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Posts Tagged ‘stock exchange’

The tax on financial transactions, an old idea back on the table Tuesday by France and Germany, is a mechanism both to discourage speculation and bring new tax revenue.

Question: What is the tax on financial transactions?

Answer: The idea, launched in 1972 by the American Nobel laureate in economics James Tobin, is to apply a small levy (eg 0.01%) on international currency transactions or on all transactions in the financial markets ( Stock Exchange, bond market, derivatives markets …)

Q: What is it?

A: According to its proponents, the tax on financial transactions and therefore dampen speculative volatility in the markets. Orders to buy or sell hedge are often characterized by their large numbers, their extreme speed (you buy to resell minutes or even fractions of a second later) and low profit margin. A tax very low applied systematically to each transaction would therefore reduce the benefit of enough to discourage speculators.
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The Federal Finance Minister Jim Flaherty says Canada’s economy remains stable and growth despite the volatility of world markets, but admits that the continued uncertainty poses obvious risks for the country.

Mr. Flaherty told reporters Wednesday before its annual retreat summer with economists and academics, that the difficulties the United States and Europe did not prevent the Canadian economy to get away reasonably well and to record seven consecutive quarters of growth.

The minister does not want to underestimate the risks, but believes that Canada is well positioned to meet global economic challenges.
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So far this year, the markets of developed countries have exceeded those of developing countries in terms of profitability, and among the former, until recently lagged Europe has led and marked the way forward.

The grounds on which these movements are based earlier this year ranging from the revolutions in North Africa to cover short positions. Fears about a possible rise in inflation has affected the profitability of emerging markets. In Europe, meanwhile, many investors with short positions in peripheral markets and the financial sector have been in a hurry in filling these positions as they both began 2011 with a more positive approach. All this may sound like a rash and appears euphoria based on temporary factors. Do not try to extrapolate the behavior of the first six weeks to the next forty-six. However, we like the beginning of the year and believe that some of the reasons underlying the observed Europe’s leadership during these early weeks are sustainable over time. Sector leadership in Europe is also in contrast to what happened in 2010 and, although factors such as short-covering may have had something to do, we want to draw attention to the importance of “starting points.”
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Diversification is based on prudence. Diversify is to accept a lower return in exchange for lower risk also.

If an investor was able to know what is the most value will go up in the future would not need to diversify, since in that case would invest all his money on that value and get the maximum return.
But in practice we do not know what that ideal value in advance so that the most prudent, even for very experienced investors, is to resort to the diversification.

When diversification must take into account 3 main factors (the number, weight and type of values that make up the portfolio) and 2 secondary (emrpresa subsector and geographical area).
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An initial public offering (IPO) is the sale of equity usually in the form of common shares by a company through an investment banking firm. These shares are then listed on a recognized stock exchange where they are bought and sold.
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The American Stock Exchange, or AMEX, is a stock exchange that is operated by American Stock Exchange LLC, a subsidiary of the National Association of Security Dealers. Located in New York, the American Stock Exchange is one of the many exchanges in the United States that has had continued success since the earliest days of the colonial expansion.
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The stock market comprises of two types of markets: the primary market and the secondary market. In the primary market, issuers sell securities with listing them as one of the objectives of the issue. A company which wishes to list its shares on the stock exchange must offer shares to the public through the primary market. In the secondary market, securities that are already listed on the stock exchange are bought and sold. When one looks at the television screen, the stock market may appear to be a chaotic place with traders shouting and vigorously gesticulating on the trading floor. In reality, it is a highly organized market.
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India is fast emerging as an important destination for international investors. This is evident from the number of foreign institutional investors who have started investing in India. These investors are being furiously wooed by the Indian government which wants investment India to become a major buzzword in the West.
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The investment in stock exchange must be made carefully because the risks involved are very high. An individual stands to lose money that he has invested in shares listed on the stock exchange. The loss may result on account of factors beyond the control of the investor.
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