Can your Investment gain 2000% within a month?

I am not from Zimbabwe to say that my investment of 1 dollar (Zimbabwean Dollar) at the start of the month would fetch me more than 21 dollars at the end of month, nor this is published from the book authored by me from a mental asylum. Also this can happen when most of the asset prices you see around you have seen a cut in prices increasing your purchasing power too. This is possible due to a Financial Instrument called Option, It is a form of Derivative (a thing which derives its value from something else, which we call underlying asset), there are two variants, a Put Option (PE and PA) and a Call Option (CE and CA), when the prices of the asset deflate, investment in a put option on that asset is profitable while when prices of an asset inflate, investment in a call option on that asset inflate. Now here are some examples wherein you could have seen your investment grow by 2000% in just a matter of some days if you would have being able to identify the trend before hand by using technical analysis, If you want to learn all this subsribe through paypal buttons at the top of the page, for any queries you can contact click_dotcom@rediffmail.com.

A Put Option Contract on Nifty having a strike price of 3800 and set to expire to 30th October 2008 was quoting at a day low price of 53/- Rs on 22nd September 2008, on 24th October 2008, the same 58 Rs invested were attracting buyers at a day high price of 1298.8/- Rs.

A Call Option which gave the holder, right to buy Nifty at 4000 until 28th May 2009, was quoting at 12/- Rs on 28th April 2009, when the markets opened on 19th May 2009, the same investment could be exchanged for cash at a price of 572.85, which was the day high for the contract.

An investment made in Nifty Put Option for 31st January 2008 Expiry having a strike price 5700 would have cost you 28.1/- Rs on 15th January 2008, if you would have purchased it at that days low, the same investment could be offset for 1310/- Rs on 22nd January.

3/- Rs invested in Nifty Put Option having a strike price 3200 and expiry date 25th April 2006 would have made you rich by 317/- Rs on 22nd May 2006

Gold, is it a Candidate for Investment?

Like any another Commodity, prices of precious metal Gold depend on demand and supply, when the prices of Gold move up from say 1000 dollars per ounce to 1200 dollars per ounce, it means that earlier 1000 dollars invested were sufficient to buy 1 ounce Gold, but now an investment of 1200 Dollars can let you own 1 ounce.

Now if we consider investor demand for Gold has not changed then

• Either the informed investors are betting supply of Gold would be reduced against the number of dollars likely to float around the world in future and have bought Gold in anticipation.

• Or The informed investors are betting that there would be a huge supply of dollars in future which the supply of Gold would not be able to match up, loaded with dollars the investors would be bidding up the price of Gold, in anticipation of the future Informed Investors have bid up the prices of Gold

Looking at the charts, we get a picture that for the 2 years between 2007 and 2008, new investors buying the gold and old investors selling the Gold were equally placed in a price war and whenever new investors got a hold of Gold at near 860 dollars they would buy the Gold while whenever the prices rushed above 970 dollars, old investors would sell to book profits in there investment, A small period of 2-3 months between september to november 2008 saw sellers gaining an upper hand, new investors seemed as loosing patience and triggering stop loss, prices crashed unto 700 Dollars an ounce, but the introduction of TARP (troubled asset relief program) in october 2008 saw the informed investors bidding the prices of Gold above the previous high of 1040 dollar.

Looking to invest in Gold, wait for your desired investment target to witness a price of 970 Dollars, or the other way round cross the previous 2009 high, there are many ways (fundamental and technical) through which you can zero in on the price to invest in an asset and then book your profits and exit from the asset, also you can leverage through options if you have worked out and know exactly the time by which you expect your investment to reach a level where you can book profits, I have shown you the most basic identifications, if you wish to know the advanced ways subscribe through the PayPal link given at the top, for further queries, write to click_dotcom@rediffmail.com

CAN POSITIVE RETURN ON INVESTMENT IMPLY PROFITABILITY?

If you invest 100 Dollars and get 120 Dollars after 5-7 years is your investment really profitable, what a stupid question, read further on and it might not be the case.

Mark (frictional), a resident of New York, a normal person just like you and me had a dream of having a home of his own in the city, but his savings were not enough for him to materialize his dream, credit or borrowing were not the words present in his vocabulary, so he decided to stay off in his rented home and being a risk averse, invested his funds in US treasuries at early 2000, nominal house prices prevailing at that time were $225000, The collapse of the Nasdaq boom made sure he did not have to curse his decision, but while the Nasdaq lost its 70% and Dow Jones lost its 20% value by 2002, the housing prices just refused to retreat, and Mark decided to prolong his stay in the rented home, monetary easing by the US Federal Reserve, ultra low interest rates paved the way for housing boom, nominal home prices in New York doubled and topped out at just below $500000, Mark’s dream was shattered

What is the definition of investment, it could be generalized as, to divert our excess money from our safety to a person/institution who guarantees a return more than what was originally invested, Are we God, Knops, so we can have excess money at some timeframe, but we do have expenses in future which we cant just spend on for immediately, we can have excess money which would suffice future expenses real-time, but who knows about future, so now can we generalize an investment as a vehicle which will make sure that the excess money we invested now, which can suffice for expenses on items we might require in future but we cant spend on them right now, would be able to buy all those things which we can buy now, plus add some more.