Bernanke: Dollar Carry Trade still on!

Bernanke had its first Conference today in which he held to the idea that the Fed would remain unusually lax by keeping the cheap dollar, including a renewed interest in the forex carry trade for pairs of press labels ever.

Carry trade is one of the opportunities for the most basic money for investors. A portage is essentially borrowing in currency to lend to another. The AUDUSD and NZDUSD are pairs of popular currency for this job.

Banking on the carry trade is an easy task with the current policy of the Fed. The Federal Reserve kept at low rate, which means traders forex can borrow at low prices to the United States and invest money when returns are better, such as the New Zealand and the Australia.

Australia, for example, pays a whopping 4.95% annually. The United States, the interbanks are lending money at lower prices as. 15% per year.

Thus, investors can borrow $ 100,000 US dollars to 15% on the market Forex, investing in Australian Dollars to 4.95% and interest income annual 4.8% or $4,800 on foot, while no change in the exchange rates are carried out.

Carry trade AUDUSD presents an excellent opportunity to make serious cash on a dollar flows. With margin as high as 50: 1 for USA registered brokers forex running, investors who adopt this carry trade may purchase $100,000 USD for a small expenditure of $2,000. Thus, the annual return, interest, operates at 140% per year, with the carry trade generating $4,800 per year in pure cash flow.

It is the reason why the carry trade will continue for at least a year, in which case the dollar should rally slightly that Bernanke began to raise rates. Until then, enjoy this trade, because with the possibilities of profit on interest rate spreads, it is illogical not step to employ this strategy even with a minimal margin.

Forex audusd, bernanke, transport of trade, us dollar

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Passive income: dividend Stocks still make sense

While the reports of price-earnings to Wall Street start to get a little ridiculous, high-dividend stocks have not yet lost their lustre. Institutional investors, empowered by record low cost of borrowing are alignment every imaginable society. Until PSE stay within 25 years, the cost of Portage is offered by benefits companies.

High dividend companies have an advantage on non-income stocks in what they have a buffer against rising interest rates: their dividends. When companies which pay no dividends are sure to decline as institutions relax their carry trade long-term borrowings against corporate profits, dividend payers know seem attractive as long as they are not returning too much money.

Philip Morris International (PM) is one of these companies appears to be solid against even higher costs of borrowing. The company is not a price too far in the future with a PE of 16, while yield dividend right around 4% per year gives plenty of room to the company. Unlike bonds, dividend usually stocks not sour steps on rising borrowing costs, since any recovery usually accompany stimulates the bottomline profit. With links, the bottomline is not as important to the upside.

As always, the passive gains are the way to go. Consider the establishment of a drip to make routine purchases of blue chip equities. While high-dividend companies are not as "high-dividend" that they were, they have a lot of downside protection makes them attractive in any environment. Load!

Passive income, PM, income, PRD, stock dividend stock

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