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How To Invest in Crowdfunding

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iCrowd-Investment-Crowdfunding-infographic-297x600In many ways, the Internet has been society’s great equalizer, allowing the average person access to knowledge and opportunities that, for much of recorded history, weren’t available to the masses. Crowdfunding, in the sense of being an investment opportunity, offers an excellent example of that equalizing action. That’s because the crowdfunding investment field is open not just to accredited, wealthy investors, but also to those working with a lot less money. That type of opportunity offers a chance for financial growth over time, the sort of growth that can act as a bridge to the next level of financial achievement and security.

The Other Side Of The Coin

Crowdfunding is a term that is working its way into the mainstream of modern language. Most Internet users are familiar with the term in the sense of raising money, whether it be for charity or for a particular creative project or invention. Even people who don’t use the Internet are becoming familiar with the term as crowdfunded charitable acts and projects make headlines in mainstream news with increasing frequency. Such news stories tend to focus on the recipients of crowdfunding, the people or projects benefiting from the money that is raised.

However, there is another side to the crowdfunding coin – those putting up the money. It is on that side of the funding equation that investment opportunities lie. Crowdfunding is an international phenomenon, increasingly playing a vital role in small and micro business development in emerging economies. While investment regulations do vary from nation to nation, for the most part crowdfunding platforms have room for the small investor as well as for the large investor.

The Beginning Of The End For Exclusion

With the 2012 Jumpstart Our Business Startups Act (JOBS Act), the United States loosened regulations limiting these sorts of investments to accredited investors with significant financial holdings, opening up a wealth of opportunity to Americans in the 99 percent. This is a major change from the regulations that have been in effect for over 80 years, restricting certain types of investments to the wealthiest of the nation, referred to as accredited investors.

As defined by the Securities and Exchange Commission (SEC), to be an accredited investor, one must earn at least $200,000 per year or $300,000 annually as a couple or have a net worth of more than $1 million. These restrictive regulations were supposedly put into place to prevent the sort of investor losses experienced at the start of the Great Depression, when the government decided that people should only be allowed to make certain types of investments if they could demonstrate that they could afford to lose the money. Peer-to-peer lending and crowdfunding have been a powerful force in pushing governments to reconsider those antiquated regulations.

Inclusion Comes With Responsibilities

As the walls of exclusion crumble, it’s important to remember that with inclusion comes responsibilities. It is the responsibility of an investor to be knowledgeable about what he or she is doing with his or her money. For the inexperienced investor, the first investment should be in education, perhaps even formal classes at a local community college or a certified financial education program. Due diligence is essential with each investment. Don’t invest money that you cannot afford to lose.

Become A Lender

Peer-to-peer lending has become a powerfully disruptive force in the world of traditional banking. The concept is simple, people making loans to other people, facilitated by cutting edge financial technologies. Peer-to-peer lending groups provide a broad range of loans, including loans to micro-businesses, small businesses and to borrowers seeking to pay off higher interest credit card debt, for varying amounts and interest rates. Loans are graded for risk, with higher risk loans offering higher investment returns to the lenders via higher interest rates.

As the concept and its associated technologies have matured, lender strategies have been adopted by peer-to-peer lending groups to help mitigate potential losses for lenders. One such strategy is breaking loans into smaller pieces, spreading them across multiple lenders, reducing individual lender exposure to a single loan. Lending Club, for example, allows lenders to fund loans in $25 increments.

Peer-to-peer lending groups can differ on specifics, such as minimum investment or account balances required, term of loan and timing of return distribution. While you may find investment opportunities requiring less or more, in general, $2,000 to $5,000 is enough to get you started. Something new in the peer-to-peer/crowd-funding loan market is the ability to participate in lending within the real estate market, made possible in the United States by the SEC and its amended Regulation A.

Groundfloor is one of the real estate focused groups with investments open to non-accredited investors. This group’s pilot program was a success, with no defaults on the $2 million in commercial real estate project loans it made during that initial period. The average loan was for between $50,000 and $100,000 with a term of 6 to 12 months. The average annualized yield for these loans was just over 12 percent.

Make Equity Investments

With equity investments, investors receive shares in the business for their money. As the business grows in value, so also do the shares. However, there is risk involved, particularly when investing in start-ups because they do fail sometimes and when they do, investors lose. This is one of the areas of investing that the average American, until very recently, was prohibited by law from participating in. This type of investment opportunity, which can be quite lucrative when it comes to returns, was limited to these deemed able to withstand potential losses.

Many other nations don’t have such tight regulation, allowing for a quite brisk equity investment market open to a wide variety of investors. This is especially true in developing nations and emerging markets. This type of investment is a vital factor in the growth of small business in Asia, Africa and India, small businesses that are lifting individuals, families and even whole villages out of poverty.

Title III and IV of the JOBS Act of 2012 have not yet been fully implemented by the SEC. The agency is still wrangling over the fine print details of the new guidelines it will be issuing. So, while there are currently equity investment opportunities for non-accredited investors, such as those offered through MicroVentures, those types of opportunities can be expected to expand greatly in the near future.

Work Toward Growth

If you’re hoping to see your investment fund and your capital grow, then invest with a plan and live by a budget. Choose your investments wisely, bearing in mind that higher returns are often associated with higher risk. Don’t be drawn in by high yield investment hype. Investment scams are not at all uncommon and are designed to prey on those lacking financial or investment knowledge. Whenever you are promised high returns on your investment, make no decisions until you have independently identified and considered the risks involved. Don’t expect the person or investment group trying to sell you on a particular investment to fill you in on its potential pitfalls.

When you do begin to see returns on your investments, split that yield in half, placing some in savings to bolster your capital and keep some in your investment account to increase your investing and earning capacity. Using this strategy, you can experience a steady, gradual growth. A conservative approach is the best bet for a beginner serious about long-term financial growth. Leave higher yield, riskier investment for when you have the experience and education required to better assess the probability of success and a better financial cushion to absorb the inevitable occasional financial loss.

Change The Future

Despite Wall Street’s efforts to muscle in and take things over, crowdfunding and peer-to-peer lending are truly of the people. Sidestepping the traditional financial industries and their exclusionary practices, these crowd-based, peer-oriented loan and investment platforms are already changing the future, as demonstrated by such major legislative changes as the 2012 JOBS Act. Now, the future holds more than just the rich getting richer. It also holds the potential for the average person to take advantage of the same financial growth opportunities the wealthy have always had at their disposal and to pull themselves up the economic ladder, rung by rung.

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Alternative Investments

How to Invest in Marijuana: Investment Properties since 1975

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Legal-weed-investments1How to Track Marijuana Stock Performance

Are you interested in watching the marijuana industry grow before you make any moves? Then it might be a good choice to simply sit back and watch. However, you shouldn’t take this to mean that you should be passive; no, instead take an active role in understanding what’s going on in this particular stock segment.

You can do this by picking some of the stocks you believe will perform the best in the coming months. Many online stock brokers offer automated “stock watcher” options that allow you to track the stocks that have gained your interest. Take full advantage of these features! Watch the news and see how your stocks ‘ value responds to the new. Every day, something new is happening in this industry; it’s important to not only understand the who of the industry, but the when. Getting your timing right is one of the most underrated aspects of investing.

Legal Weed in Alaska since 1975

The “Marijuana Index”

Don’t have the time to look at the individual stocks? You may want to consult the “Marijuana Index.”

This index is not exactly the S&P 500, but it does do a good job of showing you where the marijuana industry is at. If you’re interested in the industry but haven’t looked at individual stocks yet, then you may want to pay particular attention to this ‘index’ and keep up on the latest news as well. Understanding how the “index” reacts to various news events can really help you understand market timing.

It’s in this index that you can identify potential stocks to buy, as well. Doing your research with this index as a baseline or a guide, you’ll be able to identify all sorts of companies that you hadn’t thought of, perhaps even when you were doing your serious research into the industry.

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Investing in Lithium: The Energy Giants

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This metal is perhaps best known for its use in lithium batteries common in all sorts of electronics devices.


Lithium is a soft, silver-white metal that is highly reactive and flammable. Its unique chemical profile makes it the lightest metal and the least dense solid element. Lithium has several other industrial applications as well, including use in heat resistant glass and ceramics, alloys used in aircraft, and lubricating greases.

As an investment, lithium makes for an enticing play on the growing demand for energy efficient technologies. Lithium batteries, which are far more efficient than traditional nickel-metal hydride batteries, are seeing an increase in demand from the automobile and electronics industry alike.

Limited supply is another appealing factor that makes this metal a potentially lucrative investment. For those looking to invest in lithium, there are a number of options in the marketplace. While physical exposure is not possible, investors can buy a number of companies which are engaged in some aspect of lithium production. Lastly, investors can also purchase a lithium ETF which offers exposure to a basket of commodity producers.

How to Buy Lithium Stocks

There are a wide variety of companies who rely on lithium for a substantial portion of their revenues. One of the biggest is Sociedad Quimica y Minera (SQM) which is a Chilean producer of specialty plant nutrients and chemicals that maintains lithium production operations. Philadelphia-based FMC Corporation (FMC) is a diversified chemical company which also focuses on this rare metal. Rockwood Holdings (ROC) is another prominent manufacturer which is focused on the production of lithium chemicals.

How to Buy Lithium ETFs

Exchange traded products can be an efficient way to access lithium. The most targeted product is the Global X Lithium ETF (LIT), which offers investors exposure to the performance of the lithium industry. This ETF holds a global portfolio of companies engaged in everything from lithium mining to exploration and lithium-ion battery production.

Tesla Motors, Inc.’s (TSLA – Analyst Report) decision to build a $5 billion Gigafactory to meet its requirement of lithium-ion battery packs brought glaring focus on the shortage of supply of this emerging energy storage technology. Lithium-ion batteries are used by many auto manufacturers, including General Motors Co. (GM – Analyst Report), Navistar International Corp. (NAV – Analyst Report), BMW, Daimler AG (DDAIF) and Ford Motor Co. (F – Analyst Report). They are also used in cellphones, laptops, and other electronic devices as well as in the aerospace and defense sector.

However, the market for lithium-ion batteries has a lot of untapped potential. Tesla, for example, is facing problems in meeting the demand for its electric cars due to shortage of battery packs, which is limiting its production capacity. This was one of the chief reasons behind its decision to build a large-scale factory to produce lithium-ion batteries in collaboration with various partners. The electric carmaker’s Japanese battery pack supplier, Panasonic Corp. (PCRFY), is widely believed to be one of the partners.

By 2020, Tesla expects the annual lithium-ion battery production of the Gigafactory to exceed the global production in 2013. The factory will produce enough battery packs to allow Tesla to build around 500,000 electric cars annually by 2020.

However, Tesla’s Gigafactory will not start production until at least 2017. Till then, the focus will be on other lithium-ion battery manufacturers. Thus, it would be a good idea to invest in some companies that manufacture these batteries.

Two of our Favorite Stocks to Watch:

Arotech Corp. (ARTX) has two business divisions – Training and Simulation and Battery and Power Systems. The Battery and Power Systems division manufactures and sells Lithium and Zinc-Air batteries and chargers for the Military.

Arotech reported a 150% positive earnings surprise in the third quarter of 2013. This Zacks Rank #3 (Hold) stock is expected to report 100% and 411.11% year-over-year growth in earnings per share (EPS) in fourth-quarter and full-year 2013, respectively, based on the Zacks Consensus Estimate of 2 cents and 28 cents, respectively.

Arotech has a price-to-book (P/B) ratio of 1.3x, significantly lower than the industry average of 3.1x. Even the price-to-sales (P/S) ratio of 0.6x is lower than the industry average of 0.9x.

EnerSys (ENS – Snapshot Report) is the largest manufacturer, marketer and distributor of industrial batteries in the world. It also manufactures and distributes chargers, power equipments and battery accessories and provides aftermarket services for industrial batteries. The company recognizes the growing market share of lithium-based battery technology in the aerospace and defense sector, and is thus trying to develop products based on lithium and other new energy storage technologies to increase its market share in the aerospace and defense sector.

EnerSys, a Zacks Rank #2 (Buy) stock, reported a positive earnings surprise in each of the trailing 4 quarters with an average beat of 3.44%. The Zacks Consensus Estimate for the company’s fiscal 2014 (ending Mar 31, 2014) earnings is $3.87 per share, reflecting an estimated 9.01% year-over-year growth.

EnerSys has P/B ratio of 2.6x, far below the industry average of 6.5x. Its P/S ratio is 1.5x, also lower than the industry average of 1.9x. Long-term EPS growth rate for the stock has been pegged at 15.3%.

Read Investing in Lithium: The Energy Giants Part 2

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How to Invest: Graphene Investing

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Graphene Investing: The Real Benefits of Graphene

Andre Geim and Konstantin Novoselov, both of the University of Manchester were credited with the discovery of graphene and as a result won the 2010 Nobel Prize in Physics.

Graphene is 200 times stronger than steel and more robust than a diamond. You can see where the Graphene Investment Opportunities can be so relevant. As used here robustness refers to, “the ability of a structure to withstand events like fire, explosions, impact or consequences of human error, without being damaged to an extent disproportionate to the original cause.”
Read More on Graphene, from Extremetech.com

Understand What Graphene Is: Before you Invest
Anyone familiar with the robustness of diamonds will be more impressed by this fact, than the “200 times stronger than steel” line that would impress the layperson more. This is worth keeping in mind as we read on.

Diamonds and Graphene

Though unproven, reasonable theoretical applications include the creation of synthetic plasma and various potential cancer treatment methods.

What you didn’t know about Graphene Stock, is it’s companies will likely put the power of up to 10,000 mainframes into the typical ‘tablet’ or ‘smartphone’ at some point in the near future.

Scientists also theorize that graphene could help clump together radioactive waste, making disposal remarkably safe, clean and efficient. During tragedies like the Fukushima meltdown, graphene could not only serve a valuable economic, but priceless social benefit.

Regulations on Graphene

This is an important factor to note because it could lead to a far lighter regulation note being placed on graphene-based products as they’re manufactured and put into mass production. It means better power, and better Eco-Friendly Products, Graphene Investment Opportunities really span a broad range of businesses.

Perhaps the biggest cause of excitement surrounding graphene is the active attempt by a slew of scientists to replace the silicon inside of semiconductor wafers with graphene. We can only imagine what this will do to the “Silicon Valley” moniker.

For this reason, some have taken to calling graphene “Moore’s Murderer.” The reference is to Moore’s Law, a historical observation of computer hardware claiming chip performance would double every 18 months. If graphene can do what most knowledgeable minds seem to think it can, chip performance could theoretically grow exponentially overnight, thereby making Moore’s Law as obsolete as blind faith in a flat planet.

Graphene is already a part of our daily lives. Graphite in pencils, batteries, brake linings, foundry facings, charcoal and lubricants…but it is also the basic structural element of other allotropes, including graphite, charcoal, carbon nanotubes and fullerenes.

The properties of graphene are so amazing that they have the potential to revolutionize multiple industries. Sensors, batteries, computing, touch screens, electronics, water filtration and salinization, organic solar cells, energy generation and storing, medicine and much more.

As the world’s thinnest material graphene is considered a two-dimensional object, while also being flexible and transparent. It also conducts electricity more efficiently than a semiconductor and is an exceptional heat conductor.

And though the temptation is to look towards technology and manufacturing, the medical devices, biotech and healthcare markets, are all venues where the carbon-based Graphene may have the most investment impact. As we all know, tech and bio stocks tend to do very well in strong performing markets, so just imagine how well such stocks could have performed in recent years with Graphene-backed products.

The standardization of Graphene as a medical/medicinal component, and its potential to enter the human body without damaging the immune system would give it a remarkably beneficial characteristic as a drug delivery mechanism. Graphene also has properties which can aid in bone-rebuilding processes and create the biological structures needed to create organs and tissues.

But here’s an example of what we are all most interested in, the investment value and the rarely-seen, always-profitable synergistic link between government and industry. Namely, the European Union recently awarded Nokia (NYSE: NOK) with a $1.35 billion grant to research the commercial applications of Graphene. Can anyone really imagine how much a company like Phizer or Johnson & Johnson may get from the US government to research healthcare applications of Graphene?

The point of the example is to illustrate that when a material has the ability to affect positive societal change and advancement, as well as being worthwhile for the investment set, a far greater likelihood of success will emerge.

Rarely does an investment opportunity come along that seems to have everyone’s support and very rarely does such an opportunity result in anything but profits to investors.

Graphene Investing has taken on so many industries, these should all be very positive signs. It truly is strange that more investors aren’t talking about Graphene, but at a time when information flows so freely and is so readily available, and you understand What it is capable of, you will see the rise in potential Graphene Stocks.

 

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