In the United States:

In the United Kingdom:

In Australia:

In Switzerland:

In Germany:

In France:

In Canada:

Trading Products

When we say trading products, we mean every asset the broker offers. And since we’re talking about forex brokers, they should provide forex products. Essential forex products include all the major and minor pairs.

If you’re not familiar with the majors yet, here they are:

These are the essential pairs you may trade. They get the most significant trading volume in the market, as well as the broadest news coverage. So, it’s easy to buy them and search for information.

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Trading Platforms

After checking out what you can trade with the broker, check out where you can trade those assets. The trading platforms are your portal to the market. They’re the bridge connecting you to the world of currencies and currency pairs.

In the forex market, the most popular trading platform is MetaTrader4.

What is the MetaTrader4 (MT4)?

MetaQuotes developed the MT4 in 2005. Although traders can use it to trade stocks, indices, cryptocurrencies, and commodities, they mainly use it for forex trading.

Most forex brokers offer the MT4 platform to clients as an industry standard. It comes with excellent trading features such as the following:

And many more. The MT4 is a useful, high-quality platform every trader needs in forex trading. Also, traders can use them on different devices.

A forex broker can also offer platforms other than the MT4. The newer platform and successor of MT4, the MetaTrader5, is also now available in many brokerages. Other times, forex brokers develop their in-house platform. Such platforms typically fit the more specific needs of the broker’s clients.

Read Broker Reviews

Reading a forex broker review goes a long way.

When you finish checking the broker’s background, products, and platforms, it’s time to read from people with first-hand experience with the broker.

Reviews from websites are usually a treasure trove of information about the broker. They talk about more things other than products, platforms, and regulatory status. You’ll get to know the broker’s customer service. Are they accommodating? Friendly? Are they rude? Unprofessional?

You’ll also know how the broker ranks in comparison with others in the field. Are they popular among traders? Do they receive negative reviews from angry traders?

Moreover, with readily available access to different broker reviews, you will not be dealing with a broker with zero clues on what you’re looking at.

Reviews from websites are usually a treasure trove of information about the broker.

Conclusion

With the advent of retail forex trading comes the emergence of retail forex brokers. You can search for thousands of brokers, and you will see how the industry is booming.As a trader, it’s your responsibility to check the broker information as thoroughly as possible. Never forgo the background check.

Finally, finding the right broker is one of the first crucial steps you’ll take if you’re serious about succeeding in the forex market.

With the first signs of the coming global crisis rattling global markets investors are starting to swoop for opportunities that fit the new financial paradigm.

Recently we entered the eleventh straight year of a bull market, only to see a double digit slide happening just days later. Everything appeared to be relatively calm with all the main indices of the developed world touching record-highs, with interest rates and inflation low and stable. The labour market was also expanding and wages were rising. In other words, the future seemed to be very bright.

But suddenly the landscape is changing with the coronavirus outbreak making the markets sick with worry. However, many investors saw change coming and were already prepared for such an event. For those investors, the time has come to stress-proof their portfolios to suit the emerging paradigm shift in the world of investment. A period where the old familiar rules get torn up and new ones are formed. 

Were we overdue a market correction? Possibly, but it’s always difficult to predict when they will hit. Remember back in 2006 when stocks were relentlessly climbing up and up? Who would’ve thought within a year the Subprime Mortgage Crisis would hit, followed by the first Great Recession of the new century. 

The New Paradigm Shift Can Help You Weather Financial Storms

The key economic paradigm of most developed economies in the decade since the Great Recession can be characterised with two phrases: low rates and quantitative easing (QE). 

To keep the economic system afloat, central banks decided to:

However, after 10 years of this strategy, we are beginning to see visible side effects:

Consequently, most assets have had more than a decade to absorb and digest the effects of low rates and QE and their valuations today are at a peak. Given that rates can hardly go much lower and QE has already saturated the market, peak asset pricing offers little upside and significant downside going forward.

Furthermore, asset price inflation, combined with automation, globalisation and tax cuts (all of which benefit corporate earnings), have significantly increased wealth inequality. This is damaging social stability and exerting political pressure on governments to alter course. Plus, the protectionist trade policies pursued by President Trump are an inherent (albeit incorrect and suboptimal) response to an electorate dissatisfied with the status quo. Going forward, we will see more and more governments with nothing more than knee-jerk responses to an increasingly disillusioned population.

All of these factors are damaging the current economic paradigm and forcing it to transform. As a result, investors who fail to get to grip with the new market fundamentals might see their portfolios run into serious trouble. Plainly speaking, now is not the time for dithering but to master a new way of investing and doing business.

The Curse of the Old Paradigm in a Brave New World

Traditionally investors favour a rather limited range of asset classes, namely: stocks, bonds and properties. Some more adventurous individuals might enter the realm of precious metals, but they are in the minority. Most investors would simply buy an index fund or ETF for their pensions and forget about it.

This approach is very dangerous, especially now.

Firstly, after a decade of low rates and QE, asset valuations are at their highest, which means investing now offers a much lower margin of safety than ten years ago. This increases the probability of permanent capital loss. 

Secondly, the shift from active management to passive has significantly expanded index-based ETFs. Many of these funds, despite the claimed diversity, run a very concentrated portfolio as a result of the capitalisation-weighted method. For example in the iShares MSCI Switzerland ETF, the top 10 holdings occupy 67% of the portfolio. This is hardly a sound risk mitigation strategy. 

Thirdly, most of these assets suffer from liquidity issues one way or another. Properties and precious metals are inherently less liquid than stocks and bonds because their trading volume is much lower. Stocks and bonds are more liquid in the sense that they trade in high volume on open exchanges. However, the proliferation of ETFs has resulted in trillions of dollars being indexed against them, a number that vastly exceeds their daily trading volume and value. This means that in the likes of the Great Recession where these capitals are getting liquidated (an event made far more likely than in 2008 through indexation and algorithmic trading), the market will simply seize up, preventing investors from exiting.

It is evident that we need an alternative approach to investing in the new era.

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Learn How to Quickly Identify Hidden Gems and Other Treasures

In the fast-paced digital world, information is both abundant and instantaneous. This means that businesses that rely solely on first-mover advantage simply will not thrive, as competition can rapidly become fierce. Instead, we need to look for the hidden gems: businesses that sail beneath the radar and yet deliver superior returns to investors.

These businesses may come in all sizes, types and sectors. However, they all share three key traits:

  1. Easy and stable business models
  2. Consistent profitability and healthy financials
  3. Fair valuation

1. The Idiot-Proof Business Model

Warren Buffett once said of his investment approach that, “I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.” His playful remarks contain an important kernel of truth: businesses that have solid margins with reliable supply and demand are much easier to manage and far less likely to fail, especially in times of market turbulence.

This principle permeates across the macro and micro levels.

At a macro-level, investors start looking at countries that are more politically stable, fiscally conservative and sensible in monetary and regulatory terms. These are the key factors that explain why Swiss and Japanese currencies (and investments in those currencies) are perceived as “safe havens”, and why during times of economic turbulence investors flock to Switzerland for example.

Perhaps its also something to do with the fact that the alpine nation is naturally more accustomed to  navigating safely through the big peaks and deep valleys in dynamic, fast-moving landscapes, where conditions can sometimes rapidly deteriorate. However, despite the world-leading transport infrastructure that can whisk you from city to city in a flash, it still pays in Switzerland to keep fit, nimble and healthy. Like the economy. Switzerland traditionally enjoys strong GDP with low unemployment to boot. Fiscally it has a small budget deficit and an independent monetary policy set in Zurich. All reasons why so many savvy investors think it a perfect location for bankable assets. Local blue-chips like Roche and Nestle would likely agree.

At a micro-level, companies in stable sectors are far easier to manage than their more volatile peers. After all, it is far easier to make plans and forecasts when you know how the next month, quarter and year is likely to pan out. Taking the Swiss tourist market as an example, there has been positive and stable growth for the past 25 years. Remarkably, it was completely unaffected by two huge global recessions during this period. Whether in terms of finance, real estate or the tourism industry, Switzerland has always been a rock of stability during times of economic shock.

2. Rock-Solid Returns With a Rosy Financial Outlook

If a stable and defendable model is the key foundation for success, then consistent profitability is the secret ingredient.

Companies that are consistently profitable tend to be able to deliver positive cash flow, which is vital to future growth as well as the ability to withstand shocks. This is more likely if the company is stable at both the macro and micro levels mentioned above. The ability to produce positive cash flow consistently creates value and enormous benefit to shareholders.

Hundreds of successful mid-sized companies, some which have been around for hundreds of years, enjoy sustainable and high returns, thanks to the sizable domestic demand and reliable economies of scale. But despite such impeccable credentials, these types of enterprises are not always targeted by big capital, as they are neither startups that promise skyrocketing growth nor companies that can accommodate hundreds of millions of dollars investments. But they are highly efficient and profitable niche brands which can be expected to perform come rain or shine, year in, year out. Just think of Rolex.

3. Fairly and Squarely Valued for the Long Home Run

There is a saying amongst investment professionals that “timing is everything”. What this implies is that the highest asset values are usually extracted with early-bird acquisitions which can enable investors to get the most premium rates of return. In fact, veteran value investors like Benjamin Graham are vocal advocates of the concept of margin of safety. That entails acquiring assets at below their fair value and holding onto them for the long-term, also minimising the risk of catastrophic capital loss.

Unfortunately, in recent years the market has been anything but fairly valued. After a decade-long bull market, the S&P500 price-to-earnings ratio had been comfortably sitting at 24, way above the long-term average of 15. It means today that finding fairly valued assets is becoming increasingly important, but also ever more challenging.

This is primarily caused by a single factor: market crowding.

The key allure of the public market is its liquidity. Securities that are publicly traded are easy to buy and sell (which is the whole point of exchange) and therefore it improves the efficiency of capital allocation. However such efficiency can never be absolute and frequently investors are driven by their emotions and perceptions rather than objective realities. 

For example, the recent surge in popularity of ETFs and index funds led to capital being channelled into some of the largest companies (by market capitalisation) in the world, even without a serious reappraisal of their long-term viability. Until recently the market was crowded with overblown valuations, not because of any outstanding financial performance, but because excess capital is competing for an artificially limited number of stocks. The situation is further exacerbated by low rates and QE, which vastly expanded the capital pool to make such investments, resulting in grossly inflated valuations.

Be ready, but stay patient. Hidden gems are not easy to discover but you’ll instantly know when you see one.

Businesses like Le Bijou are privately owned and therefore not listed, so shares are rarely traded (hence illiquid). They often have a very small investor base (a dozen) compared to their public counterparts (thousands). They often slip under the radar because investment banking analysts don’t get to report on them every day. They are different but in reassuring ways. For example, there are none of the bureaucratic hurdles and cumbersome fixed costs of public companies. (e.g. IPO fees, Big 4 auditing fees). And naturally, they are not under pressure to disclose market-sensitive data or forecast the future to Bloomberg reporters 24/7.

In other words, they are stealthy.

This is an enormous advantage in today’s viewing-glass world because these assets have way fewer investors chasing after them. They are hardly influenced by quantitative easing, which means their valuation is more likely to be fair and reasonable. Investing in such businesses provides for a significant margin of safety for flighty investors looking for safe sanctuaries to incubate wealth as well as benefit from healthy capital gains. 

Furthermore, these hidden gem companies tend to be run by managers with a significant stake in the business (often owner-managers) and their personal fortune is tied to the fate of the business. This means their incentive is truly aligned with other investors, rather than public CEOs who often worry about meeting earning targets, only to unlock a chunky bonus. 

Here are some new paradigm investments glittering under the radar:

1. Cadre

Projected Yield: 5-9%, up to 19% IRR

Asset description: Direct ownership in commercial real estate

Site: cadre.com

Country: United States

Cadre is a platform that makes commercial real estate accessible to ordinary investors with as little as $50,000.

Commercial real estate boasts certain advantages that can make it a highly desirable asset to own: it has a low correlation with the stock and residential real estate market, which makes it a great option to diversify the portfolio. Investing in the commercial estate was a privilege of institutions and super-rich until Cadre’s Ryan Williams raised 133M to disrupt it.

Unlike REITs, direct ownership is less susceptible to market moves and global volatility. Direct ownership also means lower liquidity, which Cadre elegantly solves by providing an internal platform where investors can trade their shares.

Another quintessential feature of “hidden gems” is their integration with so-called Opportunity Zones - Swiss neighbourhoods with the greatest potential for growth and where the government offers attractive tax cuts of up to 15%.

The third of Cadre’s advantages tells you why the firm is now valued at $800 million. The magic sauce is in the powerful data science that allows precision tracking of over 1 million assets and the utilisation of all this big data helps accurately predict capital movement and dividend gains for real estate. Cadre is truly shaking up an industry that has already given rise to more than 30% of the world's billionaires.

What are the hallmarks of this hidden gem?

What about the pros and cons?

One of the risks could be for investors whose circumstances have changed and who want to liquidate in a hurry. This would normally be a costly drawback but in this case, the risk is somewhat mitigated by the internal Cadre marketplace where investors can fairly trade without taking the kind of haircut likely in the open market.

2. Le Bijou

Projected Yield: 2 - 7% (B shares), over 7% (A shares), 3% - 6% (bonds, various issues)

Asset type: Private equity, real estate

Site: invest.lebijou.com

Country: Switzerland

You might think that developed markets in mature democracies like Switzerland are a little too stagnant for their own good. But then you probably haven’t met the founders of Le Bijou. The Swiss hoteliers' game-changing business model has ruffled the feathers of the continent’s 5-star hotel industry and recently prompted a gushing Apple Co-Founder Steve Wozniak to call his stay at Le Bijou, “the best hotel experience of my life”.

This avant-garde hotel-apartment business caters to a new type of well-heeled, artisan traveller, who wants genuine privacy and a level of control and comfort only normally possible by renting apartments, along with the special conveniences of 5-star hotels. So things like on-demand door-to-door deliveries and special catering.

Le Bijou’s customer base consists of a new breed of clientele that Airbnb, the one-time disruptor, is unable to cater for. A classic example of unbundling if ever there was one. The Swiss hoteliers also provide a range of spacious venues for corporate functions, special media events, personal celebrations and luxury brand launches. Together they provide a diverse flow of steady revenue streams that guarantee chunks of cash every single day.

Although the company is consistently profitable and large enough to run dozens of buildings in the largest Swiss cities, it is still too small to be on the radar of the big funds. Therefore it is very reasonably valued for an enterprise that regularly returns tidy sums to its investors.

With Le Bijou there’s also plenty more than first meets the eye. The owners are ambitious and envisage the business as a leading icon from a new-generation of blue-chip Swiss corporations to emerge in the coming decade.

There’s already an exclusive in-house investor community with professional workshops and Le Bijou member-only networking parties that often feature the leaders of world-famous firms like Porsche. The regular roster of community events is part of the philosophy of Le Bijou that hospitable, creative relations are an important ingredient for reliable and rewarding business.

What are the hallmarks of this hidden gem?

Possible risks and cons:

Airbnb rentals accounting for 8% of a company’s revenue may soon be banned in some Swiss cities. Company officials insist this won’t impact Le Bijou's bottom line, as the bulk of revenue comes from returning customers, from other booking agents like Expedia and Booking.com, as well as other income streams, like from hosting brand events. Some of the other disadvantages are the company doesn’t accept capital from outside of Switzerland and A-shares are rarely available - the company seems to prefer investments from a close group of original investors.

3. Horizon Equity

Projected Yield: 7 - 10%, the investment opportunity is available through brokers

Asset description: Private fund issued by a reverse mortgage provider

Site: horizonequity.ca

Country: Canada

Horizon Equity is a firm that offers “reverse mortgages”. A reverse mortgage loan is a fully-secured, non-recourse loan that enables homeowners, typically over 60 years old, to use the equity value of their home to release cash, a line of credit, a series of monthly advances or a combination of the three methods. In other words, it allows pensioners to start releasing liquidity from their homes without having to sell up.

The company raises funds to purchase reverse-mortgage portfolios and offers insurance to protect lenders against the risk that the value of the homes drops and becomes insufficient to the maturity on the loan.

What are the hallmarks of this hidden gem?

Possible cons and risks:

The risk we see comes from a possible unexpected increase in life expectancy that might drain the company’s profits.

4. Montreaux Capital Management

Projected Yield: 10%, unsecured fixed-income agreement

Asset type: Direct ownership in care homes

Site: montreuxcm.com

Country: United Kingdom

Ageing is one of the world’s most reliable business trends, something Montreaux CM was quick to spot. With the population of UK pensioners increasing from 17% in 2000, to 20% in 2020, and with another 25% increase by 2030, the demand for care homes is literally going through the roof. 

Montreaux CM offers opportunities to invest in elderly care homes. An investor can invest in something as little as a one room-unit, for a fixed-income contract with the management company. Around 80% of potential residents of care homes envisioned by Montreaux CM will be funded by the government.

A peculiar detail about the care home industry is that it has barriers to entry based on local economies of scale. In other words, once you open a care home in a neighbourhood, it is almost impossible to imagine another one opening across the street, as it will have tremendous troubles seducing patients to relocate.

What are the hallmarks of this hidden gem?

Possible risks and cons:

The most significant risk we see is an investor largely dependent on his fixed-income agreement with the management company, and if the latter goes bankrupt, it might be difficult to replace.

Nestle Down Under the Silver-Lined Clouds

Investors need to recognise the paradigm shift that is rippling across the global market right now. After a decade of economic recovery (the slowest on the record) where experimental policies like quantitative easing and ultra-low rates have become the norm, we are now in an age where traditional assets are becoming overvalued and lacking fundamental economic support. The smart play will, therefore, be to shift capital away from these securities and instead divert to smaller, less liquid and yet extremely profitable hidden gems.

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