Marcus TJ

If you have not seen the Oscar-winning film The Big Short, you are missing out on a truly seminal movie. This vehicle narrates the tale of the sub-prime mortgage collapse in the U.S., which of course sparked the great recession and a global, economic decline. More specifically, it explores the actions of Wall Street trader Steve Eisman, who foresaw the collapse of the housing market and profited by betting billions against the banks holding onto mortgage assets.

Eisman made billions from this tactic and it is a philosophy that has continued to underpin his trades since essentially taking advantage of the natural fluctuations of the economy in the same way that forex and commodity traders operate. He remains tight-lipped about the precise derivatives and markets that he is expecting to plummet, of course, but recent trends and developments have made it clear that he has a prominent target in mind at present. With an estimated $25 billion having been withdrawn from hedge funds during the last three quarters (and given the continued plight of the Eurozone), continental Europe’s banks have emerged has an obvious target for Eisman and similar traders at present.

Why Italy’s Constitutional No Vote Could be the Trigger for Another Economic Collapse 

While these factors have been ongoing for a prolonged period of time, there are fears that the decision of the Italian electorate to reject Prime Minister’s Matteo Renzi proposals for constitutional reform. Perceived as an attempt to reduce the power and influence of the electorate, this has the potential to trigger widespread uncertainty and decline while it has already accounted for the resignation of Renzi himself.

With calls for a snap-election, Italy could follow the lead of the U.S. by voting in a popularist, anti-establishment party and candidate. The Five Star Movement has gained tremendous credibility in recent times as outgoing Prime Minister Renzi’s popularity has gradually declined, with this party’s main electoral pledge being to hold a referendum on Italy’s continued membership of the Eurozone. This, in turn, could have a huge impact on the vulnerable and increasingly fragmented Eurozone, while potentially triggered the break-up of the ailing single currency.

In truth the value and appeal of the Euro has been in decline ever since the Greek financial crisis first began, but the latest developments could be the trigger the total disintegration of the single, European block and a period of sustained economic decline across the globe.

The Bottom Line: What Will the Immediate Economic Impact be and Can it be Avoided? 

Italy’s recent veto of Renzi’s reform proposals has already caused national economic unrest, while further exacerbating the issues surrounding the European central banking crisis. It has also reduced the prospects of driving structural reform within the Italian government, causing a contraction in growth and pushing the nation further towards a recession. A departure from the Eurozone is unlikely to help in the longer-term, while this will also impact international trade by triggering a global economic decline.

The question that remains is can this fate be avoided?  A period of calm would undoubtedly help the economy to consolidate and then recover, while the election of a more conservative, technocrat would also ensure that Italy remained in the Eurozone for the foreseeable future. This would usually seem the most likely course of events, but the Brexit vote and the election of Donald Trump as U.S. President highlight a distinct trend for nationalist and popularist movements in the modern age.

Investing is one of those things that everyone knows they should be doing. However, tons of people aren’t investing. The main reason for this is simple. At the end of the day, the average person simply doesn’t know how to build a profitable investment portfolio. So today, we’ll go over the steps to building a perfect investment portfolio from start to finish.

Step #1: Think About Your Goals

The first step to building a strong and prosperous investing portfolio is to consider your goals. Ultimately, before you can create a portfolio that’s tailor fitted to you, you’re going to need to know what your needs are. Are you investing as a way to save for emergencies or save for retirement? If so, chances are that the moves you make will be different than the moves someone would make if they are looking to make investing their full time income. So, the first thing you’ll need to do is sit back and think about what you plan to accomplish when you start investing.

Step #2: Research Investment Vehicles

Now that you know what your goals are, it’s time to look into investing vehicles. The truth is that there are tons of them out there, each coming with their own risk/reward profile. Considering your goals, think about which investment vehicles will work best for you. For example, if your goal is to save for retirement, you’ll likely want to go the slow and steady, yet very safe route. This includes using a mixture of stocks and bonds. However, if you are looking to make investing your full time income, you may want to consider high risk, high reward investment vehicles like forex, retail binary options, and more along those lines.

Step #3: Research The Market

Now that you know what investment vehicle you’ll be using, it’s time to start doing your market research. Ultimately, your investment vehicle largely dictates the corner of the market you’ll find yourself in most often. So, considering your investment vehicle, start doing a bit of research to see what causes the corner of the market you’re interested in to move. After all, when you invest, your ultimate goal is going to be to make money off of these movements. By knowing what causes the movements, you will make more accurate predictions, leading to more profitability.

Step #4: Learn About Strategy

No matter what you’re doing in life, strategy is important. If you’re a mechanic, you may have a strategy for pulling the transmission out of a car. For investors, strategy is centered around two things. Ultimately, strategies are designed to reduce risk and increase profits. Some strategies will be created for those with a higher appetite for risk while others will be made for those with a lower appetite for risk. Nonetheless, there’s definitely going to be a few strategies out there that will work perfectly for your portfolio.

Step #5: Practice Your Theories

One big mistake that most beginner investors make is using their own money first. However, the old saying rings true…. practice makes perfect! Many brokers offer virtual accounts where you can test everything you’ve put together in the steps above using virtual money, not real dollars and cents! Us a virtual trading platform to test your theories and make sure that when you do start using real money in the real market, you’re making money, not losing it.

Step #6: Start Profiting

The final step is to take everything you’ve learned and compiled and throw money at it. Once your virtual account shows you that what you plan on doing will work, start investing with real money and making real profits!