It is a known fact that franchise owners usually have a better chance of success as a business operator than an independent start up owner. The likelihood of success can be attributed to a proven and tested business model, existing market brand, support and training from the franchisor. The question is, are there advantages to investing in the public stocks of franchises?

Comparing the actual ownership and operation of a franchise to owning the stocks is like comparing apples to oranges. In terms of just an investment hypothetical, there are some clear advantages. We will take McDonald’s Corporation (NYSE:MCD) as an example.

The start up capital requirement for owning a McDonald’s franchise ranges from $500K-$1.6M. It would take a number of years to break even and turn a profit on the money invested. Since it is a franchise business, there are royalty payments to be paid and the time expenditure of running a business can be hefty.
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Investing in a Direct Participating Program (DPP) like oil/gas drilling is out of reach for most small investors based on the accredited investor requirements. The rules and regulations imposed by the government may appear to favor wealthy investors over the less funded investors. Fortunately, there is a way for individuals to invest in partnerships similar to a DPP, but without having to be an accredited investor.

“Publicly traded partnerships (PTPs), often known as master limited partnerships (MLPs), are limited partnerships which are traded on public exchanges. A share in a PTP is called a “unit,” and PTP shareholders are known as “unitholders.” PTPs can be found on the New York, American, and NASDAQ exchanges, as well as many regional exchanges.” – National Association of Publicly Traded Partnerships

PTPs/MLPs are a unique class of investments and currently contain a small group of tradable securities numbering a little over 80 companies. Few investors even know about them except for maybe the high profile or new issues like The Blackstone Group L.P. (NYSE:BX).
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Our U.S. economy for the past seven years can be summed up in two words, “It Sucks”. Hard earned money is being sucked from the American consumers because of higher costs for goods and services. There is only one thing that should be on an investor’s mind and that is capital preservation.

Many so called experts and analysts did not think gold would be where it’s at today, or oil reaching $100 a barrel or how weak the U.S. dollar would become. Today, smart investors are laughing all the way to the bank because they were dismissed as fools a few years ago.

Savvy investors foresaw the dire economic situation and hedged their portfolios with oil, currency and gold investments. By doing so, in a balanced portfolio they have offset any losses in their stock portfolios. Their buying power is not affected because of the profits from the oil and gold investments. They are also paying less taxes this year.
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Socially responsible investors select investments based on a company’s contributions for the social good. Businesses that are involved in things like alcohol, tobacco, and weapons manufacturing are often avoided for companies that are good to the environment, practicing workplace diversity and increasing product quality and safety.

Morally responsible investing on the other hand, takes the “social good” aspect to new extremes as in faith based funds –mixing in an investor’s morals and religious beliefs. One such example is The Timothy Plan, a collection of mutual funds built on the basis of Christian ideology and principles.

“The Timothy Plan® family of funds are based on the biblical stewardship principles of I Timothy 5:8, 22. The Timothy Plan mutual funds screen out companies that are involved either directly or indirectly in abortion, pörnography, anti-family entertainment, alternative lifestyles, as well as those directly involved in the production of alcohol, tobacco or gambling.”

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Diamonds may be a woman’s best friend, but treat them as lucrative investments and they can become your best friend as well –no matter what gender you are. Specifically, we are talking about colored diamonds. While colorless diamonds are rare gemstones, only 1 in 10,000 diamonds are colored and come in different shades like yellow, pink, blue or red.

The international colored diamond market may not be well understood or appreciated by the average investor. So much so, that Diamond Circle Capital Plc of the UK delayed its plans to raise about $400m for the world’s first publicly traded diamond fund last summer. They saw a potential there, however, may have postponed amidst a poor investor reception or lack of interest.

Alternative investors can look at this as an opportunity to be one step ahead of the mainstream crowd and build their own colored diamond portfolio. There are plenty of reasons why these diamonds make a good investment.
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If you are looking for a way to participate in the rising silver and gold markets without risking your hard earned money, there is a solution. Everbank has a product called MarketSafe Certificate of Deposit. There is no risk and you literally have nothing to lose.

“-market-driven returns combined with the financial security of traditional CDs. Your returns will be based on potential market gains of gold or silver while your deposited principal remains 100% safe.”

How it works: the returns above your deposited principal will be based on the spot price of gold or silver from the reference indexes. If the market performs well, you will receive upon maturity a market upside payment and 100% of your deposited principal. If it declines, you will receive 100% of your principal back.
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If you have never heard of this strategy before, you are probably not alone, but believe me it does exist. Investors in the know have been using this “distortion” in the world’s currency market to make some high returns for decades. A word of caution: this strategy is not for the faint of heart, but for those that can risk big losses for its substantial rewards.

In simple terms, the currency sandwich is a strategy where one borrows a low interest currency and then investing the loan in multiple currencies with higher returns than the cost of the loan. This difference in interests has returned many investors profits in the double to triple digits range, however, this strategy is highly speculative and is not without risks.

The cost of repaying the loan together with interest will go up should the exchange rate on the loan currency goes up, thus the net profits will decline. As long as the interest differential is larger than a possible negative development in prices and exchange rates, a potential gain on the investment is made.
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It is not a matter of “if” the demise of the U.S. dollar is going to happen, but a matter of “when”. We have seen signs of its weakening in the last couple of years and it does not look like it will recover any time soon. The actions of a number of other countries are adding fuel to the fire and can only confirm that the best U.S. dollar hedge investment is gold.

The central banks of the world may have followed the U.S. in getting off the gold standard, and pegged their currencies with the USD, but not for much longer. They all know that a weak USD will affect their own financial systems if they are holding large reserves of the greenbacks. The only hedge is to dispose the USD and add real value into their monetary system by holding large reserves of the gold metal.

It comes as no surprise that countries like China, Malaysia, Indonesia, and Thailand are shifting from the USD. China and Japan alone own about $906 billion of the $1.1 trillion of U.S. Treasuries held overseas, so when they start to unload, it will only compound the situation.
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