Archive for the ‘Investing’ Category

Investors Turning to Socially Responsible Techniques to Earn Returns in New Markets

Due to rapidly changing social attitudes and a faltering economy built by practices many economic and scientific experts see flaws in, investors are turning to a new style of investment practices known as Socially Responsible Investing (SRI). According to a study published recently by the International Finance Corporation. This report addressed sustainable investment opportunities in emerging markets around the world. Another report from UBS Wealth Management Research, titled “Emerging Market Equities: Sustainable Investment Opportunities” addresses the numbers of investors allocating assets in these new markets.

According to the UBS report, investors are embracing SRI in emerging markets to the tune of $50 billion, as of the second quarter of 2008. An additional $250 billion in assets were being stewarded by non-SRI focused investment managers who have begun taking economic and social factors into consideration in regards to their investment choices. These figures signal a shift in investor mentalities and are being viewed as proof that there is more to the much lauded “green revolution” than was previously believed in terms of investor confidence. These figures are particularly striking in light of the fact that a global recession is underway.

Key areas of interest to SRI investors have become affordable homes in Latin America and sustainable vehicles in China. Renewable energy sources such as solar cell production and biofuel refinement factories are also areas of strong interest for investors in many different nations.

The UBS report concludes that investors considering the switch to an SRI-focused portfolio will be, “investing in companies that contribute to solving environmental and social challenges in emerging market countries.”

Investing in times of economic recession-A Warren Buffet story

When one talks about value investing, one of the first investors to come to mind is warren buffet, who has become a billionaire through his unique brand of investing that he has followed faithfully and consistently over many years. But his fortunes too have been adversely affected by the current economic downturn.

Buffett has recently invested $11.5 Billion worth in companies like GE, Goldman Sachs, Tiffany’s, Harley Davidson, and Swiss Re. Many of these investments have incurred him significant losses, at least for the short term. Berkshire Hathaway’s acquisition of 10% perpetual preferred stock of Goldman Sachs at $123, which then fell to below $60, was one of these. Another loss was his October 2008 purchase of GE preferred stock, priced in the mid 20′s. Since then GE has lost market capitalization and is currently trading below 10$. Warren buffet’s investments in Wells Fargo, American Express, Moody’s and U.S. Bancorp are all bringing him losses due to the underperformance of the financial sector. While his investments in derivatives, which he has previously criticized as being “weapons of financial mass destruction” have met with allegations of hypocrisy and $6.73 billion mark-to-market losses. Shares of Buffett’s insurance and investment company Berkshire Hathaway are currently trading at a price of under 85,000$ from a peak of $147,000, and it has also reported a 77% drop in earnings during Q3 2008. These losses and failures have brought criticism upon Buffett and his conglomerate Berkshire Hathaway, and has led some investors to question the effectiveness of his method of investing, which has many followers worldwide, in the current economic climate.

Do his principles, which have brought him (And others) much wealth still hold true? There is no definite answer. Buffett has, like many other investors suffered many losses and setbacks. However one has to keep in mind that Buffett has made major mistakes before, in investments such as Salomon Inc and US Air and still gone on to make untold profits. However, a distinction that analysts make between Buffett and others who follow his investment philosophies, is that Buffett has a ready flow of cash, huge amount of capital and gets special deals from companies due to his reputation. So while only time will tell if Buffett’s philosophies will work as in the past, the followers of his methods will have to be more careful than Buffett himself.

Fed could slow bank recovery

The Federal Reserve’s latest program to buy massive amounts of government debt could provide a helping hand to the economy – but not so much for bankers.img src=”http://feeds2.feedburner.com/~r/rss/money_topstories/~4/sB6no9k6BjM” height=”1″ width=”1″/

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Time for big techs to pay up!

To preserve cash, several big banks, including some healthy ones, have been forced to slash their dividends.img src=”http://feeds2.feedburner.com/~r/rss/money_topstories/~4/6wKiwRmDHU0″ height=”1″ width=”1″/