Three important traits that define a successful investor

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Investing in stocks, bonds, real estate, and other high-risk opportunities is like gambling. They are relatively profitable, but the journey as a whole is highly unpredictable. Having an abundance of investible assets doesn’t guarantee you success, as it requires both efficient money management skills and excellent personal qualities. Before taking the leap, it’s vital to assess yourself first.  Here are some disciplines you should exercise to become a successful investor in the future:

 

  1. Be a proactive learner

 

A great investor should never stop learning. According to Warren Buffett, one of the most successful billionaire investors in the world, a good investor must continue to learn new (and useful) things every day and make it a habit. Whichever investment you are in, be a savvy and proactive individual to help build up your financial acumen. The more informed you get, the better plans you can make.

 

  1. Be bold and have patience

 

Good things come to those who wait, as the cliché goes. However, in the volatile world of investing, having patience isn’t the sole gauge to put your money in great risk. Nothing will happen if you keep on waiting and hoping for a higher return. Make a bold strategic decision on how to gamble your money well. Sometimes, investors get easily disheartened whenever they face shortfalls and eventually give up, oftentimes leading to unnecessary waste of money and effort without realizing it.

 

  1. Seek mentorship from professional wealth advisors

 

Choosing which investment opportunity to go with is a tall order for people who lack enough knowledge in investing. That is why seeking advice from financial experts and experienced professionals is necessary to help you monitor and manage your own investments. Offshore investment centers, such as The Cayman Islands and Bermuda, are excellent locations to find the best wealth managers who can custom-design your investments based on your goals, financial capacity, and risk profile.

Filing and IPO: What happens when private companies get ready to “go public”?

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The stages of “going public” through an Initial Public Offering usually involve strict and regulated procedures. Most importantly, the process does not happen overnight. In fact, an IPO typically takes three to four months before a company can finally begin their first day of trading on the stock exchange.

 

Underwriting

A company can file an IPO through the help and expertise of an investment bank, also called “underwriters”. Investment banks can either work alone or with a team of banks to help distribute the funding, helping spread around the risks.

Negotiations between the banks and the companies take place, to determine how much money can be raised by the public offering. The type of securities to be issued will depend on the results of the final agreements.

 

Registration Statement

The parties involved will then put together the necessary documents and registration statement that should be filed with the Securities and Exchange Commission. After investigations and other evaluations, the SEC will finally approve and set a date for the IPO. The same body will present a prospectus.

 

The Road Show

The financial information of the company doing the IPO in the form of the prospectus is then presented to potential investors around the world, thus, a “road show”. Underwriters have the legal power to grant shares to prospects before officially listing the stocks in the exchange.

 

Pricing and Going Public

The company and the underwriter will be the ones to decide the pricing. Some factors, however, will be considered like the present market condition and more importantly, the results of the road show. Choosing which exchanges are allowed to get the new stocks also requires decision-making from both the firm and the underwriter.

After the selection and following the date set by SEC, the company can now finally go public for the first time.

Top companies that ‘fuel’ the highly-industrialized world

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The modern world is powered by the leading providers of energy. In fact, their role in the sustenance of a highly-industrialized generation is considered irreplaceable, making the oil-based energy industry one of the most important providers that fuel the modern era. As such, oil companies are an extremely valuable component in many investment portfolios, including those managed by leading asset management firms like LOM Financial.

Based on their market capital and their ability to deliver millions of products per day, here are the world’s biggest energy companies today:

British Petroleum

With a BPD (barrel per day) estimate of 3.3 million, British Petroleum (BP) is one of the largest producers of oil and gas not only in Europe but in the world. The company is based in London and has an estimated market cap of over $142 billion. BP has operations in 29 countries worldwide that cover activities such as exploring for new oil and natural gas resources, developing access to such resources, as well as producing, transporting, storing, and processing oil and natural gas.

PetroChina

The energy company is a state-run producer of oil and gas in China. PetroChina’s oil production rate has been estimated to have delivered an impressive 4.1 million of BPD based on a January 2018 report. With a market cap of over $248 billion, this energy company controls at least 31% of the country’s crude oil refining operations.

Gazprom

Russia is one of the top energy providers in the world and it’s actually ranked first for its efforts in thermal energy generation – worldwide. The company delivers 8.38 million BPD, with a market cap of almost $60 billion. Moreover, Gazprom owns and operates the largest gas transmission system in the world. The company also expressed their future plans to expand its operations specifically for gas development projects to the Russian Far East.

Exxon Mobil

As an American oil giant, Exxon Mobil has an estimated market cap of over $366 billion, producing 5.5 million barrels of oil per day. That’s why it easily ranks among the world’s biggest oil companies. Additionally, the company does significant research on clean energy technologies that it may commercialize in the near future: algae biofuels, biodiesel from agricultural waste, and carbonate fuel cells.

From traditional to technology-driven: Digital transformations in the finance industry

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For many decades since the establishment of the finance industry, banks, insurers and other related sectors have relied on relatively similar business models. While such traditional practices have proven to be profitable for a time, the new demands of today’s modern society require a more advanced and digitally dominated industry. Here are some examples of the leading digital transformations that are shaping the industry at present.

Blockchain trade finance platform

Today, digital innovations and technological tools are set to disrupt how the industry does their business. China is leading a digital transformation in finance like no other, and it includes one of the biggest newcomers in technology today: blockchain.

The Hong Kong Monetary Authority (HKMA), the country’s central bank, will launch a live blockchain trade finance platform in September 2018. The main goal of this transformation is to boost transparency to data sharing, reduce frauds and increase credit availability among its participating financial institutions.

A current total of 21 banks will take part as participating nodes in the said platform, and it includes internationally renowned institutions like Standard Chartered and HSBC.

Cryptocurrency

The blockchain is the same technology that is responsible for the birth of the latest craze in the finance world: digital money, popularly known as a cryptocurrency. Bitcoin (BTC), Ethereum (Ether), and Ripple (XRP) are just some examples of the most popular digital currencies today.

Last year was a huge year for cryptocurrencies, boasting a market capitalization from its humble $18 billion to the current $800 billion in January 2018.

Robo-advisors

The presence of robots in plant operations and manufacturing scenes is nothing new, but how about in the finance industry? One of the new services offered in finance is an automated “robo-advisor” assists clients in money management, asset allocation, tax-loss harvesting, and automated rebalancing. However, this AI-controlled technology is still at its infancy and its efficiency as compared to that of actual financial advisors is yet to be determined.

What the most successful Unicorn start-ups can teach budding entrepreneurs

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As rare as the mythical creature, the unicorn, successful business ventures termed as “unicorn startups” that made it to the over-a-billion value have been emerging in the recent decade. Their success stories are indeed worth-remembering, especially for investors and aspiring entrepreneurs who want to make it big in their respected industry. For asset management and offshore financial services firms like LOM Financial, such ventures may be important components of a well-diversified portfolio.

So what are the factors that helped unicorn start-ups build their billion-dollar companies? What did they do differently? For one, despite the high rate of failures when starting a business in the U.S., unicorn companies were once made of fearless and talented teams that have the gut and the motivation to stay afloat even in the deadliest waves battering business industry.

More importantly, the most successful companies were disruptors in the existing markets and innovators of new and flourishing markets. While they have the skills and the right attitude to succeed, the advantages of technology were the irreplaceable ingredients that completed the formula.

Airbnb, a unicorn that is worth at least $38 billion today, is a good example of how disrupting the traditional and creating an innovative and more convenient alternative through the help of technology can make a huge difference.

For these unicorn companies, it’s not just about putting together the right team of skilled and driven individuals, but it’s also about establishing a company focused on one particular mission that will guide them through the first stages of their ventures.

Toutiao, a Chinese unicorn start-up is one of the highest-valued companies today, offering information and data analyses services derived from recommendations using Artificial Intelligence technology.

While a consumer-facing strategy has put some unicorn companies to where they are right now, there are other entry points that entrepreneurs can focus on. Twilio, for instance, targeted other disruptors in the niche market like Netflix, Uber, and Lyft, and offered B2B technology services that helped them land their own place on the pedestal.

What happens to household finances in the event of Fed rate hikes?

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Any changes in the U.S. Federal Reserve’s interest rate can be directly felt by ordinary consumers, and its far-reaching consequences can, directly or indirectly, affect every aspect of your personal and household finances: from your student loan tab, your credit card, mortgage, your savings account, to even the prices you pay for your groceries.

Fed rate hikes can be troublesome for individual consumers, but it’s the only way for the government to counter inflation and most importantly, secure the rate to the neutral 3% or 3.5%. In this event, the value of money becomes more expensive and at the same time, scarcer.

It’s true that how Fed rate hike affects household finances is a cause of concern – even for savers with a debt burden, because of a Fed hike’s corresponding increase in the cost of debt. Credit card holders, in particular, are the most susceptible, with short-term borrowers that will carry the heavier burden of higher rates compared to their long-term counterparts. In other words, credit card holders that have fixed-rate interests won’t be immediately affected by the Fed rate increase.

Higher interest rates can also cause a corresponding yet indirect increase in adjustable-rate mortgages – even for homeowners with adjustable-rate home equity lines of credit. Existing fixed-rate mortgages, on the other hand, won’t feel the effect of fed rate hikes.

With all these concerns and real-life effects of the fed rate hikes, experts point out that if wages don’t rise as the implementation of these rate hikes mount, it’s just a matter of time until they can cause a broader economic slowdown.

Read up financial articles on LOM Financial’s official website for more information.

Overview: WEF’s Global Competitiveness Report of 2017-2018

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Every year, the World Economic Forum (WEF) releases the Global Competitiveness Report (GCR) with the primary purpose of ranking nations based on their economic potential and overall ability to offer prosperity to their citizens, boost productivity, use of resources, and investing potential, among others. The ranking is based on the Global Competitive Index, focusing on twelve specific pillars of competitiveness that accurately ranks a country’s potential for a sustainable economy.

The latest report reveals the three nations that ranked top among other participating countries around the world: Switzerland gaining the first spot, followed by the United States, while securing the third position is Singapore.  Ranking first is not new to the Swiss country, since they’ve been holding the same title for nine consecutive years.

Aside from the economic rankings which are what The Global Competitiveness Report is known for, the entire paper also includes additional chapters that discuss specific economic profiles of participating nations. Included in these chapters are recommendations, major findings, as well as informative analyses that will aid these countries to perform better in the future.

The index has been a trusted resource for measuring a country’s competitiveness. The results of these yearly reports also guide leaders to formulate new economic policies that can help change their country’s economic strategies for the better. For instance, some ASEAN nations like Brunei, Vietnam and the Philippines were able to rise above their previous rankings. On the other hand, other countries like South Africa considered their dramatic 14-position drop a big wake up call to its leaders and policymakers to take action.

The GCR is also an important reference for many international investment companies, including Bermuda-based offshore portfolio management firm LOM Financial, to determine which economies—both developed and emerging—to tap into.

Emerging industries with innovations set to transform the future

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The world is changing and you’re one of the lucky few who are starting to benefit from the decades of hard work of scientists and innovators who dreamed of a future where science fiction can finally be transformed into a real-life scenario. Thanks to these industries, the current and future generations are will be looking at a brighter and a more convenient future:

Virtual Reality

From home entertainment, gaming, human resource, medicine, business, to even design and engineering, the virtual reality technology has found its home in everyone’s day to day activities. By 2020, the virtual reality industry and its ability to create a full-immersive multimedia environment to its users are projected to bring in over $15 billion in total economic impact globally, making it a potential component in many investment accounts, including offshore discretionary portfolios.

Self-driving Cars

Forget first about flying cars and hover pods, and welcome the emerging industries that focus on the development of autonomous vehicles. The largest car and technology companies in the world are on a dash to launch a fleet of the vehicles of the future – minus the human drivers. While there are still a lot of challenges that this emerging industry has to face, innovators and investors know that the long road ahead will be worth the drive.

Artificial Intelligence

Creating intelligent machines that can achieve the greatest feats in learning, problem-solving, computation and planning is the main goal of the AI industry. As an emerging sector in technology, it has gathered massive interests from all over the world, with its promise of totally changing how humans live and work without compromising productivity and efficiency. AI is also a supplement to another leading sector in technology, robotics. Combining both creates a future straight out of a science fiction movie – but safer and more human-friendly.

The power of China’s middle class and their role in the global economy

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The global market has been long dominated by Western consumers, especially spenders from the United States. However, experts are seeing some major changes in the world’s global spending and recent forecasts are putting one of Asia’s population giants and a particular social group on top of the pedestal: China and the nation’s middle class.

China is currently transitioning from an investment-based economy to a consumption-led economy and in the process, a powerful middle class begins to emerge – but how powerful is the Chinese middle class, exactly?

Consider these numbers: China has an approximately 790 million of urban population (based on 2016 data). Considering the current population growth trend, analysts estimate that come 2030, the same population in the country’s urbanized community will hit a billion.  So why are these statistics significant?

According to a recent study conducted by McKinsey & Company, a consulting firm, China’s urban population will be composed of 76% of the country’s middle class by 2022 – and it’s a record-breaking number that could disrupt the global economy.

Several industries can benefit from China’s rising middle class. For instance, their changing buying patterns and consumer behavior have proven to benefit global e-commerce, thanks to the availability and access to the biggest online shopping platforms from around the world.

Chinese consumers have also disrupted other sectors with their active spending and consumption of both goods and services, domestic and international. The travel industry, particularly, is a direct beneficiary of China’s growing middle class. In 2016 alone, they have brought in over 3.9 billion Yuan in tourism revenues. Dubbed as the “new global travelers,” this social group is the major driver of the country’s outbound as well as inbound tourist market.

As they thrive and become more financially powerful, the Middle Kingdom’s middle class may also venture into overseas businesses. This can include an array of startups, as well as offshore investments in the likes of Bermuda, the Cayman Islands, or Bahamas.

 

Understanding market volatility and how it can make you a better investor

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Fluctuations in the market and the instability of the numbers related to major stocks basically describe stock market volatility. When the market goes up on a certain day and suddenly goes down the following week only to go up again the week after is a perfect definition of this financial phenomenon that has continued to challenge investors for many decades. One important question to ask when trying to understand volatility is, what fuels it? What are the factors that cause the market to drop, to recover and drop again just like that?

Short-term market drops, for example, Is one of the drivers of a high volatility. History teaches us some of the best examples of the causes and effects of market volatility. For instance, during the turn of the century when the tech bubble finally collapses, the event caused a dramatic burst of volatility. Another example of a major volatility-stimulating circumstance is after the 9/11 attacks when fear and uncertainty loomed in the U.S.

Fear can be one of the most effective drivers of volatility and its influence on market insecurities can be fully observed in every financial crisis that the global economy experiences. Usually, investors and financial analysts can see a rise in volatility coming, because of the existence of volatility-related notes and funds.

The VIX (Cboe Volatility Index) for instance, is a well-known volatility index. The product, attached to the S&P 500 options, is dubbed as the “fear gauge” that measures market risk. The gauge is a useful indicator that helps investors make the best decision especially given the state of today’s global economy.