CFI.co Blog - Page 35 of 47 - Business, Finance, Economics

A quarter of British adults have nothing in savings. Meanwhile, one in 10 Brits admits they tend to spend more than they earn. As a freelancer, you can’t get caught without a good nest egg awaiting you during retirement. By setting up a self-invested personal pension (SIPP), you can prepare yourself for the year to come. A SIPP will help you save for retirement without worry you’ll spend your savings.

What is a SIPP pension exactly, and how does it work?

Keep reading to find out everything you need to know about SIPP investments as a freelancer!

What is a SIPP?

First, what exactly is a self-invested personal pension?

A SIPP is a pension that holds all of your investments until you retire and begin drawing a retirement income. This form of personal pension works similarly to a standard personal pension. The main difference, however, is that a SIPP offers more flexibility with the investments you choose.

Once you have your SIPP set up, you can add regular contributions to your nest egg. You can also make ad hoc payments into your self-employment pension. Then, your pension provider will claim tax relief and add it to your savings.

How Does It Work?

How does a SIPP work and help you save for retirement?

With a standard personal pension, all of your investments are managed for you. They’re controlled within the pooled fund you selected. With SIPPS, however, you have the freedom to select and manage your own investments instead.

You can also pay an experienced, authorised investment manager to make the decisions for you.

SIPPs are best for people who want to manage their own funds. By giving you control, your self-invested personal pension also allows you to switch investments as you’d like. That way, you have the peace of mind that you’re making investments with your own best interests in mind.

Why Is It Important as a Freelancer?

The majority of Brits between the ages of 22 and 29 have no more than £1,000 tucked away in savings. If your self-employed, it’s up to you to start a pension on your own.

Unfortunately, many self-employed people struggle to make ends meet as they grow older. By planning for SIPP investments now, you can prepare yourself for any rocky roads ahead.

There are a few benefits to choosing a SIPP, including:

You can receive pension tax relief from the government
A strong pension plan will give you low-cost access to professional investment managers
The right investment manager can help you invest your money in a range of assets
Choosing the right assets can help you manage risk in a sensible way
If you die before you turn 75, your pension will pass on to your beneficiaries as a lump sum
New pension freedom rules allow you to decide what to do with your pension savings when you reach retirement

As a freelancer, having the freedom to choose what you do with your self-employed pension is essential. Many full-time employees are already paying into a pension. In fact, employers are now obligated to automatically enrol employees into a workplace pensions scheme.

Other Options

If you’re currently self-employed and want to set up a private pension, start by finding any old workplace and personal pensions established in the past. Then, combine them into your new pension. Completing this process will make your new self-employment pension easier to manage in the long-run.

Working with a financial advisor can make this process easier, too. They can help move your pensions over into their system. Then, they’ll combine and transfer your pensions into your new SIPP pension plan.

Otherwise, might need to contact your previous pension providers to get your pension balances on your own.

In addition to a SIPP pension plan, you might decide on other options, including a personal pension or stakeholder pension. Self-employed individuals can also utilise the government scheme National Employment Savings Trust (NEST), too. However, there’s no “best” pension for self-employed workers.

It really depends on your own specific circumstances.

Ideally, try to find a provider who lets you make contributions when you want. As someone who is self-employed, your income might not end up as predictable as you’d like. Having control over the details of your self-employed pension can make it easier to manage.

Investments

Now that you know a little more about how SIPP investments work, let’s review the assets you can choose from. A few include:

Unit trusts
Some National Savings and Investment productions
Commercial property (shops, offices, factories)
Investment trusts
Government securities
Individual stocks and shares (quotes on the recognised UK or overseas stock exchange)
Insurance company funds
Traded endowment policies
Deposit accounts with banks and building societies

However, this is only a shortlist. Speaking with an expert can help you explore your options. There are also different SIPP providers who have different investment options available for you to choose from.

You can’t hold residential property directly within a SIPP with tax advantages that usually accompany pension investments.

However, you can hold residential property in a SIPP through certain types of collection investments. For example, a real estate investment trust would allow you to include the property in a SIPP without you losing tax advantages.

These investments are often subject to restrictions. It’s also important to note that not all SIPP providers will accept this type of investment.

In addition to your self-invested personal pension, make sure to take the time to develop an overall investment strategy. Planning now will help you in the future.

You can access and use your SIPP more flexibly now. According to new rules, you can now access the money in your SIPP at the age of 55.

Take a SIPP: Understanding Your Self-Invested Personal Pension as a Freelancer

Prepare for the future and make the most of your money. By understanding the importance of creating a self-invested personal pension, you can save away money as a freelancer. Then, you’ll have what you need to prepare for the day you retire!

Searching for more helpful investment tips? Explore our latest Investment Management guides today.

Wealth Management

Core principles to boost up your profit factors

ByCFI.co Blogger

While trading, every trader uses a unique trading strategies to navigate in the Forex market. Strategies are used by traders to help them to trade in a profitable way. You need to understand the fact that not all the strategies will work for every trader. A simple trend trading strategy can help you to secure profit, but still, you might not be able to make a decent profit after a few months. The market is always changing its nature and it’s your duty to keep pace with this dynamic market.

The market allows a trader to work as per their skills and strategies. If you have good and effective skills and strategies you will be able to make profits but if you have a lack of skills and strategies then you will find it difficult to make profit. Although there are some important principles that are common in the entire market for all traders to achieve their goals.

Pay attention to the indicators

It’s important for all traders to understand what is happening and what might happen in the market. Through the analysis of Forex indicators, you can understand the market better. Indicators play a crucial role in the market, so all traders should learn their uses. When you learn the use of the indicators, open a demo account with Rakuten so that you don’t have to lose too much money.

You can find out the economic situation of the market’s currency by using the indicators. The indicators also help traders to identify the best time for entry and exit in a profitable way. If you can identify the best times then it will maximize your profits by reducing your losses.

Keep a personal trading record

Many traders fail to keep accurate and faithful trading records and thus can’t identify their previous mistakes or rectify them. Trading records can enhance a trader’s entire trading system, as it allows you to trade by thinking twice to find out whether you will make profit or not. Once you develop the habit of keeping the record, you can execute quality trades in the fx trading account. Most importantly, you will start building up confidence which is the most crucial component of trading.

You can make better strategies and skills in your trades by keeping trading records. A trading record acts as a guideline for traders as it helps them to rectify their previous mistakes and to trade with better strategies in the next move.

Embrace the risk management

If you want to become a successful trader, you should never avoid risk management in your trades. Risk management is essential for all the traders as they can lower the percentage of losses in the trades by setting proper risk management. Never break the rules of risk management as it can blow up the trading account. Stick to the safe method so that you can earn big amount of money. Analyze the losing orders and learn from your mistakes. Once you become good at trading, start placing trades with confidence.

You should never risk more than 2% of your trading capital and never change your risk management out of greed. Many new traders set higher risk management in their trades and thus end up losing their capital. It is also known that proper risk management is a savior for traders as it reduces the percentage of losses.

Conclusion

You can have your own rules for trading in the Forex market but don’t ever avoid the principle trading methods. The above points will help you to trade in a profitable way, you also need to pay attention to all the terms and conditions of the market. The entire trading system may become easier for you if you learn and understand the market more precisely. Mastering the Forex market is a never-ending learning process.

Technology

How do the professional cryptocurrency miners make a profit

ByCFI.co Blogger

Mining has become a very lucrative business. Due to the rising demand for cryptocurrency, thousands of people are trying to earn their living by mining it. In the past, mining Bitcoin was extensively popular. But things are getting much better. People are mining different types of crypto to compete with giant mining companies. Though you could have once made a decent amount of money as a solo miner, nowadays it has become way more difficult.

Does that mean, we the individual miners have no place? Well, it’s a bit of a tricky question as the answer is related to the actions of miners. If a person knows the ins and outs of the mining business, it can be a life-changing profession. Let’s learn some of the key steps which miners are using to make big profit from this market.

Return over investment

The professional miners have a clear knowledge of ROI which is often known as a return over investment. You don’t want to spend a huge amount of money setting up a personal mining rig without knowing the ROI. You have to consider mining as a business and only then will you be able to come up with a unique idea that will tell you how much money might get from per month. Once you know your monthly income from mining, it’s just basic math to find out how long it will take to cover the investment. In the past, the mining process was much easier but things are extremely difficult now. Unless you have a super-powerful mining rig, you should not expect to get a full return from your investment within a short time. So, consider the ROI factor whiling mining cryptocurrencies.

Selection of the digital asset

Selecting a digital asset is the most complicated task. It’s more like knowing what cryptocurrency to buy. Those who think Bitcoin mining is the only way to make money have a lot to learn about the crypto mining industry. People are mining Ethereum, Litecoin, Dash, etc. which is relatively easy. So, how do you find the best digital asset to mine? Pro miners use the real-time market data from bigX and they find the cryptocurrencies which are most likely to go in up the near future. So, it’s obvious you can’t make a big profit by mining one specific set of the asset. Try to diversify your mining rigs so that it increases your win rate. It might be tough for new miners but they must educate themselves to become pros.

The cost associated with mining

Setting up the mining rig is not the only cost by which you can make a decent profit from this market. You have to know about the associated cost in mining. In most cases, electricity consumption becomes the killers. But the professional miners use alternative solar power to mitigate the mining cost. Setting up a solar power hub for the mining rigs might be a very expensive process. Unless you are going to commit to this business in the long run, you should not entertain this idea. At times, you will also have technical faults in the mining rigs. To fix these problems, you have to spend a good amount of money. Include those costs in your mining business and find out how much money you can make from this industry. This data will help you to scale the business.

Conclusion

Mining can be a very profitable business for those who know the perfect way to run a rig. It requires constant supervision and adjustments to the strategy so that you can efficiently mine cryptocurrencies. Though new miners might not understand the importance of focusing on the minor details, it plays a crucial role in the ROI factor. So, follow the tips of this article very carefully.

Finance

Finding the standard size of your trading account

ByCFI.co Blogger

Very few traders pay attention to the size of their trading account. In most cases, the traders are biased in favor of leverage and they are enjoying the high-risk trading environment. But leverage is only for the expert Singaporean traders who know the risk management policy from the core. They often find it hard to manage the leverage trading account. The best practice is to use 1:10 leverage (maximum) while trading the real market. You can say that without using the leverage, you won’t be able to support your family. Well, it depends on the size of your account. If you invest $1000, it’s very obvious you are not going to make a significant profit from this market.

This content is not going to be like a traditional article. We are going to give you some key metrics that will allow you to manage the risk in trading. Most importantly, it will help you to find the amount of money which you must have to live your life with trading business.

Your family needs

First of all identity your family needs. Calculate the basic costs of your family life so that you know the minimum amount of money you need to make per month. In most cases, rookies don’t believe in such an approach. They become fairly aggressive with the trading method and try to earn money without having any goal. But such things are not going to work. This is not how the professionals place their trade in real life. They have specific sets of goals and for this reason, they can make a decent profit from this market. Being a new trader in the Forex market, it will be tough to trade with goals. Without developing these skills, you won’t be able to know the amount of money which you must invest in trading.

Depends on your win rate

The success rate of retail traders in the exchange traded funds greatly varies. You have to know your success rate by using the demo account. Those who have a high success rate can effectively use leverage. So, they will require a small amount of money. On the contrary, those who don’t have a high success rate must trade with a low leverage account. For them, leverage is like a time bomb. They will never know when it costs them a fortune. So, work hard on your trading strategy so that you can have a great win rate in trading. Never try to deal with the market with a low win rate as it makes the trading process much more complicated.

Profit factors

You might be thinking about how much money you can earn from this market. The professional usually makes 5-10%+ profit per month. So, use the simple mathematical calculation and find out how much money you need to support your family. If the number of too big, you must increase the size of your capital. But this should be done professionally. Borrowing money from other people to trade the market is a very big mistake. This is one of the most common reasons why rookies are losing money in trading.

The rookies might not be able to earn so much profit for the first few years. They should be happy with a 2-3% profit per month. Once they become good at analyzing the profit factor, they can easily scale up the size of their account balance.

Conclusion

There is no fixed rule to investing money at trading. But stop investing money that you can’t lose in trading. If we talk about the rule of thumb, it is imperative to invest at least $2000 at the initial stage. Anything less than that will force you to overtrade. Once you start overtrading, you are going to have a very long journey towards success.

Finance

How to Achieve Living Debt Free Quickly

ByCFI.co

Nowadays, households in Great Britain owe a sum of around £15,000.

If you find yourself struggling with debt, it can feel like a never-ending slog to pay back each and every penny.

But, if you’re interested in living debt-free and are ready to put in some hard work and diligent dedication, then luckily it’s possible to completely change your life.

Aside from paying off your high-interest debt first, here are a few more methods for helping you live a debt-free life faster:

1. Create an Accurate Budget

In the UK, 10% of people admit that they are terrible with money. But, it’s impossible to pay back debt if you don’t know exactly how much your lifestyle costs you.

Work out everything from how much you spend on food every week, how much your rent and bills cost, and how much you need for expenses such as travel or childcare.

Next, work out how much you spend on luxury expenses, such as clothing, going to the cinema, or eating out.

There are many budget tracking methods including apps, such as Monzo, or simply writing everything down with pen and paper.

Now, budget how much you can spend on monthly debt payments. Don’t overestimate this figure, it needs to be precise to give yourself peace of mind.

2. Take Things Slowly

Pummelling all of your earnings into paying off your debt is simply not sustainable. You’re likely to give up completely.

Instead, consider your debt payments as a slow but sustainable practice. Set yourself realistic goals, such as a year or two to pay off your debts.

Although it’s a good idea to cut down on luxuries, it’s still worth planning when and how you’ll treat yourself. Don’t let your entire working life be spent trying to pay down debt.

3. Learn to Love the Free Things in Life

There is no point in paying off your debt only to start spending again. You need to develop interests that are free.

Luckily, there are many free activities nowadays. Join a free running club with other locals, sign up to free trial classes, visit museums, and go to lectures.

You’ll be amazed by how much there is to do for free when you start looking. Regularly attending free events in your hometown is a great way to meet other people with similar interests and avoid those with expensive tastes!

4. Find a Mentor

Are you struggling to keep up the motivation to pay off your debts? Find someone who has travelled along this path before you to help keep you motivated.

This could be someone you know in your personal life or it could simply be a celebrity. There are hundreds of podcasts dedicated to finances and living debt-free.

You’ll find untapped expertise and knowledge that will help you improve your own circumstances.

For example, read this post by Giles Coghlan, chief currency analyst at HYCM, explaining the secret to trading on the financial markets!

5. What’s Your Reason Why?

Crippling debt has regularly been linked to depression. This is a good reason why you should sort out your finances.

But, if you aren’t struggling with a mental health issue, then perhaps this isn’t a good enough reason for you. Instead, find your own reason why you want to live debt-free.

Develop your own mantra that you repeat to yourself whenever you want to make an impulsive purchase.

6. Leave the Credit Cards Behind

Figure out why you are in debt. If you are simply an overindulger and spender, then there are many ways for you to trick yourself into avoiding spending money.

For example, taking only the exact amount of cash you need with you whenever you go out can stop you from spending too much on nights out.

However, if you are a struggling, single-parent, then speak to your local authorities and even your bank who may help you reduce your monthly payments.

Analyse your circumstances and the reasons for being in debt to help you avoid this situation in the future and repeating the same behaviour.

7. Generate More Income

This is an aggressive method for paying off debt that simply isn’t available to everyone. But, it can certainly help you get out of debt quicker.

By picking up a second job for a few months, you’ll drastically increase how much you earn. But, don’t ever put your mental health at risk by overworking yourself.

Only take a second job if you feel that you feasibly have the time and energy to do this.

Alternatively, consider other ways of making money such as selling unwanted clothes, furnishings, jewellery and kitchenware online. If you have a spare room, then consider renting out your room.

8. Build a Savings Account for Emergencies

As well as focusing on paying off debt, a good idea is to build an emergency fund. By doing this, you’ll have an out when something doesn’t go to plan.

By building up this fund of a few thousand pounds, you will have the peace of mind that you don’t have to stay in a job you hate, or that you can afford rent somewhere else if your tenancy is pulled from under your feet.

While paying off debt and building your savings account, be kind to yourself. Not everything is going to go right every month.

Can You Imagine Living Debt Free?

Picture how great you will feel when you are debt-free and have some savings in the bank. Living debt-free requires dedication and time.

When you’ve paid off your debts, you need to make sure that you don’t slip into your old ways and spend more than you earn. If you’re struggling to pay off your debts, then consider speaking to a financial advisor or make an appointment at your bank.

Are you interested in learning more about finance? Check out the dedicated section of our blog for more information.

Banking

Nigerian bank DLM on the move delivers at all levels – with exciting plans in the pipeline

ByCFI.co Blogger

DLM Capital Group – a developmental investment bank that supports economic and social infrastructure projects with the aim of driving GDP growth and improving lives.

Founding chairman and group CEO of investment firm DLM Capital Group , Sonnie Ayere — Founding chairman and group CEO of investment firm DLM Capital Group, Sonnie Ayere

DLM Advisory Partners (DLMAP), formerly Dunn Loren Merrifield Advisory Partners, is the advisory and capital-raising arm of DLM Capital group. The principal services provided by DLMAP include financial advisory, debt capital-raising, equity capital raising, mergers and acquisitions, and company set-up advisory.

DLMAP has played a leading role in structured finance and securitisation within Nigeria. “We have acted as sole arranger to more than 80 percent of structured finance transactions in Nigeria, and 100 percent of all securitisation transactions in the market,” says CEO Sonnie Ayere.

Most Innovative Transaction of 2019

In 2019, DLM executed the first Bus Rapid Transit (BRT) securitisation in Nigeria, working with the sponsor, Primero Transport Services Limited (PTSL). The system caters to residents of the country’s most densely populated city, Lagos. DLM raised ₦16.50bn ($45.8m) through the securitisation of the company’s BRT tickets receivables. The sponsor is licensed to operate the longest BRT route in West Africa, 35.3km, with its 434-bus fleet.

DLM Capital Group

A feasibility study conducted put the daily passenger carriage at about 226,300 passengers per day. Due to working capital pressures, the company was only able to serve an average of 135,000 daily passengers before the securitisation transaction in 2019.

The ₦16.5bn 17 percent Series 1 Fixed Rate Bonds issued were primarily used to refinance all pre-existing commercial banking loan facilities on the books of the sponsor. The transaction provided the company with savings in interest, shaving the cost of funds from 27 percent per annum to 17 percent. At the same time, it extended the tenor of the company’s debt from three years to seven.

With this transaction, DLM was able to provide the company with up to 10 percent savings in interest, reducing the cash required to service debt and improving the company’s working capital. DLM also advised on the restructuring of the company’s balance sheet by moving the operating assets into a new vehicle and eliminated the strain of depreciation charges.

Focus for 2020

DLM is in discussions with industry stakeholders and umbrella bodies to establish proprietary funding conduits across key sectors of the Nigerian economy. It intends to include microfinance, agriculture, education, health care and a continuation of other funding programmes for the mortgage, real estate and transportation sectors.

Working with a DFI partner, the company recently concluded the design of an aggregation vehicle aimed at providing local currency, wholesale funding solutions to micro-lenders in Nigeria by way of loan book securitisation.

A similar platform to provide financing to primary users of agriculture commodities is currently being developed.

Business

Workers’ Comp Benefits and the Going and Coming Rule

ByCFI.co Blogger

Traveling for work is a complex issue when it comes to your eligibility for workers’ compensation. The general rule is that workers’ compensation doesn’t cover your commute to and from work.

Does Workers’ Comp Cover Travel for Business?

Yes, workers’ comp covers travel for business. When you’re traveling because of your work, you can claim workers’ compensation in the event of an injury. The workers’ compensation system operates the same way whether you’re actively on the job or traveling for your employer.

Personal errands during work travel are not covered; however, the travel itself and incidental activities like the hotel and meals still fall under the workers’ compensation system. Workers’ compensation covers travel for business except for strictly personal activities during the trip.

Does Workers’ Comp Cover Travel to and From Work?

Workers’ comp does not cover travel to and from work. However, there may be situations when you are traveling related to work that are actually covered. Travel to and from work is generally not included. Still, if you are running errands for your employer or on a work-related travel assignment, you may actually be classified as working.

It depends on whether you’re serving the interests of your employer during the travel. Although the general rule is that workers’ comp does not include travel to and from work, there may be situations where your traveling counts as being on the job.

Workers’ Compensation and Travel

The purpose of workers’ compensation is to provide employees easy access to financial compensation when they’re hurt at work. The general rule is that you can claim workers’ compensation for work-related injuries. If you’re on the job and you get hurt, you can access the workers’ compensation system to pay for your medical bills and provide replacement income.

However, workers’ compensation doesn’t cover the risks of daily life. For that reason, the employee’s personal commute doesn’t fall under the workers’ compensation system. If you get hurt going to or from work, you have to look to your own car insurance or personal insurance to pay your expenses. You may also bring a third-party claim for financial compensation, but the person or entity that caused your injury is responsible for your damages, not your employer.

Traveling for Work

However, even if you’re traveling at the time of your injury, you’re not necessarily out of the workers’ compensation system. You may be traveling for work and not realize it. When you’re traveling on company business, you’re still covered by workers’ compensation.

Even things that are incidental to the travel itself, like staying at a hotel or eating meals while away from home, can classify you as working for the purposes of workers’ compensation. It’s essential to evaluate the entire circumstances present when the accident occurs.

Buma vs. Providence Corp. Development – Nevada Supreme Court

In the Buma v. Providence Corp. Development case, the Nevada Supreme Court recently clarified the rules when it comes to what counts as work-related travel. Nevada Revised Statutes 616C.150(1) states that a person must show their injury arises out of the course of employment. The court said that a person might be in the course of their employment even if they’re not directly on the route of travel at the time of the injury.

In the Buma v. Providence Corp. case, the victim was the vice president of sales for his company. He worked from home and made his own travel arrangements. The victim traveled out of state for a conference. He stayed at a ranch with a friend and affiliate of the company. Together, the two prepared joint presentations to give on behalf of the company. The victim died while riding an ATV on the ranch.

The third-party workers’ comp insurer, and the lower court, denied the victim’s family workers’ compensation benefits. They said that the accident did not arise out of work duties. However, the Nevada Supreme Court vacated the lower court’s decision.

When Does an Injury Arise out of the Course of Employment for Workers’ Compensation Purposes?

The Nevada Supreme Court said that an injury arises out of the scope of employment when there is a causal connection between the victim’s injury and the nature of the employee’s duties. Under Nevada Revised Statutes 616B.612(3), all travel that an employee gets paid for is part of the course of employment.

However, even if part of the travel isn’t compensated hourly, it may still be work-related travel. Generally, workers’ compensation covers business trips. It covers the actual business part of the trip, but it also includes staying in hotels, sleeping, eating, and other navigation that has to happen for the trip.

Does the “Coming and Going” Workers’ Compensation Rule Apply During Business Travel?

In the Buma case, the lower court applied the “going and coming” rule. The rule prohibits compensation for injuries that occur during the commute. The Supreme Court explained that the employer is not liable for the daily dangers of the employee; however, the commuting rule isn’t applicable when a person travels for work. Under Nevada law 616B.612(3), traveling employees are covered, including acts that are incidental to traveling.

The court said that work travel doesn’t cover social and recreational activities that a traveling employee chooses to pursue. These are things that occur for strictly personal amusement. To be a personal activity, the employee must show an intent to abandon the job temporarily. It’s a very fact-dependent question that depends on the unique situation in each case.

Conclusion

The workers’ compensation commuting rule is complicated. There are times that work travel is covered, and you are eligible for benefits. Sometimes it can be a difficult question of whether you’re traveling for business. The Las Vegas workers’ compensation attorneys at Adam S. Kutner, Attorney at Law explain travel, and the 2019 Nevada Supreme Court case of Buma vs. Providence Corp. Development.

The best way to know if you qualify for workers’ compensation is by getting a personal review of your claim by a qualified and experienced attorney.

Investment Management

How to Form an Investing Strategy For European Markets

ByCFI.co

Europe is a global economic nexus, an incredibly stable and developed market.

Its heart is EU, which operates as a single market of 28 different states and 500 million customers. Technology and innovation are driving forces behind slow but steady growth.

This upward trajectory instils confidence when it comes to investment prospects. Many lucrative opportunities are just a few clicks away. You can pursue them without running into risks that emerging markets are rife with.

Alas, launching an international investment endeavour is a daunting task. You have to do your homework and tailor the investing strategy to specifics of the landscape.

Here is a guide on how to establish a strong foothold and enhance your portfolio.

Doing the Spadework

The European market is a mature, diverse, and liquid ecosystem.

The investment risk is low, save in times of crisis. Europe is also a highly dynamic and competitive investment arena, home to leading companies of today.

Yes, it’s easily one of the most inviting investing destinations. However, succeeding is easier said than done. To maximise your chances, you have to show due diligence.

Start by running a proper market analysis and scour the continent to discover where the best opportunities are. Evaluate your risk tolerance and put a risk management strategy in place. Two main weapons for chipping away at risk are market knowledge and portfolio diversification.

We would implore you to pay special attention to the currency risk. We’re talking about fluctuations in the foreign exchange market. They can be a double-edged sword, spurring both unexpected losses and profits.

Once research tasks are sorted out, set your chief objectives. Do you want to go for foreign direct investment (FDI) or portfolio investment? Is your goal to have a small portion of shares, source raw materials or control a whole company?

Get your priorities straight before moving to the next stage.

The Main Pathways to Investment Glory

One of the easiest ways to gain exposure is thru exchange-traded funds (ETFs).

The three main options are:

Broad European ETFs
Regional European ETFs
Country-Specific European ETFs

They offer simple means of portfolio diversification, unlike the US, which is a predominantly stock-based market. It’s possible to invest in hundreds of different companies, as well as specific industries/countries. At the same time, you can avoid the steep fees associated with mutual funds.

Familiarity is another benefit you can score. Europe harbours some of the most renowned names in modern business.

There is also an alternative approach, which is two-fold. The first tactic is buying American Depository Receipts (ADRs). The second one is acquiring stocks via foreign stock brokers.

The drawback is you have to worry about legal and tax issues. You also face hurdles such as translating foreign languages and currencies. On top of that, it can be tricky to conduct in-depth research on foreign stocks.

Note that ADRs are free of these risks. Unfortunately, they are limited to large foreign corporations that boast liquidity in spades.

The Million Dollar Question of Where

It makes a lot of sense to examine investing opportunities thru regional lenses.

Eastern Europe is an interesting region due to the potential for rapid growth. Investors comfortable with higher risks head there chasing hefty profit margins.

On the other hand, one enters Western European markets for reasons other than explosive growth. Namely, those who favour a climate with low volatility should feel at home here.

Germany is probably a must-consider, as the largest economy of Europe. It houses many of the top-500 publically traded companies in the world. County’s biggest companies (by market capitalisation) are available via the DAX 30 index, which is similar to the Dow Jones index in the US.

In terms of other, small economies, there are certain rules of thumb. You want to pay close attention to conditions like domestic policies and international agreements. These are the main tools countries employ in order to attract foreign investment.

Apart from that, it’s a good idea to stick to predictable and transparent markets. EU member states have an advantage in this regard. Common institutions handle and synchronise investment rules, including areas like dispute resolution.

The Old-School Way

Beyond that, you should feel free to invest in asset classes such as property.

The yields tend to be higher than in the case of bonds. This trend persists across different regions and states. What is more, the returns are often adjusted up for inflation.

This is to say real estate investment can act as a blanket insulating you from monetary risk. Besides, the spectrum of possibilities is very wide. You can aim for steady cash flow or speculative profit.

One piece of advice is to keep an eye on hot local markets such as Amsterdam. There, a combination of limited supply, demographic influx, and scarce land inflates prices year after year.

Finally, we shouldn’t overlook the commodities.

This traditional asset class involves minerals, fossil fuels, ores, crops, and trees. Propelled by global economic growth, the consumption and demand remain stable, while supply is finite.

Again, one of the main benefits is protection against inflation. Of course, commodities also come with risks such as price volatility. Just take the example of gold, which has been on a rollercoaster in recent years.

The lesson to draw is clear: be ever vigilant and be advised.

Investing Strategy for Europe: Taking Portfolio to the Next Level

The world’s largest regional economy is a Promised Land for many investors.

However, that doesn’t mean profits are just there for the taking. You need to put together a smart investing strategy before anything else. Rely on facts and figures to make it as sound as the Euro.

Likewise, make sure to assess your risk tolerance and financial appetites. Pick your region and industry sector accordingly. Identify up-and-coming companies and business champions with a bright future.

You can hardly go wrong fuelling your investments via European ETFs.

Just stay quick on your feet and steer away from pitfalls in the shifting monetary dimension. Keep up the pace with changing regulations and standards. Following these steps, you should be able to make headways into burgeoning European markets.

Don’t hesitate to contact us with any lingering questions and dilemmas. It’s time to elevate and diversify your portfolio.

Business

Half of UK & US firms predict a recession in 2020 and a third predict a global recession

ByCFI.co Blogger

Just under half of firms in the UK (46%) and US (45%) predict their country will go into recession in 2020, according to research by trade finance provider Stenn
The poll of over 700 senior executives at medium-large sized businesses across the UK, US and China, also revealed that well over a third (37%) of UK firms and one in three (35%) US firms expect to see a global recession or international global crisis in 2020
In the UK, a third (33%) of firms expect the economy to shrink in 2020, with well over a tenth (14%) expecting it to contract by 1-3%
- A further 6% expect the UK economy to stay flat with no growth
In the US, almost one in five (16%) expect the economy to shrink in 2020, most likely by 1-3% (7%)
- In addition, 6% also expect it to stay flat with no growth.

Dr. Kerstin Braun, President of Stenn Group, commented: “2019 was weaker than expected and the stakes are only higher for 2020. Governments around the world are having to act forcefully to prevent the economic hit from Covid-19 deepening, taking a coordinated approach and opening the liquidity pipe for both fiscal and monetary support.

While a low interest rate provides an important cut in borrowing costs for businesses and consumers at this delicate moment, the coronavirus outbreak will be a real test of the health of the UK and US economies. Lowering rates alone isn’t enough to be effective in offsetting the economic impact of Covid-19. We already know the Chinese economy is going to be hit in the first and second quarter.

“For us, the plunge in oil coupled with the economic damage of Covid-19 marked the beginning of a global recession. Our research showed that at the beginning of the year, half of UK and US businesses predicted a recession and a third predicted an international global crisis, and just three months into 2020 and we’re starting to see this play out.”

Methodology

The survey was conducted by Atomik Research among 706 senior decision makers at medium-large sized businesses, across the UK, US, and Chinese markets. The research fieldwork took place on the 18^th – 28^th November 2019. Atomik Research is an independent creative market research agency that employs MRS-certified researchers and abides to MRS code.

About Stenn

Stenn International Ltd. is a UK-based, non-bank trade finance provider specialising in cross-border trade. Stenn’s trade finance solutions are comprehensive and can be combined to cover the entire supply chain from purchase order to delivery of goods. Innovative practices allow Stenn to finance in sectors and geographic regions currently underserved in global trade. The company operates globally with offices in Buenos Aires, Los Angeles, Dallas, New York, Miami, London, Amsterdam, Dusseldorf, Berlin, Mumbai, Chennai, Singapore, Hong Kong, Guangzhou, Hangzhou, Suzhou, Shanghai and Qingdao.

Learn more at https://stenn.com or follow Twitter, LinkedIn and Facebook.

Business

Coronavirus: Is your business immune?

ByCFI.co Blogger

The outbreak of the coronavirus disease, COVID-19 continues to pose a significant threat to businesses in the UK. The impact on supply chains, transport and international travel is causing businesses to consider the impact of coronavirus on their current or future contractual agreements. Here Julie Hunter a commercial solicitor at Stephensons Solicitors LLP, discusses why it’s important for businesses to understand their legal rights and obligations in light of this global pandemic.

Coronavirus: Is your business immune? — **Julie Hunter**

The outbreak of the coronavirus disease COVID-19 continues to cause severe disruption and uncertainty to global trade. Now categorised as a global pandemic by the World Health Organisation, businesses must consider whether the impact of the coronavirus could cause them to default on their contractual obligations, whether this may be an inability to supply goods due to the effect on the supply chain, an inability to provide services due to travel restrictions or the cancellation of planned public events due to quarantine. Many larger businesses have already started to issue statements to their customers and suppliers in advance of any potential disruption caused by the outbreak.

Can your business delay performance or fail to fulfil its obligations under a commercial contract due to the coronavirus outbreak without facing liability? The often-standard force majeure clause contained in commercial contracts may mitigate risks and help parties navigate the difficulties caused by the outbreak.

What is Force Majeure?

A force majeure clause may relieve a party from performing its obligations under a commercial contract due to the occurrence of events which are unforeseeable or outside of its control. You can only rely on a force majeure clause if it has been drafted into your contract. A force majeure clause cannot be implied.

As force majeure has no defined meaning in English law, the effect of a force majeure clause will depend upon the way it has been drafted into each individual contract. Typically, force majeure clauses can cover:

acts of God, such as natural disasters and extreme weather events
terrorist attacks, civil war and breaking off diplomatic relations
compliance with a law or order, rule or direction of the government
embargos
epidemics or pandemics

Your force majeure clause may give you the right to suspend performance of the contract for a certain period of time or allow either you or your counterparty to terminate the contract entirely on the occurrence of a force majeure event.

COVID-19 as a Force Majeure

On 11 March 2020, the World Health Organisation classified the coronavirus as a global pandemic. If your force majeure clause covers the occurrence of a pandemic, then the coronavirus outbreak is likely to constitute a force majeure event.

If your force majeure clause does not cover pandemics, you must carefully consider whether the outbreak or its effects could fall into any of the other force majeure events specified in your contract. For example, you may find it possible to argue that the quarantine or isolation restrictions effecting your supply chain constitute a ‘work stoppage’, or that any international travel restrictions imposed in the UK and other countries which restrict performance could constitute ‘compliance with an order of a government’.

The court often interprets the precise wording of force majeure clauses strictly. If the situation is unclear, you should seek specialist legal advice on whether the coronavirus would constitute a force majeure event under your contract.

Invoking the clause

Even if the coronavirus qualifies as a force majeure event under your contract, you may not necessarily be able to invoke your rights under the force majeure clause.

Most force majeure clauses require you to demonstrate that the event itself has prevented performance of your contract. This means that if the coronavirus outbreak is simply causing performance to be more difficult, costly or time-consuming for your business, this may not necessarily be enough to invoke the clause.

Additionally, it may not always be desirable to invoke your force majeure clause for commercial reasons. You may need to consider the following matters:

Is the force majeure clause / event open to interpretation? Your counterparty may dispute your entitlement to any force majeure remedies and seek to enforce performance of the contract.
Could your insurance policy cover any losses or business interruption instead?
Will other parties / business be facing similar problems with supply or performance? Could you negotiate new terms to navigate the issues?
Would exercising the force majeure clause damage your ongoing relationship with the counterparty? Is there a reputational risk if the matter became public?

Breach of contract

It is possible that the effects of the outbreak on your business may not be covered by the force majeure clause as drafted or you may not have the option of relying on a force majeure contract at all.

If this is the case, any failure to perform your obligations under the contract (even if the failure is attributable to the coronavirus) may constitute a breach of contract which you could be liable to the counterparty for. However, there may be other mechanisms in the contract or under English contract law generally which may assist you and it is imperative to obtain legal advice should you find yourself in this situation.

Seeking a legal specialist

If you are currently considering entering into new contracts or are reviewing your contracts in light of the coronavirus, you should seek legal advice on strengthening your force majeure clause.

If you are currently facing threats of litigation over failed performance caused by the coronavirus or are considering invoking your force majeure clause, it is important to seek legal advice on your rights of termination and breach of contract.

About Stephensons

Stephensons Solicitors LLP is a full-service law firm with offices in Bolton, London, Manchester, St Helens and Wigan.