Understanding and buying foreign stocks

Trading stocks can be risky; trading foreign stocks is even riskier.

A first step in learning about foreign stocks is to get to know some of the organizations and their webpages that deal in foreign exchanges.  Jonathan Anderson, UBS chief economist, indicates that a correlation exists bewteen GDP and emerging markets. One might look for growth in national GDP in considering good investment markets.

The World Federation of Exchanges is the trade association of 54 publicly regulated stock, futures and options exchanges. The 2011 WFE Market Highlights reports variations in market capitalization by member exchange. Indonesia and the Philippines appear to be the gig winners in 2011.

The Depository Trust & Clearing Corporation (DTCC), based primarily at 55 Water Street in New York City, is the world’s largest post-trade financial services company. DTCC was established in 1999 as a holding company to combine The Depository Trust Company (DTC) and National Securities Clearing Corporation (NSCC). It was set up to provide an efficient and safe way for buyers and sellers of securities to make their exchange, and thus "clear and settle" transactions. It also provides central custody of securities.

User-owned and directed, it automates, centralizes, standardizes, and streamlines processes that are critical to the safety and soundness of the world’s capital markets. Through its subsidiaries, DTCC provides clearance, settlement, and information services for equities, corporate and municipal bonds, unit investment trusts, government and mortgage-backed securities, money market instruments, and over-the-counter derivatives. It also manages transactions between mutual funds and insurance carriers. The DTC subsidiary is the largest securities depository in the world handling over 3.5 million securities issues valued at $40 trillion, mostly stocks and bonds from the United States and 110 other countries and territories.

An American depositary receipt (ADR) is a negotiable security that represents the underlying securities of a non-US company that trades in the US financial markets. Individual shares of the securities of the foreign company represented by an ADR are called American depositary shares (ADSs).

The stock of many non-US companies trades on US stock exchanges through the use of ADRs. ADRs are denominated, and pay dividends, in US dollars, and may be traded like shares of stock of US-domiciled companies. TopForeignStocks.com gives a list of foreign ADRs at  http://topforeignstocks.com/foreign-adrs-list/.

The OTC Bulletin Board or OTCBB is an interdealer electronic quotation system in the United States that displays real-time quotes, last-sale prices, and volume information for many over-the-counter (OTC) equity securities that are not listed on the NASDAQ stock exchange or a national securities exchange. Broker-dealers who subscribe to the system can use the OTCBB to look up prices or enter quotes for OTC securities. To find foreign securities on the OTCBB click on the Foreign Only in the OTC Symbol Directory search tool and put an asterick (*) in the Search Criteria.

Basics of real estate investment

With all the possibilities out there for investing in real estate, sometimes an investor can feel overwhelmed.  You get lost in all the possibilities. So where should the beginning investor start?

Start small and stick to the basics, says Ammon Brimhall.  Small real estate investors are "not the average everyday investor." They don't have lots of money so are looking for deals to make money today.

They're looking for motivated sellers.  This translates itself into a good price or good terms.

To be successful as a small investor you need to look at where you are.  How much time do  you have to commit? What are your goals and how mauch experience do you have? Do you have the emotional make up to be an investor? And how much money do you bring to the table?

Identify the time you have for your investment business and budget your time appropriately.  (To be considered a legitimate business the IRS requires 750 hours a year - 15 hours a week - be spent in the activities of the enterprise.)  Keep track of your time, who you call, your mileage and business expenditures.  Much of your time can be spent looking for properties and following up. One investor looks at 20 properties a week to find one golden possibilitity.  Your job is to create opportunities by calling people.

If you're a good listener and are not afraid to ask, you can learn alot, says Brimhall. "Get them to talk and soak it up!" You can spend a lot of time calling professionals in the real estate and housing field and get a lot of information.  Most people are willing to help and share information. Let people in your community know you are investing in real estate.  Build a team of contacts which includes realtors, bankers, mortgage brokers, hard and private money lenders, title companies, building inspectors, accountants and lawyers, property managers, tradesmen, and other investors. If you need to know about foundations or termites or mold, call an expert tradesmen. Whenever you have a question, call someone.

Establish realistic goals based on your experience.  If you're just beginning, you probably won't go into a big commercial venture. Because you have strong values, you will stay clear of shady deals and avoid hurting other people. Learn to treat people with respect.

Control of emotions is important.  You need to learn to be calm working under stress. Believe in yourself. Confidence will help you deal with stress.

Money is the last on the list because it is least important. When you find a good deal, the money will find you, says Brimhall. 

One problem of new investors is that they are afraid to make offers.  Brimhall seldom does complete due diligence before making an offer on an investment. He looks at the numbers to determine its worth and cash flow.  He might visit the property. But then he makes an offer. He makes the offer subject to a personal inspection.  If a deal is not right, don't be afraid to walk away from it, he says.

Create a total health plan

On Dr. Wayne Andersen's website is a health quiz. I took the quiz and got the following results:80–89 = Health Status: Healthy.

Here is what healthy means: Congratulations! You have a number of positive habits that have helped keep you free from disease and within the healthy range. But don’t get too comfortable—without constant vigilance and improvement, it’s all too easy to slip. Working to make even better choices can put you firmly on the path toward the best possible health you can achieve.

I'm going to take the quiz again in 3 months when I have lost 30 pounds. I'm not on a diet, but I have changed my lifestyle and am following Dr. Andersen's advice to follow a low-glycemic, portion-controlled approach to eating.

The statistics about dieting programs in the United States are pathetic: 85% of the participants will put the weight back on in less than two years. Dr. Andersen has authored Dr. A's Habits of Health which describes an optimal health plan, not only focusing on weight loss, but also establishing a lifelong pattern that will maintain healthy weight and eating.

Dr. Andersen recommends a color-coded shopping system. Dark green foods are lowest glycemic and are the best foods for weight loss and optimal health. Red foods should be avoided.

He teaches how to sleep better and reduce toxins in the body and home. He also suggests the NEAT system which makes small motions a part of our regular life patterns. For example, simply moving from sitting to standing can substantially increase energy consumption.