What makes hedge funds different from other investment options?

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In definition, a hedge fund is a pooled fund that utilizes several strategies to manage and invest funds. It is primarily a managed fund that can invest in bonds, commodities, stocks, or even in real estate. How it differs from a mutual fund is that, with a hedge fund, anyone who wishes to invest should be accredited.

That is, their minimum annual income should fall under a specific net worth, depending on the country they are in. In the United States, for instance, you need to have at least $1 million to be a part of a hedge fund. Most important, these investors should have the crucial knowledge for investing. Unlike mutual fund investors, hedge fund investors are also known as the “sophisticated investors”.

When talking about the structure of hedge funds, one can see some similarities to mutual funds. For instance, like the latter which depends on sub-advisors to manage the funds, the former can be run by managers. However, unlike mutual funds, hedge funds cover a wider range of investment strategies and a broader list of the kinds of investment positions that they can follow.

The most commonly known hedge fund structure is called the “limited or general partnership” model. Here, the general partner takes on the responsibility to operate the funds. On the other hand, limited partners can only invest into the partnership but can only be liable for their own paid-in amounts.

Typically, the general partner uses a typical structure, the limited liability company, also known as LLC. In this case, the general partner has the responsibility to both manage and market the funds. Additionally, they can perform the important functions such as hiring fund managers as well as administering the fund’s operations.

Why the US-China Trade war can be a good thing for other economies

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Despite the growing tension between China and the United States because of their ongoing trade war, experts and economic analysts argue that something good could still grow from the rising spat, especially for specific countries and economies that provide agricultural and petroleum-based products.

India, for instance, is one of the countries that can enjoy the benefits of the US-China trade war, especially on their cotton export sector. How? Basically, the United States is the number one exporter in the world of products such as fiber and it mainly answers to the biggest demands of millions of Chinese consumers – and the growing dispute may change all that.

With China’s imposition of a 25-percent tax on imported goods especially on U.S. farm commodities, including tones of cotton every year, this opens up an opportunity for other suppliers, especially India, to take on the role and engage with the huge Chinese market.

In fact, several contracts between Indian suppliers and Chinese importers have already been closed, assigning the biggest advanced deals of this year, with 500,000 bales of cotton heading directly to China after the first harvest season.

The same pattern will be expected once China finalizes its plan of imposing higher tariffs for goods from the U.S., especially when it comes to agricultural products – and this is where other countries of Asia can enter the picture.

Additionally, energy experts also predict that the expensive value of the U.S. oil due to the current US-China trade war may prompt Chinese purchases to focus on other sources such as Iran. In other words, China can easily replace their American-sourced oil with a much cheaper and accessible Iranian crude oil.

World’s rapidly shrinking industries

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Most people believe that they are already living in the future, with all the innovations and technological advancements that the modern world has to offer. However, as the influence and power of the emerging sectors rise to the pedestal, the older and less technology-based industries are slowly shrinking.

Here are the rapidly dying industries that may not be able to cope with the pace of a technology-driven future.

Record Store and Recordable Media Industry

The increasing reliance of consumers on the internet has caused several industries to crash, and one of these is the recordable media manufacturing industry. CDs, DVDs and cassette tapes used to be the compact and portable solution for music lovers worldwide, but the latest introduction of music and movie streaming services online made these once practical options a rather inconvenient and old-fashioned alternative.

In fact, recent statistics show that the shift to music streaming has caused the music industry to lose billions in revenue, primarily because of the sudden change in consumer listening behavior.

Data Recovery Service Industry

The decline of the data recovery industry has been predicted years ago when the cloud storage technology was introduced to the public. Cloud-based systems from companies like Google, Amazon, and Rackspace give private users and even companies to store digital files of their system in a secure and easily accessible online storage.

Wired Telecommunications Carrier Industry

Even your trusty landline is facing an industry decline. Ever since the world became fascinated with the wireless and cordless power of cellular phones, many have seen the imminent death of the wired telecom carriers industry not only in the U.S. but also around the world.

Landlines used to be the main channel for communicating, but mobile smartphones have exceeded the former’s capabilities in terms of function, cost, and connectivity.

The fascinating history of the modern private equity industry

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The modern private equity industry has an interesting history that dates back to 1946 when the very first venture capital firms were founded. One of them was the American Research and Development Corporation and the other was J.H. Whitney & Company. For 35 years until the late 1970s, several small volumes of investments focused on private equity were recorded.

But private equity, despite its early success among relatively smaller firms on Wall Street, became dormant for quite some time. However, the start of the 1980s gave way to headlines of several major buyouts that catapulted the industry into the frontlines.

For one, the story of Jerome Kohlberg, Jr. and Henry Kravis’ effort to form Kohlberg Kravis Roberts (KKR) followed by their famous purchase of the RJR Nabisco through a leveraged buyout became an inspiration for a book and a film, Barbarians at the Gate.

Although it was not the first LBO in history, the RJR Nabisco buyout was one of the largest at the time and the most phenomenal. Unfortunately, the KKR investment did not fare that long and ended in a substantial failure. From 1979 through 1989, thousands of leveraged buyouts were executed, recording a total transaction value of more than $250 billion.

The pre-2008 and the post-2008 eras of the private equity posed new challenges and advantages for the industry. During the early years of the 2000s, the changes in the liberal US monetary policy coupled with stronger credit markets make a blockbuster and large-scale buyouts possible for successful equity firms.

The years following 2008, however, introduced a new environment for private equity investing. The global economic crisis and the credit crunch as the primary obstacles prevented firms from obtaining debt financing and finding more attractive investments.

As the economy began to show signs of improvement, private equity buyouts also started to emerge and began their slow return to the financial scene. At present, the private equity industry is a booming environment that has become more acceptable to the public. Many modern-day investment companies, including those offshore such as LOM Financial, have capitalized on this sector’s potential as a viable investment option for portfolio diversification. They mostly have a long history of facilitating private placements in both listed companies or as-yet to be listed companies.

How sustainable energy sources can fuel a more technologically advanced future

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The world has witnessed different stages of industrial revolutions that have shaped not only the advancements of the present but also the innovations of the future. In the forms of intelligent machines, high-tech machinery and more, humans have continued to discover, explore and create.

However, there’s one factor in these advancements that have been continuously exploited and undervalued: energy and its unlimited but most of the time limited sources. As the world’s resources dwindle and become scarce from overharvesting, will there still be left for the generations to come?

Luckily, there are emerging sustainable and futuristic energy sources that are starting to be adopted by even the most highly industrialized nations in the world.

Solar Energy, for instance, is one of the most promising candidates as a top sustainable energy source. While the current scope of this type of energy is still in its early stages, small solar projects have begun to reach residential communities in the form of solar panels and solar water heaters. Another industrial country like Germany, for instance, rewards its citizens who opt for solar energy.

Nuclear Power is a popular topic among experts who touch on discussions in finding the ultimate energy sources of the future. At present, it covers 14% of the planet’s consumption. Despite its risks, its potential as a carbon-free power source places its role as an important energy provider for the generations to come.

Human power may sound straight out of a sci-fi movie, but researchers from around the world are currently testing on a technology that has the potential to produce energy from human movement. For instance, engineers in the UK have developed a knee brace that readily collects electrons while running, walking, or even bending the knees.

For more about the energy sector, commodities, stock markets, and investing, read updates on LOM Financial‘s official Facebook page HERE.

How to take advantage of Influencer Marketing to promote your brand

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The popularity of the Social Media and other online networking platforms gave rise to influential online personalities, also known as “influencers,” who use their massive followings to promote their ideas, share their skills, or even empower people to move and make a difference.

Different influencers represent specific niche, creating content for a particular demographic or social group. Having this access to a particular audience gives them the power to reach the people who actively consume their content – and this particular structure makes influencer marketing a great tool when it comes to online marketing, even for small businesses.

In fact, many companies who made it into the top have sought the help of influencers to promote their brand to their target market. Small or big enterprises have their options when choosing their influencer marketing strategy based on their budget: investing in micro-infuencers or large-scale influencers.

However, investing in influencers to promote your brand is not as simple as paying someone with an impressive number of followers to mention your product or services. The first challenge that you might encounter is how you can reach out to them. While it’s easy to talk to lesser-known influencers, their more popular counterparts with over 100,000 followers may not be as accessible.

Choosing the influencers to promote your products should also be properly considered. The most important things to keep in mind is the quality of the influencer’s content. Additionally, the ideas that they represent should also align with your brand.

Lastly, credibility and validity should also be taken into consideration and this is where research will help the most. Bots, spam, and followers from fake accounts often make up a relatively large percentage of their list so make sure to check for a “verified” icon on their profile.

The indispensable role of airports in economic growth and development

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Airports play an essential role in connecting the world – and this just one of the several reasons why every major city on the planet has invested in this infrastructure. For starters, airports don’t just move passengers, but they also help transport resources no matter where they are in the world.

Beyond its primary function of providing accessible channels to transport people from one place to another, airports also contribute to economic growth and development of its home regions. In fact, several industries benefit from and rely on the commercial aviation industry for their daily operations. Along with seaports, airports are extremely important in export and import trades.

The manufacturing and distribution sectors are heavily dependent on air travel to comply with their time-sensitive schedules. Hotel, travel, and tourism rely on airplane routes and access to transport human cargos to different parts of the world. Business people and investors can create partnerships and networks from companies or individuals who live on the other side of the globe, thanks to the availability of travel that grants them actual access to foreign markets. Especially among businessmen who make a lot of international transactions with global clients (such as LOM Financial), air travel serves paramount purpose.

The presence of airports in a particular global location greatly shapes the economic as well as social landscape of the region. Aside from making it physically accessible to investors, it promises a potential for urban development.

Just like how railroads, seaports, and highways opened a wider entrance for people, products, and services, airports provided a more efficient, faster and 24/7 mode of transport that suits the fast-paced demands of the modern era.

Most importantly, airport infrastructures contribute to a higher economic productivity as well as more dynamic mobility for the most important economic resource that every city can ever have: human capital.

Practical funding options for a financially sound retirement

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When people talk about retirement, others imagine a day at the beach, bathing in the sun, or traveling the world, savoring their well-deserved freedom. Such activities mark the beginning of a retiree’s new life, but there’s one factor that everyone seems to miss: the process of successfully planning for retirement especially when tackling the financial side of it.

So what preparations should one take into consideration when planning for their golden years? First, it’s important to find smart ways to fund your retirement. Here’s some of them:

  • Stock Market Investments

No matter what financial goal you have, investing in the stock market is always a right choice – especially if you’re still decades away from retirement. Planning for your future means looking at for at least 20-30 years of life and the long-term as well as the short-term benefits that you can get from investing and growing your stocks are the perfect vehicles to fund your retirement. If direct investment in stocks may seem complicated and laborious for you, it’s always wise to seek an expert’s help (such as offshore discretionary portfolio management with LOM Financial) or buy shares from equity mutual funds.

  • Employee-Sponsored Retirement Accounts

One example of an employee-sponsored savings account is the 401(k) plan. While it’s usually a less advantageous choice than a pension plan for a retirement fund, there are several reasons why many people still consider this a go-to option because its tax benefits as well as long-term opportunities to build a stable savings. If you’re planning to rely on your contribution plans such as the 401(k) offered an employer, then you have to know the basics of smartly converting this source of fund for retirement.

  • Social Security

Social Security can be one of your income sources after retirement in the U.S., but did you know that strategically planning your claiming options can double the rewards? Here, timing is everything. While you can already benefit from this income source as early as 62, a single year or two of claiming delays can increase the sum of these benefits.

The economics of the Oscars and what it means for film producers

The film industry is not just an avenue where filmmakers and actors can create art and expression through their work – it’s also a type of business where producers and movie makers expect to double or even triple their investments.

While some earn their prize in the box office and other business models designed to market and sell products related to the film franchise, other channels where moviemakers can boost an impressive return on investment is by winning recognition from experts, especially given by bodies as highly-recognized as the Academy Awards, the Oscars.

The question that most people wonder about is this: what are the financial benefits of winning big especially from award-giving bodies like the Academy? Most importantly, what does it mean for film producers, financially, to nab this highly-sought acknowledgment?

For starters, Oscar winners don’t get cash prizes. Instead, they receive a swag bag worth hundreds of thousands of dollars. While these may seem less grand, the gold rush from being recognized by the Academy comes after this milestone.

For instance, the earning potential even for movie producers of small-budget films doubles after the awards night. Movie houses and cinemas across the world will take advantage of their newly won popularity by running and re-screening the winning films to sell more tickets – and this means millions of dollars from additional gross ticket sales.  The gold mine that is the box office will be followed by increased DVD sales, international television streaming franchises, and media franchising demand not just in their home countries but from around the globe.

Everything that comes after an Oscar victory can easily be translated to an expected growth in demand from actors and filmmakers when choosing where to take their next masterpieces.

For instance, when the company, Open Road Film, won their first Best Picture for “Spotlight” in the 2016 Oscars, the bragging rights of winning big and being recognized by the Academy have boosted the film producer and company’s brand image. Similarly, in 2009 Academy Awards, sleeper hit “Slumdog Millionaire” went from earning $44.7 million in domestic box office before Oscar nominations to bringing home additional $100 million (approximately) after its Best Picture win. In this year’s edition of the awards show, the Guillermo del Toro-directed sci-fi film “The Shape of Water” won the top accolade. As experts are predicting, it may well pull off dramatic box office growth over the next few days or even weeks following the victory.

Transportation industry: Big changes we will see in the future

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With the technology that the world has now, it’s not hard to imagine a future where anything is possible. This idea is true for most industries out there, especially when it comes to the transportation sector. Here are the big innovations that you should expect in the coming years and how it will transform the transportation industry as you know it.

Self-driving vehicles

As early as 2016, the world has already caught a glimpse of the future in the form of Tesla’s autonomous cars. In the future, day-to-day vehicles will be driving autonomously, that means, without human intervention.

While there are already car makers that are starting to take the first steps like Mercedes and BMW, by 2020, over 10 million self-driving vehicles are expected to cruise major highways not only in the U.S. but around the world.

Drone air taxi

You’ve read that right. Recent collaboration efforts led by Volocopter tested the possibility of an aviation-type taxi service that will hopefully introduce the concept of unmanned flying vehicles in the future’s commuting and transportation system.

Aside from removing the worries of heavy traffic and other on-road obstacles especially in megacities, it’s a faster and more effective means of taking passengers from one place to another.

Unmanned cargo transport

It’s not only land transportation that is expected to get an upgrade in the future – even cargo ships will not need human crew onboard, making it cheaper and providing more room for cargo.  Through a land-based control hub, multiple ships can be remotely controlled wherever they are in the world. The vision is expected to go beyond transporting goods as it’s also expected to be applied in commercial shipping.