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Sunday, May 6, 2018

Mediterranean diet and Mediterranean lifestyle for health living.

Mediterranean diet, as the name suggests, refers to diet eaten in Southern Italy, Greece island of Crete and other areas of Greece in early 1960s. At that time, the average life expectancy of the region was highest in the world and incidence of heart diseases, certain cancers and other diseases was lowest in the world.

The diet includes olive oil, legumes, fish and other sea food, whole grains, nuts and fresh fruits and vegetables.  Many studies concluded that the diet is good not only for physical health but also for mental health and reduces the risk of many diseases from cancer to depression. 

Researches proved that healthy diet along with healthy lifestyle is the secret to region’s good health and long life expectancy. The routine fat intake is lower than 35% of their daily calories and much of that too from heart healthy olive oil. 

How does the diet work?
It is the overall diet approach that makes the difference. It is the combination of foods, rather than single superfood stuff that makes a healthy way to eat. 

Hence, if you are taking unhealthy diet adding one or two elements from Mediterranean diet isn’t going to make any difference. On the other hand, if you change whole of your eating habits, reducing processed food intake, increasing seafood consumption and opting for variety of foods and vegetables can add years to your life.

Implementing the diet plan in your daily life
Despite the health benefits of the diet, average person cannot afford to increase the costly food items like fish and olive oil in their diet. The move towards Mediterranean diet can be made by substituting costly olive oil with other plant based oils like soybean and canola oil.

Joan Salge Blake, clinical associate professor and dietetic internship director Boston University, offered the following advice for less wealth health conscious consumers:-
1.    Buy in-season.
2.    Look for variety and sale.
3.    Don’t overcook
4.    Consider frozen and canned food.
5.    Try affordable alternatives.

Mediterranean lifestyle
Mediterranean diet is an important part of healthy lifestyle followed by the Mediterranean region. The region has many cultural elements different from that of other parts of the world.  

“We need to redefine the Mediterranean diet, the truth is that it’s a lifestyle. It’s the whole approach. It’s the food. It’s the social interaction. It’s getting the right kind of exercise. It’s being outside. It’s getting sunlight and sunshine.” Dr. Aeem Malhotra , British cardiologist, told New York Times.

The habit of Siesta- enjoying shuteyes in the afternoon for a few minutes to a few hours- is very common the region. The life in the region comes to halt in the afternoon for mesimeri ( Greek for quiet time).

Other life routines in the region include walking to stores rather than driving. Greeks are habitual mountain climbers in their daily routine as majority of Greece is covered with mountainous region. Eating with family or friends and taking long time to eat is another thing in Greece culture. Taking long time to eat reduces the possibility of over-eating and hence reducing the risk of obesity.

Thursday, May 3, 2018

Rare Earth Metals: From America's dominance to Chinese hegemony

The recent discovery of rare earth metals in Japanese deep sea proves that rare earth metals are not that rare as their name signifies.

Today’s modern life is impossible without rare earth metals. Rare earth metals are 17 elements including 15 separately presented lanthanides as well as scandium, and yttrium.

These metals are used in manufacturing batteries, vehicles, LCDs, plasma screens, fiber optics, medical imaging, hybrid vehicles, wind turbines, microphones, speakers and other green technology devices. This group of metals is indispensable for high performance optics and lasers and key to the most powerful magnets and superconductors in the world.

Their various applications have given rise to western powers’ fear of Chinese dominance in high technology. China currently has near monopoly in Rare earth metals supply.

  "The Middle East has oil; we have rare earths ... it is of extremely important strategic significance; we must be sure to handle the rare earth issue properly and make the fullest use of our country's advantage in rare earth resources." Deng Xiaoping, a Chinese politician from the late 1970s to the late 1980s.

China is rapidly reducing export quota of rare earth in order to strategically move Chinese manufacturers up the supply chain so that they may sell valuable finished goods to the world rather than lowly raw material.

This presented America with a challenge in keeping its dominant position in high tech but also its hegemony over developed nation, who are in dying need of the elements.

The significance of the metals can be gauged from the fact that many geopolitical experts consider these metals to be the sole reason of U.S. stay in Afghanistan. United States, according to them, wants to make European powers their ally, against China, by controlling the supply of Afghanistan’s rare earth metals.

In 2010, Pentagon estimated Afghanistan’s mineral deposits to be worth 1 trillion $, once mined. The New York Times reported that White House officials are looking at Afghanistan’s mineral resources as compelling reason to extend their stay in the country.

“We live in a different world than the past, where commodity prices mattered because a monopoly allowed sometimes a single nation or a group of nations to charge an extremely high price for that material, and people are still thinking along those lines,” Michael Silver said. “That’s not the world we live in today, particularly with rare-earth metals, which is kind of what got me involved in the Afghanistan situation.” Michael Silver head White House Initiative and CEO of American Element

Critics on the other hand points to the fact that Afghanistan is a war zone moreover; mining and refining these metals from the mountain is costly. Another factor which goes against America is Afghanistan has no coast of its own and the only cost effective route for the metals is through Pakistan’s pushtun belt.

Sunday, April 22, 2018

Investing through mutual funds and its benefits

In an article, I have written about benefits of diversification. But small investors face the problem of spreading out their small investing capital across different industries. If you are small investor you cannot diversify effectively owing to variety of factors like having to pay service fees like brokerage commission, minimum investment to be made in one particular security.

The solution to above mentioned problems can be solved by investing through mutual funds. Mutual funds are investment vehicle made up of pool of moneys collected by large number of investors for the purpose of investing in securities, bonds and other financial markets instruments.

There are many benefits of investing through mutual fund. When you invest through mutual funds, you get to enjoy the benefits of diversification. Your mutual fund asset manager has enough capital to invest across variety of assets, hence delivering you the benefit of diversification.

Another benefit of investing through such vehicle is enjoying economies of scale. Your fund can bargain discounted prices for investments. Moreover, other favorable terms can also be agreed because of increased collective bargaining power.

Your fund manager is a professional manager who has learnt about investing through experience and university learning. He is therefore better able to manage your money in a professional style. He can diversify using various statistical techniques. The third advantage of investing through mutual funds is being able to use the skills of professional manager.

There are as many as 40 mutual funds registered with SECP. You can invest in any of the funds mirroring your preferred style of investing.

Some of the funds use aggressive style of investing. They try to generate more returns but the down side is that they are more risky. Some others are income funds, which target generating regular income along with securing your capital.

There are sector funds which invest in specific geographical territory or specific industry e.g. energy mutual funds invest only in stocks and bonds of energy companies. They don’t invest in other industries. As a fund become more specific towards particular territory or industry, its ability to diversify reduces. Try to invest in funds which have consistent track record of generating returns. Although the returns generated by mutual funds are dependent on performance of stock markets.   

There are two types of funds 1. Open ended mutual funds 2. Closed ended mutual funds
Open ended funds are available over the counter and bought and sold on demand. Their net asset value (NAV) is calculated at the end of every trading day whereas closed ended funds are those which are only available on the stock market and has fixed number of shares.

Thursday, February 8, 2018

Investing strategies: used by billionaires to amass their fortunes

There are many investing strategies, which investors use. Value investing, contrarian investing and growth investing are mostly used investing strategies. Let’s briefly study them.

Value investing is the most successful investing strategy. It was founded by Benjamin Graham, mentor of Warren Buffet. In this strategy investors see for underpriced securities based on some formula other than market price. This formula for ascertaining the value of the security is generally some multiple of income of the corporation. Value investors usually have to wait for longer in order to realize the full value of their assets.

Along with Warren Buffet many other successful investors follow the value investing strategy of investing. According to researches value investing proved to be the most successful way of investing.  Many billionaire investors favor value investing over other forms of investing. Warren Buffet, Howard Marks, Seth Andrew Klarman, Charles Brandes, Walter J. Schloss, Irving Kahn, Mario Joseph Gabelli, Michael F. Price   are some of most successful value investors.     

Another strategy is contrarian investing. Contrarian investing is buying when other people are selling and selling when other people are buying. Every up and down in the overall stock market or some specific share price offers opportunity of selling and buying to these contrarians respectively.  Warren Buffet is also sometimes referred to as contrarian investor, owing to the obvious reason of many similarities between contrarian and value investing strategy. Other famous proponents of contrarian investing are Michael F. Price, James Beeland Rogers, Marc Faber, David Dreman, Mark E. Ripple, and William Albert Ackman.

Growth investing is another strategy which many successful investors use.  Those who follow growth investing strategy invest in companies that show above average growth even when their shares seem to be highly priced. Unlike value investors, growth investors buy stock in companies that are trading higher than their intrinsic value-assuming that the intrinsic value would grow eventually exceeding current valuations. These investors focus on capital appreciation. Venture capital funds can be classified as growth investors.   

Wednesday, November 22, 2017

Diversification (Finance) and its benefits

Diversification is the most important technique available to investors. It helps you avoid losing all of your money in financial crisis. Diversification is allocating your investing capital to different asset classes with the goal to reduce your total risk. 
But question arises as to why to invest in variety of assets when some may perform poorly.  Why not invest only in assets with greater returns.  The simple answer is that investment returns depend on variety of future events, which nobody can reliably predict.

Diversification can help reduce the risk associated with these future events.

Making diversification effective can take more than simply spreading out your money in more than one asset. The real benefits of your diversification strategy can be fully achieved by owning uncorrelated multiple asset classes which behave differently under different economic conditions.

For example, having a portfolio of 30 oil and gas stocks isn’t diversification. Even owning stocks and bonds may not be sufficiently diversified. Investing in variety of unrelated industries is real diversification.   

Different assets are exposed to different types of risks. If one asset perform badly there are good chances that other assets would perform well and would nullify the impact of bad-performing asset.

Investors should distribute their investments in assets with varying degree of liquidity, risk, and potential of earning. If you are investing in financial markets, you may diversify by investing in real assets like gold or real estate. Financial markets also offer avenues for diversification. Bond market often moves in opposing direction to that of equity. Investing in bonds can save you during period of falling share prices.

Although no amount of diversification can save you from complete disaster but it provides your assets with considerable protection against random events.