Even too big (and good) to fail are making mistakes. The coronavirus may be seasonal (also the bear market).

You can try to do your best, but here is no perfect.

Even too big to fail make mistakes. Please note, they are good not bad, but mistakes happens to everyone.

Example A

The Securities and Exchange Commission announced settled charges against Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network for failing reasonably to supervise investment advisers and registered representatives who recommended single-inverse ETF investments to retail investors, and for lacking adequate compliance policies and procedures with respect to the suitability of those recommendations. The SEC ordered Wells Fargo to pay a $35 million penalty, which will be distributed to harmed investors.

Example B

LF Woodford Equity Income Fund
On 3 June 2019, the LF Woodford Equity Income Fund (WEIF) suspended dealing. The
WEIF was a retail scheme authorised in accordance with EU rules for Undertakings
for the Collective Investment in Transferable Securities (UCITS). UCITS schemes
are a type of open-ended authorised fund designed that can be marketed to all retail
investors. The WEIF’s suspension demonstrated the issues which can arise when other types of authorised retail funds invest in less liquid assets.
In October 2019, Link Fund Solutions, the authorised corporate director of the WEIF,
decided it was in the best interest of investors to close the fund. The liquidation of
the fund commenced on 18 January 2020 and will see money returned to investors in
instalments. 

Example C

Leveraged financial investment instruments. One small movement in the underline asset, and your invested capital is gone.

Investing is risky, you should take more than 1 advise.  It can save you a fortune.

BTW, we can assist with a good advice, just ping us back (email us).

BTW 2, the coronavirus may be seasonal, and the market may recover from the bear market. If you have available cash, there are plenty of bargains out their now.

Old and not secure

Congrats, but you are in risk. The risk of losing your life, your money and your love-ones.

You need to keep fighting, it does not end until it ends.

Five Red Flags of Investment Fraud

Promises of High Returns with Little or No Risk.  The promise of a high rate of return, with little or no risk, is a classic warning sign of investment fraud.  Every investment carries some degree of risk, and the potential for greater returns generally comes with greater risk.  Avoid putting money into “can’t miss” investment opportunities or those promising “guaranteed returns.”  Remember – if it sounds too good to be true, it probably is.

Unregistered Persons.  Always check whether the person offering to sell you an investment is registered and licensed, even if you know him or her personally.  Unregistered/unlicensed persons who sell securities perpetrate many of the securities frauds that target older investors.  Researching the background of the individuals and firms selling you investments, including their registration/license status and disciplinary history, is free:

  • Search the Financial Industry Regulatory Authority (FINRA)’s BrokerCheck online database.

Red Flags in the Financial Professional’s Background.  Even if an investment professional is in good standing with his or her regulators, you should be aware of potential red flags in the professional’s background.  SEC, FINRA, and state securities regulator records can be used to identify red flags for potential problems, including: (1) employment at firms that have been expelled from the securities industry; (2) personal bankruptcy; (3) termination; (4) being subject to internal review by an employer; (5) a high number of customer complaints; (6) failed industry qualification examinations; (7) federal tax liens; and (8) repeatedly moving firms.

Pressure to Buy Quickly.  No reputable investment professional should push you to make an immediate decision about an investment, or tell you that you’ve got to “act now.”  If someone pressures you to decide on an investment without giving you ample time to do your research, walk away.

Free Meals.  Be wary of “free lunch” seminars.  The ultimate goal of free meal investment seminars is typically to lure new clients and to sell investment products, not to educate the public.  If you decide to attend one, commit to yourself before the seminar that you won’t purchase anything or open an account while at the seminar.  Even if the free meal does not come with a high-pressured sales pitch, you should expect the “hard sell” in subsequent contacts from the person selling the investment.

Distributing or selling contracts for differences (CFDs) to retail clients

According to ESMA statement it has serious concerns about firms’ marketing, distribution or sale of CFDs to retail clients and considers it necessary to remind CFD providers about some of the requirements connected with the offering of CFDs. 

ESMA has identified undesirable practices related to:

  • Professional clients on request; and
  • Marketing, distribution or sale by third-country CFD-Providers.

Ensuring investors are protected necessitates that all CFD providers respect all applicable requirements and do not circumvent them using professional client status or third country entities.”

Professional clients on request

ESMA is aware that some CFD providers are advertising to retail clients the possibility to become professional client on request. Investment firms should strictly refrain from implementing any form of practice that incentivises, induces or pressures an investor to request to be treated as a professional client. In this respect, any form of promotional language in relation to the status of professional client shall be seen as incentivising a retail client to request a professional client status. This includes providing a comparison between leverage limits available to different types of clients and the provision of any form of rewards for becoming a professional client.

In order to mask wrongdoing, in some cases, CFD providers will change the client categorization status according to their needs (first from retail to professional, and then from professional to retail once you lost your invested capital), with no compliance justifications.

ESMA is also aware that some third-country firms are marketing CFDs that do not comply with ESMA’s measures to retail clients.

ESMA notes that firms should not incentivise retail clients to start trading with an intra-group firm established in a non-EU jurisdiction.

You can control your faith, don’t be tempted to change your categorization status from retail to professional, and/or open an account with non-EU firms.

EU rules are here to protect you, and reduce your risk. Please rest assured that the regulator does not like it when you lose your invested capital. Protecting you is part of the regulator missions.

 

Broker-dealers or investment advisers, which one should I choose?

A retail customer that intends to buy and hold a long-term investment may find that paying a one-time commission to a broker-dealer is more cost effective than paying an ongoing advisory fee to an investment adviser to hold the same investment. That same investor might want to use a brokerage account to hold those long-term investments, and an advisory account for other investments.

Nonetheless, whether a you chooses a broker-dealer or an investment adviser (or both), the recommendation or advice is required to be for your best interest. Moreover, broker-dealer or an investment adviser cannot place their own interests before yours.

Neither investment advisers nor broker-dealers are required to recommend the single “best” product. Many different options may in fact be in your best interest, and what is the “best” product is likely only to be known in hindsight.

In the U.S. The broker-dealer must comply with the below component obligations:

  • The Disclosure Obligation, which requires full and fair disclosure of all material facts about the scope and terms of its relationship with the customer, including material facts relating to conflicts of interest associated with its recommendations.
  • The Care Obligation, which requires brokers to exercise reasonable diligence, care, and skill, to understand the potential risks, rewards, and costs associated with the recommendation, and to consider those risks, rewards, and costs in light of the customer’s investment profile in order to make a recommendation that is in the best interest of the retail customer and does not place the broker-dealer’s interests ahead of the retail customer’s interest.
  • The Conflict of Interest Obligation, which requires firms to implement policies and procedures to mitigate (and in some cases, eliminate) certain identified conflicts of interest that create incentives to make recommendations that are not in the retail customer’s best interest.
  • The Compliance Obligation, which requires firms to implement policies and procedures.

Similarly, an investment adviser has an obligation to act in the best interest of its client—which is an overarching principle that encompasses both the adviser’s duty of care and duty of loyalty.

Conclusion: it is clear why we can be confused about the differences between brokers and investment advisers. Nonetheless, choose at least one, and make sure it is register.

Therefore, you can use the SEC website at https://www.investor.gov/ in order to find what you need and consult.

With leverage most probably you will lose your invested capital

With leverage most probably you will lose your invested capital

Small trades matters. If you do big leveraged trades you will not be able to keep them for long (unless you have free available money outside of you trading account, to support safe margin levels and your large trading position).

When you do small not leveraged trades, even if the market goes against you, you have the option to recover, and to close the position in profit.

Example:

When trading FX Currencies, an investor borrows one currency to buy another. In order to hold the position overnight, you may pay a fee, which also known as “rollover rate” or “swap charge”.

If you purchase EURUSD contract with 10 lot volume, and you are holding the position overnight, your fee (rollover rate/swap charge) can be 0.0002*10*100,000 = 200 EUR (assuming your account base currency is EUR). 200 EUR fee may cancel all the profit you earned from the position, or even create you a loss.

Imagine that you deposit 500 EUR in order to open the above-mentioned position, and the market go against you, the result will be, most probably, that you will lose your 500 EUR invested amount.

If you were less leveraged (for instance, 0.5 lot volume and not 10 lot volume), than you are in a position to keep the position open for longer term, bear the overnight fees, and wait until the market goes to your direction/prediction.

Leveraged financial products are excited, but you need to be careful if you want to use it. BTW, you will also need luck.

The information contained herein does not constitute investment advice, or an offer to sell, or the solicitation of any offer to buy any financial instruments.

It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future results or expectations. Past performance has no predictive value and is no indicator of future performance.

As with all investments, there are associated risks and you could lose money investing – including, potentially, your entire investment. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment.

What’s Next? market bullish or bearish

What’s Next? is the market bullish or bearish? is the Cryptocurrency market high or low? is Blockchain technology can assist us?

The genuine answer is who knows?!?!

There may be few good bargains out there in the regular stock market. The old, familiar, reliable and regulated stock market still maintain its reputation. Hopefully, regulator and governments are trying to make it better for the benefit of all investors.

For example, the following may be a good bargain:

Kraft Heinz Co (NASDAQ: KHC, an American food company ), traded low compare to the last previous 52 weeks (around 31.90 USD per share). Market Cap of 39.144 billions USD, Avg. Volume 11,938,227 USD according to Yahoo finance. In case of bearish markets, hopefully, you may be able to exit faster. Please analyze if you believe in this company/industry (industrial food). Maybe you think the food industry is going elsewhere and less industrial.

Vodafone Group Plc (NASDAQ: VOD, British multinational telecommunications conglomerate), traded low compare to the last previous 52 weeks (around 17.70 USD per share). Big Company, Market Cap of 48.524 billions USD, Avg. Volume 6,447,988 USD according to Yahoo finance. In case of bearish markets, hopefully, you may be able to exit faster. Please analyze if you believe in this company/industry/geographical zone. Maybe you think the Brexit will impact hard and badly on Vodafone Group Plc.

Will it go up again? no one knows, but that’s the risk. No reward without a risk. Life is amazing, you can enjoy your hard saving money with a good vacation, or risk it. Don’t forget to purchase those “luck vouchers”, they can be useful along the way :).

The information contained herein does not constitute investment advice, or an offer to sell, or the solicitation of any offer to buy any financial instruments.

It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future results or expectations. Past performance has no predictive value and is no indicator of future performance.

As with all investments, there are associated risks and you could lose money investing – including, potentially, your entire investment. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment.

If you ever wanted to know more about the financial lives of UK adults, now you can

If you ever wanted to know more about the financial lives of UK adults, now you can

The survey is the largest tracking study the FCA has commissioned.

The survey is trying to:

  • estimate the number of UK adults holding any one of around 70 products and to profile those who do and do not hold these products
  • understand consumers as people, and observe the financial behaviours and
    experiences they have in the context of their everyday lives
  • analyse results in different ways, to see, for example, where the young and old differ in their behaviour, or where some characteristics such as low income affect people in the same way whatever their age
  • demonstrate differences in behaviour and experiences by sector
  • identify and quantify harm or potential harm

Pages 14 – 15 are providing few insights, such as:

  • 50% of UK consumers currently show one or more characteristics of potential vulnerability (25.6 million) – they may be at increased risk of harm, or would suffer disproportionately, if harm occurred. Potential vulnerability does not mean all people with these characteristics will suffer harm.
  • People showing characteristics of potential vulnerability are twice as likely to have used high‑cost credit in the last 12 months as other UK adults.
  • At least 4.5 million UK adults say they have been declined a financial product in the last two years. Around half say they were unable to get the product they needed at all, while some say they ended up paying more or being subject to different terms and conditions.
  • Satisfaction with financial circumstances only notably increases from the age of 55: 21% of those 75 and over have low satisfaction.
  • 18‑24 years olds are least satisfied with their financial circumstances. 60% have low satisfaction.
  • 24% of UK adults have little or no confidence in managing their money, and 46% of all UK adults report low knowledge about financial matters.
  • 13% of 25‑34 year olds are in difficulty, having missed paying domestic bills or credit payments in three or more of the last six months.
  • 12.9 million adults (25% of all UK adults) have been overdrawn in the last 12 months.

 

Investment research is not investment advice

Some investors are mixing between investment research and investment advice, but they are not alike. Please make sure you understand the difference between the two.

Websites such as www.moneyshow.comElliottWaveTrader.netwww.wyattresearch.comwww.lucaswaveinternational.com and so forth are providing investment research (we have no idea how good or bad they are, and if the service they provide is a good bargain). We know that using their services is your own responsibility, and you should consult with independent financial advisers with respect to any investment in the securities mentioned.

The investment research services mentioned are not regulated like your independent financial advisers (please make sure he or she are register), and they may be less cautious with their marketing materials and statements.

If you will not bear responsibility for your own actions, no one else will. Again, please make sure to consult with independent financial advisers with respect to any investment.

It is advisable to use register financial adviser, if things goes wrong, he/she may have professional liability insurance, and you may be able to get back your money.

Please find attached an enforcement action related to this category (press here). According to the press release, The Defendants told clients and prospective clients, falsely, that trading in the Room was conducted by a “professional trader” and that all the trading was conducted “live” with real money at risk. The Order also finds that Defendants told clients and prospective clients that trading in the Room generated substantial profits — profits that, if annualized, amounted to a return of more than 400%. In reality, according to the Order, all of these statements were false because there never were any futures contracts traded in the Room and all supposed trading was in fact simulated. The Order further finds that the Defendants provided supposed past performance information to clients and prospective clients but failed prominently to display in immediate proximity to this performance information prescribed disclosures relating to the inherent limitations of such simulated or hypothetical performance information. The Defendants failed to register as required.