Tuesday, May 29, 2012

5 Growth Sectors Worth Investing In

One of the hardest parts of investing is finding a growth sector that you can believe in. Talk to any stock market 'specialist' and he or she will tell you about buying in early to an industry that is about to take off. The Internet and financial circles are full of tips and premonitions regarding stocks and markets that are about to fly into the stratosphere, but the truth is most of this is thinly disguised guesswork, deductions based on smatterings of evidence and hearsay. Sometimes the best investing guide is to look at macroscopic trends in society, over-arcing patterns that are effecting the economy in multiple ways. What industries are actually growing and what factors are there that could impede this growth? If you can find no logical roadblock to stop an industry that's growing by leaps and bounds, it could make for a lucrative investment. That's why the following industries are considered by many to be extremely promising growth sectors: Life sciences The advances in the life sciences field have been nothing short of remarkable in recent years. Improved micro-arrays have increased our ability to study the human genome and fashion new pharmaceuticals. So has microfluidics and gene therapy. Biotechnology applications have also used artificial selection and hybridization in order to improve the domestication of animals and the cultivation of plants. The growth of life sciences has seen the evolution of findings that used to be contained in Ivory Towers leak down to have extremely valuable real-world applications in everything from agriculture to health care. The government has even invested in life sciences in order to ramp up its efforts to protect against bioterrorism. As advances continue to be made in the pharmaceutical, biotechnology, agrochemical and industrial chemical fields entrepreneurs who make a considerable life sciences investment are likely to see good to great returns if they are prudent and look for smart value plays. Green engineering Green engineering jobs are expected to see meteoric growth in the coming years as more and more homeowners and businesses renovate and upgrade their houses and office buildings in order to be more energy-efficient. Alternative energy is also expected to be a major growth sector, but picking out specific companies in this field will be a harder to do because of the political uncertainties inherent in the industry. On the other hand, green engineering projects don't require an entirely new infrastructure and are likely to be heavily invested in by both private firms and federal agencies because of their ability to both produce jobs and save money. Additionally, new regulations mandating certain CO2 emission levels will force many businesses to commission new installations. Many engineering education programs are now focusing intensely on green engineering, attempting to train a new generation of engineers to take seriously the challenge of energy efficiency and sustainable city planning. Digital information You don't have to look far to see the wide-ranging impact of digital information technology. Smartphones, high-speed Internet, GPS, and cloud services are now taking over our professional landscapes, changing the way businesses operate and the way people communicate with each other. It's no longer necessary for some colleagues to even be in the same room in order to have business meetings anymore; students can earn their degrees remotely; investors can organize their portfolios and move their money around while in transit. While a long term investment may be difficult in the digital information field—due to its ever-changing nature—short term goals could reap a significant harvest. Augmented reality, VoiP services, open source online education tools, and place-based messaging apps are all popular right now and are expected to grow in the near future. In particular, mobile Internet use is expected to continue to flourish, adding to the lure of companies who are building up 4G LTE network connections and other high-speed broadband systems. Clean technology Clean technology has seen a considerable uptick in funding since President Barack Obama was elected and we can expect that trend to continue if is he is reelected. Even before Obama was elected, the clean tech train was in motion. In 2007, $148 billion was invested in clean technology. This includes federal subsidies for renewable energy, information technology, green transportation, electric motors, and a wide range of projects attempting to reduce environmental pollution. By 2018, biofuels, wind power and solar photovoltaics will be $325+ billion dollar industries, making it one of the more promising fields for venture capitalists. Clean technology stocks in China and India have grown steadily for years now because of considerably federal investments. If similar efforts are made here, it is possible that clean technology could become one of the most promising investments on the market. Advanced technology Advanced technology is generally defined as the use of innovative technology to upgrade or improve a product or commercial process. In recent years this has included advances in computer technologies, high performance computing, high precision technologies, robotics, automation control systems, sustainable technologies, and new industrial technologies. Advanced technology can be hard to pin down, which at first could make it an unattractive investment. But the government, including the White House, has been enthusiastic about this field. Obama even put forth a $1 billion dollar proposal for the National Network for Manufacturing Innovation, which would create a network of institutes all across the country working on advanced manufacturing projects. The President has also recently submitted a budget for the National Institute of Standards and Technology that would significantly increase funding for the research facilities working on these projects. While no investor can be 100% certain that a particular company's stock will rise exponentially, following the trends in a particular growth sector can be a worthwhile strategy. It will also be necessary to track a company's financials over the course of many seasons, assessing the way it adapts to change. It may behoove you to invest in a mutual fund, which encompasses a wide-ranging portfolio of stocks in a certain industry. Therefore, your money is not dependent on the performance of any one company, but rather the overall growth of a network of technologies and processes. A mutual fund in any of the preceding industries would be highly likely to accrue value over the course of time and is much safer than buying a single stock. But this requires the investor being able to keep the money in the market over many years, possibly even a decade or more. If you're looking for short-term earnings, you will have to wing it like the rest of us. But at least you'll be starting in a verdant field that is primed for growth.

Thursday, May 24, 2012

Talking with Danielle Rodabaugh on How Sureties Work with the Financial Industry

We're shifting to the mortgage industry today, a topic I've covered here and there over the last 2 years. After having some neighbors of mine go through problems with their mortgage provider, I reached out to Danielle Rodabaugh, a journalist / surety expert who covers the industry. My question to her: "How does your industry deal with mortgage brokers and companies that act illegally? How does the surety protect the consumer?" Here's what she laid out for me, posted here in full. Thanks Danielle!

How to make a claim on mortgage professional's surety bond

Countless instances of unethical lending practices in the past decade have motivated government agencies to strengthen mortgage industry regulations across the country. A crucial aspect of the crackdown has been stricter surety bond requirements for mortgage professionals. If a bonded mortgage originator, broker or lender performs dishonestly when helping clients with their mortgages, injured parties might qualify for reparation paid out from professionals surety bond funds. Those who are adversely affected by a violation of the professional's performance can make a claim against the bond. This includes consumers, third-party providers and state authorities in charge of mortgage industry licensing. When it comes to the mortgage industry, the surety claims process varies greatly depending on
  • the obligations outlined in the bond
  • the jurisdiction in which the bond is active
  • the parties bound to the contract's terms
To collect reparation, though, the injured party must make a valid claim against the professional's surety bond. To do so, injured parities should follow these three steps.

1. Verify that the mortgage professional actually violated the bond's terms.

If you believe a licensed mortgage professional you've been working with has violated industry regulations, you might be able to gain reparation. For a valid claim to be made against a bond, however, the mortgage professional must have violated its terms.  Some problematic practices that could result in a claim against a mortgage professional's bond include:
  • intentionally targeting vulnerable or at-risk borrowers
  • pressuring clients to buy certain loan products such as high-risk loans or loans with higher interest rates
  • basing clients' interest rates on anything other than credit history
  • approving clients for loans they cannot afford to repay
  • charging clients unnecessary or additional fees
  • encouraging clients to use fraud when applying for a mortgage
Before you try to make a claim against a surety bond, you or your lawyer should verify whether the mortgage professional actually broke the bond's terms.

2. Get in touch with your attorney.

A number of legal issues could arise during your attempt to make a claim on a bond. The best way to handle potential problems is to get in touch with your lawyer right away and explain the situation. Not to mention the fact that mitigation is typically handled better with the help of a lawyer. You should always discuss your claim with an attorney before taking legal action because, unfortunately,  the amount you'll be able to collect might not be worth the time, money and effort that will be required to make a successful claim.

3. Contact the mortgage professional's surety.

Effective communication is crucial when trying to make a claim against a bond. To find out who the surety is, contact whatever state agency regulates mortgage professionals. The department can provide you with the name of the licensed mortgage professional's surety bond provider. Then contact the surety underwriter and follow its required procedures to make your claim. Oftentimes surety underwriters have personnel that deal exclusively with the claims process. Bond claims against mortgage surety bonds must typically be filed within one year of the date of the act that causes the claim. The duration of the surety bond claims process varies among underwriters. The surety underwriter will have to verify the claim is valid before paying reparation to injured parties. Sometimes mortgage bond language requires a county court ruling against the principal for a claim to be considered valid. Whether or not you have to take legal action against the mortgage professional to gain reparation depends on the bond's contractual language. Too many people have learned the hard way that the housing market and mortgage industry can be extremely risky to get involved with. Armed with an understanding of surety bonds, however, current and future homeowners can protect future investments from fraudulent mortgage professionals.
. . . A little more about Danielle: Danielle Rodabaugh is the chief editor for SuretyBonds.com, a nationwide surety bond producer. As a part of the company's educational outreach program, Danielle writes about mortgage industry developments since they're often intertwined with the surety market.