Financial Ratios and Statistics – FahStats

Archive for February, 2011

In financial terms, the times are currently tough for many. During the current recession, many have lost their jobs and fight. This has led to fewer people to invest for fear of losing even more. And with the fluctuating stock markets, it can not be the best time for investments with high risk. So the question is, what secure investment options are there?

http://www.onlinesavings.pannipa.com/2009/10/safe-investments-savings-accounts-bonds/

The most obvious is to secure investment to open a savings account at a bank. How many are not willing to”invest” as such, this is a way to earn your money safe, while a little interest. It is perhaps only a little, but it’s better than nothing and earns nothing. The great advantage of a savings account is that your money is safe. In the current financial situation, you may be wondering, what if my bank goes under? I then get to lose all my money? The non-response to this, unless you have more than £ 35,000 in the account. Up to this amount is guaranteed by the government, it is not solost. A savings account in the future, not make you a lot. It is somewhere you keep money if you lose, you kill not one, but do not risk it either.

Bonds are another way to invest with low risk. Again, like everything else, like a low-risk and less profitable. The reward (and risk) is potentially higher than a savings account though. If you buy a bond, you are essentially loans to the company that you have purchased. You are then required to pay a certain amount of interest.You can use the money you have given them () the bond to finance long-term investment. Bonds have run for a certain time, as maturity. This means that you agree to the loan after that date until it via withdraw. Since this is a long term loan as such, it means the company has more freedom to do what they want. This means that they pay more interest as a reward for having to do so. The longer the maturity, the greater the commitment should prove profitable. TheMay be risk associated with bonds, that interest rates rise with increasing interest of the loan at a lower level. This means that the tape is less real. Since you will receive a fixed amount of interest (eg 3%), this means that you will lose the interest, increase this amount.

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There is a common misconception that people who cannot store their unaccounted wealth in their own country open accounts in Swiss banks. Even though this may be true to an extent, Swiss banks are well known for their sophisticated and discreet banking services.

Many of the rich and famous like film stars, business entrepreneurs, top government officials, presidents, etc, are reputed to have Swiss bank accounts. Then again, it is also said one need not be a multi-millionaire to open a Swiss bank account.

Brief Background of the Swiss Banking System

One of the most prosperous and economically advanced nations, Switzerland has the world’s largest gross domestic product (GDP). There are nearly 400 banks in Switzerland, which range from the “Two Big Banks”, to smaller banks, serving single communities or selective clients. Considered as the world’s largest offshore financial center, the Swiss banking sector is renowned for its privacy, stability and protection of their customer’s information and assets. The Federal Banking Commission (FBC) regulates these banks.

Opening a Swiss Account

Often freely available, a Swiss bank account provides total confidentiality, strict privacy, and is tax-free. However, certain documents are required as proof to open a Swiss account. For example, people who are not residents of Switzerland need to furnish their passports, along with a passport size photograph. Depending on the profession, a current bank statement would be required to determine the client’s current financial condition. Along with this, certain personal information, like the date of birth, country of origin, etc., is also required.

A useful feature of Swiss banking is that it can also be done via correspondence as long as the customers follow bank rules and regulations. The bank and customer could interact through the Internet, telephone or snail mail.

However, a drawback of Swiss banking is that non-residents are expected to pay a hefty amount as deposit, and, the smaller accounts are more expensive to maintain. There is a clause especially for US citizens wherein they are expected to refrain from making any business transaction through their Swiss accounts, to keep their account privacy intact.

Deposit

A security deposit is needed in case the customer wants to obtain a credit card. Approximately 1.5 to 2 times the monthly credit limit is demanded, depending on the bank the customer chooses. This deposit is returned when the customer decides to discontinue the credit card, and has paid all outstanding bills.

Confidentiality

There are legends about mysterious numbered accounts in Swiss banks. Some high security bank accounts are given pseudonyms or special names instead of issuing them in the name of the customer, to preserve the anonymity of the customer. This number or name is used wherever the customer is referred. Moreover, even bank employees are expected to respect the customer’s privacy, the failure of which could land them in prison for several months.

However, Swiss banks, being very particular about preventing money laundering, crosscheck the authenticity of the information provided by the customer. If, during the scrutiny, the bank finds the information of a potential or existing customer connected to some criminal activity, a Swiss judge or prosecutor issues a lifting order. These investigations could include international criminal investigation for tax fraud, insider trading, or the infamous terrorist financing of recent times.

Closing of an Account

Despite a few negative notions about Swiss banking, closing an account is said to be easier than expected. No financial penalty is demanded, and neither is the money held hostage, like it is done in other off shore banking.

To conclude, the secrecy and discreet nature of Swiss banking makes them convenient and dependable. This not only helps customers to save money, but also is a viable means of attaining economic superiority in the business world and society as a whole.

Treasury securities are one of the safest ways to invest your money and get a stable return. There are some trade-offs to be expected with such a safe return, but the rewards can offset them. Let’s take a look at some of the types of treasury securities available and what you can expect from them in terms of safety and return.The primary treasury security available is the Treasury bill or T-bill, for short. They are issued by the US Department of the Treasury and are sold at a discount from face value. These are generally short term investments that mature in less than one year, and do not pay interest until the maturity date.Another type of treasury obligation is known as a treasury note. It differs from the Treasury bill in that it matures in two to ten years, and issue interest payments (known as coupon payments) every six months. They are issued with two, five, or ten year maturity dates and have par values of $1,000 to $10,000.A third type of Treasury security is known as the Treasury bond, and has the longest maturity of all the Treasury securities. The maturity period for these is usually 30 years, and like the Treasury notes, have coupon payments every six months. These are no longer available directly from the Treasury department, as issuance of this type of bond was discontinued in 2001. They are, however, still traded widely on the secondary market and will continue to be until the last one matures in 2031.A fourth and final type of Treasury security is known as the Treasury Inflation Protected Security or TIPS, for short. This security differs from the other securities in that the principal or par value of the security is adjusted for inflation over the period of maturity. The amount of adjustment is coupled with the Consumer Price Index. As a result, the coupon payments on a TIPS will differ by the amount the principal has been adjusted. This has the end result of protecting the investor against the degrading effects of inflation on the principal value of the investment.Treasury securities are widely considered to be a very safe investment because they are backed by the US government, the largest economic power in the world. Because of the relative safety of these investments, however, the yield on these securities is low in comparison to other municipal bonds or corporate bonds. The primary goal for someone interested in investing in these securities should be capital preservation rather than growth.