Tuesday, May 29, 2012

How To Become Wealthy

We all have heard the saying "it takes money to make money" but is that all it takes?  Do you actually need money to make money if so do you need lots of it?

Becoming wealthy is a state of mind it usually does not happen as a result of someone handing you $50,000 to get you started.  If that were the case most of us would not have a chance to attain wealth. 

There isn't a universal way to become financially independent but there are some shared characteristics that can take you there.  At some point or other taking risk is a must to rid you from a 9-5 steady income into a larger income status. 

What separates the wealthy from the masses is a unique way of thinking.  It isn't an inheritance or access to huge sums of money although that can help.  A wealthy person thinks big and does not hold himself back.  The rich & savvy have good money management skills and set out a plan which they carry out.  They fall and get back up to try again.  Using this formula low income individuals have ascended from lower class to become part of the nouveau riche.

If individuals with poor spending habits were to come across a large amount of money they would probably end up in more debt or with little progress if at all.  They would need to change their lavish spending styles and fix their money management skills to make good use of their resources.  On the other hand you can give a $1000 - $5000 loan to someone with a wealthy mentality and have her turn an idea or venture into a million dollar company like Barbara Corcoran the real estate mogul did.

If you don't have much money or do have savings realize that becoming wealthy comes from within and it eventually becomes a reality when you allow it.  The exciting part is that it can come in different ways at different times.  Becoming wealthy can be the result of a strong network, a loan, a stock investment, real estate, an invention, advertising, education, intellectual property or a small business.  The point is you have to start and take action in your life.  Hang out with people that are wealthy see how they think, if they are not in your immediate network then read about them. 

Then there is the black swan the one that defies the norm like Sara Blakely who became wealthy by starting her business with her life savings of $5000 and turned it into a billion dollar company.  She started Spanx a hosiery company with no outside investments or advertisement.  Sara is the youngest female self made billionaire in the world and she owns 100% of her company.

Thursday, May 17, 2012

Heading For The Exit?

It seems these last few days everyone is selling everything some of the selling can be attributed to U.S. data but mostly it's the return of the European concerns.  Every investment is in the red; commodities, stocks from all over the world, 10 yr treasuries, euro, oil and gold.  It seems people do not like gold as much for the time being investors prefer cash.  Fear and panic make people do unexplainable things. 

If there were a flood coming would you sell everything you have; possessions, gold, cattle, investments and your house?  Why would you want to have so much cash during a flood in that case all you would need to survive would be an ark.  You would probably need some healthcare on that boat that is probably why healthcare stocks have fallen the least thus far.  Unless you are retired, near retirement or have a serious heart condition you should not be heading for the exit so fast.  You should be considering your entry if anything you should have exited at the beginning of the month.

What if you had timed your exit perfectly before the recession sometime in October 2007 when the Dow was making record highs.  You would have protected your money from the severe crash that followed but you would also have had 4 years of little or no returns on that money. The worst part is that you would have missed out on one of the best bull markets in history that followed.  A nice dividend paying stock is a good alternative right now since interest rates are down worldwide in the places where one can safely invest in.  Being in cash only can be good at times but not for the long term.  Sooner or later that money has to be put to work otherwise you begin to work for your money.  Things could get worse with Europe but at some point the market will begin to rise and that is when it will be too late to enter to get the real returns the ones that double your money.

During these market panics and crashes a risk taker and investor starts looking for entry points.  If a major catastrophic event were to come then I would be happy that I left with at least some of my money invested.   

Tuesday, May 15, 2012

Investing In Pfizer Inc.

In the past year Pfizer (PFE) has moved pretty close with the Dow.  When stocks crashed last summer so did Pfizer but it did recover fairly well. From December 2011 it has taken off and it has outperformed the Dow. Although the company lost some revenue due to the expiration of some of its best selling drug patents it has mostly stayed in the green and has not dropped much despite European news worries. Pfizer gets about a quarter of its revenue from Europe.

In the first quarter of 2012 Pfizer reported higher than expected earnings thanks to Lyrica.  This helped counteract Lipitor sales which fell by 42%. The market has continued to pick up the stock, the feeling is that if the loss of Lipitor one of the biggest drugs in the world only led to a 3% loss per share then Pfizer must be on the right track. Pfizer is awaiting approval for 2 blockbuster treatments Eliquis and Tofacitinib. Overall Pfizer's sales were solid and sales of older drugs were mostly higher. Pfizer plans to extend the use of its antidepressant Pristiq to treat depression in women with menopause.

Trading at 22.30 and with a dividend yield of 3.90 it offers a good play for those who want to diversify their portfolio. Volatility has been picking up especially in the financial stocks.  European concerns that won’t go away point to a tough summer.  We may repeat the roller coaster ride we had last year or even worse if Greece is dropped from the eurozone, but adding this pharmaceutical with a beta of .70 can be a good move going forward as this stock has good possibilities in the long term.  One thing to keep in mind is that when major European indices drop one can usually find a pharmaceutical as one of the day’s top performers.

Healthcare & Big Pharma Stocks are good buys during hard economic times.  In the coming years innovation will help companies find effective treatments at a faster pace. Pfizer was able to speed up the clinical trials and bring to market Xalkori in 4 years instead of having to wait decades using the research models of the past. This is a new era that will lower the astronomical costs of drug testing and will allow companies to bring drugs to patients at record speed.  As Pfizer focuses on treating more promising diseases such as cancer and Alzheimer's picking up the stock on these market drops is a good idea.  

Sunday, May 6, 2012

Sweden's Economy

Sweden has had a good run financially with its neutral position in the world and a highly skilled labor force.  In 2008 the global crisis lowered demand for Swedish exports and caused the country to enter a recession.  Sweden came back strong in 2010 as a result of the high demand for its commodities and high returns by Sweden's banking sector.  The government is considering a stimulus in 2012 to shield against the global slowdown to sustain healthy employment and growth according to The World Factbook.

According to the World Bank Sweden's GDP is worth $458 billion dollars which is 0.74% of the world economy.  Sweden is a major European economy they have a high tech capitalist system with extensive welfare benefits.  The country's unemployment rate is at 7.7% and their interest rates are at 1.5%, the interest rates are set by the Executive Board of the Central Bank of Sweden, currently Sweden's inflation rate is at 1.50%.

The major stock index in Sweden the OMX includes the largest volume stocks that trade on the Stockholm Stock Exchange.  It closed at 1,031.95 the top performers were Swedish Match AB and AstraZeneca PLC a pharmaceutical company.  In the past 12 months the stock index has declined a little over 100 points.  As of 2012 Sweden has 11 billionaires one of them is Stefan Persson the owner of H&M. 

In the first ever World Happiness Report the data shows that happier countries are usually the richest countries but social factors are the largest contributors to being happy.  On the top of the list are the Nordic countries they average 7.6% on a happiness scale from 0 -10.  Sweden comes in at #7 in regards to happiness while the U.S. comes in at #11.  An interesting fact is that in advanced countries women are happier than men.  According to The World Factbook Infant Mortality Rate Sweden has one of the lowest infant mortality rates it ranks number 5 on the report with 2.74 deaths per 1000 live births.  Not surprisingly the Nordic countries are at the top of the list with some of the lowest mortality rates.  The U.S. does not even make the top 40 despite all the money we spend on healthcare. 

If the Swedish lifestyle is starting to appeal to you be sure to check out the Scandinavian House in NYC enjoy art exhibits and photography from the Nordic countries. In the mood for Swedish Meatballs with Lingonberries? After a day full of trading get your appetite on at Smörgås Chef Wall Street location.