Author Archive: Robert Bell

How you can pay less tax while making the world a better place

Image source: pixabay.com

While altruism is the primary quality that motivates people to donate and help those in need, did you know that the simple gesture of writing checks to your favorite charitable institutions can help in reducing your taxes?

Generosity indeed goes a long way, and the benefit of paying lower taxes is one of its most practical advantages that are surprisingly less known to most people. Fortunately, there are financial institutions, such as LOM Financial, that help clients identify such opportunities and execute tax management plans in the most strategic and beneficial ways possible.

Donating to charity through the organizations recognized by the Internal Review Services (IRS) can make you eligible for a reduced tax. In order to check if your chosen organization is included in IRS’ list, you may request their IRS determination letter or call the government agency’s hotline.

However, you have to take note of the following:

  • Tax deductions are not honored if donations are given to individuals. These forms of donating include handouts to the homeless, pooled funds or collections to financially support a neighbor or coworker in need, or other victims of tragedies.
  • Claiming a charitable deduction is only possible if you itemize these deductions on your tax return. You can do this by itemizing them on Schedule A found on your federal form 1040 (lines 16-19).
  • Your donations will only be valid for tax deductions if it is substantiated by a receipt or a bank record where the name of the charity is clearly annotated.
  • While volunteering services won’t give you the advantage of reduced taxes, the expenses acquired while performing your charity work will – unless they are personal in nature or reimbursable.

Most importantly, you have to remember that only charitable donations made in the same year are entitled to tax deductions.

Major bonds that dominate the Debt Market

Image source: pixabay.com

Also known as the debt market, the Bond Market is a dynamic financial market that allows participants to issue and trade debt securities. These exchanges play an important role in the economy especially since the primary objective of the bond market is to give access to long-term funding for both public and private expenditures. Financial services companies, including offshore investment firms like LOM Financial, look at the debt market as a major investment vehicle. Here are some of the most common types of bonds issued and traded in the credit markets.

Government Bonds

Government bonds are issued by national governments but it can also be issued by lower levels of governments such as local and municipal entities. Basically, it offers bonds with periodic interest payments, initially attracting buyers, especially conservative investors, by presenting a face value on their agreed maturity dates. Municipal bonds, on the other hand, are issued by lower levels of government such as a state or a local government entity.

Corporate Bonds

Corporate bonds cover a huge percentage of the entire bond market primarily because of the issuing capacities of large corporations – the bond’s main issuers. The debt securities, unlike the bonds issued by government entities, can carry a higher credit threshold and boasts the possibility to return higher yields – of course, with an equivalently higher risk.

Other types of bonds

There are other types of bonds that fall under the category, asset-backed securities. These are the kinds of bonds that are primarily issued by financial sector participants and banking institutions. An example of this type of debt security is mortgage bonds that rely on pooled mortgages from real estate properties.  However, these bonds are usually reserved for institutional investors and not accessible to individual investors.

Industries that scored the largest revenues in 2017

Image source: pixabay.com

 

The largest industries in the world today have a huge influence in the global economy. Aside from generating massive revenues of over $27 trillion, these industries have also raked in a total of $1.5 trillion in profits (based on 2016 data) – and their successes don’t end here. Inevitably, they have become important components in many investment portfolios, including discretionary accounts from offshore investment firms such as LOM Financial.

Based on Fortune 500’s ranking which was released after the end of the different sector’s respective fiscal years, these are the top industries with the highest revenues in 2017.

Banking and Finance Industry

The global banking and financial services sectors represent one of the world’s largest grossing industries.  According to the said ranking, there are 55 companies whose performances from the previous year earned their spots in Fortune’s top 500 money-makers. Included in the top ten is America’s Berkshire Hathaway with a revenue of $223.8 billion.

Automobile Industry

Another industry that’s in the ranks of the biggest industries in terms of revenue is the Automobile Industry, with 34 companies making it to the list. Examples are Japan’s Toyota Motors (with over $254.7 billion in revenue) and Germany’s Volkswagen with a revenue total of $240.2 billion.

Petroleum Industry

Not surprisingly, the petroleum industry is home to the top companies in 2017 based on their revenues. In this particular industry, 28 companies were recognized by Fortune 500. Ranked fourth is China’s Sinopec, with a revenue of $267.5 billion, and Netherland’s Royal Dutch Shell with a $240 billion on the seventh place.

While the retail industry did not make it to the top three highest grossing industries, WalMart Stores actually bagged the top rank as the leading company with the largest revenue in 2017.

What’s inside the most profitable investment portfolios today?

Image source: pixabay.com

Portfolio diversification is one of the most effective investment strategies that you should turn to especially if you’re new at investing. However, diversification does not only mean putting different entries into your folder but it also involves carefully balancing and choosing which sectors and specific industries can help you reach long-term financial goals.

Here are the top industries that constitute the most profitable investment portfolios:

Industries under the Technology Sector

Technology companies constitute the most popular sector to invest in, especially with the rise of several new industries that are transforming how people work and live – especially in this booming information age.  Artificial Intelligence, the Internet of Things and even Autonomous Vehicles are part of the new wave of innovative industries that investors should consider for a balanced portfolio. Whether it’s investing in shares of this growing sector such as startups or opting for already established companies, you’ll be on the right track.

Industries under the Health Care Sector

This particular sector plays a vital role in responding to the demands of an aging population through leading innovations and life-saving products and services offered by the different health care industries. From biotechnology, the insurance industry, the pharmaceutical industry, hospital conglomerates, and other healthcare companies, including these investment options in your portfolio is a wise move.

Industries under the Financial Sector

The financial services sector covers a long list of industries that include financial organizations, banks, insurance companies, brokerage firms, credit card companies, and even offshore portfolio management firms like LOM Financial. The financial sector is your best bet if you’re looking at the benefits of long-term investments, especially in the U.S. as the government rolls over regulations that will effectively put financials on top of the best industries to invest in for 2018 and beyond.

The promise of a billion-dollar market in the luxury tourism industry

Image source: LOM Financial

Luxury travel is no longer just about expensive destinations and staying at the most luxurious hotels in the world. In fact, the recent trends that currently dominate the entire industry make it more diverse than how it was conventionally perceived.

According to statistics, the new face of the global luxury tourism industry shows an increased interest in destinations that offer unique, exclusive, and exotic holiday experiences for travelers. More interestingly, luxury travels are no longer limited to a particular affluent social group. This is because, the popularity of the luxury travel experiences in the social media coupled with the increased spending of the middle as well as an upper middle class have shaped and redefined the whole luxury travel market, fueling market growth that is expected to reach over $1.1 billion by 2022, according to the Allied Market Research report.

What drives the demand for luxury travel? According to the same report, the rising growth of the industry can be attributed to luxury travelers’ high spending power as well as their need for exclusivity. Similar studies and statistics that examined the opportunities and forecast for the luxury tourism industry showed that North American and European travelers contributed 66 percent of the industry’s total revenue. In addition, recent data revealed that the global destinations that topped the most-sought-after luxury travel experience are in Kenya.

Safari adventures, for instance, accounted for an approximately 44 percent of revenue not just in the U.S. but of the overall luxury travel market globally. In fact, this segment is still the most popular among young and middle age vacationers. On the other hand, about 70 percent of millennial travelers prefer culinary-focused travel experience as a top motivation in taking their own luxury trips.

Nevertheless, the likes of Santorini, the Cayman Islands, Maldives, and other “expensive” islands remain to be the top choices amongst affluent travelers, given their reputation and the superiority of hospitality services. Just last year, popular offshore investments center and luxury destination Bermuda has hosted the America’s Cup, a racing competition for sailing yachts that attracts not only the world’s top sailors and yacht designers but also wealthy entrepreneurs and sponsors.

Top business films that will spark your entrepreneurial spirit

Inspiration can come from different places and in different forms, and films are one of its greatest sources. Whoever you are and whatever you do, movies have the power to change your perspective and transform how you see the world – even if you’re an aspiring entrepreneur.

Here are some examples of the most motivating and inspiring business-themed films that will keep your entrepreneurial spirit alive:

  1. The Founder

First released in 2017 in the United States, “The Founder” is a biographical drama film that portrays the journey of one of the world’s largest fast-food chain, McDonald’s. The story revolves around how traveling salesman Ray Kroc, played by Michael Keaton, met the original McDonald’s brothers, Maurice and Richard McDonald, and built the fast food empire that we now know today.

  1. The Social Network

The Social Network is a 120-minute American movie adaptation of the 2009 book, “The Accidental Billionaires: The Founding of Facebook”. It was released in 2010, raking in over $220 million from the Box Office. The film portrays several revealing stories of early stages of the now-influential social networking giant, Facebook – but it’s not your typical success story, for the movie depicts several challenges and betrayals that came along with the company’s rise to popularity. Its founder, Mark Zuckerberg, is played by Jesse Eisenberg.

  1. The Intern

The movie has a star-studded cast that includes Robert De Niro and Anne Hathaway. It’s an American comedy that features the chance meeting of a rising start-up founder (Hathaway) and a retired business-owner (De Niro). In the movie, Jules Ostin is the workaholic CEO of a booming fashion website. As part of her company’s “senior internship” initiative, she hires a widower and a former business owner, Benjamin Whittaker – and it was the start of an unusual yet inspiring friendship.

Private equity: A brief history of the trillion-dollar global industry

Image source: LOM Financial

 

The beginnings of private equity industry can be traced back the post-World War II era as a response to the economic gloom caused by the war’s aftermath. The late 1940s, in contrast to the state of the finance industry during those times, was the golden age of the formation of the world’s very first venture capital firms: the American Research and Development Corporation (ARDC) and the J.H. Whitney & Company.

In the 1980s, private equity investors in the U.S. recorded a boom in large buyouts on Wall Street, participated by two famous PE investors: Henry Kravis and Jerome Kohlberg, Jr. of the Kohlberg Kravis Roberts (KKR), a modern global investment firm.

Over just a period of ten years (from the end of the 1970s through 1990s), records show thousands of leveraged buyouts, amounting to an overall transaction value of $250 billion.  The same decade also produced major private equity firms like Hellman & Friedman, The Carlyle Group, Bain Capital, and the Blackstone Group.

The deterioration in economic and financial performance in the U.S., for instance, totally changed the recent history of the private equity industry and the investment industry as a whole. Before 2008, private equity firms used to have the freedom and capacity to complete huge buyouts, thanks to low-interest rates, laid-back lending procedures, and even easy access to debt-financing.

Come 2008, fewer buyouts were observed, recording only small volumes of completed deals. The figures drastically dropped, from the early years of the 21st-century value of trillions to just over $400 billion from 2008-2010. However, as soon as the economy recovered from this recession, private equity buyouts slowly found its way back to the limelight, closing billion-dollar buyout deals once again.

Today, the global private equity industry holds over $2 trillion in assets and a committed capital value of $1 trillion.

Fashion juggernauts: Top design brands based on what you wear

Fashion has been and will always be part of modern human civilization. The demand for designer clothing increases every year as well as the number of people working in the industry—which some sources estimate to be enough to build their own country.

Today, fashion is one of the most lucrative businesses across the globe. Furthermore, the trends and styles that we follow are typically ephemeral and constantly changing—even from season to season. In addition, especially among women, wearing apparels and accessories with a designer’s label is more than just a social status. It defines every individual’s personality and may boost his or her confidence and self-esteem.

From the creations of well-known fashion designers and reputable fashion houses, here is a list of some of the most coveted fashion brands according to which type of garment you would want to wear:

Image source: independent.ie

Lingerie – Victoria’s Secret

Victoria’s Secret is famous for its premium lingerie brand and sleepwear for women. It was founded in 1977 by an American businessman, Roy Raymond, and currently has over 1000 operating stores in the United States and the UK. In 2016, the company had an estimated global net sales of $12.6 billion and approximately $5.29 million net sales per store average.

This year’s highly anticipated fashion show was filmed in Shanghai, where 55 Victoria’s Secret models have donned their embellished lingerie and wings covered with tons of crystals while walking down the VS runway at the Mercedes-Benz Arena. In addition, Lais Ribeiro, a Brazilian model, has worn this year’s VS Fantasy Bra worth $2 million (£1.5m); this is by far the most expensive and famous lingerie brand in 2017 according to express.co.uk.

 

Image source: summitmedia.com.ph

Haute couture – Michael Cinco

A Dubai-based Filipino fashion designer, Michael Cinco is widely known for his magnificent couture creation. He launched his first fashion line in Dubai, in 2003. Eventually, he became famous when he started dressing international celebrities such as Tyra Banks, Christina Aguilera, Lady Gaga, Jennifer Lopez, and Mariah Carey.

One of his most expensive creations was worth $1 million, a six-meter long train wedding gown encrusted with Swarovski crystal worn by an Austrian singer and heiress to the Swarovski fortune, Victoria Swarovski, during her extravagant wedding in the Italian city of Trieste. And just recently, Michael showcased his Fall- Winter 2016-2017 couture collection during the Haute Couture event in Paris. He also designed the farewell gowns of the two latest Miss Universe winners, Philippines and France.

 

Image source: ferrvor.com

Luxury bags and apparel – Louis Vuitton

Louis Vuitton is the epitome of luxury and one of the most recognized brand names in the world of fashion. It was established in France in 1854 and was named “The World’s Most Valuable Luxury Brand” for six consecutive years (2006-2012). This year, Louis Vuitton ranked again on Forbes list as the 20th Most Valuable Luxury Brand with $28.8 billion brand valuation and $9.9 billion revenue.

Furthermore, Louis Vuitton staged its Fall-Winter Collection for 2012 at Express Train Station in Shanghai. The runway was designed in a highly dramatic setting, with the models onboard all the way from Paris in a luxury train as their theme for the extravaganza and was reportedly cost $8 million for the steam train alone.

REPOST: Startup unleashes big data on art investing

Yes, even in the seemingly millennia-old realm of arts, artificial intelligence (AI) can have a big influence on. Read up St. Louis Post-Dispatch‘s article on how Big Data on arts can affect people’s investing decisions when it comes to alternative investments:

Three pieces from a set of 18 Chinese export paintings (center) at Ely House in London on Oct. 12, 2015. Bloomberg photo by Luke MacGregor.

Hedge funds and some of the world’s biggest banks have embraced the predictive properties of machine learning to spot patterns and guide their investment decisions. Could this branch of artificial intelligence be used to divine the vagaries of the art market?

A New York startup says it can. Arthena analyzes hundreds of thousands of data points on works of art — artist, style, medium, size and so forth. Adding a touch of human insight, the company picks pieces it says will generate handsome returns for investors. Arthena currently manages several funds, ranging from low-risk ones that invest in modern art to higher-risk funds that buy works from emerging artists.

The startup, which is backed by Foundation Capital, Beamonte Investments and Y Combinator, recently teamed up with brokerage Charles Schwab, which offers a suite of alternative investment offerings.

Valuing art is inherently subjective, and many experts are skeptical that it can be profitably bought and sold simply by the numbers. But Arthena co-founder and Chief Executive Officer Madelaine d’Angelo says AI could shed light on a market where deals are often done privately, lower the barriers to entry and help democratize art investing.

“Most people in the art world don’t like what we’re doing,” d’Angelo says, noting that she’s been accused of stealing the soul from art investing. “We’re not advocating that art shouldn’t exist for art’s sake, or that people should stop building collections, but we want to make it more widely available as an asset class and investment opportunity.”

Read more HERE.

Economics of Christmas: How much money is made and spent during the holidays?

Image source: fjackets.com

 

The Christmas season is perhaps one of the most celebrated holidays in the world and while many countries consider it as a religious festivity, other nations have created their own definition of this joyful event.

From sharing meals among one’s family and friends, exchanging gifts, to selfless giving to the less fortunate, these are just some of the ways to celebrate the essence of the holidays—and all of these typically come from careful budgeting and stretching one’s finances.

If you scratch the surface and look at it from an economic perspective, how expensive really is Christmas and how much money is made during the most wonderful time of the year?

According to several statistics, Christmas is one of the strongest economic drivers among many nations globally, reporting rapid and dramatic sales increases in almost every retail store worldwide. In the United States, for instance, the retail industry recorded a staggering three-trillion dollars in the 2013 holiday shopping season.

 

Image source: womansday.com

 

A recent study by the National Retail Federation further revealed that in 2016, an average American spent over $900 for their holiday gift list – and researchers are expecting that this year, it will go up and reach almost a thousand dollar per person.

On a comparative perspective, the spending habits of Australians—for example—are not far from that of the Americans. In fact, they’re one of the most generous in the world when it comes to gift-giving, spending over $11 billion during the holiday season. It is estimated that this year, the average Australian will spend almost $600 for gifts alone. In the developing world, however, spending can be understandably lower but also growing over time.

The commercialization of Christmas season started a long time ago and its influence as strong economic stimuli is expected to grow in the future. People are expected to spend thousands of dollars on gifts, decorations, holiday parties and more. In fact, Christmases around the world, especially in the West, are anticipated to be increasingly extravagant every year.