If this were your companies stock and the CEO kept telling you "everything is great" "the fundamentals are strooong"!!! What would your thoughts be?

20071001

Well the sad fact of the matter is that a countries currency is very similar to an individual companies stock. A countries currency can be valued by many inputs, but some of the major elements would be GDP similar to a companies product (e.g. widgets, software etc;)The next significant element for a companies value would be similar to shares outstanding so as to base a valuation per share multiple from.
(e.g. P/E ratio)

So let's ask ourselves another simple question. If a CEO of a company or group of executives from that company kept continually and indiscrimantly granting themselves options immeadiatly saleable into the open market, what effect might that have on the companies stock price? (hint: lower..?)

Now.. if we were discretionary investors with little or no nexus to the company we could either sell any stock that we might already own as a way of saying "no thanks" or just refuse to buy any in he open market. Either of these actions would create more difficulty for any of those currently owning shares of that company and especially those attempting to sell their shares such as the the excecutives previuosly mentioned.

But what if we were employees of the company that for whatever reason outlined in the companies terms of employment, were to have only one choice for our 401(k) investment plan and that choice was the companies stock? The companies benfits dept. automatically converted a percentage of our salary to company stock for our monthly 401(k) contributions. How might we feel about this?

What could we do about it? Well we could immeadiatly stop contributing to the 401(k) plan right..? That'll show em! Let's take it one step further now. What if the company had a policy whereby instead of being paid in the customary form of say U$ Dollars the company paid us in company stock for our salary. Wait a minute... now were damned if we do and damned if we don't! What could we do? We could quit! Not that easy a thing to do but we could if it were bad enough. If that were to difficult we could upon payment of our salary on payday, immeadiatly sell the companies stock and convert it into either another companies stock that was not looking so continiously pathetic or sell it and convert it into something else that at least remained stable as far as it's relative value.

Well the truth of the matter, that is very similar to what is occurring here in the US. The items are almost interchangeable. The countries stock is the U$ Dollar. The Federal Reserve, Congress and the Treasury are the executives continiouslly issueing shares/Dollars (albeit not for their direct personal benefit) and we as the domestic population are the employees being paid in company stock. (U$ Dollars) We could quit by moving to another country (although I still really like the one here still) or we could convert the stock we are being paid immeadiatly into something that does a better job of maintaining its value.

That's where this website and its service attempts to help come to aid!
You see... When Wall Street and its financial media army continually puts out statements that a "weaker dollar is a good thing", it's only good for a few select individuals and institutions. A perpetually falling dollar benefits Wall Street and a few select large domestic exporting companies, off the backs of the domestic working poulation and savers. (you and I!) The irony is that so many of the jobs that had existed to produce any of those manufactured products here locally have already been exported years ago. What little of those that are still left are watching the pinkslips slowly eat away at them next.

So how do we help the indvidual investor in this matter? First thru a little education and perspective with a few more variables on a personal level. My own scenario, I personally had CD's linked to my checking account at the bank paying ~ 4.75% - 5.25% for bill paying purposes and such to help slow the loss of purchasing power. When that wasn't enough and it became obvious that the U$ Dollar had lost ~9% of its value for the year 2007 thereby sowing me a loss of more than 4% on my money, I realized I needed to either hold my cash reserves either in higher interest paying instruements or hold those cash reserves in a basket of appreciatting currencies vs my U$ Dollar CD's. Not too difficult and we'll show you how.

The more important aspect though is savings and investment. If the U$ Dollar has lost ~9% for the year 2007 as of Oct. 1 2007 and the S&P 500 has shown a positive return of 9% as well for the same time period where does that leave it? Score tied at -0-!!! Wait a minute... I forgot to figure in taxes, so depending on your personal circumstance, unless your at least outperforming the S&P, the score isn't tied, it's going backwards!