Bank of Hawaii vs First Hawaiian

Economic

Summary:

Analyze the key differences between Bank of Hawaii (BOH) and First Hawaiian (FHB) stocks. Compare business models, loan portfolios, financial performance, and risk profiles to make informed investment decisions in Hawaii's banking sector.

Bank of Hawaii Corp (BOH) and First Hawaiian Inc (FHB) are two prominent financial institutions serving the Hawaiian market. Both banks have long histories in the islands and offer a range of banking services to consumers and businesses. However, there are some key differences between these two stocks that investors should consider when evaluating them as potential investments.

Business Models and Focus Areas

While both banks serve the Hawaiian market, they have developed somewhat different business models and areas of focus:Bank of Hawaii (BOH):

More consumer-oriented approach

Stronger focus on mortgage banking and fee-based services

Larger securities portfolio relative to total assets

First Hawaiian (FHB):

More commercially-oriented approach

Larger commercial loan portfolio

Bigger emphasis on commercial and industrial lending

These differences in focus are reflected in their balance sheets and income statements. For example, First Hawaiian has a significantly larger commercial loan portfolio of $2.3 billion compared to Bank of Hawaii's $537 million. Meanwhile, Bank of Hawaii tends to hold more securities as investments.

Loan Portfolios

The composition of their loan portfolios highlights their differing approaches:

First Hawaiian:

Total loan and lease portfolio of $8.9 billion

Over $900 million in individual loans

$2.3 billion in commercial loans

Bank of Hawaii:

Total loan portfolio about $3 billion smaller than FHB

Less than half the amount of individual loans compared to FHB

Only $537 million in commercial loans

This larger loan book allows First Hawaiian to potentially generate more interest income, while Bank of Hawaii's smaller loan portfolio results in more excess cash to invest in securities.

Financial Performance and Valuation

Both banks have demonstrated solid financial performance, but there are some differences in their valuation metrics:

First Hawaiian (FHB):

Forward P/E ratio of 13.68

P/B ratio of 1.55

PEG ratio of 1.43

Bank of Hawaii (BOH):

Forward P/E ratio of 15.29

P/B ratio of 2.72

PEG ratio of 1.80

Based on these metrics, First Hawaiian appears to be trading at a more attractive valuation compared to Bank of Hawaii. The lower P/E, P/B, and PEG ratios for FHB suggest it may offer better value for investors at current price levels.

Growth Prospects

Both banks have received identical Growth Grades of B from AAII's A+ Investor grading system, indicating strong growth potential. This suggests that both institutions have demonstrated consistent sales growth and positive cash flows from operations.

Risk and Volatility

When considering investments in regional banks, it's important to assess their risk profiles:

First Hawaiian:

1.1 times less risky than Bank of Hawaii over a 90-day horizon

Trades about 0.0 of its potential returns per unit of risk

Bank of Hawaii:

Slightly higher volatility compared to FHB

Generates about 0.01 of returns per unit of risk over a similar time horizon

These metrics suggest that First Hawaiian may offer a slightly more favorable risk-return profile for investors seeking stability.

Correlation and Diversification

For investors considering holding both stocks, it's useful to understand their correlation:

The 3-month correlation between FHB and BOH is 0.27

This indicates a weak positive correlation

Suggests modest diversification benefits from holding both stocks in a portfolio

Conclusion

While Bank of Hawaii and First Hawaiian share many similarities as long-established Hawaiian financial institutions, they offer different investment propositions:

First Hawaiian appears to be trading at a more attractive valuation and has shown stronger recent momentum in terms of earnings estimates.

Bank of Hawaii offers a more consumer-focused approach and may appeal to investors seeking exposure to the Hawaiian mortgage and retail banking market.

Ultimately, the choice between BOH and FHB will depend on an investor's specific goals, risk tolerance, and view on which bank's strategy will be more successful in the evolving financial landscape. Both institutions have demonstrated resilience and a strong commitment to their local markets, suggesting they may both have a place in a diversified portfolio focused on the Hawaiian banking sector.

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Risk Warnings and Disclaimers

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Glendon

Economic

Introduction to FintechZoom

FintechZoom has established itself as a premier platform for financial news, data, and analysis. Catering to investors, traders, and financial enthusiasts, FintechZoom offers a wealth of information on a broad spectrum of topics, including stock markets, cryptocurrencies, commodities, and personal finance. The platform's comprehensive insights and real-time updates make it an indispensable resource for anyone looking to stay informed about market trends and financial opportunities.

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Historical Growth and Market Position

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Financial Performance and Stock Analysis

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Market Sentiment and Analyst Opinions

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Challenges and Competitive Landscape

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Glendon

Economic

The Permian Basin, nestled across Texas and New Mexico, is a prolific oil and gas producing region. Permian Basin Royalty Trust (PBT) offers investors a unique way to participate in this energy hotspot. This article dissects PBT, exploring its merits, drawbacks, and suitability for your investment portfolio.

What is Permian Basin Royalty Trust?

PBT isn't your typical stock. It's a royalty trust, a legal entity that owns fixed interests in oil and gas properties. These properties are located within the Permian Basin, and PBT receives royalties based on the production of oil and gas. The trust then distributes these royalties to its shareholders quarterly.

The Allure of Permian Basin Royalties: Potential Advantages

Passive Income Stream:

PBT offers a steady stream of income through quarterly distributions. This can be attractive for income investors seeking to generate regular returns.

Hedge Against Inflation:

Energy prices often rise with inflation, potentially increasing the value of PBT's distributions over time.

Tax Advantages:

Royalty trust distributions are generally considered depletable income, meaning a portion may not be taxed as ordinary income. However, consulting a tax professional is crucial for specific details.

A Closer Look: Potential Drawbacks to Consider

Price Volatility:

PBT's share price fluctuates based on oil and gas prices. A decline in energy prices can lead to a decrease in the trust's value.

Limited Growth Potential:

Unlike traditional companies, PBT doesn't have the ability to grow its asset base or reinvest profits for significant expansion. Distributions are primarily dependent on existing production levels, which naturally decline over time.

Depletion Risk:

As oil and gas are extracted, reserves deplete. This can lead to a decline in royalty payments over the long term.

Is Permian Basin Royalty Trust Right for You?

The suitability of PBT depends on your investment goals and risk tolerance. Here's a breakdown to help you decide:

Income Investors:

PBT can be a good option for income-focused investors seeking regular distributions. However, diversification remains key to mitigate risk.

Growth Investors:

PBT might not be ideal for those seeking capital appreciation. The limited growth potential may not align with growth-oriented strategies.

Risk-Averse Investors:

The price volatility associated with oil and gas prices makes PBT a riskier proposition for conservative investors.

Beyond the Basics: Conducting Your Due Diligence

Before investing in PBT, conduct thorough research:

Review Financial Statements:

Analyze PBT's historical and projected production levels, royalty rates, and distribution history.

Assess Underlying Reserves:

Evaluate the estimated lifespan of the oil and gas properties in which PBT holds royalty interests.

Research Industry Trends:

Stay informed about oil and gas market dynamics to understand potential impacts on the trust's future performance.

Alternative Options for Income Investors

While PBT offers a unique income stream, consider these alternatives:

Dividend-Paying Stocks:

Several companies have a history of consistent dividend payouts, offering another avenue for regular income.

Real Estate Investment Trusts (REITs):

REITs invest in income-producing real estate and are obligated to distribute a significant portion of their taxable income to shareholders.

Bonds:

Bonds offer fixed income payments, but their price can fluctuate based on interest rates.

The Final Verdict: A Well-Considered Investment

Permian Basin Royalty Trust can be a valuable tool for income investors seeking exposure to the energy sector. However, its price volatility and limited growth potential necessitate careful consideration.

By thoroughly researching PBT, understanding the risks involved, and considering alternative options, you can make an informed investment decision that aligns with your financial goals and risk tolerance. Remember, diversification is key for a balanced portfolio.

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Cohen

Economic

Political

America is a nation of immigrants, and yet migration as a political issue is tearing the country apart. An April Gallup poll notes that for the third month in a row, immigration is the number one political concern for Americans, topping government dysfunction, the economy and inflation.

Voters across the board are uneasy with the rise in asylum seeking following the surge in southern border crossings. But Republicans are, not surprisingly, much more obsessed with the issue. There is a 40 percentage point gap in concern about migration between Republicans and Democrats. Red states such as Iowa and Texas are attempting to enforce their own statewide migrant bans.

Migration is also rising as a priority for independents, who rank it higher as a political concern than they have since the polling began in 2014, and are twice as likely to agree with the Republicans’ handling of the issue as they are with the Democrats’. There are plenty of Democrats in so-called sanctuary cities who are also worried about the pressures that migration brings with it, even if they are sympathetic to migrants themselves and generally pro-immigration.

In New York, the cost of migrant care is one of many reasons that governor Kathy Hochul is so worried about keeping the city’s economy in good shape. This has in turn prompted her to push back against things such as higher taxes on the super-rich and congestion pricing, which is essentially a tax on commuters who drive.

Meanwhile in Massachusetts, a buckling shelter system and the problem of migrants sleeping in airports and other public spaces, has voters calling for reform.

Biden recently passed an executive order cracking down on illegal migration, but not before he took much of the blame for the issue. At the beginning of his presidency he rolled back some of the Donald Trump-era restrictions on legal migration at the same time as some illegal migrants began to take advantage of loopholes in asylum law in order to stay in the US longer.

All of this was exacerbated by a rise in crime in Mexico and other parts of Latin America which pushed people across the border towards a raft of unfilled jobs in the US.

But that last fact points towards the hypocrisy of this whole debate. Economically speaking, immigration is far from being America’s worst problem. In fact, it’s the quickest way to address pressing labour shortages and inflation. Apollo’s Torsten Slok recently produced an eye-catching graph showing the rise in the foreign-born labour force, which has increased 11 per cent since February 2020 while the native-born labour force has remained flat. That means the entire growth in the US labour force is coming from immigration.

Indeed, migrants are a key reason that inflation in the US hasn’t risen further and faster. As Goldman Sachs has noted, immigration is the answer to “one of the biggest puzzles of the last year”, namely why America has both robust growth and lower inflation in recent years than any other wealthy country. Net immigration is at its highest level in two decades, particularly in lower wage sectors like agriculture, construction, childcare, and hospitality.

While some voters and labour unions advocating for workers in such industries may be worried about this, business is not. Trade groups representing construction workers are pushing for immigration reform, as are groups representing restaurant and hotel workers. Such groups want more immigration across the socio-economic spectrum, while policymakers have mostly been focused on getting higher skilled immigrants into the US over the past two decades.

That’s a good idea, but you can argue that more immigration of lower-skilled workers is good as well. Not only can it keep growth high and inflation low but there are some new studies showing that it can boost the wages of native born workers as well.

Despite the rhetoric of immigrants “taking” US jobs (an argument that Trump cynically and incorrectly employed in the last presidential debate) there is complementarity between the two groups. Think of a working family with an immigrant caregiver or gardener, or an immigrant working in a hotel or restaurant.

Should the attitude towards migrants change quickly under a second Trump administration, it could have a dramatic effect on the economic picture in the US. I recently spoke to one Swiss chemical company CEO who told me he was eager to invest more in America to take advantage of the tailwind from fiscal stimulus, but that he couldn’t find anywhere near the number of skilled staff that he needed. Re-industrialisation in sectors such as manufacturing, where older staff have retired and there has been little interest in joining among younger people, will exacerbate this trend.

This isn’t just a US problem of course. Anti-migrant sentiment in Europe has been a headwind to growth for some time. And in the UK, the new Labour government is stressing job retraining for native-born citizens in order to address labour issues. It’s worth noting, however, that Japan, where growth has long been constrained by the lack of women and migrants in the workforce, is now trying to encourage migrant labour. Good idea. As the famous “Hamilton” chorus rightly puts it, “Immigrants: we get the job done.”

Source:Financial Times

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Devin

Economic

Political

France faced a hung parliament and the prospect of taxing negotiations starting Monday to form a government, after a surprise left-wing surge blocked Marine Le Pen's quest to bring the far right to power.

The leftist New Popular Front (NFP) emerged as the dominant force in the National Assembly after Sunday's election, but with no single group securing a working majority the possibilities include the NFP forming a minority government or the building of a broad, unwieldy coalition.

The result delivered a stinging blow to President Emmanuel Macron and leaves the euro zone's second largest economy in limbo, heralding a period of political instability just weeks before Paris hosts the Olympic Games.

Macron ended up with a hugely fragmented parliament, in what is set to weaken France's role in the European Union and further afield, and make it hard for anyone to push through a domestic agenda.

The left won 182 seats, Macron's centrist alliance 168 and Le Pen's National Rally (RN) and allies 143, interior ministry data cited by Le Monde newspaper showed.

"According to the logic of our institutions, Emmanuel Macron should today officially invite the New Popular Front to nominate a prime minister," said Green leader Marine Tondelier, one of a number of NFP figures seen as potential candidates for the post.

"Will he or won't he? As this president is always full of surprises, we'll see," she said on RTL radio.

Prime Minister Gabriel Attal said he would tender his resignation, but it was not clear whether the president would accept it immediately, given the daunting task ahead to form a government. Attal said he would be willing to stay on in a caretaker role.

"I will of course do my duties as long as it's needed - it cannot be otherwise on the eve of a date (the Olympics) that is so important for our country," Attal said as it became clear Macron's alliance had endured a humbling setback.

Strongly Divided

Parties from the NFP - made up of the French Communist Party, hard-left France Unbowed, the Greens and the Socialist Party - met overnight for first talks on how to proceed.

France Unbowed's firebrand leader Jean-Luc Melenchon said the new prime minister should hail from NFP. However, the bloc has no leader, and its parties are strongly divided over who they could select as a suitable premier.

Some prominent centrist figures, including Edouard Philippe, a former prime minister under Macron, said they were ready to work on a pact to ensure a stable government, but were not prepared to work with Melenchon's France Unbowed - a force seen by many French centrists as just as extremist as the RN.

Yael Braun-Pivet, a lawmaker from Macron's party who was the National Assembly leader before the election, said French political culture would have to evolve, becoming less antagonistic and more cooperative across party lines.

"The message I'm hearing from the voters is 'no one has an absolute majority, so you have to work together to find solutions to our problems'," she said on France 2 television.

The euro fell on Sunday after the vote projections were announced.

"There's really going to be a vacuum when it comes to France's legislative ability," said Simon Harvey, head of FX analysis at Monex Europe in London.

Unified Anti-Rn Vote

For Le Pen's RN, the result was a far cry from weeks during which opinion polls consistently projected it would win comfortably.

The left and centrist alliances cooperated after the first round of voting last week by pulling scores of candidates from three-way races to build a unified anti-RN vote.

In his first reaction, RN leader Jordan Bardella, Le Pen's protege, called the cooperation between anti-RN forces a "disgraceful alliance" that he said would paralyze France.

Le Pen, who will likely be the party's candidate for the 2027 presidential election, said however that Sunday's ballot, in which the RN made major gains compared with previous elections, had sown the seeds for the future.

"Our victory has been merely delayed," she said.

As darkness fell on Sunday, the statue of Marianne in Place de la Republique was lit up by fireworks amid celebrations by left-wing supporters. Marianne is a national symbol of France, representing reason, liberty and the ideals of the republic.

Baptiste Fourastié, a 23-year-old designer in Place de la Republique, said: "We weren't expecting it, neither were the polls. We are happy that the French people succeeded once more in blocking the far right."

However he was worried that the right may grow in strength and win next time if the next government is not beyond reproach.

"It will be difficult with a hung parliament, but better than if it was the far right (ahead)," Fourastié said.

Source: Reuters

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Samantha Luan

Economic

US retailers are shrugging off a tripling of spot freight prices, rushing to ship holiday goods earlier than expected as they bet that robust consumer demand will offset higher shipping costs.

Attacks on ships in the Red Sea have forced carriers to take longer transit routes, injecting unpredictability into global supply chains that has increased port congestion from Asia to the US east coast.

The latest disruptions to supply chains have strained container capacity and revived fears of empty shelves that retailers confronted during the coronavirus pandemic.

To circumvent delays and get ahead of rising freight costs, retailers have brought their peak shipping season forward, moving goods for the December holidays as early as April and May instead of the July to October increases that were typical before the pandemic.

The combination of supply chain disruptions and strong shipping demand has caused the composite spot rate to surge more than 200 per cent since November 2023, according to the World Container Index from Drewry Supply Chain Advisors. Carriers including Maersk have warned that freight rates may rise further.

US Retailers Paying Premium To Place Big Bets On Holiday Sales_1

“While it makes sense at an individual level, any herd behaviour can overwhelm the liner network and create a vicious cycle whereby extra demand causes more congestion, leading to higher rates,” added Simon Heaney, a senior container shipping manager at Drewry.

Big importers such as Walmart and Target have locked in multiyear contracts with carriers below spot market prices, but smaller shippers and freight forwarders are disproportionately affected by market volatility and must pay higher prices to receive goods earlier.

The fixed rates that smaller players negotiated last year for the 2024 season “never really saw the light of day” because of the Red Sea crisis, according to Michael Short, president of global forwarding at logistics group CH Robinson. “If you’re comparing the increase to those rates, you’re looking at a 75 to 100 per cent increase.”

“Clearly, it’s a better problem to have to overpay and have the shelves full for the holidays, a cost that may be passed fully or partially to the consumers, than to having to explain to the shareholders the empty shelves and lost sales,” explained marine shipping expert Basil Karatzas. “Playing probabilities, the former is a scenario with better odds, which of course has a disproportionate impact on smaller shippers and companies.”

However, optimism about consumer spending has helped drive cargo owners’ decisions to ship earlier despite current market conditions.

Retailers were “surprised how healthy the demand is”, said Marcus Reimann, head of sea logistics for global freight forwarder Kuehne+Nagel. “We heard from a couple of customers that they didn’t expect to ship as much volume as they’re shipping right now.”

The National Retail Federation expects US imports to rise to their highest levels in two years this summer, following a 12 per cent decrease in 2023 that brought volumes close to pre-pandemic levels. American port cargo volumes increased by 13 per cent year over year in April, according to the NRF’s Global Port Tracker.

The forecasts suggest the drastic changes to consumer spending patterns seen in recent years continue to reshape retail. Disruptions to supply chains early in the pandemic prompted consumers to start holiday shopping earlier, and more recent inflationary pressures fuelled the trend of spreading out purchases over a longer period of time leading up to the peak shopping season.

“We are buying earlier,” said Daniel Hackett of trade logistics firm Hackett Associates, which produces the Global Port Tracker with the NRF. “We’re seeing retailers have to account for that and bring cargo in earlier.”

The NRF projects retail sales to grow 2.5-3.5 per cent this year, slightly below the 2023 rate. Total US retail sales in May were up 2.3 per cent year on year, according to the US Census Bureau.

“Consumers are continuing to spend more than last year, and retailers are stocking up to meet demand,” said NRF supply chain vice-president Jonathan Gold in a June press release. “The high level of imports expected over the next several months is an encouraging sign that retailers are confident in strong sales throughout the remainder of the year.”

Source:Financial Times

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Warren Takunda

Economic

Forex

The central bank won't alter interest rates but it could be a significant event for the NZ Dollar as Adrian Orr and his team will address the potential for an interest rate cut later in the year.

The July decision comes days after a much-watched survey of Kiwi businesses revealed a further deterioration in conditions, prompting economists to say the central bank has little choice but to consider cutting interest rates.

The latest NZIER Quarterly Survey of Business Opinion showed high interest rates continued to weigh on confidence, and one local bank said the economy is enduring recessionary conditions again.

Following the survey, Auckland Savings Bank brought forward its forecast for when the RBNZ will cut interest rates.

"We have changed our OCR outlook – we expect the RBNZ to cut the OCR from November this year," says Nick Tuffley, Chief Economist at ASB. "Households are starting to buckle more noticeably under the various pressures of high interest rates and high (though easing) living cost inflation."

The NZD can come under further pressure against GBP if the RBNZ points toward a rate cut later in the year. To be sure, it will be coy and won't be generous in raising hopes of a cut.

But any nod to easier monetary conditions later in the year can trigger NZD weakness.

The result would be a further lift to the GBP/NZD exchange rate which is looking increasingly constructive. Pound Sterling has some wind in its sails, rising even as the odds of an August interest rate cut increase, suggesting that some sentiment adjustment is underway following last week's election.

"The pound could be about to stage a bigger recovery as it has momentum on its side now that the UK’s political risk premium has been eradicated," says Kathleen Brooks, an analyst at XTB. "Interestingly, the pound is rising, alongside expectations of a rate cut from the Bank of England next month, there is currently a 66% chance of a rate cut priced in by the OIS market."

The convincing win by Labour in last week's election sets the UK up for a period of political stability, with Labour saying it is already moving to establish closer ties with Europe. Analysts have written that closer EU ties can support the Pound in the coming months as the long-standing Brexit premium the Pound still carries fades.

“We have raised our GBP forecasts in part on better political stability ahead and in part on the signs of a stronger rebound in economic growth than we previously expected," says Derek Halpenny, head of FX research at MUFG Bank Ltd. Pound to New Zealand Dollar Week Ahead Forecast: Setup Increasingly Constructive_1

Pound to New Zealand Dollar Week Ahead Forecast: Setup Increasingly Constructive_1

GBP/NZD has broken above its key moving averages and immediate support is at 2.0845, which is the 100-day moving average. While above here, gains to the 2.10 level can occur in the coming one to two weeks.

Bear in mind that the NZD can find some support and frustrate GBP/NZD upside on Thursday if U.S. inflation numbers undershoot expectations and boost investor sentiment.

This is because a soft reading will raise the odds of an interest rate cut at the Federal Reserve in September. However, an above-consensus reading would risk a setback to AUD, allowing GBP/NZD to test multi-week highs.

Headline CPI is expected to decline to 3.1% year-on-year, down from 3.3% in May, a level last seen in January. The core inflation print is expected to be at 0.2% month-on-month.

Such readings would signal the disinflation process is underway again, having been disrupted by the price acceleration in H1. This will raise the odds that the Federal Reserve will cut interest rates in September and potentially weigh on the Dollar.

The inflation report will follow Friday's labour market report, which confirmed a trend of cooling is underway, and this will continue to bring wage pressures down. Falling wages will ultimately result in easing domestic inflation.

"This week will be a hot one for US macro, with the CPI report for June out on Thursday," says Francesco Pesole, FX Strategist at ING Bank. "There is a clear weakening trend emerging in the US jobs market and that will, in our view, push an FOMC that wants to avoid unnecessary economic pain to cut three times this year, starting in September."

Source: Poundsterlinglive

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Risk Warnings and Disclaimers

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Data

Bank of Hawaii vs First Hawaiian

Business Models and Focus Areas

First Hawaiian (FHB):

Loan Portfolios

First Hawaiian:

Bank of Hawaii:

Financial Performance and Valuation

Growth Prospects

Risk and Volatility

First Hawaiian:

Bank of Hawaii:

Correlation and Diversification

Conclusion

FintechZoom Netflix Stock Analysis: Comprehensive Insights and Trends

Introduction to FintechZoom

The Phenomenon of Netflix Stock

Historical Growth and Market Position

Financial Performance and Stock Analysis

Market Sentiment and Analyst Opinions

Challenges and Competitive Landscape

The Role of Fintech Platforms in Analyzing Netflix Stock

FastBull: A Valuable Resource for Investors

Conclusion

Permian Basin Royalty Trust

What is Permian Basin Royalty Trust?

The Allure of Permian Basin Royalties: Potential Advantages

Passive Income Stream:

Hedge Against Inflation:

Tax Advantages:

A Closer Look: Potential Drawbacks to Consider

Price Volatility:

Limited Growth Potential:

Depletion Risk:

Is Permian Basin Royalty Trust Right for You?

Income Investors:

Growth Investors:

Risk-Averse Investors:

Beyond the Basics: Conducting Your Due Diligence

Review Financial Statements:

Assess Underlying Reserves:

Research Industry Trends:

Alternative Options for Income Investors

Dividend-Paying Stocks:

Real Estate Investment Trusts (REITs):

Bonds:

The Final Verdict: A Well-Considered Investment

Immigrants Really Do Get The Job Done

Source:Financial Times

France Shifts to The Left, But Risk of Policy Paralysis Looms

Strongly Divided

Unified Anti-Rn Vote

Source: Reuters

US Retailers Paying Premium To Place Big Bets On Holiday Sales

Source:Financial Times

Pound to New Zealand Dollar Week Ahead Forecast: Setup Increasingly Constructive

Source: Poundsterlinglive

Risk Disclosure