Janet Schlarbaum collected article

Author: Carloscevola

The initial trigger for the huge market turbulence was the possibility that the Chinese government would impose taxes aimed at stopping speculative activity and controlling the speed of growth in the country’s market, which has doubled in value over the past 12 months. The rumors set off a sudden wave of selling in China, sending China’s stock market index down by more than 8% in a single day which was its’ steepest decline since the September 11 attacks in 2001.

The initial trigger for the huge market turbulence was the possibility that the Chinese government would impose taxes aimed at stopping speculative activity and controlling the speed of growth in the country’s market, which has doubled in value over the past 12 months. The rumors set off a sudden wave of selling in China, sending China’s stock market index down by more than 8% in a single day which was its’ steepest decline since the September 11 attacks in 2001.

This strong decline was accompanied by a tremendous volatility in the global market. Over the course of just five days, the principal stock exchanges of Europe lost an average of 6.9%. In the United States, the Dow Jones dropped 4.6% and the S&P 500 dropped 5.19%. These declines are slight in comparison with the losses suffered in the stock exchanges of emerging markets. In Latin America, the Buenos Aires exchange plunged 12.58% during this period; the Bovespa in Brazil dropped 10.88% and the IPC in Mexico fell by 8.05%.

Of course circumstances leading up to the crises varied across countries and regions. But each of these events had one dynamic in common - the confluence of a sharp increase in risk perception, and the subsequent actions taken by financial institutions and investors to limit their exposure and to hedge against further losses.

With the recovery of the market and continued market volatility, Resolute Capital Growth Fund (www.rescgf.com Bloomberg: RESCGFL) has captured profits while lowering volatility, thereby preserving capital and delivering positive returns under all market conditions.

Volatility can, and should, be expected along the way and we encourage investors to use this market volatility to reassess their asset class weightings and level of risk in their portfolios. While market corrections are not pleasant for investors we consider it normal and expect such market movements on occasion. The truth, of course, is that without risk no investment would ever produce a return worthy of the name.

Volatility expectation can be forecasted using historical volatility that is a measure of how much an exchange rate or any asset has varied, on average, over a specified period, say one year. As its name suggests, historical volatility is backward looking. This measure has the advantage of telling us something about expected volatility over the certain timeframe. It therefore has a forward-looking component.

Achieving ideal returns by managing and diversifying away risk is a weightier issue than ever for Resolute Capital Growth Fund. In our view market-neutral investing is one of the hottest strategies for achieving downside protection. Resolute Capital Growth Fund opens investors up to new thinking on highly

effective approaches to return enhancement and risk reduction through our market-neutral investing techniques that hedge exposures to neutralize the impact of market volatility on investment performance. Resolute Capital Growth Fund has shown it can outperform in down markets as well as in up markets, and, if there were a recurrence of such market condition, we would expect a similar outcome. The objective of the Fund is to achieve consistent equity growth regardless of market conditions by investing in the global markets using the most advance asset allocation process.

Article Collected By: Janet Schlarbaum

Janet Schlarbaum collected article

Author: Amy Remollata

Borrowing from banks is every small entrepreneur’s nightmare. One gets turned down for bank loans for a variety of reasons, including lack of assets, collateral and business experience. Don’t despair, however. There are several common types of alternative sources of capital for setting up a business available to young companies.

Savings and Investments

The first source you should consider is your own savings and investments. One disadvantage though of self-financing is that if things did not turn out the way you want them to be it will be your money that goes down with the ship.

Angel Investors

Angel investors are affluent individuals who provide capital for a business start-up, usually in exchange for ownership equity. These individuals are looking for a higher rate of return than would be given by more traditional investments (typically 25% or more).
Angel investors are an excellent source of early stage financing and high-growth start-ups. They are often willing to tread where there is too much risk for banks and not enough profit potential for venture capitalists. And since angel investors are often retired business owners and executives, they can also provide valuable management advice and important contacts.

Peer to Peer Lending

Peer-to-peer lending is a means by which borrowers and lenders may transact business without the traditional intermediaries, such as banks. It can also be known as social Lending, ordinary people lending money. The process may include other intermediaries who package and resell the loans–examples are Prosper.com and Zopa-but the loans are ultimately sold to individuals or pools of individuals. Prosper.com, which is available in the US only, offers business loans for small companies.

An enabling technology for peer-to-peer lending has been the internet, which connects borrowers with lenders, for example through an auction-like process in which the lender willing to provide the lowest interest rate “wins” the borrower’s loan. (wikipedia.com)

Money pool

Instead of a bank loan, borrow smaller sums from several family members, friends, or colleagues. The lenders have no legal ownership in the business, but can act as advisors and cheerleaders for your venture. Remember though that nothing causes tension in a family like lending money that is never paid back.

Credit Cards

Many business owners use their credit cards to fund their businesses. Credit cards offer the ability to make purchases or obtain cash advances and pay them at a later time. But as a long-term financing method, they can be expensive. Most credit cards will charge you 2% to 4% of the face value of a cash advance as a “fee” making this method of financing very risky.

Bootstrapping

Another source of capital for setting up a business is bootstrapping. It is a way to finance a business by saving rather than borrowing money. It’s being as frugal as possible so your business can be started on as little cash as possible.

The use of private credit cards is the most known form of bootstrapping, but a wide variety of methods are available for entrepreneurs. Other forms of bootstrapping include owner financing, minimization of accounts receivable, joint utilization, delaying payment, minimizing inventory and subsidy finance.

While bootstrapping involves a risk for the founders, the absence of any other stakeholder gives the founders more freedom to develop the company. Many successful companies including Dell Computers were founded this way.

Venture Capital

Venture capital is not suitable for all entrepreneurs. It is an option for small companies that have a seasoned management team and very aggressive growth plans; however, venture capitalists will rarely invest in small businesses that have no intention of going public. If a company does have the qualities venture capitalists seek such as a solid business plan, a good management team, investment and passion from the founders, a good potential to exit the investment before the end of their funding cycle, and target minimum returns in excess of 40% per year, it will find it easier to raise venture capital.