Your Finance and Investments

Today we have added two new companies into our portfolio. They are TDK ($58.78) and TIDEWATER INC ($55.87).

Our portfolio on the end of 20. August 2008:

Hi everybody!

We would like to introduce you our new portfolio, whitch currently consists of 7 companies. This number will be increasing as we find new interesting companies to buy. We are going to write something more about companies in our portfolio soon.

Our portfolio on Yahoo:

We have found interesting video on YouTube, which is showing with basic arithmetics the consequences of growth. We strongly recomend to watch all the 8 videos.

To watch videos, click on to read the whole article.

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After long pause we are back. We had some majer issues, but hopefully they are gone.

In few days, we are going to introduce you our portfolio, which we are building from august 7th. Currently we have 6 companies in it. See you soon.

In our upcoming blog-portfolio we are going to invest into about 28 companies. We have derived interesting investing strategy, which is partly based on Harry Markowitz’s portfolio diversification. We are going to rebalance our portfolio daily, and the changes will be published on this blog.

Our simulations have showed up very stable yields and small dispersion. They were also resistant against problems in US economy. We are doing everything to start our online portfolio as soon as possible.

Today Ben Bernake, the Federal Reserve Chairman, warned Congress that the economy may shrink over the first half of this year, which would signal the start of a recession. Yet, he didn’t offer assurances of further interest rate cuts.

In prepared testimony to Congress’ Joint Economic Committee, Bernanke didn’t use the word recession. But it’s the closest he has come to date to suggesting that possibility, given a trio of crises — housing, credit and financial — that has pummeled the country.

“It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States’s economic health. Under one rule, six straight months of declining GDP, would constitute a recession.

Until now, Ben Bernake stayed reserved about recession and this is the first time he adumbrated the possibility of recession. A few weeks ago, Alan Greenspan warned, that the US economy is going to recession.

I think that the situation is crucial. The fluctuations of S&P 500, DJIA etc, are enormous. This is a very bad indicator of health of the US economy. Also the lowering of interest rates may lead into another problem, which is the trap of liquidity.

Today we updated our blog which is powered by Wordpress, to version 2.5. For our readers it means faster loading screens and more posts from finance sector, because of easier and faster writing of posts.

As you can see, we have also changed the theme of our blog. We hope you will like it and it will be easier for you to find what you need.

In the horizon of few days we would like to introduce you our BLOG-PORTFOLIO. We have sat aside $10 000 which will be invested according to our posts and tips. You will be able to watch our profit/loss and transactions which we made.

Recently, I was thinking about investing into US companies in these days. If you are an investor from United States, you don’t have to worry about depreciation of US dollar and further investments into US bonds or stocks is good decision. You may say, that recession is coming, so bonds are much more better than stocks, but the markets are from my point of view in the stable position. The stagnation can occur, but the big falling in value is not very likely to happen. Of course, investing into undervalued companies is recommended.

On the other hand, if you are an investor out of the US, i.e. from Europe or Asia, the depreciation of US dollar takes a big part in your decisions. Nowadays I would prefer investments into European companies (BMW looks good), Eastern-European companies or funds (Slovakia, Czech Republic, Poland, Hungary, Romania, Bulgaria) or Asian companies. I was highly focused on the American markets, but this situation forced me to focus also on the other world’s markets.

Monetarist explanations
In their 1963 book “A Monetary History of the United States, 1867-1960″, Milton Friedman and Anna Schwartz laid out their case for a different explanation of the Great Depression. After the Depression, the primary explanations of it tended to ignore the importance of money. However, in the monetarist view, the Depression was “in fact a tragic testimonial to the importance of monetary forces.”

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Federal Open Market Committee (FOMC) of American central bank decided to cut the main interest rate in amount of 75 points to level of 2.25%.

FED in Tuesday again released the monetary politics to protect the US economy before further negative impact of mortgage crisis with menaces of recession. Federal Open Market Committee (FOMC) of American central bank decided to cut the main interest rate in amount of 75 points to level of 2.25%, what is the lowest value since February 2005. Since half of the September, FED has lowered the main interest rate for 3 percent points, what a more, since the beginning of this year for 2 percent points.

The decision of Federal reserve system was in concord with predictions of the market, inasmuch as the finance markets are probably in the biggest crisis since World War II. FED has made also several “first aid” measures during last weekend, when one of the largest American investment bank, Bear Stearns, has fallen into critical finance problems. FED on Sunday lowered the discount rates for direct bank loans for quarter percent point on level of 3.25% and provided Bear Sterns cover of her liquid assets in amount of $30 mld.