• 12Sep

    Gold and silver, the world’s favorite precious metals, have a sixty century history of surviving financial collapses, raging wars, and economic chaos. Even the words for “money” and “silver” are the same in over a dozen languages. Six thousand years of history indicates that precious metals will continue to be used as a means of exchange for the foreseeable future, especially if fiat currency becomes worthless.

    The most popular silver investment vehicles are 100 ounce and 1,000 ounce bars as well as one ounce bullion coins. And the most popular bullion coins are Silver Eagles.

    Is Silver a Better Investment than Gold?

    During bull markets in precious metals silver has almost always produced higher percentage increases than gold. While gold has doubled in some of the upward moves silver has, at times, tripled or quadrupled in price.

    It also has considerably more industrial applications than gold, which helps to underpin the price of silver.

    In the past several decades the industrial demand for this metal has exceeded mine production as well as the secondary recovery. Above ground supplies have dwindled as well. From this perspective, things look quite bullish for the lower-priced alternative.

    The Gold/Silver Ratio

    If you were to research precious metal stocks you would probably find that both gold and silver miners convert precious metals prices into the cash equivalent of its byproduct. In other words, gold miners will convert their silver byproduct into the dollar equivalent of gold ounces while silver miners would do the converse. So silverminers would convert their byproduct gold production into ounces of silver and then convert the gold into the dollar equivalent of silver.

    Over the past several decades this ratio has consistently been approximately 55:1. It is a well established equivalent.

    When the ratio has increased the price of silver has invariably gone up. Conversely, when the ratio has decreased the price of silver has gone down. Relatively recently gold has traded at 84 times the price of silver while at other times in recent history silver has traded at 1/45 the price of gold.

    What is the Gold/Silver Ratio Today?

    On March 15, 2010, gold was trading at $1,104.50 per ounce while silver was trading at $17.03, yielding a ratio of close to 65:1. Should gold remain the same and should silver return to the 55:1 ratio, the price of an ounce of silver would be just over $20, seventeen percent higher than it is today. If the 45:1 ratio (established in 2006) returned then the spot price of silver would be more than $24.50 per ounce.

    Of course the choice of what to invest in and how to determine when you should invest is totally in your hands. However, some successful investors have been using the gold/silver ratio to increase their precious metals holdings.

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  • 11Aug

    For healthy and continuous in flow of Foreign Direct Investments (FDIs) to Nigeria, the country has over the years put in place friendly legal framework for Foreign Direct Investments (FDIs) protection.

    In this Foreign Investors’ Guidelines for Doing Business in Nigeria Series, we shall be examining the legal mechanisms put in place for the purpose of encouraging an increasing FDIs inflow and ensuring foreign investors’ confidence in the country.

    We shall be discussing foreign investors’ protections ranging from certainty of arbitral proceedings and other dispute resolution mechanisms in the country.

    The fact with modern economic systems is that no country can be an island economically; Foreign Direct Investment (FDI) protection is very essential to the successful attainment of foreign investors’ business objective(s) and economic development of any economy.

    There are steps that host countries can lawfully take in the exercise of their sovereignty and power can lead to depriving foreign investors of reaping the fruits of their investments.

    Host government actions that can affect foreign investment adversely includes nationalization; the act of a government taking control of a private enterprise and converting it to state or public ownership.

    Expropriation; the act of a government taking possession of or otherwise meddling with privately held assets or property for the use and benefit of the public, or in the public interest.

    The legislative and administrative acts of the government as government action can also have adverse effects on foreign investors’ businesses in Nigeria.

    This is the indirect or creeping form of expropriation. The only difference is that, it mode of operation shifted attention from the physical and actual taking-over of an investor’s assets to the legislative and administrative acts of the government.

    While not depriving a foreign investor of the ownership of an asset in this type of government control, it is capable of significantly reducing the value of properties and investments of the foreign owner.

    Foreign investors don’t like investing in country’s with risk such as arbitrary revocation of a license; permit or a concession after the investor has made the requisite investments.

    The advancement and expansion of international business relationships and the importance of foreign direct investment to the economic development of Nigeria has made the country to put in place some foreign business protection laws for the purpose of encouraging foreign investors.

    Nigeria has performed greatly in providing protections to potential foreign investors.

    Investment Treaties

    In spite of the provisions of Section 12 of the Nigerian Constitution, investment treaties entered by the country are binding on, and enforceable against Nigeria upon ratification under the principle of ‘pacta sunt servanda’.

    Also, by a literal application of Article 31 of the Vienna Convention on the Law of Treaties which provides that a treaty shall be interpreted in good faith in agreement with the ordinary meaning to be given to the terms of the treaty.

    Bilateral Investment Treaties (BITs): Nigeria entered into its first Bilateral Investment Treaty (BIT) with Germany in 1979 which came into force in 1986.

    According to finding from my investigation Nigeria has entered into 28 Bilateral Investment Treaties (BITs) between 1986 and November, 2015.

    Of the total number, 13 are currently in force, 14 are signed and 1 repealed. The Bilateral Investment Treaties (BITs) currently in force are the ones entered into with Finland, France, Germany, Italy, Netherlands, Romania, Serbia, Spain, South Korea, Sweden, Switzerland, Taiwan, and United Kingdom.

    The 14 BITs which have been signed by Nigeria but are yet to enter into operation were signed as far as back as 1996.

    In addition to the usual investment protection standards, these BITs provide that a contracting state shall not damage by irrational or unfair means the maintenance, management, disposal of investment in its territory of nationals or companies of the other Contracting Party.

    And the same recompense for losses suffered due to a safety event made to a domestic investor shall be allowed to the investor from the other contracting state.

    These BITs also provide for the right of subrogation allowing foreign investors to obtain suitable investment insurance and for these investment insurance providers to seek remedy on their behalf from Nigeria.

    The BITs that are presently in force have also made satisfactory requirements for the standard investment protection. These include fair and equitable treatment, umbrella clauses, most favoured nation status, national treatment, obligations against arbitrary and discriminatory measures and security.

    Multi-lateral Investment Treaties (MITs): Economic Community of West African States (ECOWAS) treaty is one of the famous MITs Nigeria have entered. The ECOWAS treaty was signed on 28th May 1975; it came in into force on the 20th June, 1975.

    The treaty currently has 15 signatories who are member states of ECOWAS.

    Article 2 of the Treaty gives ‘Community Enterprise’ status to businesses whose equity capital is owned by two or more member states, and citizens or institutions of the Community.

    Article 16 of the Treaty provides that Community Enterprise shall be accorded favourable treatment with regards to incentives and advantages, and shall not be nationalised or expropriated by the government of any member state except for valid reasons of public interest, and subject to the payment of prompt and adequate compensation.

    Organization of Islamic Conference (OIC) investment treaty is another MIT Nigeria has entered into in relation with providing favourable conditions for foreign investments in the country.

    OIC is a treaty with an Agreement on Promotion, Protection and Guarantee of Investments among Member States of the Organization of the Islamic Conference, which came into force in September, 1986.

    Chapter 2 of the Treaty mandates all member states of the Organization of Islamic Countries to provide adequate security and protection to the invested capital of an investor who is a national of another contracting member state.

    The terms of protection specifically include the enjoyment of equal treatment, undertaking not to adopt measures that may directly or indirectly affect the ownership of the investor’s capital or investment and not to expropriate any investment except it is in the public interest and on prompt payment of adequate compensation.

    Host states are further obligated to guarantee free repatriation of any capital and returns due to an investor.

    Conventions to which Nigeria is a Signatory:

    The country is signatory to a number of Conventions which have been entered into for the purposes of protecting foreign direct investment.

    The most significant convention in this regard is the Convention for the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention).

    International Centre for the Settlement of Investment Disputes (ICSID) as an arbitral institution under the World Bank Group is a fully integrated, self-contained arbitration institution that provides standard arbitration clauses, arbitration proceedings rules, arrangements for venues, financial arrangements and administrative supporting including the appointment of arbitrators to parties.

    Convention for the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) primarily provides for the settlement of investment disputes between investors and sovereign host states.

    It has also taken the necessary legislative measures to make the Convention’s resolution effective in Nigeria by enacting it as a domestic legislature in the International Centre for Settlement of Investment Disputes (Enforcement of Awards) Decree No. 49 of 1967.

    Another significant investment protection convention Nigeria has entered into is the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

    New York Convention was adopted by the United Nations in June, 1958 and it mandates domestic courts in signatory countries to give effect to arbitration agreements, and to also recognise and enforce valid arbitral awards given in other signatory states.

    The New York Convention in other words is particularly significant for the enforcement of arbitral awards resulting from non-ICSID investment arbitration proceedings.

    In an attempt to bring into conscious awareness the legal guidelines to undertaking business in Nigeria to intended foreign investors, we shall specifically be reviewing domestic legislations and investment treaties which collectively make up the legal framework for foreign investment protection in the country.

    The Domestic Legal Framework:

    The notable investment legislation in Nigeria is the Nigerian Investment Promotion Commission Act, CAP N117 Laws of the Federation of Nigeria (“NIPC Act”).

    The NIPC Act provides the fundamental and suitable legal framework for the protection of foreign investors in the country. Part 5 of the NIPC Act provides that foreigners may invest and participate in any enterprise in Nigeria.

    They are assured unrestricted transfer of funds attributable to the investment such as profits, dividends, payments in respect of loan servicing, and the remittance of proceeds obtained from the sale or liquidation of assets or any interest in the venture through an approved dealer in freely convertible currency.

    Section 25 of the NIPC Act clearly provides that no enterprise shall be expropriated or nationalised without prompt payment of compensation; the same section also provides a protection clause to an investor to claim “creeping” expropriation by establishing that the acts complained of indirectly results to expropriation or have expropriatory tendency.

    Lastly, the NIPC Act provides that disputes between a foreign investor and any government in Nigeria arising from an investment shall be submitted to arbitration within the framework of any investment treaty entered into between the government of Nigeria and any state of which the foreign investor is a national.

    It further provides that where there is a disagreement between the Nigerian government and the foreign investor on the mode of dispute settlement, the dispute shall be submitted to ICSID for arbitration.

    Foreign investor is thus at liberty in Nigeria to institute arbitration proceedings against a government even after bringing a claim or counterclaim against the government in a court or domestic arbitration.

    Another domestic legislation that provides protection to foreign investors is the Foreign Exchange (Monitoring and Miscellaneous Provisions Act) CAP F34.

    Section 15 of this Act provides that any person may invest in any business venture with foreign currency or capital imported into Nigeria through an authorized dealer who will issue a Certificate of Capital Importation to the foreign investor.

    Sub-section (4) of the same section in addition guarantees unconditional transferability of funds in freely convertible currency of any such monies arising from an investment made in Nigeria with foreign currency, including dividends and profits, payments in respect of loan servicing, and remittances of the proceeds of sale or liquidation of assets.

    A similar provision on repatriation is also found in Section 18 of the Nigeria Export Processing Zones Act, CAPN107 (“NEPZA Act”).

    Section 18 of the NEPZA Act provides that foreign investors who invest in outlined businesses within an export zone shall be eligible to remit profits and dividends earned in the zone and repatriate foreign capital investment at any time with capital appreciation of the investments.

    Other foreign investors’ protection laws are the Arbitration and Conciliation Act. The act gives foreign investors the opportunity to determine the mode of settling disputes that may arise out of their investments without resort to litigation in domestic (Nigeria) courts.

    With the anticipation that such settlement will unfailingly and efficiently protect and enforce the rights of foreign investors and their investments provides a framework for domestic arbitration it also makes provisions for international commercial arbitration which is more preferable by foreign investors.

    Section 56(2) (d) defines ‘international arbitration’ to include any arbitration that the parties have expressly agreed in the arbitration agreement to treat as international arbitration. The Act provides that every arbitration award is capable of enforcement under the New York Convention.

    Nigeria’s entries into these investment treaties and its enactment of the Conventions into domestic legislation have made the protection mechanism part of Nigeria’s legal framework for protection of Foreign Direct Investments (FDIs) friendly and convenient to actual and potential foreign investors.

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  • 25Jul

    The steps outlined below are the “”Process”” to be sure you Need to contact a company in the business of doing this ,however the information will give you insights that may be missing for you today.

    So you’re planning to open an IRA, i.e. a depository account. This might be a very smart move on your part if you know how to go about making investments with it. By using your IRA to buy and sell assets, you can end up making a lot of money. To those who don’t know how to do this, fret not, we will be covering the uses of IRAs in a later article. For the time being, let this article serve as a basic introduction to the topic, outlining the fundamental points you need to remember when opening an IRA.

    First things first, you need to know that all IRA applications will be undertaken in your name. You will have to use your own personal name, while the name of your spouse or any other person will not suffice. Next, you will need to provide your full and exact address along with your social security number. Without this information, your account will not open.

    Meanwhile, in some instances, an Employer Identification Number, i.e. EIN, may also be required. You will need to specify the type of account you want because depending on the account-type, you may be required to present additional information. For instance, if you plan to open an SEP IRA, you will be required to submit the name of your employer on the contribution agreement. Additionally, you may also want to consider appointing a beneficiary. Although designation is not mandatory when you open the account, it is nonetheless highly advised.

    If you’re an employer, or simply self-employed with no other employees, you may be able to become the trustee for your qualified plan. Point to be noted; qualified plans, unlike IRAs, are not subject to mandate with regard to banks and other institutions in fulfilling the role of a trustee or custodian. Hence, with a qualified plan you have free-reign in the sense that you can select as the trustee yourself or another individual. You can also select a group of individuals, i.e. a corporation, or for that matter, you have the option to select a combination of these as well.

    However, when founding a qualified plan, remember that you need to go over the investment section of the plan document with great care as it is imperative that you verify that the plan is self-directed. Additionally, you will need to fill out an adoption agreement with respect to your plan document, by inputting information such as the terms for eligibility, vesting, allocations, and so on and so forth.

    If you’re an employer, your life becomes a tad easier as you can make use of an IRS-approved prototype or master-plan to establish your qualified plan. Nonetheless, in any case you do have the option of drafting your own plan from scratch. All you need to ensure when writing your plan is that it takes into consideration the IRS Code.

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  • 17Jun

    Metrics such as price/earnings ratio and dividend yield on the S&P 500 index, a commonly used proxy for the U.S. stock market, are hardly at bargain levels. This has lead several market pundits to predict single digit annual returns for domestic mutual funds over the next decade.

    While pursuing the search for the best mutual fund, some mutual fund investors tend to focus exclusively on fees and expense ratios. The rationale is that by choosing
    mutual funds with low fees, investors will have more of their capital invested. Also, no load mutual funds with low expense ratios will pass on more of the returns
    they earn to their shareholders.

    Is shopping for the lowest fees and expense ratios a smart way to select mutual funds? Not always. The answer depends on the type of mutual fund you are evaluating,
    the time you can devote to evaluating and managing your mutual funds investments, and the type of cost incurred.

    Investing in the Best No Load Index Mutual Funds.

    If you believe markets are generally efficient and prefer to invest in an index mutual fund to achieve an index-like return, shopping for the best index mutual
    fund based on low fees and a low expense ratio makes good sense. The portfolio manager of an index mutual fund endeavors to invest the fund’s assets to track the
    index as closely and cost-effectively as possible. Larger index funds have an advantage in that they can spread their operating costs over a larger asset base.

    Some of the interesting index mutual fund options currently available include no load index mutual funds like E*Trade S&P 500 Index Fund (Nasdaq: ETSPX),
    Fidelity Spartan 500 Index Fund (Nasdaq: FSMKX), and Vanguard 500 Index Fund (Nasdaq: VFINX) with expense ratios of 0.09%, 0.10%, and 0.18%, respectively.

    Investing in Actively Managed Mutual Funds and Strategies.

    Mutual fund fees and expenses are just one of several important factors to consider if you believe portfolio managers can add value and out-perform the index
    through active management. The portfolio manager’s ability and investing style are just as important. Therefore, seeking out the best mutual fund based on just low
    fees and a low expense ratio may not always be the right approach. It may just be a case of being ‘penny-wise and pound-foolish’.

    Legendary investor Peter Lynch, who managed the Fidelity Magellan Fund (Nasdaq: FMAGX) from 1977 to 1990, achieved returns well in excess of the market averages
    even after accounting for the fund’s fees and expenses.

    So too has Bill Miller who currently manages the Legg Mason Value Trust (Nasdaq: LMVTX). Even after accounting for its relatively high 1.7% expense ratio, this
    no load mutual fund has achieved compound annual returns of 18.6% for the 10 year period ending in 2004, well in excess of 12.0% for the
    Vanguard 500 Index mutual fund.

    Ensure Your Mutual Fund Puts Your Interest First.

    Whether you prefer to index or take an active approach to managing your investments, ensuring that your mutual fund is putting your interests first is good
    investing practice.

    Mutual funds charge different types of fees. By looking at some key factors pertaining to fees, you can get a sense of whether the mutual fund puts your interests
    first or merely seeks to line the mutual fund company’s pockets.

    Serving the Interests of Long-Term Shareholders. Some mutual funds impose short-term trading fees to discourage frequent trading of mutual fund shares. Frequent
    trading disrupts efficient management of the mutual fund and increases operating expenses. A short-term trading fee can therefore actually be beneficial to long-term
    shareholders if the fee is rightly treated by the mutual fund company.

    Fidelity Spartan Total Market Index Fund (Nasdaq: FSTMX), for example, follows the practice of returning short-term trading fees collected on shares held less than
    90 days to the mutual fund itself rather than passing on the benefit to the mutual fund company. By having this short-term trading fee structure, this no load mutual
    fund seeks to contain its operating expenses. Such fees are therefore aligned with the interests of long-term shareholders of this mutual fund.

    Passing on Savings from Scale Economies. The operating expenses incurred by a mutual fund are a combination of fixed and variable costs. As the asset of a mutual fund
    increases, the fixed cost gets spread over a larger asset base. Therefore, the expenses incurred to operate the mutual fund as a percentage of the fund’s assets
    should trend lower.

    A mutual fund that places the interest of shareholders first must pass on the savings from scale economies to the shareholders. The trend in a mutual fund’s expense
    ratio therefore serves as a metric of how seriously a fund takes its fiduciary responsibility.

    Key Points.

    1. If you are searching for the best no load index mutual fund, shopping for one with low fees and expenses makes perfect sense.

    2. If active management of investments appeals to you, fees and expenses are just one of several important factors to consider.
    The ability and investing style of the portfolio manager are at least just as important as fees.

    3. The types of fees a mutual fund charges and how the fund uses the fees provides clues as to how seriously a mutual fund takes its fiduciary responsibility.
    Mutual funds that impose fees to contain operating expenses and return fees to the mutual fund help protect the interests of long-term shareholders.

    4. Mutual funds that put the shareholders’ interests first typically pass on savings from scale economies to the shareholders.

    Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such.

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  • 16May

    Let’s take a look at Personal Property as it compares to Real Property. This is a topic that comes up a lot when a real estate transaction gets difficult and the two parties (buyer and seller) begin to argue over what stays in the house and what doesn’t according to the contract and law.

    Personal property is defined as all property that can be owned and does not fit the definition of real property. In other words, if it is not real property then it is personal property. An important distinction between the two is that personal property is movable. Personal property is also referred to as chattels. For those of you who like to work on expanding your vocabulary.

    Next let’s look at some examples of personal property including manufactured housing, plants, crops, and classifications of fixtures.

    Manufactured Housing is defined as dwellings that are not constructed at the home site. These are normally trucked in and placed on the property. For those of you breaking down the word manufactured, and wondering why all homes aren’t considered manufactured, since they are after all “manufactured” think of mobile homes as manufactured. Here’s the tricky part, if the manufactured home has been attached to the property then it is REAL property, if it is just sitting there and hooked up to utilities then it is PERSONAL property. Why would it matter? well, if it is REAL property, then the property taxes are higher because the government sees the homes as essentially adding value to the land it sits on.

    Plants and Crops: There are two categories here and both have their differences. Trees, perennials, shrubbery and grass that do not require annual cultivation are considered real property or real estate. And these transfer with the sale of the property. Crops on the other hand that are harvested on an annual basis, are considered emblements. Or personal property and in the sale of the property, the crops that are being produced stay with the seller for that current harvest.

    Here are some additional details… if an item on the land, lets say a tree (which is real property) is cut down and separated from the land (called severance), then it becomes personal property. It is also possible to do the same thing but the other way. If the tree that was cut down is used to build a home on the property, through annexation, it become real property.

    Fixtures – these are often the hot topic in the sale of a home because sellers often take their fixtures with them when they move, and that is against the agreement set out by the contract. Knowing what a fixture is, will help you understand what to expect stay with the home and what does not. A fixture is personal property that has been affixed (attached) to the land or building and it becomes real property. Remember real property stays with the home when it is sold.

    How do you test if an item is a fixture or personal property? Here are the three basic tests the court will use to decide.

    1. Method of Annexation – how permanent is the method of attachment? Can the item be removed without damaging the surrounding property?

    2. Adaptation to Real Estate – Is the item being used as real property or personal property? For example a fridge is normally considered personal property because it can be removed easily. However if the refrigerator has been adapted to match the kitchen cabinetry, it become a fixture.

    3. Agreement – Have the parties agreed on whether the item is real or personal in a purchase offer.

    The overall rule is to determine, what is the purpose of the fixture? Is it’s function to be personal property or a real property.

    Trade Fixtures are the exception to the rule. A trade fixture is property used in the course of business. Often it will be attached to the property and resemble real property. However, if it is something used as part of the seller’s trade, it is considered personal property and does not stay with the home.

    Often home buyers will be looking at homes and what draws them to the home will be certain aspects of the home. Fixtures such as entertainment centers, backyard gazebos and surround sound speakers are often considered fixtures and real property that will stay with the home. However a home owner may consider those items of great value and may be planning on taking them to their new home. It is very important to identify what fixtures you want and expect to stay in the home and put those items in the purchase agreement so everyone will be on the same page and in agreement from early on.

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