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What are ETFs and how they make investors money

What are ETFs and how they make investors money

What Are ETFs and How They Make Investors Money

Exchange traded funds, more popularly known as ETFs, work quite like mutual funds. They have their own ticker symbol and are traded just like stocks.

ETFs hold assets such as bonds, stocks, and commodities. They typically operate with an arbitrage mechanism to ensure they trade close to the net value of the assets that they contain. However, deviations can occur.

The ownership of an ETF is divided into shares that are listed on stock exchanges.

Make sure to only invest in ETFs that are registered with the US Securities and Exchange Commission. Canadian investors should opt for ETFs registered with the Canada Securities and Exchange Commission. However, from what we see, US ETFs are more profitable.

You will need the assistance of a broker to invest in an ETF.

Most brokers charge a fixed commission for their services. However, in some cases, you might be able to buy or sell an ETF without having to pay a commission.

Understanding Exchange Traded Funds

It is important to know a few more things about ETFs to make a sound investment in an ETF.

Since ETFs include a variety of assets, it is important to pick a pool that you know about. Pay attention to historical figures, potential risks, and available investment strategies before making a decision.

Some exchange-traded funds utilize short stocks and super leverage, while some concentrate in specific industries. Remember that investing in an ETF is as risky as investing in any other asset. Prices can go up or down without any warning.

How ETFs Make Money for Investors

As mentioned earlier, ETFs work like mutual funds. However, unlike mutual funds, they’re traded at intervals throughout trading hours.

The trader has to keep an eye on price fluctuations and pick an appropriate price to buy or sell an asset. This is very important because prices change throughout the day.

The investor can set criteria on traders such as limit orders. This will set price limits on buying and selling. However, how an investor makes money mainly depends on the type of investments an ETF holds.

Available assets include bonds, stocks, commodities like precious metals, preferred stock, and famous indexes like the S&P 500 or The Dow Jones Industrial Average. Moreover, an ETF can also invest in real estate investment trusts (REITs).

Here’s how you will make a profit if you invest in ETFs:

  • Investors make a profit when the asset increases in value, i.e: when a stock gets more expensive due to reasons such as a positive outlook.
  • You will make money when the company pays dividends on the stocks that you own.
  • You can make money in the form of interest if you own bond fund ETFs.
  • ETFs that include real estate give returns in the form of underlying rents and capital gains on sales.

Here are some ETF portfolios worth considering. These include a variety of options based on potential returns and risk factors.

Aggressive portfolios, for example, offer good and quick returns but they can be very risky. Conservative portfolios, on the other hand, are less risky but do not offer exceptional returns.

You have to be sure about what you’re looking for before you make an investment.

Scientists can now force mice to hibernate – are humans next?

Scientists can now force mice to hibernate – are humans next?

Scientists Can Now Force Mice to Hibernate – Are Humans Next?

Scientists have found brain ‘switches’ that can force mice to hibernate on demand.

This is a breakthrough discovery and could be the first step in identifying how to put humans in a similar state.

The state, known as torpor, is a condition in which there is very little physiological activity in the body resulting in a reduced metabolic rate and body temperature.

This condition forces the body to conserve energy for the future, i.e: winter when food is scarce.

Scientists have known for a long time that the brain is heavily involved in the hibernation process, however, these new reports provide more information on the topic and help understand the neurons that air the process.

Why is this useful?

The ability to naturally slow down metabolism and reduce energy use on demand can be very useful for health applications.

Being able to go in a hibernation-like state can help humans fight conditions that may otherwise lead to death or severe damage.

It’s believed that it can also make space travel safer. It can be very difficult for the human body to handle the pressure of long travel. Being able to move in a suspended state will reduce the risk and increase the chances of success.

More about the research

Mice are known to hibernate. They typically go into a sleep-like state if they do not get access to food for more than 24 hours. The purpose is to conserve energy so they can go longer.

Scientists studied Q neurons, in the first research, to understand the phenomenon.

Found in the hypothalamus, these quiescence-inducing neurons express a special neurotransmitter known as pyroglutamylated RF-amide peptide (QRFP).

The research revealed that these neurons trigger a hibernation-like state in mice when stimulated for more than 48 hours, i.e: longer than the animal’s natural torpor cycle.

Their metabolism and body temperature reduced while they stayed in the sleep-like state, however, they all recovered and showed no signs of illnesses or negative effects.

Scientists were able to identify a huge network of neurons that play an important role during the process. They used this information to demonstrate how these neurons could be manipulated.

Another study identified and tagged the neurons that play an important role during the process. These neurons help the animal go into hibernation and wake up from the on-demand sleep.

Researchers found a connection between the largest subset of these neurons and the expression of the pituitary adenylate cyclase-activating polypeptide (PACAP), a protein that plays an important role during the process.

The research showed that stimulating these triggers torpor and blocking them disrupted the animal’s regular torpor cycle.

There are slight differences between the results the two reports found especially since they both identified different groups of neurons – QRFP and PACAP.

“Both of [the teams] come at it from a different angle and almost end up in the same place, so they complement each other in that way, which is pretty nice,” said Steven Swoap, a biologist from Williams College, who wasn’t a part of the research team.

When will be able to put humans in a sleep-like state?

Scientists are hopeful but it’s hard to tell exactly. We must remember that these findings are not linked to humans.

We’re not yet sure if humans have the ability to hibernate. More research is needed to reach a conclusion.

Coronavirus and cannabis: Is there really a connection?

Coronavirus and cannabis: Is there really a connection?

Coronavirus and Cannabis: Is There Really a Connection?

Coronavirus and Cannabis: Is There Really a Connection? 

The cannabis market saw huge surges during the pandemic as people queued outside stores to get hands on their stash of marijuana. Some argue that this sudden boom is due to the apparent benefits of cannabis.

While we’re not yet sure, there are reports that claim cannabis can treat or prevent coronavirus.

Pro-marijuana users have promoted cannabis as the ‘cure-all’ solution for years, hence it doesn’t come as a surprise that weed is being presented as a coronavirus cure.

While there’s no denying that cannabis has medical benefits, it is too early to consider it a good option to treat Covid-19, especially when the world is still struggling to find an effective treatment option for the disease.

Why Are These Reports Not Reliable?

The problem with reports or research papers that present cannabis as a reliable solution is that most of them haven’t been peer-reviewed, i.e: the results are not to be taken seriously by professionals as these papers are not considered legitimate. It’s early research that’s yet to be verified. Such papers are not considered authentic and cannot be a basis for treatment.

The paper linked above, which has been receiving the most hits, has been written by authors who have conflicts of interest. They’re associated with businesses engaged in the cannabinoid and cannabis drug development. Hence, they cannot be considered reliable.

Moreover, the experiments performed to gauge the effectiveness of the treatment are not reliable as they were performed in artificial models. No animal or human has been tested yet.

Does It Mean These Reports are Useless?

Technically speaking, these reports do not prove anything but they can provide interesting findings that warrant additional study into the topic.

Researchers can use the information found in these reports to study how cannabis affects coronavirus patients and if it can be helpful in treating the condition.

So, Can CBD Affect Coronavirus?

Companies are busy researching how CBD and cannabis products can affect coronavirus, but so far there has been no movement in the right direction.

No authentic study or report directly addresses cannabis and coronavirus.

We can safely say that cannabis does not affect coronavirus. In fact, some experts suggest that patients or infected individuals should not consume cannabis as we’re not yet sure what kind of effect it can have on a patient.

There are chances that cannabis may aggravate the condition.

Mary Biles wrote in Project CBD, “A new wave of research and mounting anecdotal evidence points toward cannabinoids having an adaptive, immunomodulating effect, rather than just suppressing immune activity.” In other words, it’s possible that cannabinoids like CBD may keep inflammation at bay when healthy, but increase inflammation when getting sick.”

You need to be very careful about what you believe. There are all kinds of rumors on the internet. You may even come across companies claiming their air purifiers can kill coronavirus in the air.

Such reports are bogus and should not be trusted. Only use authentic sources for information on coronavirus and stay safe.

British Columbians in Favor of Banning Foreign Owned Property in Vancouver

British Columbians in Favor of Banning Foreign Owned Property in Vancouver

British Columbians in Favor of Banning Foreign Owned Property in Vancouver

British Columbians in Favor of Banning Foreign Owned Property in Vancouver

According to a new report, a huge majority of British Columbians would ban foreigners from owning property in Canada if they’re given a chance to.

More About the Research

The research conducted by Research Co. consisted of 800 adult residents of British Columbia.

About 78% of the people polled support a ban on foreigners buying property in BC. Only 15% were in favor of foreign-owned property, and about 7% had no opinion on the matter as they were still undecided.

“The notion of forbidding most foreigners from owning real estate in Canada is popular among all demographics in British Columbia,” said Research Co. president Mario Canseco.

Vancouver Island residents seem to be behind the idea very strongly. It’s said to be popular among people aged 35 to 54. The rate of ‘approval’ between these groups is 88%.

Note: The survey has a +/-3.5% margin of error.

But Why?

Property prices are very high in British Columbia and foreigners buying houses is said to be one of the major reasons behind the inflated prices.

Vancouver’s metro area is among the most expensive housing markets around the world.

Residents hope that less competition or demand will push prices down.

Not the Only Case

New Zealand took a similar step to make housing more affordable. The country put a ban on foreign-owned residential property in 2018. Citizens of Singapore and Australia, however, are exempt due to free-trade agreements between the countries.

Despite New Zealand being mentioned as an example, it isn’t the only country that has barred foreigners from owning real estate.

Many other countries have adopted similar rules due to a variety of reasons.

  • Foreigners cannot freely purchase newly-built properties in Australia.
  • Switzerland has quotas on how many houses foreigners can own in a state or county.
  • Nonresidents cannot own property in specially designated areas in Mexico. These include some very popular zones such as seaside areas.
  • Malaysia has a minimum purchase price system for foreigners to limit foreign-owned properties.

There are similar restrictions in many Arab countries. Moreover, some countries have restrictions on the kind of property foreigners can own.

Will This Change Anything?

Will the government take a drastic step and announce a ban on foreign-owned real estate in Canada? We’re not so sure yet.

The opinion seems to be divided. Real estate prices increased rapidly in Vancouver until 2016, when the government introduced a 15% foreign buyers’ tax.

The government pushed the tax to 20% in 2018 to combat rising prices. The current situation is strange. The market crashed in 2020 due to the on-going crisis, however, the prices have remained stable in most parts of the province.

Sales fell about 42.5% in May but the average resale price increased 3.2% compared to 2019 figures according to the British Columbia Real Estate Association.

British Columbians support the steps the government has taken to keep the market stable. These include the introduction of the ‘foreign buyers’ tax’ and the ‘vacant home tax’.

Tighter credit requirements make buying property more difficult than ever

Tighter credit requirements make buying property more difficult than ever

Tighter Credit Requirements Make Buying Property More Difficult Than Ever

The coronavirus pandemic has caused the housing market to take a hit.

We’ve seen a major decrease in the number of home sales entering escrow. However, some people are still looking at homes (mostly virtually) to live or invest in. But, most appear to be unhappy due to the current scenario.

What’s Really Happening?

Lenders do not seem to be willing to help.

Many lenders have increased down payment and FICO requirements. We’ve seen mortgage credit tighten and fewer loan applications are getting accepted.

In fact, two major financial institutions are not issuing new lines of credit (home equity).

Low-documentation loans have pretty much dried up and jumbo mortgages are also extremely rare these days.

“Lenders are concerned … with the severity and the duration of what is going on,” said George Bahamondes, an analyst working with Deutsche Bank Securities Inc.

The latest data proves this notion. We’ve seen The Mortgage Bankers Assn.’s Mortgage Credit Availability Index crashing rapidly in the last few days. It’s used to measure how accessible money is to borrowers.

What the Numbers Say

The index has constantly fallen, reaching its lowest number since Dec 2014 in April. The March index was 16% down from the February figures and the April index saw a decline of 12% from the March figures.

Mortgage rates for a fixed, 30-year loan have fallen to 3.26%. These may be low but tight standards means fewer people can take advantage of the situation.

While the situation is bad, some experts believe that we have seen worse. Credit was tighter during and after the 2008 crisis, according to Joel Kan, a financial expert.

Despite very low prices, families could not count on the opportunity due to a lack of credit.

What Will Happen Next?

We can’t be sure as there are several factors that come into play here. The economy can take a while to rebound.

Recovery might be a little slow. Over 30m Americans are looking at unemployment benefits for support. Many startups have shut shop and more may follow.

Lenders have to tighten standards to protect their interests. Poor business means a higher risk of defaults. Plus, the presence of forbearance programs is also a challenge. It allows borrowers to make late payments.

“I wouldn’t be surprised if we got back to the 2010-2011 type of tightness of credit,” said Kan.

What Should Homeowners Do?

Some experts think it might be a good idea to wait for a year to purchase a house. Many banks, including JPMorgan Chase & Co., now require a FICO score of at least 700 to qualify for a mortgage. Plus, down payment requirements are also higher – 20% or more.

Wells Fargo and Chase have also stopped issuing HELOCs.

“The decision to temporarily suspend the origination of new HELOCs reflects careful consideration of current market conditions and the uncertainty around the timing and scope of the anticipated economic recovery,” Wells Fargo spokesman Tom Goyda said in an email.

Moreover, lenders appear to be charging higher premiums. The Federal Housing Finance Agency is trying to play its role but they can’t control the changing economies.

The scenario looks bad for new homeowners. However, if you can afford to pay in cash and you have set your eye on a property then there’s no harm in going ahead with the purchase.

Prices aren’t necessarily going down in the future. In fact, they may rise once things get normal.