Will Rises in Inflation Boost the Forex Market?

Doom for the Dollar?

Earlier this week, Richmond Fed President Jeffrey Lacker made an announcement signalling that U.S inflation is likely to ‘accelerate’ over coming years, following a sluggish period after the 2007-2009 recession.

Speaking at the Global Interdependence Center’s Central Banking Series conference in Paris this week, Lacker forecast that inflation would be close to 2 percent by 2017, “despite low recent inflation readings, FOMC (Federal Open Market Committee) participants generally expect that inflation will rise back toward 2 percent over the medium term”.

He continued to speculate that this would mean that interest rate hikes were likely to occur in two or three small increments, over a similar period of time. The dovish announcements from Lacker and other Fed members fuelled speculation that the dollar would suffer; be softer, less volatile and that Forex investors may seek to trade currencies that offered higher yields.

In addition to this, more downward pressure has recently been exerted on the dollar by the recovery of the AUD, CAD and NZD, who have been bolstered by the surge in the price of oil and by unexpected appreciations in the price of the EUR.

So How Does All This Work?

If interest rates rise, then this would be likely to attract foreign investment and, in turn, this inflates the value of the dollar. If interest rates remain low, however, then foreign investment is less likely and the value of the dollar would likely fall.

Other factors also feed into this equation and in particular inflation rates. Higher interest rates can mean that the rate of inflation rises also and this generally leads to a decrease in the value of the dollar. Striking a good balance between the rate of inflation and interest rates is key to ensuring that the dollar remains strong and can hold its own on the Forex markets.

It is important to consider that these rules only apply verbatim, if all other factors are equal, that is to say, if all countries are participating on a level playing field and of course this is not the case and world economics and politics all serve to make the overall picture less clear.

What Can Small, Independent Investors Do?

For small, independent investors who wish to trade on the Forex markets, the sheer pace at which the economical climate can change and the array of factors that need to be taken into account, can be a little bewildering and make it difficult to pinpoint trades that will result in profit.  Traders who are most successful, will achieve that success by investigating a number of avenues. A reliable trading platform, such as, ETX Capital is a good place to start, this will allow the trader to access many trading instruments, including Forex, but it doesn’t end there. Users will also be privy to a host of advice and information that will help them trade with confidence.

Further to this, traders need to have their eye on the world economic window, setting up news feeds that are fast and reliable. Social media can play a vital role in this, as can regular visits to websites such as The New York Times. Research is paramount, as is an in depth understanding of how Forex markets react to breaking news and events.

Another way to optimise the chances of success is for Forex traders to develop a disciplined trading strategy and to hone their technical skills. Accurate chart reading is an essential ingredient in any traders recipe for profit, as is using a strategy that includes things like stop loss orders.

So is it Really Doom for the Dollar?

In short the answer is no. The dollar did suffer a 1 percent loss against some major currencies after the announcements from Lacker, however it picked up again after only a two day sell off. Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, New Jersey, was quoted as saying: “It looks to me like we have dissipated the dollar weakness from the Fed”. This is perhaps, in part, because the U.S is currently enjoying low unemployment and because improving domestic household finances are fuelling family spending, facts echoed by Atlanta Fed President Dennis Lockhart, who said: “Short of some big shock that turns consumer psychology on its head, I see no reason why consumer spending growth should not continue. I think the conditions supporting this engine of economic momentum are likely to hold steady”.

World Economic Stage

It is not only domestic economic conditions in the U.S that are supporting the dollar, uncertainty regarding global economics; concerns over conflicts in the British Conservative Party and the upcoming referendum on leaving the European Union (Britex) have triggered a slide in the strength of sterling. The on going slowdown of the Chinese economy, the pressure being felt throughout Europe in the face of the conflict in Syria and the humanitarian problems that are being caused as a result are just some of the factors that are worth bearing in mind. Germany has Europe’s strongest economy, but even it has strained under the weight of the influx of refugees fleeing to seek asylum in Europe. The world stage is far from stable and it is possible that in terms of Forex, Europe in particular may see some of its players exit stage left.

Forex Outlook

With the dollar currently looking only a little bullish in the medium term, Forex investors would be advised to take a cautious approach to investing in it. The Fed’s policy outlook is still far from set in stone and there is market scepticism regarding whether interest rate hikes will actually materialise. It is possible that inflation will rise without the accompanying interest rate rises needed to balance this. Furthermore there is still a risk that the domestic economy will slow down and recession will, once again, rear its ugly head. But let us not forget that ‘there is more than one way to skin a cat’ and traders are not obliged to adopt a bullish approach to Forex investing. One man’s loss, can be, another man’s gain and if the tables turn bearish, going short, may be a profitable consolation.

A Quick Introduction To Online CFD Trading

Contract for Difference trading requires a contract between a broker and an investor in which profits can be made when the asset moves in the same direction as the position that is taken. The asset itself is never owned. However, these contracts are tradable instruments and there are many benefits in online CFD trading.

How Contract For Difference Trading Works

CFDs allow speculation on the direction that the price of an asset is expected to go. It is the difference in the price of the asset when the contract is purchased and the actual price of the asset at the end of the contract that holds the potential for profit. The contracts can be completed on currency, commodity shares, or an index.

Online CFD Trading – The Long And The Short

Online CFD trading allows you to go either long or short. When you go long, you are betting that the price of the underlying share will increase over the term of the contract. In order to close your position at a profit, you must enter a sell order.

On the other hand, going on the short side means that your CFD trade opened with a sell order. The idea is that you plan to profit when the price of the underlying share drops in the larger market. To close your position, you will buy when the price falls to a lower level and you expect that it will soon increase again. Contracts for difference are one of the few ways that investors can profit when the price of an asset drops.

What To Expect When You Trade CFDs

Leverage is used to properly conduct online CFD trading. This means that you will only pay a percentage of the total cost. There is a considerable magnification of the total available profits as well as losses. Expect to pay 1% on indices trades and from 5-10% on shares.

There is no expiration date on CFDs. Until there is enough margin to support closing the trade, they can be moved forward indefinitely. Of course, at the end of each day, the broker will charge or credit your account to reflect any dividends or the daily cost of financing the trade.

The only way to close your Contract for Difference trade is to go in the reverse position. For example, if you started your trade by going short, you must then go long. At any point during regular market hours, you can close your position.

Contract for Difference trades have been rapidly rising in popularity, in large part because they can be traded online in real time. Each day, the cash flows will be calculated and you will immediately know where you stand. In addition, they can be traded on almost every asset in the market including currencies, indices, shares, commodities, and sectors.

Many investors are using brokerage firms that are located online and are engaged in online CFD trading from the comfort of their own homes. While you never actually own any of the underlying assets, there is considerable potential for profit.

Thank You Ninja & The Future of Punch Debt in the Face

Like many of you I have been reading Punch Debt in the Face for the better part of a decade, so when I saw his post about being done with Punch Debt in the Face I was completely bummed.  I actually found my first comment on the way back in 2010 in a post about optimism and stupidity.  So who am I? and why did I buy the site?

My name is Evan and I own and run MyJourneytoMillions an 8 year personal finance blog.  While I never gained the popularity or notoriety that Ninja did, I have always enjoyed blogging and couldn’t bear the thought of this becoming a landing page when the domain expired.

While I won’t be writing here that often I hope to share some other fantastic voices!  If you have a story to tell please contact me!

4 Things You’re Not Prepared for in High School

High school is the best time of many people’s lives. For others, it’s a complete and utter nightmare. But for every high school student, there are a few things that you just can’t prepare yourself for, no matter how confident you may be about the future. While constant studying, homework, college prep and trying not to fall asleep in your classes might be consuming most of your brain, it’s likely that the other half is focused on your social life. The harsh reality of the matter, however, is that in the long run, many of these things don’t matter as much as you think they do – or even at all.

High school – and life after it – requires some preparation. Here are four areas that you might think you’re an expert in, but should really should read about, just to be safe.

  1. College

According to EdSource, a recent survey reported that less than half of the U.S. high school students feel they’re ready for college. No matter which side you’re on – ready or not ready – rest assured that there’s little that can prepare you for the actual experience, short of diving right in.

One way to prepare yourself for college is to take AP classes. The coursework will teach you critical thinking skills necessary to excel in the university classroom. When it comes to the application process, selecting a school and ultimately making your move onto campus, you’ll find yourself faced with an entirely new lifestyle.

In college, you’ll be living on your own, making your own schedule and facing new responsibilities; not to mention taking your education into your own hands. Appreciate what you have now, live in the moment. College will change you, in a good way.

  1. Life Skills… Seriously

Unfortunately, understanding the Pythagorean theorem will only get you so far. Many high schools don’t teach a lot of basic life skills, and you’re going to need those more than anything once you get into the real world. The Huffington Post wisely recommends that you educate yourself on life skills like finances, cooking and handling stress while you’re in high school.

Because unfortunately, you might not learn them any other way. You may not need help figuring out where to put the stamp on an envelope – as this particular Huffington Post writer lamented – one day you’re going to have to do things like sew buttons, file taxes, open a bank account and know how to do more in the kitchen than boil water. You’ll also have to manage necessities like auto and health insurance, that is, once you’re no longer eligible to be on your parents’ plan.

  1. Getting Auto Insurance

Getting your own car might be one of your biggest dreams and goals right now, but owning a car isn’t all made up of fun and driving off into the sunset. A car is an investment that you’ll have to put some serious thought into, and one of the biggest mistakes you can make is having those thoughts clouded by factors like what make and model will boost your popularity. And don’t forget about the fact that you’ll have to make car payments – and pay for insurance. Unfortunately, there’s no answer out there to help you pay (asides from your own financial planning), but when it comes time for you to look up the best car insurance for students, sites like CoverHound are a helpful resource. Figuring out various types of insurance on your own is just one of the things you’ll be dealing with later in your adult life.

  1. Relationships

This last item on the list will be brief, and maybe one of the hardest to remember. While there’s a lot to be excited about when it comes to getting started on your dating life, the truth is that high school relationships aren’t always fruitful. They can seriously distract you and bring about undue stress. Staying with your high school sweetheart is pretty darn unlikely – and that’s coming straight from Psychology Today. In high school, you’re just not prepared for the level of maturity, understanding and commitment that a serious relationship needs to thrive.

 

Overall, keeping an open mind, staying humble, and taking initiative to educate yourself will all serve you well during high school and beyond. Eventually, you’ll be able to look back and feel proud, rather than reflecting on all of the things you wish you would have known or done to have made your life easier. Regardless, growing up is certainly no easy journey. But try to keep in mind that no matter what life throws at you, if you keep the proverbial good head on your shoulders, you’re going to survive it – guaranteed.

I guess this is Goodbye.

Screen Shot 2016-03-13 at 10.54.16 PMIf it wasn’t entirely obvious, my blogging flame has finally flickered out. It’s been nearly six months since my last post and I’d be lying if I said I had a desire to write again. My season as a Personal Finance blogger has come to an end.

It’s been a wild ride and I’ve been fortunate to have many successes over my six year blogging career. Girl Ninja and I were flown to Chicago to appear on the Steve Harvey Show. I was featured in a print version of Reader’s Digest. Had a huge interview and feature on Forbes.com. And even won the “People’s Choice” award at the largest personal finance blogging conference in the world UNIVERSE, meaning a bunch of random people thought I was the best PF blogger alive!

Thanks for sticking around for so long. If you want to keep somewhat abreast (hahaha, I said breast) of my current life happenings, feel free to follow along on my latest hobby, furniture flipping. I started MidandMod.com (not so much a blog, but a showroom for my furniture, with an occasional random life thought), or on instagram at…

Midandmod (my furniture instagram)

or

B_patch (my real life, day-to-day, instagram)

Or you can always shoot me an email if you’d like to stay in touch (ninja@punchdebtintheface.com)

Also, Girl Ninja has another human/fetus/baby/thing inside of her, a Girl apparently. Due in May. Jury is still out on a name. Oddly enough Baby Ninja 1, Weston, was named by a random reader of this blog when I asked you all to help name him. Perhaps you have some gem of a name you’ve been saving that you wouldn’t mind us considering 🙂 If so drop it in the comments.

I’ll do my best to respond to any comments this post gets (within the two weeks before my anti-spam robot closes the comments section of this post), so feel free to ask any questions if you have them.

Oh, and our current Net Worth is like $420,000 (for those of you weirdo’s that would feel like you were left with a big cliff hanger if I didn’t do one last net worth update).

Well, I guess that’s all.

As the cliche saying goes…

ALL GOOD THINGS MUST COME TO AN END. 

That end is here.

Adios,

Ninja

 

p.s. If you’re interested in buying my blog and the URL let me know.I guess I won’t have much use for it anymore. 

I bought a couch I never got to see in real life.

Last week, in a moment of zeal, I decided to post our relatively new sofa on Craigslist. We bought this pretty piece of furniture Summer 2014…

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We liked it a lot, but I had two issues with it. It was a little too big for our relatively small living room; As you can see we had to shove the couch all the way up against the left wall just to get it to fit.

Second, we live on a wooded street and don’t get a ton of direct sunlight. The dark charcoal fabric didn’t help our dark living room.

We paid $1,700 (after tax) for it last summer. I posted it on Craigslist for $1,500 thinking no one would be pay me close to that since they could go buy the sofa brand new for just $200 more.

I was wrong.

Not only did our sofa sell in a couple days. I sold it for $1,600. That’s right $100 more than I posted it for. If you didn’t already know… I LOVE CRAIGSLIST!!!

There was only one problem, I wasn’t expecting our sofa to actually sell. So when it did, we had a big empty living room.

Awkward. 

We spent the weekend doing a good bit of couch shopping visiting the local modern stores and sitting on nearly 50 different sofas. We found a lot that we liked. But there was only one that we LOVED.

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The Hess leather sofa at Room and Board was absolutely dreamy. Clean lines. Super supple leather. And extremely comfortable. But $3,800 for a sofa…before tax and a delivery charge…

HELL NO! 

I now had a mission. Get a sofa very similar to the hess without breaking the bank.

Enter the Interwebz….

After doing a good bit of research on a handful of online furniture vendors (All Modern, JoyBird, YLiving), a random Google search brought me to Bryght Furniture.

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I clicked through the furniture they offer and just about pooped my pants when I stumbled upon this beauty…

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I mean look at this ghetto side-by-side photoshop I did comparing the Room and Board Sofa to the Bryght Sven sofa…

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Pretty similar right?! 

So my thought process was something like “Holy Crap, I found the perfect sofa. But what if it sucks?”

I mean, I can’t sit on the thing. I can’t call their customer service department and ask them about it. They’ll just lie and tell me it’s dreamy.

So what do I do?

First, I try and Google “Bryght Furniture Reviews” but there aren’t many. So naturally, I decide to instagram stalk people that have hastagged this specific Bryght sofa. I click to their instagram profiles and find that two of them have a blog. I click to their blog and go to their “About Me” page. I find their email address and send them an email asking for a review of their sofa after owning it a couple months.

Creepy? Whatever. 

In the emails I ask them things like…

…Does it look as nice in real life as the photos?

…Is it comfortable?

…Does it look nice, but feel cheap?

…How has it held up?

…Anything you wished you knew before you bought it?

Fortunately, they emailed me back and both had glowing reviews and said they would absolutely recommend the sofa.

Sold. 

I bought the sofa online last Wednesday, knowing that if we hated it, I’d take advantage of the 30 day, no-hassle, return policy and be only be out the delivery fees ($98 total). It was worth the gamble.

So today (Monday), I’m sitting in my living room and I get a call from a truck driver that says he is 5 minutes from my house and has my couch. I never got a call asking to schedule the delivery so I find it odd that they were just randomly showing up to my house, virtually unannounced. But whatever, I was home so it didn’t matter too much.

Look at how absolutely monstrous the cardboard box is the sofa was shipped in…

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It was kind of a headache breaking that giant box down in to a manageable size, but it was definitely well protected so I can’t really complain.

To get the couch ready for use, all I had to do was screw on the five legs (there is a center support leg) and we were rocking and rolling.

WE ARE IN LOVE. 

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It looked just as good as it did in the photos and felt even better than I was expecting. Our last sofa had a firm seat cushion, which I loved because it helps keep it from looking saggy and lumpy. Our Bryght sofa was right on par. A nice firm, yet comfortable cushion. The back cushions are poly filled so I imagine they will start to look a little frumpy in a couple years, but since they are zippered, I should be able to throw in some extra fill as needed down the road.

My favorite thing about this sofa is that it is full aniline leather. It has a ton of variation and a nice patina (that’s the fancy word for leather that ages prettily). I don’t have to worry about scuffing or scratching the leather, because the scuffs and the scratches are part of the charm. BOOYA! What’s more, it will be much more wipeable than our old tweed fabric sofa. I’ll condition it a couple times a year to protect from stains and to prevent the leather from cracking, but that isn’t that big of a headache.

Overall, I would say I’m pleasantly surprised with my first significant online furniture purchase. It’s exactly what I wanted it to be, and nothing like I feared it might be. Win, win.

Is it as nice as the $4,200 Room and Board sofa? No. But at $2,400 cheaper, it’s definitely the better value.

And in case you are wondering. NO. I was not paid or compensated in any way for this Bryght Furniture review. In fact, I tried to get the hook up from Bryght in exchange for a review and they, politely, declined. Darn.

Have you ever bought a substantial piece of furniture online, without seeing it in person?

Was it what you expected, better, or worse?

Any other gem of a websites y’all know about that I need to be filled in on?