Function And Purpose Of Stock Market

The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate.

History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where the stock market is on the rise is considered to be an up coming economy. In fact, the stock market is often considered the primary indicator of a country’s economic strength and development. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is the raison of central banks.

Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction.

The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity.

The financial system in most western countries has undergone a remarkable transformation. One feature of this development is disintermediation. A portion of the funds involved in saving and financing flows directly to the financial markets instead of being routed via banks’ traditional lending and deposit operations. The general public’s heightened interest in investing in the stock market, either directly or through mutual funds, has been an important component of this process. Statistics show that in recent decades shares have made up an increasingly large proportion of households’ financial assets in many countries. In the 1970s, in Sweden, deposit accounts and other very liquid assets with little risk made up almost 60 per cent of households’ financial wealth, compared to less than 20 per cent in the 2000s. The major part of this adjustment in financial portfolios has gone directly to shares but a good deal now takes the form of various kinds of institutional investment for groups of individuals, e.g., pension funds, mutual funds, hedge funds, insurance investment of premiums, etc. The trend towards forms of saving with a higher risk has been accentuated by new rules for most funds and insurance, permitting a higher proportion of shares to bonds.

Similar tendencies are to be found in other industrialized countries. In all developed …

Leaving a financial legacy

One of my earlier articles touched on living a meaningful life and making a difference with an exhortation to consider the legacy we will leave behind. Well, what exactly do I mean by “legacy”? The American Heritage Dictionary defines “legacy” as “money or property bequeathed to someone by will” or “something handed down from an ancestor or predecessor”. The latter definition is more applicable generally and the lives we lead and notable achievements (or lack of them) will determine how we will be remembered. This article is intended to briefly discuss the issue of legacy and how to leave a lasting financial legacy.

Looking at prominent people of the past, each of us will have our favourite people who have left their indelible marks and lasting legacies. Mahatma Gandhi sought peace and change through passive resistance and was therefore a burning torch for others like Martin Luther King and Nelson Mendela who fought against oppression. In government, President John F Kennedy left a lasting legacy of many achievements that have helped transformed not only the USA but also  the world to be a better place including the establishment of the US Peace Corps and successful handling of the Cuban missile crisis that averted a nuclear war. Elvis Presley can be considered a musical legend with fans still having annual gatherings to remember the man and his music. Similarly idolized is Bruce Lee, who is considered the most influential martial artist in life and on the silver screen.  History remembers not only men of peace but also men of war and Adolf Hitler is one such man and deemed to be responsible for the millions of deaths during the Second World War and the Holocaust.  In helping humanity, we remember Nobel prize recipient Mother Teresa who dedicated her life to helping (especially in India) the poor and down-trodden, the sick, and the dying. Lately, we have also been made aware of billionaires like Bill Gates and Warren Buffet who have intentionally decided that a substantial part of their wealth will be given to charitable causes to help society at large.

The aforementioned are famous people and their legacies but what of mere mortals like most of us? Rich or poor, famous or insignificant, each of us will leave behind our respective individual legacies. Whilst it may not be possible to plan and live our lives such that history will record the good that we would want to do, we can however take control of the way we would like to write our financial legacy.

Leaving a financial legacy that is lasting and beneficial entails the ability to amass wealth (tangible and non-tangible assets) and structuring a plan that would ensure the wealth continues to grow to benefit those we love (whether individuals or organizations like charitable foundations ) from the legacy. Recognizing this objective, we need to note the adage “easy come easy go” and prevent wealth being squandered and in this respect we would do well to note …

When To Contact A Personal Injury Attorney

When To Contact A Personal Injury Attorney

Personal Injury attorneys are usually known as ambulance chasers, but they are actually very useful. If you have been in a car accident, chances are the aftermath and mess of the collision can be causing you a bit of chaos. From medical bills to car insurance calls, it’s difficult to assess where to start and where to stop with the stress. One solution to handling a car accident and any injuries associated with them is to call a personal injury attorney.

When should you call a personal injury attorney?

If you are dealing with any major personal injuries, you should consult with a personal injury lawyer and seek advice. Visiting a doctor and going to the hospital can rack up medical bills. Even if your insurance company is willing to pay for some of the bills you have, often times it may not be enough. Hiring a car accident lawyer will allow you to seek compensation for harm done to you mentally and emotionally, not just physically.

Once a car collision occurs, the scene will automatically become hectic. Drivers and any other party members involved may not know what to do next. Make sure you exchange and gather information, call the police and visit a doctor, if necessary. Once all these initial steps have been taken, calling an attorney as soon as possible will be beneficial. The sooner you call an accident attorney, the better chances you will have of a lawyer taking your case. Many times people wait too long and the legal limitation to file a case expires. Call an accident attorney as soon as possible.

If your insurance company or the other party’s insurance company is pressuring you to sign documents that claim you agree to the compensation you are being given, call a personal injury attorney. Signing a document can mean losing out on your compensation. Call an accident lawyer before speaking or negotiating with an insurance company. Lawyers can fight for the proper compensation you deserve for the personal injuries you have had to endure.

These criteria should hopefully advise you on when you should consult with a personal injury lawyer. Car accidents are always untimely and unfortunate. Don’t deal with the aftermath alone. Hire a car accident attorney today and fight for your rights. If you’ve been involved in a car accident, contact the Accident Attorneys’ Group. They will put a fighter in your corner.…

Financial Projections For New Businesses:

This article is subjected to review financial projections for a new business. It provides basic tools and components required for forecasting financial situations for a new business. The significance of financial forecasting cannot be overestimated easily. It is equally important to the investors, suppliers, employees, financial institutions and customers.

The significance of financial planning and forecasting helps new business entrepreneurs to make realistic moves and through financial forecasting, they can estimates return on the ventures. For a new business; financial forecasting helps to forecasts the financial difficulties such as, when and where to reduce expenses. It helps in developing a pace for the company’s cash flow and financial matters. It involves management of long term and intermediate transactions to understand the concepts being associated with the term finance like; revenues, expenses, cash paid, or cash received.

Financial projections involve:

  • General forecasting issues: It includes forecasting revenues and expenses of an organization to examine the financial conditions, cost structure and profit margin. It helps in determining the size of the potential market, company’s operational scale and the market share.
  • Issues present in forecasting new business results: In the development stages of new business, financial forecasting plays a pivotal role. From scarcity of resources to development decisions. It includes multiple scenarios like market size, growth rates, and profitability of market and structure of cost. It is necessary to study the possible partial failure, or success.
  • Growth in sales and capital: Sales generation ultimately leads to raise capital and resources. Therefore, it is essential to recognize the substance of sales to give pace to your company’s sales. For a new business a boost in sales is required which needs outside financing.
  • Utilizing working capital: A company’s capital includes; cash, inventories, liquid securities, debts owned by company, these all are essential components of a company’s net working capital
  • Credit policy and pricing: The business planninginvolves pricing and credit policy. The financial analysis in this regard prevent from the possible upcoming loss.
  • Dividend policy: It directly affects the company’s balance. These policies affect your cash, because if your policy to pay higher dividends means your liquidity will be low to re invest that amount in assets, but vice versa if your policy is to re invest than dividend will be less, or none. Low dividend policy means high re investments and higher dividend policies means low cash balance.

Bond Fundamentals – Monetary Policy and Fiscal Policy

It’s the Federal Reserve Bank that influences the money supply. Three tools are used to implement monetary policy:

1. Open Market Operations

2. Discount Rates

3. Reserve Requirements

Since open market operations is the tool used most, we will cover it. Here’s how it works: When the economy is growing too fast and the Fed is worried about the inflation rate, it will sell government securities from its portfolio to the open market. This decreases bank reserves, which means the money supply decreases. When there are less bank and businesses have to pay the bank more in order to borrow. This discourages consumers and businesses from borrowing. Less borrowing means less spending, which slows the economy and eventually can reduce price pressures.

When the economy is growing too slowly and the inflation rate is low the Fed will buy government securities, such as Treasury bills and notes. This increases bank reserves, which increases the money supply and causes short-term interest rates to decrease. Reduced rates induce consumers and businesses to borrow. Consumers will borrow money for items such as automobiles or home loans. Businesses borrow to build their inventories or finance a new factory. As a result, economic growth will accelerate.

The Fed will also leave rates unchanged if the economy is growing at a moderate pace with low inflation or if they feel the economy will slow down by itself. They will even take a wait-and-see approach with regard to how slowly the economy is growing and the rate of inflation, before determining monetary policy.

The bond market plays close attention to the activities of the Federal Reserve, which is why it’s important for us as well.

The Federal Reserve has three goals:

1. Moderate economic growth (not too fast, not too slow)

2. Low unemployment

3. Low inflation

How does the Fed determine whether they are reaching these goals? They watch the same economic indicators as we do. In other words, they monitor the reports that are released by the Labor Department, the segments of our economy.

For instance, the Gross Domestic Product (GDP) consists of four major components: (1) consumption; (2) investment; (3) government; (4) exports. Most of the key economic indicators fall into one of the above categories. For example:

– Retail sales would fall under consumption.

– Business inventories and housing starts would fall under investment.

– Construction Spending would fall under government.

– Trade would fall under exports.

If the key economic indicators continue to come in strong, the GDP will increase. If the indicators come in weak, it will decrease. In other words, Gross Domestic Product measures economic growth.

Learn more about the Bond Market, sign up for Paul Judd’s Free BondLessons, click here.

How to Forecast Veterinary Clinic Business Sales

Predicting likely sales for your Veterinary Clinic business is a very valuable process; you should have a clear-cut idea before you commence your business of your likely sales. It’s unlikely you will be right on the money but if you don’t make a realistic endeavor your Veterinary Clinic business will likely crash; forecasting is an important part to your business stratgey.

The amount of money your Veterinary Clinic business will achieve each year depends on how many sales of its products or services – but before you start the process of actually making these sales you should create a sales forecast. The sales forecast for your Veterinary Clinic business will exist on its own merits – it will of course be a part of your overall Veterinary Clinic business plan.

So why do you need to forecast sales?

It is needed so you can

1. Predict your cash flow – your forecast might predict slow times of business where you may need a cash injection to pay for products or merely to pay the staff for example.
2. Manage Cash flow – central to the success of your business, it is essential that you appreciate how sales forecasting contributes to the computation of the cash flow forecast.
3. Plan future resource requirements – for example, you may want a new machine which produces more goods.
4. Plan marketing activities – and the consequent monetary strategies arising from these.

Quite clearly constructing a sales forecast for your Veterinary Clinic business is vital to your business success – you ought to constantly re-evaluate your sales forecasts – by looking at actual sales to your forecasted sales firstly you can measure if you have done good or not.

What components do you need to think about?

Your sales forecast should show sales by month for at least the next 12 months, and then by year for the following two years. Three years, in total, is generally enough for most business plans.

Things to think about

1. Is there an traditional market for your product or service?
2. How extensive is the sector?
3. Is the market growing or declining, and if so,by what % each year?
4. What are the chief factors that are presently influencing that market?
5. Have you seen any factors that may influence it in the future?
6. Is your business seasonal?
7. What trends or fashions are related to the sector?

Who are your customers going to be?

1. How many customers will in reality pay money for your product or service?
2. Will they ditch a different supplier to move toward you?
3. How much will you charge?
4. Can you actually offer the products and services that you are predicting?
5. How many competitors do you have?
6. Your business will not be unique; what happens when additional competitors enter the market once you have done the groundwork to raise market awareness?

The entire world is your marketplace with the creation of the internet – but …

Private Finance Vs. Public Finance

Private Finance and Public Finance – A Comparison

Private finance refers to ‘individual finance’ whereas public finance refers to ‘state’ finance. Keynes has said that “What is true of the individual may or may not be true of the state as a whole. The similarities and dissimilarities between private finance and public finance are therefore, examined below.


The goals and methods of private finance and public finance are more or less the same.  Both have to satisfy human wants with limited economic resources, controlling wastage. That is the objective and rationality in their budgets. Individuals as well as the governments are engaged in economic activities viz. consumption, production, exchange, growth etc. They receive income and make payments. Both borrow and invest funds. Both contribute to the national product.


Private Finance

Public Finance


Satisfaction of one’s own wants

Satisfaction of societal wants


Optimisation for oneself

Optimisation for all


Personal benefit  (profit)

Social Advantage (service)


Individual adjusts his expenditure to his income

Dictum: cut your coat according to cloth

Government adjust its income to its expenditure


Small and less varied

Enormous and highly diverse


No force possible

Coercive Methods adoptable

(e.g. using the axe of tax to chop off the Manhattan of incomes for ‘equity’ sake)





Budget is secret

Budget is open and transparent

Public debate and criticism


  • Surplus Budget is natural and acceptable
  • Smaller budgets of a week or a month are also executed
  • Deficit Budget is common and healthy
  • Normally big budget, for a financial year


No one has right to print currency

Government has currency right:

Fiat money (fiat=order)




Know all about Personal Loans and their Uses in Daily Life

The number of credit items has expanded in the course of recent years as monetary need and a requesting open needing specialisation to unravel budgetary conditions. From individual credits, instructive advances, business advances and even city advances to address a couple required different enterprises to be imaginative. The elements that partook in the formation of the different monetary items are statisticians, hazard administration experts, “data and informatic specialists” and Wall Street amongst others. It was important to make, improve or separate for better or for more terrible credit administrations and items to keep cash liquid in a various commercial centre that obliged assets to address corner demographics.

Personal Loans

Signature Loans – A mark credit is general as it sounds. One applies for a credit and gives a mark on a promissory note to reimburse the advance in a specific measure of time. That measure of time is known as a “credit term ” and might be from six months to five years. Signature advances more often than not require great credit and the criteria for advance endorsement are generally in view of the borrower’s credit and to a lesser degree on resources. Not all mark credits have the same parameters for capabilities. A few advances may require the borrower even with great credit to represent resources for demonstrating the loaning organisation for endorsing purposes. The organisation could conceivably put a lien on the advantages however, all things considered, needs to have documentation demonstrating that there are surely money related or physical resources claimed by the borrower. Signature advances, as a rule, accompany lower financing costs than different sorts of purchaser advances like payday advances, charge card propels, title credits and some auto advances. More on these subjects later. Who are the banks in mark credits? They go from extensive backups of automobile producers to banks, funds and advance establishments, money organisations and payday credit organisations.

Charge card Loans – Credit Card advances or loans from Visas are another type of individual advances. These fast advances are all the more promptly accessible to the overall population and do not require a credit check. To get the underlying card more than likely required a credit check or if nothing else the procedure of recognisable proof for secured Mastercard. Mastercard advances or advances, as a rule, accompany higher loan costs furthermore different charges for having entry to the money. Different elements permit access to the charge card loans from bank employees, check getting the money for offices and computerised teller machines (ATMs). The expenses change in view of the source used to get to the assets. To bring down the expenses for loans some utilisation check getting the money for offices to have the card charged and get trade pull out turn for not incurring the expenses of ATM machines as cards are imposed a charge twice; first by the ATM organisation furthermore their bank. The financing costs on Visa advances or advances …

Factoring invoices is the solution for slow paying customers

Just about every business understands that when they sell to another business that business usually expects to receive 30 day payment terms.  This 30 day period often becomes 40 to 45 days and this can put a serious cash flow strain on just about any business.  When your business starts to slow down or turn away opportunities because your cash is not in house, then factoring invoices may be your solution.

Factoring receivables was created to eliminate the payment gap that your customers created by paying you 30 to 60 days after the sale was completed.  It sounds silly that a financial tool was created simply to get a business paid when they did what they were suppose to do to be paid in full, but that is what traditional sales credit terms have done.  We get calls every day from business owners who need funds for payroll or other reasons because they are waiting for payments from customers.  We often mention invoice factoring as a solution and they are surprised to find out that indeed they can get paid in one day and normally for less than the price of accepting a credit card payment.  The factoring company will advance around 80% to 90% of the invoice total to you the day you submit the invoice for funding and then when your customer pays you get the remaining amount back, less the factoring fee which ranges from 1% to 5% in most cases.

The other nice piece to the factoring solution is that getting approval is usually dependant on your customer’s credit and that allows companies with little established credit leverage customers good credit to obtain a financing solution.  If your customers want to use your money for 30 to 60 days, then they should pay to use your money.  Many businesses add the cost of factoring to the pricing model so the customer is paying for the credit terms.  It makes sense if you’re acting as a bank for customers they should pay for the cost of money, just like a bank.

If your customers are paying in 30 to 60 days and you need cash back within your business sooner, then factoring invoices should provide a quick solution at very reasonable cost.…

Cigna And Aetna Do Not Cover "Angelina Effect" Cancer Testing

Cigna and Aetna have ensured that they will not be covering for the latest generation of tests.

Reuters states, “Medical researchers call it the ‘Angelina Effect’, the surge in demand for genetic testing attributable to movie star Angelina Jolie’s public crusade for more aggressive detection of hereditary breast and ovarian cancer.” This has been one of the most expensive treatments in the medical world, which requires some additional tests and checkups as well. Therefore, it is believed that some of the major insurance companies, such as Aetna or Cigna, have refused to cover the ‘Angelina effect’. These insurance companies have clearly declined to pay for the latest and expensive generation of tests, known as multi-gene panel tests.

The insurance companies claim that these latest tests are ‘unproven’ so far that might require additional medical care, which the patients would not need. The national medical officer for enterprise affordability at Cigna, David Finley, said that these latest tests would help in finding ‘unknown’ mutations. He said, “This is where there is controversy and disagreement. My problem is what do you do with that information?” However, from doctors to genetic counselors, academics, and diagnostic companies, have not agreed with the insurers’ claims. They termed it as “dangerous miscalculation”.

Despite of the fact that the experts in this field understand that multi-gene panel tests’ data might not be as useful from a diagnostic standpoint, but it would not favor the suffering patients. According to them, by refusing to cover up ‘Angelina effect’ on their plans, the insurers would be endangering their clients (patients) who might be in need to undergo from screenings or change their diets, etc., in order to get more knowledge about the risks.

A surgeon at Kaiser Permanente Hospital, Susan Kutner, said, “If we have members who are not being tested in a timely manner, we know that their risk of cancer in the long run costs us and them a lot more.” It is believed that the latest generation of tests can cost the insurance companies around $2,000 to $4,000, which would be analyzing 20 or more genes at once. Sources tell that humans have 23,000 genes; hence, the tests allow health care professionals to make DNA links to other cancer related conditions.

The major insurance companies are not in favor to cover this in their plans, as it might increase their costs and would benefit either the company or the patient. Health care professional strongly disagree and encourage the insurers to consider this in the near future.