Tock Research - As Hedge Fund Industry

Both the hedge fund and private equity industry had free rides during George Bush's Administration when the Congress was safely in Republican hands. All that changed in November 06 when the Democrats swept the Congress, and with the change in control came new Democratic responsibilities to address the fiscal deficits generated during the time, the Republicans controlled both the executive and legislative branches of government.

All About Hedge Funds : The Easy Way to Get Started by Robert A. Jaeger Explains how any investor can take advantage of the high-potential returns of hedge funds while incorporating safeguards to limit their volatility and risk. This clear-headed, commonsense guide tells investors: What hedge funds are and what they are not Four key hedge fund strategies How to incorporate hedge funds into an existing portfolio Types of risk involved in hedge fund investing

It is strange to ponder, but the Republican Party which is considered by most to be the party of fiscal responsibility has probably generated 80% to 90% of the nation's accumulated national debt. Nevertheless, myths still persist that the Democrats are the big spenders. Just today, the major newspapers featured articles stating that Bush says Democrats must control spending.

Now there are only two ways to deal with spending. The first is to spend less, but no politician likes that concept. The first rule of government is that politicians regardless of party spend money. The second way is to raise taxes in an attempt to close the gap between spending and revenues taken in. With the Democrats in power, they will use the second method, which now brings us to Hedge Funds and Private Equity.

Under the provisions of the current tax code, both Hedge Funds and Private Equity are given preferential tax treatment. Certain items of income which might be considered subject to ordinary income tax rates are instead subject to 15% capital gains tax rates. As for the equity of this policy, the quick and dirty of it, is that there is no equity or fairness. The tax code is 80,000 pages of special interests. Every provision in the tax code was written in a certain way to benefit some one, or some special interest, whether it's the farmer or a hedge fund, or the restaurant industry. Everybody exercised their political muscle at one time or another to get what they could out of the tax code.

These special interests just head down to Washington DC and meet with the people who control the Congress, go to fancy restaurants, and try to re-work the tax code to benefit themselves. The latest journeyman to Washington is none other than Henry Kravis, the man who made the private equity industry what it is today, through the formation of Kohlberg, Kravis, Roberts and Company (KKR). Democratic Congressman Sander M. Levin is proposing to more than double the amount of taxes Kravis now pays. Kravis is a billionaire several times over, and he's still looking to cut his tax bill. Whatever happened to giving back. Whatever happened to Andrew Carnegie's approach to civic responsibility?

The Congressman's staff asked Henry Kravis very pointedly, if increasing taxes on private equity would adversely affect workers and other middle income type families by distinctly lowering returns that pension funds got on their investments. When Kravis answered "No", the meeting ended abruptly.

In other meetings, Stephen Schwartzman who founded the Blackstone Group, and David Rubenstein, who co-founded the Carlyle Group have met with other regulators in an attempt to stall the tide. Lobbying groups are being set up in a hurry, and money is being poured into them by private equity and hedge funds, who up until recently were asleep at the switch. They did not realize to what extent Washington has had them in their gun sights. For more on this topic, please visit our website.

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Dow Jones Industrial Average Explained

We see the numbers nightly on the evening news. The Dow Jones Industrial Average may be up 100 points one day, down 30 the next. But what happens when the Dow rises 100 points? Is that a good day? Or just an average one? Measuring the markets can be a daunting task if you don’t know what to look for.

Investments: Analysis and Management by Charles P. Jones Teaches readers not only how to identify successful investment opportunities, but how to anticipate and deal with investment problems and controversies. Jones carefully and gradually develops key concepts, while covering all the necessary background material. Only essential formulas are included. It's one of the most readable, comprehensible investments titles available! Details the variety of securities available, the markets in which they are traded, mechanics of securities training, and insight into the important concept of risk and return. Examines portfolio analysis, valuation and management of stocks and bonds. Complete discussion of Exchange Traded Funds, operations on NYSE and NASDAQ, margin trading, electronic communication networks, global investing, and technical analysis.

Actually the Dow Jones Industrial Average (sometimes known as the Dow 30, the Blue Chips or just the Dow Jones) is only one of several markets on Wall Street. Every evening, with the Dow numbers, you may see the NASDAQ or the S&P 500. These are some of the other markets. But it is the Dow 30 that is the most recognized and most talked about market.

A journalist named Charles Dow first created the market indicator. In the late 1800’s, people on Wall Street found it difficult to interpret the clutter of numbers tossed around on a daily basis. Some companies would be up an eighth of a point or down a half. It was easy to tell how a company was doing if it had a string of down days, but it was much more difficult to figure out how the market was doing as a whole. On May 26th, 1896, in an attempt to clear the confusion, Dow started putting out a nightly report in which he combined the daily results of 11 stocks. Railroad industries were the big traders of the day, but when utility companies started to come along, the number of industries in the report jumped to 20. Today, the Dow holds 30 companies. You probably recognize most of them. They are some of the biggest names in American business- General Motors, Microsoft, Coca Cola, 3M, Disney, IBM and Exxon are just a few. It is a rare occurrence for these businesses to change. Coca Cola has been listed since 1932. We’ve seen GE since 1907. This is why the Dow is the most talked about market on Wall Street. Because these are the most established business in the country, the Dow30 provides the best indicator of how the market, as a whole, is doing.

Historically, there have been good times and bad times for the Dow Jones. During the Great Depression, the markets were performing so poorly, and so many people were losing all the money they had, some turned to suicide. It was only after the bombing of Pearl Harbor and the start of World War II, that the markets started to turn around. The call for war supplies boosted many industries and secured their bottom line. During the economy boom of the late 90’s, the Dow traded around 11,500. However, just a couple of years later, in the middle of an economical recession, it hovered around 7,500.

Daily, investors buy a tiny piece of these Blue Chip companies. These pieces are called shares. The value of these shares goes up or down depending on how many people buy or sell these shares. If several people buy shares of the company on a particular day, the value of one share will go up. If several people sell shares, the value will go down. For example, if you buy 1 share of “Company X” at $10, and over the course of the day, the value of the shares go up to $11, you just made $1. Many times, these numbers are reported in percentages. In this example, “Company X” gained 10%. However, if the value of the share goes down to $9, you lost $1 or 10%. Easy, isn’t it? This is the simplest of examples, however. Companies in the Dow see millions and millions of shares exchanged in a single day. Generally, if the company is doing well, more people will buy shares, and the value will go up. However, there are several factors that decide if a company is doing well. If a report comes out stating “Company X” didn’t reach their sales goals for a particular quarter, investors might see that as a bad sign and start selling shares. This would decrease the value of a share. If “Company X” surpassed their goals, investors will see that as a good sign and buy more shares, thus increasing the value. If only it were that easy. Because companies can’t control what people think, many times companies have little control of the value of their company. For example, let’s say both “Company Y” and “Company X” sell widgets. If “Company Y” sees a bad earnings report, investors might see that as a bad sign on the entire widget industry, and start selling their shares of “Company X” as well. World events also play a major role on how the markets do. Usually, these events have a negative affect on the market initially. Sometimes, the market recovers within a couple of months. Sometimes they don’t. The day a gunman assassinated President Kennedy, the Dow fell 2.89%. A year later, the market gained 21.58%. The day the Federal Building in Oklahoma City was bombed, the Dow gained .68%. One year later, it was up 14.07%. On 9/11, the market fell 7.12% and was still down 10.66% a year later.

Sometimes, companies reward their investors by splitting a portion of their profits. These are called dividends. If 10 people own 1 share of “Company X”, and “Company X” makes a $100 profit, each investor would get $10. Again, this is the simplest of examples, as the Dow 30 companies each have millions and millions of outstanding shares. IBM, for example, has somewhere in the neighborhood of 1.7 billion outstanding shares. That means, a dividend for a single share is usually only around a couple of cents. So which companies offer dividends, and which don’t? That’s up to the Board of Directors of each company. Some companies share their profits. Others think it is a better business move to reinvest their profits to make the company better- thus raising the value of each share.

Many people spent hours a day studying companies that are poised to make a significant gain. The nice thing about the Dow 30 stocks is that these are usually a safe bet. Most people don’t expect Coca Cola to go out of business any time soon. Even if they have a bad couple of quarters, these companies have proven leadership that will eventually turn the company around. They wouldn’t have lasted all these years if they didn’t. So with thousands and thousands companies trading on Wall Street, you now have a better understanding of what all those numbers mean, the next time you see them on the evening news.

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Make your Choice on Mutual Fund

There are thousands of mutual funds to invest your money in. So how do you pick one over the other? Here are some things to look for when making your choice:

• Fund Performance. The single most important measure to consider is how the funds have performed over time. Check the three- and five-year annual return (and ten-year if available) and see how well it’s done through the years. Anything that has returned at least 10% or more per year over a long period of time would certainly be worth considering.
• Fund Management. The next thing to look at is how long the current management has been managing the fund. If a fund has returned 20% a year for the past five years, and the current manager is the one who managed it for those entire five years, you should certainly feel comfortable with that person’s skills. If the fund returned 20% for four years and 3% last year, and the current manager just took over last year, I’d be skeptical until he’s managed it a few more years.
• Volatility. The most volatile funds (like aggressive-growth) will return more in the long run, but will also drop more on bad market days. If you can stomach volatility and are in it for the long-haul, go with a more volatile fund. If you are in it for the short-term or just can’t stand to see your fund go down even for a day, get into something more conservative.
• Cost of getting into a fund. Every fund will have an expense ratio. This is the percentage of the fund’s money that is deducted each year for the fund manager’s salary, mailings, marketing, and other costs. As long as the ratio is in line with most other successful funds, I wouldn’t be concerned about it. If it’s extremely high compared to others, I would certainly expect a much higher return than other funds. Also, you need to be concerned with whether the fund is a “load” or “no-load” fund. In other words, do you have to pay (load) to get into the fund or is there no cost to get in (no-load)? There are many successful no-load funds to get into. I’d only get into a loaded fund if it has produced exceptional returns year after year.

All of the information I mentioned above on mutual funds can usually be found in a special mutual fund issue published at the beginning of each year by Kiplinger’s or Money Magazine. Using those sources, along with asking a financial professional should help you pick the fund that is right for you.

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Finance Tips for Stock Market Investor

So, you're ready to dive in and become the next Gordon Gekko. Alright! Time to get on the wait list for that Rolls Royce Phantom, right? Not so fast. Stock picking is tricky business and is, frankly, not for everyone. Many newcomers have discovered just how fast their life savings can evaporate, and that's a lesson you probably don't want to learn first-hand.

The Stock Market Investment by Richard J. Teweles, Edward S. Bradley Packed with clear definitions, cutting-edge strategies, and helpful examples, this new edition provides in-depth information on topics that have changed how stocks perform, as well as how they should be handled. In addition to the globalization of the securities business, regulatory changes, program trading, and advances in online services, you'll find details on key developments in several important areas, including the derivatives market, index fund investing, and technical and fundamental analysis.

But let's start on the other end; your financial situation. Before you plunk a single cent into the stock market, you should take a hard look at your other assets, debts and financial obligations. If you have thousands of dollars in revolving credit card debt (i.e. you don't pay your balance in full each month), the wisest investment you can possibly make is to pay that off first. Why? Since credit cards typically charge some 15-20% interest, any investment you'd make instead would have to have a guaranteed return of at least as much - and there's no such thing.

Other types of debt, such as mortgages and student loans, are less of an emergency. Mortgages are tax-deductible (as opposed to credit card debt) and student loans generally have generous terms. Some like the peace of mind that comes from being entirely debt-free, but it's not really important once you've cleaned out the credit cards. Car loans is a gray area - if you got a good deal, it's ok, but if the dealer slammed you with a high interest loan you're wise to pay it off.

How The Stock Market Works by John M. Dalton Explains the workings of the securities industry, including the initial public offering, types of stocks, who's who inside the brokerage firm, back-office operations and investment analysis. This new edition includes new chapters that cover ongoing changes at the NYSE, the AMEX, Nasdaq, online trading and the globalisation of the stock market. It has been thoroughly updated to reflect changes that have taken place on Wall Street and in the way securities transactions are conducted.

Next, make sure you have a sufficient cash cushion for emergencies. Remember, the stock market goes up and down. If you get laid off or have a sudden big expense dropped in your lap, you may have to sell your stock at the worst possible time. By keeping 3 to 6 month's worth of living expenses in a savings account or money market fund you can handle the curveballs life throws at you without the added grief of losing money in the stock market.

Last but not least, do you have the nerves for stock investments? If the market takes a sudden plunge and you see thousands of hard-earned dollars disappearing into a black hole, will you panic and sell at a loss? Will you be stressed out at the expense of work and family? Will you check the online stock tickers every hour to track your investments? If you said yes to any of the above, you may want to stick with treasury bonds, Certificates of Deposits (CDs) and other safe investments where you have a modest but guaranteed return on investment. You probably won't make as much money in the long run, but at least you'll sleep well at night.

Ok, now that we have the fundamentals out of the way, let's focus on the actual investing. If you are fresh to the game, you may not want to jump off the deep end and try to pick the next Microsoft out of the thousands of publicly traded stocks. By investing in an index fund or a stock mutual fund, you can be part of the stock market drama without having to lift a finger once you've mailed in your check.

Index funds are pre-packaged baskets of stocks that follow the market ups and downs in lockstep. The S&P 500 index funds, for example, invest in the 500 largest US companies. That's it. There is no team of bean counters and analysts working the phones all day long trying to catch the latest trends. The fund simply buys shares of those 500 companies and does absolutely nothing else. When you buy into the fund, the fund buys a tiny bit more of each other 500 companies, and when you sell your share of the fund, it sells a tiny bit of each company.

This is obviously not very exciting, but it has the advantage of low cost (since there are no analyst salaries to pay, the fund companies can offer very low management fees). Another advantage is that your odds of long-term gains are pretty good. History shows that someone who plunked down money in this type of fund in the 1950s and sat on his hands through ups and downs would have an average annual return in excess of 10% by now.

You can also buy index funds with a more narrow scope, such as small-cap (smaller companies), but the principle remains the same. The smaller index funds are typically more volatile (higher possibility of bigger gains or bigger losses) which can be an option if you feel that a specific section of the market has better potential than others.

Another route is the regular stock fund, where you pay a bit more in fees to have the analysts try and beat the market. Some succeed and reward their investors handsomely, others lose a big gob of dough even though the rest of the market is heading up. The most important thing to realize here is that last years winner isn't necessarily this years winner. In fact, if a fund brags about having returned so-and-so much last year, they probably took great risks to achieve such spectacular results. That's the bummer about risk; the more you stand to gain, the more money you'll lose if the fund manager is wrong. Simply put: avoid the hotshots and seek out the mature funds with competent, experienced managers and a track-record of moderate but consistent gains.

If you decide to try your own hand at stock-picking, get an online discount broker such as Ameritrade, E-Trade, Scottrade or Sharebuilder. These offer cheap trades (less than $30) while many also provide basic research tools. If you pick a broker that doesn't offer research tools, don't fret - there are tons of free websites that will help you get started. However, no tool will replace your most important asset: your mind.

Getting good at identifying strong companies with good growth potential takes years and requires a lot of homework. Tons of books have been written on the subject, most of which are fads and shortsighted baloney. Start with down-to-earth books like Investing for Dummies and the like, and don't forget to tap the power of the Internet. The Motley Fool (www.fool.com) is a great place to start for beginner do-it-yourself stockpickers.

Full service brokers charge considerably more for each trade, but they also offer investment advice. Many of these guys are brilliant and earn a lot of money for their clients, but you pay accordingly and have no guarantee that their "hot tip" won't go belly-up next week. As a rule, a small-time beginner eager to learn is best off with a cheap online discount broker where trial-and-error is simple and won't hurt very much. A well-heeled investor with a busy schedule may be better off handing the money over to a broker and make it her problem to make the pile grow.

Finally, a word about fees. Whenever you invest, the house always takes their cut whether you're up 20% or down 20%. Over the years, that half-percent makes a big difference. Whether you're shopping for a fund or a broker, compare the fees with others. Do your homework, watch the fees and keep your cool when the market doesn't, and you're off to a great start in stock investing. Good luck!

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How Financial Planner can Help you Meet your Goals

Choosing a financial planner can help you meet your financial goals. However, the process is not without pitfalls. Selecting a financial planner is a very personal decision depending upon what you would like to accomplish, but there are broadly applicable criteria as well.

Personal Financial Planning by G. Victor Hallman, Jerry S. Rosenbloom Provides in-depth coverage and analysis of the latest tax law changes. In addition, it features an entirely new chapter on planning and paying for education expenses, including the new 529 plans; ramifications of the GST estate tax repeal; new checklists and questions to tie up each chapter; and more.

The most important thing to remember is that the financial planning industry is unregulated. The majority of planners have not passed any tests to demonstrate their competence. Only about 40,000 of the 250,000 or so planners in the United States are Certified Financial Planners. Chartered Financial Consultants and Personal Financial Specialists, which are certifications offered by the insurance and accounting industries, account for only a small portion of the remaining planners. Selecting a planner with a certification is a critical initial consideration. Finding someone who is also experienced and participates in continuing education is important as well.

In addition to their qualifications, it is important to understand how you will be compensating your financial planner. Many supposed financial planners are really just sales representatives for a particular financial product. Understanding whether your planner subscribes to a code of ethics that includes fiduciary responsibilities can shed light on the degree to which the planner is likely to place your needs ahead of their compensation system.

Two compensation systems are prevalent in the world of financial planning. Most planners get a portion or all of their compensation through commissions on financial products they sell you. These arrangements can create a conflict of interest between you and your planner. Your planner should be forthcoming about how commissions affect their compensation and will influence the products they will recommend to you.

Alternatively, some planners are compensated solely by an annual fee. The fee is typically based on a percentage of your assets under management. One percent per year is typical. Fee-based planners are not subject to the same conflict of interest that exists with commission-based planners. However, you may pay more for their advice than you would by going the commission-based route. They are also more difficult to find.

Another important consideration is the aspects of your financial life that you are seeking advice about. Many financial planners only have adequate knowledge to address a small portion of a client’s financial condition. Those with an insurance background are best at insurance, while those with a brokerage background tend to be better at investing. It is best to find a planner who can understand your entire financial situation and provide comprehensive financial advice. At the very least, try to match your planner’s background with your most important problems or obtain advice from multiple planners with different specialties.

The final consideration is the nature of the firm you would be working with. Larger companies and smaller companies will likely provide different degrees of service and fee structures. Understanding whom you will be working with on an ongoing basis to formulate and implement a financial plan is very important. There is little point in interviewing a famous financial planner if you are ultimately going to be assigned to a staff planner that you have never met to actually create your plan.

By interviewing multiple financial planners before you make a selection, you will best be able to find one you are comfortable with. Personality, qualifications, and compensation structure are all important areas to evaluate. Before making a final selection, check into any disciplinary problems your prospective advisor has had by contacting your state’s insurance department, the National Association of Securities Dealers, the Securities and Exchange Commission, and the group overseeing their planning certification. While not guaranteeing you will not encounter problems, applying this approach will greatly reduce your chances of having an unpleasant experience.

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Open a "Swiss Bank Account"

In 1934 the Swiss passed a law which made it illegal for any bank to disclose any information about an account, including the fact of whether an account actually exists or not.

This act, passed in response to the growing strength of the Nazi revolution, and underpinned by a long-standing commitment of the Swiss to the notion of privacy, was the embryo of the now infamous “Swiss Bank Account”.

For most of us such accounts are the domain of corrupt politicians, the mega wealthy, arms dealers, despicable dictators and mythical arch villains and spies. For the most part the mention of the words “Swiss Bank Account” conjures up images of mysterious big black sedans bearing faceless men, of eyes of cold steel guarding the cache of secret numbers that are the key to untold riches.

Like all legend, this one is somewhat based in fact, however the “Swiss Bank Account” is a far more mundane creature than this and something that is accessible to most people from most parts of the world.

In fact, opening an account with a Swiss bank is much the same as opening an account with any bank, and provided one has good reason to do so, provides some useful advantages over banking in many countries.

Firstly and foremost Swiss law decrees absolute secrecy of banking details in all civil matters including divorce, lawsuits, creditor claims, inheritance disputes and the like.

This secrecy does not extend to any activities that are criminally related, but the Swiss authorities do not regard tax evasion as a criminal offence (it is regarded as a political matter).

Put simply, unless a foreign government can prove that an individual has committed one of the specified crimes that is also a crime in Switzerland, and link the individual to an identified bank account used for transactions associated with that crime, the bank may not release any banking details to anyone without their customer’s consent.

While the cloak and dagger stuff may be beneficial to some, there are other advantages to opening a Swiss account which are more applicable to the common person.

Switzerland is a politically and socially stable economy, with a reliable legal system and a history of economic prosperity. The Swiss have a long standing tradition of excellence in banking which has been legitimately earned and their bankers offer outstanding levels of experience, knowledge and service.

Furthermore, the banking system is based on the concept of a full service bank, with banks performing services such as securities brokerage, investment counseling and portfolio management.

Put simply, if you put your money in a Swiss bank account it will still be there as the rest of the world’s financial institutions crumble.

There are basically three ways to open a Swiss account. Firstly you can pay someone to do it for you at a cost of between $US400 to $US1000 depending on the account type. Just do a search with the keywords “open Swiss bank account” and you will find a number of firms who are willing to take your money to open the account for you.

If you are likely to be dropping into Switzerland at any time then you can simple drop into one of the banks and open an account in person. Its handy in this case to have some record of past earnings just to prove to the bank that you are on the “up and up” and you’d also need to be carrying the minimum deposit in one form or another.

If you value your hard-earned cash then opening an account via the mail is the best option.

Choosing this option is time consuming as you have to wade through the huge variety of services that Swiss banks offer, however it is your money so a little extra time spent finding out how to best use it is not a bad way to go.

While most of the banking options include the standard services such as checking accounts, credit cards and internet banking, you may have to search harder to find a bank that will purchase and store bullion for you.

In basic terms there are four types of accounts that may be opened.

1. The Swiss Postal Account
This account is offered by the banking arm of the Swiss postal service, requires no minimum balance, has minimal fees, but does not have a checkbook. Unfortunately the bank offers few investment offers but the account can be useful if you are trading on the internet (for example) and choose to pay all your bills via the bank’s card services.

It is the bank of choice should you want to be able to drop the “just send it to my Swiss bank account” line at dinner parties and can easily be searched out on the net.

2. The Standard Account
One notch up from the postal account is the standard account that gives you the added options of phone banking, online trading, enhanced investment options and checkbook. This account does require a minimum balance of somewhere around $US4000 and has small annual fees.

3. The Investment Fund Account
If you want to want to ‘play the markets’ then this account is the one to opt for. To do so, however, carries a necessity for a $5000 minimum balance. With this account you fix an investment strategy with the bank and they do all the securities trading for you. Come withdrawal time they simply liquidate the necessary shares and forward you your money.

4. The Swiss Numbered Account
The stuff dreams are made of, expensive dreams. We’re talking a minimum balance of $US100,000 but for that you buy total discretion, attention from the best people in the bank, total discretion and the ability to purchase anything that is traded on the public markets.

Also you get the pleasure of only a few select bank officials knowing who the name behind the numbers is.

The only hitch with this one is that you have to apply for it in person, but of course with that sort of money to hide away a trip to Switzerland is part of the business.

Opening your Swiss Bank Account
You’ve made one trip to the Swiss Consulate, waded through the list of Swiss banks that they’ve given you, sent off for all the information and forms and painstakingly gone through every one of them. Finally after an eternity of sorting and resorting you have identified an account with a bank that you want for yourself, what next?

Once you’ve filled out the requisite forms, take them and your passport to your closest Swiss Consulate, or an affiliated bank and get your signature verified; simple red tape.

At this point it is wise to contact the bank and ascertain whether they need any extra information (such as proof of income for the past whatever years) and whether they need a deposit to be forwarded with the forms. In all likelihood a deposit won’t be required until after the account is verified and then it is prudent to send it off as a money order.

After you have everything the bank needs then just mail it off and wait a couple of weeks. The bank will get back in touch with you and tell you where to go from there.

Remember that banks exist because they want your money, and if everything is on the up and up they’ll be happy to take it.

Depositing and Withdrawing Money
There is no secret to depositing and withdrawing money from your Swiss bank account, it is simple as trading with checks, money orders and credit cards.

Should you want to divulge your secrecy then you can also simply wire money back and forth through your local bank accounts.

Clearly, the best way to operate your secret Swiss bank account is to have others deposit money in there for you and for you to pay for goods and services through the vehicles of that bank. That way, no one other than the bank will know and remember, they can never, ever tell.

Some words of caution
While Swiss banks are under legal obligation not to disclose account details to anyone (except in criminal cases), in many instances, such as with the IRS, it is the obligation of the individual to disclose their financial affairs with their local taxation authorities.

There is no way that such authorities can find out about a Swiss bank account that is held by someone however to deny ownership of such an account in court is to commit perjury. In the case of divorce proceedings for example, it is quite legal to have a fortune tucked away in such an account but if you are asked whether you have such an account, it is illegal to deny it. Food for thought.

One further concern of operating a Swiss bank account is that Swiss authorities impose a 35% withholding tax on all interest earned by the account.

Much of that (depending on your country of residence) can be refunded but in order to do so you have to disclose the account to your local authorities. Bye, bye secrecy.

Internet banking
Swiss banks do offer full internet banking services, however, such activity is restricted in many countries including the USA. Nevertheless, as time progresses it is probable that many of these countries will ease up on this restriction and that such accounts will be viable in these countries.

Most recently an online Swiss bank, Swissnetbank.com have set up shop and are offering a simple fee free worldwide moneymarket account. This account operates in three currencies, the Swiss Franc, the Euro, and the US dollar.

Deposits and withdrawals can be made in any of the currencies via nominated accounts and you can shift your money into any of the three currencies with a few strokes of the keyboard.

Its not a Swiss bank in the time honored tradition of Swiss banks but it is another feather in the cap of those who are unwilling to let their wealth dwindle away in some petty interest bearing account somewhere.

Let’s see how long it takes 007 to jump onto this one.

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Which Bond are Right for you?

Most people know about the basics of investing in the stock market but many people are puzzled as to what bonds are. In one word, a bond is a loan. The loans can be from the federal government, a federal agency, municipality, or corporation. When you purchase bonds you are lending your money to whomever you buy the bonds from. In return for lending them your money you are paid a fixed rate of interest over a set period of time. When the bond matures the investor’s money is usually returned with the earned interest included.

Bonds: The Unbeaten Path to Secure Investment Growth by Hildy Richelson, Stan Richelson An expanded and updated version of "The Money-Making Guide to Bonds", is designed to educate novice and sophisticated investors alike and serve as a tool for financial advisers as well. It explains why bonds can be the right choice and how to use them to achieve financial goals. It presents a broad spectrum of bond-investment options, describes how to purchase bonds at the best price, and, most important, shows how to make money with bonds.

Bonds are like stocks because they are both traded. Therefore you can buy the bonds after they are originally issued while at the same time you can sell bonds before they mature. Bond prices are subject to volatility in relation to market conditions.

When a person is issued a bond they are basically promised to get their money back. Bondholders are paid before anyone else, even stockholders and creditors, if the company runs into hard times or goes bankrupt. Bonds give you a stream of income based on their rate of return. Bonds are usually much less volatile then stocks are. Bonds also can provide a tax break because municipal and government bonds are sometimes exempt from state and federal taxes.

When a bond is issued, the issuer is essentially promising to return your investment, the face value of the loan. The main disadvantage to bonds is that they generally have lower returns than stocks and mutual funds. Bonds are like stocks because their prices are sensitive to interest rates as well. Bonds also carry with them some heavy terminology, which can be confusing and hard to understand.

Type of Bonds:

Government Bonds – The U.S. Department of Treasury and other federal agencies issue treasuries and federal agency bonds. Treasuries are basically risk free because the U.S. government backs them. They are issued to help finance all of the costs involved in operating the government. Municipal Bonds – State and local governments to help pay for schools, streets, highways, hospitals, bridges, airports, and other public works issue municipal bonds. You usually don’t have to pay federal taxes on the interest earned from municipal bonds.

Corporate Bonds – Corporate bonds are issued by businesses to help pay for business expenses. There are a ton of different corporate bonds available all with their own interest rates, maturities, and credit ratings. Corporate bonds are generally higher risk bonds in comparison to municipal and government bonds. They also have a higher rate of return than municipal and government bonds. However you do have to pay taxes on the interest earned from corporate bonds.

Municipal bonds are issued by more than 50,000 state and local governments and their agencies to fund projects such as schools, streets, highways, hospitals, bridges, and airports.

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