Black Friday Wars: Amazon vs. Walmart vs. Target

This Black Friday, no retailer is gunning for your holiday shopping dollar more than WalmartAmazon, and Target

Aside from Costco, which is less focused on gift-giving as it’s a buy-in-bulk warehouse operator, Walmart, Amazon and Target are the three biggest mass-merchandise retailers in the country, and all three see significant spikes in sales when the holidays arrive. Not surprisingly, these companies are extra competitive during the holiday season, when retailers need to make the most of the once-a-year crush of shoppers looking for deals.

Let’s take a look at how Walmart, Target, and Amazon are preparing for Black Friday this year.

A blurry image of dozens of shoppers going up and down an escalator

Image source: Getty Images.

The shipping wars

E-commerce has taken center stage during the holiday season as Black Friday and Cyber Monday have essentially rolled into one long shopping weekend bonanza. Walmart, Amazon, and Target have all made efforts to reach more customers through e-commerce over the past year and during the holiday season as online shopping is a crucial component of the holidays for retailers.

Walmart has rapidly expanded programs like online grocery pickup and delivery, now offering pickup at more than 3,000 locations and delivery at more than 1,400. Though food doesn’t tend to be a focus of holiday shopping, those initiatives have helped Walmart build a digital relationship with customers, getting them to download its app and become used to ordering from the company online. Similarly, the company has rolled out Pickup Towers to at least 700 stores, making in-store pickup for most items easy.

The company has also stepped up its delivery capabilities. After offering free two-day delivery on orders with a $35 minimum without a membership fee starting in 2017, Walmart this year launched NextDay Delivery, bringing customers free next-day delivery on 220,000 items with a $35 order minimum. The company also announced Delivery Unlimited, which offers free grocery deliveries with a $98 annual fee.

Amazon continues to set the pace in e-commerce as the company earlier this year accelerated its two-day Prime shipping promise to one-day, an expensive move that will cost the company $1.5 billion in the fourth quarter. However, it’s sure to delight customers, especially those counting on last-minute gifts. Amazon continues to offer the widest selection of products online, and e-commerce is especially popular during the holidays when the weather is cold and shoppers can avoid the stress of the mall by shopping from home. With its voice-activated Alexa technology, Amazon continues to find new ways to make shopping more convenient, and its Prime membership program locks in shoppers and gives it a competitive advantage.

Christmas Shopping

Target, finally, has made dramatic improvements in its e-commerce and fulfillment strategies in recent years. Following its acquisition of Shipt, the company now offers same-day delivery, and it has a number of convenient pickup options, including Drive Up, allowing customers to conveniently drive up to their local store and get their order put in their car for them, or Order Pickup, a convenient pickup option inside the store. In the third quarter, CEO Brian Cornell said that 80% of the company’s digital sales growth came from same-day fulfillment initiatives, showing that those moves have been successful in fending off Amazon and gaining market share.

spy camera

Target is also making a big push this holiday season, again offering free two-day shipping with no order minimum, adding 50 million payroll hours, and doubling the number of staff focusing on fulfillment so customers can get their orders even faster. Target is also adding 10,000 new and exclusive toys to its holiday selection in addition to thousands of gifts under $15 and new Disney shop-in-shops in 25 Target stores.

The price wars

Convenience isn’t everything. Price also counts for a lot on Black Friday. Here are some of the savings you’ll find online and in stores.

Walmart’s deals include:

  • A 65-inch 4K Philips TV for $278.
  • $50 off an Oculus Go Virtual Headset. Now $149.
  • Up to $700 in eGift Cards with the purchase of a new Apple or Samsung smartphone.


3D Virtual Reality Headsets glasses

3D Virtual Reality Headsets glasses

At Amazon, shoppers can take advantage of:

  • 33% off of 9-speed Elby Electric Bike. Now $1,999.99.
  • Up to 45% off of Samsung QLED TVs.
  • Tons of deals on Amazon products like Kindle e-readers and Echo devices.

Target’s specials include:

  • $170 off on a Dyson AM09 Hot and Cool Fan. Now $279.99-$449.99.
  • $100 off on a Playstation 4 Pro. Now $299.99.
  • $220 off on a KitchenAid 5-quart Mixer. Now $229.99.

Shoppers looking to get the lowest price on a specific item should download a price-comparison app such as PriceBlink, which will help them get the most savings and alert them to any available coupons or discounts. It’s also worth remembering that Target and Walmart will both match competitor prices, though Walmart ended its Savings Catcher price-match tool earlier this year. Amazon, on the other hand, does not have a price-matching policy.

Who’s the winner?

Where you shop on Black Friday will likely be determined by your own preferences. If you prefer the selection and discovery of browsing in a store, you’ll choose Walmart and Target over Amazon. Target has particular strengths in private brands, apparel, toys, and home goods. Walmart, meanwhile, is best known for low prices on everyday products, but the retailer has pushed into higher-end items lately, like its recent launch of Hart power tools. If you’re looking to do some gift shopping while you pick up your groceries, Walmart is also probably your best bet.

Amazon, meanwhile, is the best place to go if you’re looking for Amazon-made items such as e-readers, tablets, connected TV devices, or smart speakers, and the tech giant is probably the best choice for those looking for the convenience of shopping from home, fast delivery, and easy online returns.

Though Walmart, Amazon, and Target are all competing with each other this holiday season, in the greater universe of retail, all three are likely to be winners. Their efforts to improve delivery speeds and offer more convenient pickup options are helping them to grab market share from struggling retailers such as department stores and mall-based chains.

It’s no surprise, then, that both Walmart and Target have seen strong comparable sales growth over the past several quarters, while Amazon continues put up sales growth in its home region in the 20% range, blowing away nearly every other retailer. Expect that pattern to continue this holiday season, no matter who emerges victorious from this Black Friday battle royale.

By: Jeremy Bowman-The Motley Fool
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Boomer homes to flood US market

Boomer homes to flood US market, but who will buy them?

Protect your home

Best Hidden Camera for business or home

The U.S. housing market is on the verge of being inundated with homes for sale on a scale that hasn’t been seen since the housing bubble in the mid-2000s.

The tsunami is being driven by a grim reality: Baby Boomers dying.


Four out of 10 U.S. homes are owned by residents age 60 or older, and five out of 10 by residents 55 or older, according to Zillow. Over the next two decades, more than a quarter, or roughly 21 million homes, are likely to be vacated. During the last housing bubble, there were only 450,000 new home sales per year, on average.

Although all of these homes will be hitting the market, they will be located in areas where most of the younger generations don’t want to live. The areas that will be impacted the most are traditional retirement communities, including Florida and Arizona.

However, the areas that will be least affected are vibrant, affordable cities, including Dallas, Houston, and Atlanta.

By Julia Limitone Fox Business
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Amazon Sellers Are Paying $10,000 A Month To Trick Their Way To The Top

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An emerging black market offers Amazon sellers pricey ways to cheat the marketplace and mislead customers

Zak Tebbal for BuzzFeed News

We have investigated many articles about Amazon Sellers Paying $10,000 A Month To Trick Their Way To The Top!

Some sellers who employ black hat tactics say they’re reluctant to do so, but don’t know how else to keep up with their competitors. A seller who uses Howard Thai’s suite of services on and asked to remain anonymous told BuzzFeed News that he’s been using different versions of black hat techniques since 2014, when Amazon’s marketplace became inundated with dirty selling tactics. That’s around when he said he noticed people using Amazon’s messaging system to send emails to shoppers offering free products in exchange for reviews and learned about offices full of people in Bangladesh paid to write fake reviews.

“Everybody is doing it,” he said. “People have to survive, so of course they’re going to do it. … They’re like, 

‘Why the hell am I spending money on ads and I’m not on page one?’”

The seller said that without Seller Mafia he would barely break even on sales because the cost of advertising on Amazon is so high. He said he spends about 30% of sales on advertising. He currently makes about $3 million a year in net profits, but before he used Thai’s services he was making $73,000 a year.

“They’re upsetting me,” he said about sellers who depend on black hat tactics on Amazon. “You always want to do things the right way.”

The following article was written
By Leticia Miranda
BuzzFeed News Reporter

Read Our Article on

For the millions of third-party sellers on Amazon’s marketplace, maintaining a successful business is a constant battle to rank high in search results, collect positive product reviews, and keep up with Amazon when it releases its own branded versions of sellers’ most successful products. This intense competition has led to the emergence of a secretive, lucrative black market where agents peddle “black hat” services, sometimes obtained by bribing Amazon employees, that purportedly give marketplace sellers an advantage over their rivals, according to documents obtained by BuzzFeed News.

The most prominent black hat companies for US Amazon sellers offer ways to manipulate Amazon’s ranking system to promote products, protect accounts from disciplinary actions, and crush competitors. Sometimes, these black hat companies bribe corporate Amazon employees to leak information from the company’s wiki pages and business reports, which they then resell to marketplace sellers for steep prices. One black hat company charges as much as $10,000 a month to help Amazon sellers appear at the top of product search results. Other tactics to promote sellers’ products include removing negative reviews from product pages and exploiting technical loopholes on Amazon’s site to lift products’ overall sales rankings. These services make it harder for Amazon sellers who abide by the company’s terms of service to succeed in the marketplace, and sellers who rely on these tactics mislead customers and undermine trust in Amazon’s products.

“The extent to which sellers go to game the system, and the amount of resources they devote to doing it, [are] a testament to how Amazon’s recommendation and ranking algorithms shape consumption,” Renee DiResta, director of research at cybersecurity company New Knowledge, told BuzzFeed News. “While Amazon repeats that ‘even one fake review is too many,’ the fact remains that manipulative tactics from dishonest sellers make honest business owners afraid that they can’t remain competitive. And when manipulation is successful, it’s Amazon’s customers who are the victims.” “When manipulation is successful, it’s Amazon’s customers who are the victims.”  

This black hat economy continues to elude Amazon’s detection, despite the company’s efforts to better combat fraud on its site. Although shoppers tend to trust Amazon, the site has long struggled to deal with scams on its marketplace, which include secret organized fake review rings and get-rich-quick schemes that scam sellers out of thousands of dollars. Some third-party Amazon sellers told BuzzFeed News that the use of black hat tactics has become so widespread that when one seller is banned for employing these methods, another seller doing the same thing pops up in their place.

Amazon declined to comment on the specific black hat consulting firms named in this story, but it told BuzzFeed News that these “bad actors make up a fraction of activity” on the site.

The rise of black hat consultants comes as Amazon’s marketplace continues to become a more significant piece of its retail business. Amazon’s third-party sellers now make up 58% of total sales on the platform, at $160 billion, compared to $117 billion in sales by the company’s own retail business, according to Amazon CEO Jeff Bezos. But as that third-party marketplace grows, so does the fierce competition among its millions of sellers across the world.

Davide Nicolucci, founder and director of the Amazon marketing consulting firm Growth Hack, has been critical of black hat tactics on Amazon. He told BuzzFeed News that the marketplace has become so competitive and fraught with black hat manipulation that some sellers feel compelled to break the rules and employ these tactics.

“Amazon is so slow in responding to cases, by the time Amazon resolves your issue, you’ve lost so much money you might as well do black hat,” he said. “It’s crazy. It’s a war.” “It’s crazy. It’s a war.”  

While Amazon has made some effort to police manipulation of its marketplace, the business of black hat consultants continues to prosper, largely hiding in plain sight. A simple search on YouTube for “super URL” brings up dozens of tutorials on how to manipulate Amazon’s ranking system by writing a few words into a product URL that tricks the algorithm into believing real shoppers are finding a specific item through popular keyword searches and adding it to their shopping carts and wish lists. Amazon black hat consultants frequently speak at Amazon seller conferences and events, and some run their own private groups on Facebook, which is where most Amazon sellers connect with one another. For sellers, buying black hat services can be as simple as sending a message on Facebook or attending an online webinar.

One such site that markets black hat services to Amazon sellers, AmzPandora, offers clients a menu of services, which range in price from $1 for a single thumbs-up on a product review to $10,000 to reinstate a suspended account, according to documents obtained by BuzzFeed News. The site disappeared after BuzzFeed News contacted the site’s owner, a China-based consultant who goes by the name John Zhu, who operates another black hat tactics site called This site also went offline before publication.

AmzPandora’s services ranged from small tasks to more ambitious strategies to rank a product higher using Amazon’s algorithm. While it was online, it offered to ping internal contacts at Amazon for $500 to get information about why a seller’s account had been suspended, as well as advice on how to appeal the suspension. For $300, the company promised to remove an unspecified number of negative reviews on a listing within three to seven days, which would help increase the overall star rating for a product. For $1.50, the company offered a service to fool the algorithm into believing a product had been added to a shopper’s cart or wish list by writing a super URL. And for $1,200, an Amazon seller could purchase a “frequently bought together” spot on another marketplace product’s page that would appear for two weeks, which AmzPandora promised would lead to a 10% increase in sales. Amazon declined to specifically comment on AmzPandora and the services it offered marketplace sellers.

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Import Quotas

Import Quotas

Import Quotas are a “non-tariff trade barrier”
used to limit imports of particular products.

By limiting imports these quotas
can be used to stabilize the US price above the world price for the protected

US suppliers benefit from the higher prices. Supporters of import
quota policies note that the policy gives protection to domestic industry with
no cost to the American taxpayer.

Those who receive the import quotas get the right to buy a product at the lower world price and sell the product in the US for a higher price,so the quotas are valuable rights allocated by the US government to foreign governments it wishes to support. The costs of an import quota program are born largely by consumers of the product subject to import quotas.

US Sugar
Import Quota Program
Note the chart below of world US prices for raw sugar (not yet refined).
The US inititated the import quota system for sugar in the early 1980s.
Since then the world price of sugar has ranged from less than 5 cents to 13 cents per pound.
Recently the world price has been below 10 cents.
Within the US the price has mostly ranged bewtween 20 and 24 cents.

Products Under US Import Quotas

  • Sugar and products with more than 65% sugar content
  • Tobaccco
  • Peanuts and peanut butter
  • Many specific dairy products (e.g. powdered milk, baby formula)
  • Cotton
  • Beef
  • Animal feed
  • Anchovies
  • Wire rod
  • Ethyl alcohol
  • Olives
  • Mandarin oranges
  • Tuna
  • Brooms and others. For more information see the US Customs Department:


Sugar Cane


Sugar Beets


The Rule of One Price: Economists argue that markets, if allowed to function freely, will generate one price for traded products. What they have in mind is that if, for example, the price of sugar was higher in the US than in Mexico, then someone could make a profit through arbitrage (buying low and selling high). If traders bought sugar in Mexico to sell in the US, then the extra demand in Mexico would raise the price of sugar in Mexico, and the extra sugar supplied by traders to the US would operate to lower the price of sugar in the US, and this would continue until the price of sugar was the same on each side of the border. Of course, even if markets were free to operate like this, prices differences which reflect transport, storage, and risk costs will persist. The price data charted below show that when world prices are very high (mid 1970s and around 1980) the rule of one price seems to hold for sugar. Otherwise, US sugar policy has operated to prevent the US price of sugar from falling to world price levels.    Quotas on US Sugar Imports: Under the sugar import quota system (which started in 1983?) imports of raw sugar are limited to about 3 billion pounds (about 15% of US consumption). Since 1995 the world price of sugar has shown a downward trend. Normally, if the world price falls relative to the US price, we would expect imports to increase. However, under the quota system, the quotas allocated to sugar importers decreased during this time. From the data, it seems as if imports are restricted to a level which keeps the US price above 20 cents per pound. 

Using the Trade Model for Import Quotas: We can construct our model of the US sugar market to fit data which appoximate current conditions in the market:US Price: 20 cents per poundWorld Price: 10 cents per pound

US Production: 17 billion pounds

US Imports: 3 billion pounds

US Consumption 20 billion pounds

US Average cost of production: 12 cents per pound

Step One: We know that when the price in the US is 20 cents per pound US producers supply about 17 billion pounds, so the US supply curve goes through the point P=.20 and Q=17. Secondly, production costs per pound of sugar are about 12 cents. So we draw our US supply curve so that if price fell to 10 cents, the US quantity supplied would be zero. This is done in the diagram to the right.      Step Two The sugar import quota system has operated to limit US imports of sugar to 3 billion pounds. So the total supply of sugar in the US market is the Supply(US) plus the 3 that can be imported. This is shown as “Supply(US) + 3” in the diagram to the right..     Step Three: We know that when the price in the US is 20 cents per pound US consumers buy about 20 billion pounds, so the US demand curve goes through the point P=.20 and Q=20. This is done in the diagram to the right.   Step Four: Putting the supply and demand together we can see how the import quota is set at 3 so that 20 cents is the market equilibrium price in the US .     Calculating the magnitude of the efficiency loss caused by the sugar import program:Economists argue that trade is benficial to both buyers and sellers. From this it follows that restricitions on trade, like the sugar import program, will cause some loss in efficiency. Now it may be that, as a country, we are willing to incur some efficiency loss in order to pursue some other objective like preserving agricultural lifestyles. Many developed countries restrict trade in agricultural products to protect their domestic farmers. The Japanese restrict rice imports and the Norwegians restrict dairy product imports. The US restricts sugar imports. One job for economists is to calculate the costs of such programs so that more informed decisions can be made about whether it is too costly to have programs like the sugar import quota program. If the cost to the US is only $1 million per year, maybe the program is a cheap way to protect farmers and maintain a vibrant ag community. But if the cost is $100 billion, maybe not. These calculations are provided here.

Questions1. Suppose that due to increases in income, the demand for sugar in the US increased {shift to the right of Demand(US)};a. What is the effect on the price in the US?

b. What is the effect on the quantity supplied by US producers?

c. What is the effect on the quantity of sugar imported?

2. Suppose that the world price of sugar fell from 10 cents per pound to 5 cents per pound. What are the effects on the US sugar market?

3. High fructose corn syrup (HFCS) is a sweetener made from corn. HFCS is a close substitute for sugar. About 50% of food sweeteners come from HFCS in the US. Noting the the sugar import quota raise the price of sugar in the US, analyze the effect of this program on (a) the market for HFCS, and (b) the price of corn.Would corn farmers support the sugar import quota system?

4. Suppose that pressure from the World Trade Organization (WTO) force the US to stop using the sugar import quota system and instead have free trade in sugar. Analyze the effects on the US market if the US were to have free trade in sugar.

5. Refer to Bastiat’s petition for the candlemakers, but rewrite it using US and foreign produced sugar as the example.

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Sugar Quota

Using Consumer and Producer Surplus to Calculate the Cost of the Sugar Import Quota System

From our description of the US sugar market, we learned that the sugar import quota system operated to raise the price of sugar in the US to be about two times higher than the world price. US sugar producers gain from this program while US consumers of sugar (i.e.Coca Cola, Hersheys) are made worse off by the program. But additionally, the restriction on trade introduces some inefficiency to the market. Economists argue that trade is benficial to both buyers and sellers. From this it follows that restricitions on trade, like the sugar import program, will cause some loss in efficiency. Now it may be that, as a country, we are willing to incur some efficiency loss in order to pursue some other objective like preserving agricultural lifestyles. Many developed countries restrict trade in agricultural products to protect their domestic farmers. The Japanese restrict rice imports and the Norwegians restrict dairy product imports. The US restricts sugar imports. One job for economists is to calculate the costs of such programs so that more informed decisions can be made about whether it is too costly to have programs like the sugar import quota program. If the cost to the US is only $1 million per year, maybe the program is a cheap way to protect farmers and maintain a vibrant ag community. But if the cost is $100 billion, maybe not.

From our previous description of the US Sugar Import Quota and the US sugar market we gleaned these (appoximate) facts:US Price: 20 cents per poundWorld Price: 10 cents per pound

US Production: 17 billion pounds

US Imports: 3 billion pounds

US Consumption 20 billion pounds

US Average cost of production: 12 cents per pound

The diagram to the right is drawn to be consistent with these “facts”.

 If there were free trade in sugar: First we look at what the US market would look like if there were free trade for sugar. Given our facts, if there was free trade, the price of sugar would fall to about $ .10 per pound in the US. Given the US supply curve, if the price was $ .10 per pound the quantity supplied by US sugar beet and sugar cane growers would be ZERO…that is, the US would import all of its sugar, and consumers would expand consumption from 20 to 25 billion pounds per year. The graph to the right shows what the US market would look like if we allowed sugar to be freely imported. The price in the US would fall to $ .10, the quantity demanded would increase to 25 (probably a shift from HFCS to sugar by some food processors), quantity supplied by US producers would fall to zero, and imports would be 25. With free trade and a price of $ .10 per pound consumer surplus would be equal to the area shaded green in the diagram to the right.  

Costs of the Sugar Import Quota System: As noted above the sugar import quota system causes the price in the US to be $ .20 per pound instead of the world price of $ .10 per pound. This cost is borne by sugar consumers and is quantified as a loss in consumer surplus. We can calculate the magnitude of the loss in consumer surplus geometrically as the area of the trapzoidal area shaded light green in the diagram to the right. Benefits of the sugar import program. There are two groups of benificiaries of this program. First is the US sugar producers. If there were free trade in sugar with a price of $ .10, the quantity supplied would have been zero, but with the program, the price of sugar is $ .20, US producers supply 17 billion pounds of sugar, and earn a producer surplus shown in the diagram to the right. The magnitude of the producer surplus is calculated as the area of the shaded producer surplus triangle which is $ .10 tall, and 17 billion wide and thus the producer surplus is equal to ($ .10)(17billion)(1/2)=$.85billion.The second beneficiary of the program are those that are allocated import quotas. These importers get the chance to buy sugar at the world price and then sell it in the US. They earn a profit of ($ .20 – $ .10)= ten cents per pound and get to import 3 billion pounds and so earn a total profit of $ .3 billion per year. This is shown as the area of the shaded rectangle in the diagram to the right. Cost minus Benefits = Efficiciency Loss: Above we noted that the cost of the sugar import quota was the loss in consumer surplus. Then we noted some of the lost consumer surplus was captured as a benefit for US sugar producers (shown as the producer surplus) and a benefit for owners of the import quotas (shown as “Profit for Quota Owners”). But the costs of the program are greater than the benefits and the magnitude of the loss in efficiency is calculated as the size of the two shaded triangles shown in the diagram to the right.The magnitude of the two shaded deadweight loss triangles represent that portion of the loss in consumer surplus not showing up as benefits for either US sugar producers or sugar importers. They are triangles, and we know the dimensions of the triangles, and so we can calculate their size. This is done in the diagram to the right. The results of the sugar import program can be summarized as:  

Loss in Consumer SurplusGain in Producer SurplusProfits for Importers

Deadweight Loss

$2.25 billion$ .85 billion$ .30 billion

$1.10 billion


Sugar Import Quota and US EmploymentAudio file from NPR on closure of Lifesavers factory in MichiganPolitics of Sugar Import Quota

Audio file from NPR on political backing for Sugar Import Quota

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Switzerland tops global tax haven ranking

A new study on financial secrecy has found Switzerland to have the world’s most opaque bank system, despite recent fiscal agreements with Germany, the UK and the US.

A major report by the Tax Justice Network — an independent non-profit group supported by academics, NGOs and political activists — keeps the country in the eye of the storm when it comes to bank secrecy and its status as a tax haven. Switzerland tops the list ahead of the Cayman Islands and Luxembourg.

However, many in Switzerland expect the country to shed its financial pariah status in the coming years. Fiscal expert Jean-Christian Lambelet told The Local that “the battle for bank secrecy is lost,” predicting that Switzerland’s banks would cease to be tax havens in 2004.

Lambelet, head of the macroeconomics institute at the University of Lausanne, said his opinion was based on recent bilateral agreements, particularly with the US. That deal would open the door for the automatic exchange of data between the Swiss government and its counterparts around the world, he said.

But the demise of bank secrecy need not be a cause for major concern, he added.

“The country’s economy does not depend on the arrival of foreign money,” Lambelet told The Local.

Bank secrecy in Switzerland dates back to 1934. The country recently signed agreements with Germany and the UK and agreed, for the first time in history, to give the US the personal data of more than 4,000 bank clients. Yet, these efforts are considered “ineffective” by the Tax Justice Network.

The organisation is deeply critical too of members of the G-20. Meeting in London in April 2009, the group published a “blacklist” of the jurisdictions that were not cooperating enough with fiscal and judiciary authorities. The list was compiled by the Organization for Economic Co-operation and Development (OECD).

A few months later, after the signing of several bilateral agreements, no countries remained on the list. A few nations were consigned to a so-called “grey” list” but Switzerland manage to get itself off the roster.

In its report, the Tax Justice Network rejects as “inadequate and inefficient” the criteria used by the OECD to put together its lists of tax havens.

Switzerland’s “widespread involvement in the administration and use of trusts, foundations and offshore companies remains a major barrier to tackling tax evasion and illicit financial flows,” the report says.

The Helvetian Confederation administers 40 percent of the world’s private fortunes. According to the Swiss Bankers Association, the country’s banks currently hold €3.6 trillion, of which 2.3 billion belongs to foreign clients, most of them European.

Experts estimate that about one third of these assets are resting in opaque accounts, meaning they have not been declared to the tax authorities of their homes countries.


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International investment strategies for a crumbling world

International investment strategies for a crumbling world – Help rejuvenate the economy


With the present market conditions, almost all financial experts are of the opinion that the Fed has no more bullets left. The curve is running flat, near zero, the mortgage rates are low and still the economy is weak. The Euro is also not working, at least not for all kinds of investors and this is voting Greece, Italy, and Spain out of the Euro. What can we do when there are increasing debts, budget deficits and soaring unemployment level in the most important economies of the world?  Is there only the option to buy gold when everything else is not working? The governments are not paying much heed and this is generating a huge turmoil throughout the globe. The burning question is whether or not there are patches in the global economy. The whole world has seen almost seven years of plenty and now it’s time to pay back literally.
Learning some international investment strategies to stay on top of your finances
They say that investments, whether active or passive, entails determined decisions and firm responsibilities. While on one hand you dedicate your time in determining the safe assets, on the other hand you delegate the entire responsibility to an international investment strategy planning company to do the task on your behalf. There are many such companies that specialize in stock investment strategy, retirement investment strategy or property investment strategies but how about getting yourself educated and taking the decisions on your own?
What is international investment and how does it help in reducing the debt of a nation?
The total act of in vesting your money in assets that are located outside the United States of America or the country where you reside is known as international investment. This particular branch of investment has excited a hoard of investors as they get the opportunity to invest in locations that are beyond their imagination and also boost their returns positively. As the American market for the determined goods are already over-exploited, investing in the international assets provide a route of escape for the investors. With better investment and better revenue in the hands of the people, there will be lot of income with which people could repay their debt obligations and emerge debt free. The lesser are the budget deficits within a nation, the lesser will be the chance of defaulting on the government debts and crashing the economy.
Valuable tips to follow for international investment strategy
Once you leave behind the domestic market and intrude in the other continents, you need to determine your objectives and also follow some tips that can help you achieve your goal. Here are some of them.
  • Diversity is the essence: The most important strategy that you need to follow is to diversify your portfolio. Though this is almost the quintessential strategy for all investors, this holds more importance when it comes to international investment as it is always risky to put all your money in a single asset. Even though you’re completely sure about it, this will always be a mistake.
  • Don’t think ahead of time: Remember that it is always impossible to think ahead of time. Even though you’re sure about the performance of an asset, your plan can go down the chute if there is a sudden adverse financial event, like the one that happened in Thailand.  Think about the present and work accordingly so that you do not face any loss.
  • Research of the socio-political condition: Wouldn’t investing your money in a territory that is unstable be the last thing that you would want? Do a research of the socio-political background of the country to avoid being a threat to terrorism, natural calamities and other sabotage attacks.
Staying updated with what has happened in the world years ago and whether or not those events could boomerang the economy is another step that you must take in order to stay in tune with the investments. Don’t forget to check the status of debts in the country if you also want to stay sure about the decisions taken.
Jenny Roberts
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Monaco Tax Status

That Monaco is crowded with celebrities is no piece of news. Since 1869, when the politics of personal income tax became favorable, Monaco attracted many individuals with high net income, such as movie stars, sporting stars etc.. who became residents of the principality to benefit from the exemption from personal income tax.

Take, for instance, Roger Moore, Shirley Bassey, Ringo Starr, Karen Mulder, Eva Herzigova, drivers Jacques Villeneuve, David Coulthard, Button Jenson’s race.

But the number of celebrities is far outnumbered by the number of business people who enjoy the country’s tax facilities: the green retail tycoon Philip and the Barclay brothers are Monegasque residents.

Being a resident of Monaco implies prove you have somewhere to live and be rich enough to produce a very high standard way of life. And I mean really rich, as a place to live in apartment blocks jammed into two square kilometers, rented or purchased, I am extremely high.

Save the implementation involves live show in Monaco at least 6 months and one day per year. If you are rich, the advantage of being a Monaco resident is that, besides enjoying a sunny climate, friendly, you can live in the same time in another country. The Principality is very close to major airports and is also easily accessible by sea, by car or train. So, being a Monaco resident and working in another country is not only possible but it is especially easy discourse UK citizens: laws in UK permit a maximum stay of 90 days (without counting the day of departure and that of Check!) to passersby. Many UK business people reside in Monaco and works in the UK without exceeding the limit of 90 days so that it conforms to lawas of Monaco for tax purposes.

The attraction of so many rich resulted in a conflict of interests: many countries disapprove of this taxation policy, looking at her tax evasion in their national area. And not entirely wrong! In fact, Monaco has been tax-cheating “a little close to attracting capital from high tax countries.

Looking at the issue from the perspective of the Principality, seems to me only right to try and have successfully developed with limited means and resources a state so small has. Monaco became from one of the world’s poorest countries (in the 1860s) in a state with one of the world’s highest per capita income (around EUR22, 000). And it was made possible by a strategic direction of a resourceless country. It is after the territory was drastically reduced that this policy of personal income tax came into being. Attracting foreign capital do one of the main targets for development. That’s how the Casino became grand and famous and emphasis was put on tourism, is rising in the levels of luxury.

After the individual taxation regulations, in 1963 the Principality came with another financial artifice: no tax on profits or dividends from the company premises. So the target was to enhance local business flourishing. This provision combined with an almost hermetic data privacy did nothing to increase even more foreign investments in Monaco.

Thus, from the point of view of big economic powers, Monaco should be punished, and so deserves any country daring to offer a better alternative to taxes, putting at a disadvantage their high-tax based economy. The OECD has a project on “harmful tax practices” stipulating a set of punitive measures for non-cooperacio’n jurisdictions.

Relying on money laundering and international terrorism tracking, many OECD governments promote a policy of free information exchange that has as main purpose limiting the tax competition, beyond the intention to limit tax evasion and combating serious crime.

Estimated negative results of OECD policy:

* Eliminating tax competition would result in uniformizing taxes to the amount dictated by some governments. Without the ability to choose a better alternative, there is no reason for governments to reduce taxes and make the tax system more efficient.

* This policy would change the current status of emigrants that pay taxes only to their new country and promote the premise that the state still has a right to benefit from previous work nationally. This sounds like a violation of fundamental human rights.

Although in 2004 still on the OECD blacklist of jurisdictions cooperacio’n non-tax policy, Monaco has changed its policy regarding the high confidentiality of financial data in the light have been expected, recent admission council Europe (Monaco joined the Council of Europe on October 5, 2004). Amendments to legislation

* October 2001: French citizens living in Monaco since 1989 must pay a wealth tax beginning with 2002.

* Information on French nationals must unconditionally be provided to the Bank of France when required. Information can be passed on to the authorities of France or a third country if necessary.

* 2004: Under the tax savings eU directory, Monaco will impose a witholding tax to the returns on savings such as bank interests earned by EU citizens. The tax quantum will be like in Austria, Belgium and Luxembourg (initially 15%). 75% of such revenues will be delivered to the respective Member State resident in the EU. This will be implemented beginning 2005.

* December 2000: Monaco signs the United Nations convention against transnational organized crime. The treaty stipulates that its members do not permit anonymous accounts requiring identification of customers. Banks must keep accurate records of accounts and report any suspicious transaction. Moreover, officials from domestic law enforcement are permitted inspection of accounts.

With all these measures, it seems that Monaco’s attraction as a haven of personal income tax will decrease. The haven that will be how all these measures will affect Monaco financial and banking system after becoming operative.

By: Kareleo Business Centre

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Investing in Dubai

It is Worthwhile to Invest in Dubai

Dubai is one of the 7 Emirates of the United Arab Emirates. It is the largest by population and second largest in surface area. UAE is bordered with Saudi Arabia and Oman on the Arab Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi Dubai and Abu Dhabi are the only two emirates to have veto power over critical matters of national importance in the country’s legislature.

Historically Dubai used to be a port for the past 200 years and gained further importance in the 70’s and 80’s. However after that period Dubai has reduced its importance in international trade and created industry specific “free zones” including Dubai International Finance Centre and Dubai Internet City.

Dubai International Financial Centre

THE Gateway for Capital and Investment, DIFC is an onshore financial center strategically located between the east and west, which provides a secure and efficient platform for business and financial institutions to reach into and out of the emerging markets of the region.

The DIFC is the Middle East’s’ regional financial center. Although in its developing stage it already has established a presence with major investment banks and financial centers. It initially was created to benefit the economic development of Dubai as well as the rest of the UAE. DFIC established in 2004. Types of firms in the DIFC include banking, asset management, brokerage, reinsurance and financial operational services. Typical benefits of starting a business in the center are 100% foreign ownership on all parts of the established business, 0% tax on profits, no restrictions on capital and foreign exchange repatriation and transparent and a highly developed operating environment. Compared to the majority of tax havens, which are offshore, the DFIC is onshore. In terms of the physical structure of the center, the DFIC has developed modern day offices and technology to attract the best companies as well as smaller financial startups.

The main objective of developing the center was because of the large amounts of money that was invested and spent abroad. In terms of high net worth individuals in the Middle East, the size of the asset pools which are invested abroad amounted to over 1.5 trillion USD. The lack of available liquidity and political risk as well as bad banking practices of the region have caused investors to send their funds in foreign institutions. This has been especially true in the past 30 years when oil prices rose rapidly. The development of the center allows for the efficient process of transferring the funds in a local region as well as allowing potential profits to be locked in the emirates, rather than abroad. The increased liquidity, which the center will create, will also reduce the investment risk in the region and create better credit ratings for local banks as they have more efficient funds available.

Many companies in the Middle East are seeking to make themselves public as a means of raising capital. This has been especially true with the growth in privatization, the fact that Dubai is the 3rd biggest re-export center in the world and the increasing amounts of foreign direct investment in the region by foreign multinationals. The IPO market for Middle Eastern countries are flourishing and DFIC is going to attract a lot of IPO’s and PO’s as well as fixed income and money market originations. DFIC will be the Wall Street of the Middle East. It has also established the Dubai International Finance Exchange (DFIX), which will be the regions main exchange where, equities, fixed income, index products; derivatives and Islamic funds will be traded.


Dubai Internet City (DIC)

DIC  is an information technology park created by the government of Dubai in 2004 as a free economic zone and a strategic base for companies targeting regional emerging markets. DIC is a member of TECOM Investments.  The economic rules of DIC allow companies to avail themselves of a number of ownership, taxation and custom related benefits, which are guaranteed by law for a period of 50 years. One model of operation includes 100% foreign ownership; similar to those prevailing in other designated economic zones in the United Arab Emirates. These freedoms have led many global information technology firms, such as Microsoft, IBM, Oracle Corporation, Infor Global Solutions, Sun Microsystems, Cisco, HP, Nokia, Cognizant and Siemens, as well as UAE based companies such as i-mate, Acette, to move their regional base to the DIC. DIC is located adjacent to other industrial clusters such as Dubai Media City and Dubai Knowledge Village.

Dubai Media City (DMC)

Dubai Media City is part of Dubi Holding; it has the same tax-free structure that DIC has to offer. It has been built to boost the UAE’s media capabilities and recognitions as the next “Hollywood” of the Middle East. It has been developed as a conventional market where different businesses work together to form a unit. Dubai Media City has many different business segments not limited to broadcasting; media support services filmed entertainment/production and publishing.

Other Benefits that the Dubai Media City has to offer are fully furnished business units; flexible leasing terms, flexible visa and work permit structures to benefit foreign entrepreneurs. Other similar districts include Dubiotech, which target biotech companies with the aim of growing the regions medical and pharmaceutical research capabilities.

Dubai Media City is the hub for the media industry in the GCC and Middle East, with more than 1,300 companies registered under the Free Zone, from where they serve the entire region.


Real Estate Developments.

Dubai is a lucrative destination for investment. Its world-class infrastructure along with a safe living and facilitated business environments make it an ideal place to live and work. Dubai’s population is set to double in the next decade making the demand for Dubai real estate even more viable.

Real estate prices have rapidly risen in the past decade after the government shifted its main revenue sources from oil and trade to services and tourism. There was a major property boom in 2004 to 2006.

Property development in the region is Inland and Offshore. Inland projects include many of the very modern skyscrapers and the world’s tallest buildings. Burj Dubai is the worlds tallest building built by Emaar properties. Dubai Mall next to Burj Dubai is the world’s largest shopping mall. Dubai also has a number of buildings, which are replicates of famous buildings around the globe including the Eiffel Towers. Other original type structures include an underwater hotel and an indoor ski resort.

Offshore developments include Palm Island, which is the world’s largest artificial Island and includes over 30 of the world’s top hotels and 75 kilometers of beaches. Other offshore developments include “The World” which is a group of islands, which form the shape of the globe when looking at it from the sky.

Dubai Metro City

Dubai already has a fully running bus system but to create further accessibility of the above centers and is investing under 4bn USD to develop a high tech transportation system called the “Metro”, which is supposed to be fully operational by 2012.

By: Adma Dababneh


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Starting a Business in Jordan

Listed below is a detailed summary of the bureaucratic and legal hurdles an entrepreneur must overcome in order to incorporate and register a new firm, along with their associated time and set-up costs.  It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy’s per-capita gross national income (GNI).

The information appearing on this page was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 183 economies. The most recent round of data collection for the project was completed in June 2010.

No. Procedure Time to Complete Associated Costs
1 1 day JOD 800
2 Open b

compaExecute the company’s formation contract and the memorandum and articles of association.The ny’s formation contract and its memorandum and the articles of association may be executed either before an officer at the Companies Control Directorate (CCD), located at the Ministry of Industry and Trade (MIT), or before a notary public or a licensed Jordanian lawyer. If the documents are executed before the notary public, an additional fee of JOD 15 will apply. The additional fee may range from JOD 500 to JOD 1,500 if done before a licensed Jordanian lawyer.

Bank account; deposit 50% of the capital

1 day no charge
3 Register the company; obtain registration certificate, and file general assembly first meeting and board of directors’ minutes of meeting at the Ministry of Industry and Trade The promoter can complete the following formalities at the one-stop shop at the Company Registry/ Ministry of TRade and INdustry (albeit at different counters): company registration, tax registration (including obtaining a company tax number for VAT and income tax), registration with the Chamber of Commerce or Chamber of Industry. In addition, the municipality of Amman maintains a counter for license renewal (though the initial license must still be obtained at the municipality).Upon payment of relevant fees, filing for company registration and obtaining the registration certificate is done at the one the company registration at the newly established reception desk. 1 day JOD 10 (Filing Fee), + JOD 10 (Registration Certificate Fee), + 0.02% of Share Capital (Registration Fee), + JOD 15 (Fee For Publication in the Official Gazette)+ JOD 40 File general assembly first meeting and board of directors’ minutes of meeting
* 4 Register for corporate tax, salary withholding tax, and VAT The promoter can register for taxes at the one-stop shop counter at the Company Registry. The company receives a unique tax number. 1 day (simultaneous with previous procedure) no charge
* 5 Register with the chamber of industry or chamber of commerceThe company documents and the respective authorized signatories required to register with the Chamber of Industry or the Chamber of Commerce are:
– Rental contract.
– Formation contract.
– Registration certificate.
– Certificate of authorized signatories.
– Memorandum and articles of incorporation.Annual registration fees levied by the Chamber of Industry or the Chamber of Commerce depend on company capital.
1 day (simultaneous with previous procedure) JOD 164
6 Obtain a vocational license from the municipalityFirst, an application is filed with the following documents to obtain a vocational license from the municipality:
– planning location map (issued by greater Amman municipality, GAM).
– Occupancy permit (issued by GAM and usually obtained immediately by the landlord upon completing construction).
– A copy of the property deed (usually obtained from the landlord).Second, the GAM officer verifies that the location is situated in the right zoning area and ensures that no property taxes or fees are due. These procedures are performed in the same building. Third, a municipal officer sets up an appointment to inspect the premises for conformance with set requirements. The time before the inspection may vary. Fourth, the property inspection is conducted.Fifth, if the premises are deemed in conformity with the requirements, the file is referred to the competent vocational licenses division. At that point, the following documents are required: (a) the company’s certificate of registration; (b) a certificate of the company’s authorized signatories; (c) the memorandum and articles association; (d) a certificate of registration with either the chamber of commerce or industry; (e) a lease contract (stamped by the GAM); (f) a planning location map (issued by the GAM); and (g) an occupation permit (issued by the GAM).Sixth, for certain occupations, a representative of the Ministry of Health may conduct a health inspection at the company headquarters.Seventh, if the company’s premises is 150 sq. m. or more, or in certain professions requiring civil defense measures, the GAM sends a letter by fax to the Civil Defense Directorate. If all relevant details required to conduct an inspection are included, and if the Directorate does not respond or conduct an inspection within 4 days, the GAM grants the applicant the required vocational license with a caveat: the applicant must agree, in writing, that if the Civil Defense Department approval is not granted, the vocational license renewal may be declined in a subsequent year.
8 days JOD 200
* 7 Inspection by municipality on safety and health 1 day (simultaneously with previous procedure) no charge
* 8 Register for social security Every business must register with the social security authorities and submit, on a monthly basis, the social security contributions for its employees.Related StoriesMake Money the Easy Way
Start a Business in Dubai
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Start a Business in Dubai

What do you Need to Start a Business in Dubai?

Obtaining a trade license

A trade license is obtained through the Department of Economic Development. Regardless of what business structure you’ve decided on, you will need a local service agent, also called local partner or a sponsor.

Local Partner or a Sponsor

The law requires that you have a local partner who holds the majority interest and can therefore control the business. The local partner, a company or an individual, doesn’t need to contribute to the start-up investment or participate financially.

Money to Invest

When the business is registered, you must show the Ministry of Commerce that you have a substantial sum of money to invest. The required sum varies and is regarded as a guarantee against liabilities; you may withdraw the money shortly afterwards!

Local knowledge is important, you must also consult a good lawyer. An experienced lawyer will guide you through the registration and to protect your interests. This applies whether you’re opening a modest shop or a major enterprise.

Shared Ownership

Local Partner Since non-GCC nationals are not permitted to be majority share holders outside of free zones in the UAE, a system of shared ownership has been developed in which UAE nationals formally own 51% of the company and the foreign proprietor owns the remaining 49%; details of profit and loss distribution are then agreed upon in a separate contract. Local sponsors can be individuals or locally owned businesses. For the most part, a local sponsor will not have any responsibility towards the business but is obliged to assist with all government related procedures such as obtaining permits, trade license, visas and labor cards. The local agent or sponsor’s signature will be required on most official forms.
• Depending on the legal structure of the business, the Department of Economic Development has certain capital requirements for obtaining a trade license. Those requirements are detailed in the DED’s official explanation of legal business structures on its website.
• Remember that certain businesses require separate approvals from varying government ministries before the trade application can be completed. When applying for a trade name, be sure to enquire about any external approvals that will be needed for the proposed business activity. Do note that ‘Virtual offices’ are not allowed by DED which has advised potential investors that any commercial enterprise in Dubai must have a physical address and an actual office.

Many people have developed successful, highly profitable businesses in Dubai. New operations are encouraged by the government and your local partner might be enthusiastically supportive. Export and manufacturing industries are especially strongly supported by government, particularly as regards the acquisition of land on which to construct a factory. If you set up such a business in a free trade zone, of which there are several in the region, it’s granted exemptions from import and export duties, commercial taxes, building and property license fees, land tax and restrictions on the transfer of capital invested in the zone.

An alternative to starting a new business is to buy a going concern, which is a more straightforward process, as it doesn’t involve lodging capital, obtaining sponsorship or registration; all you have to do is agree a price and transfer the ownership of the business.

Doing Business with Arabs

You will meet with hard but polite bargaining Business people and they are expert at bargaining. You need to be completely confident about the contents of your contractual agreement. Arabs are brilliant at finding and exploiting gaps in the content of your Business contract. Arab businessmen meet their obligations fully. The experience of doing business with Arabs is pleasant and friendly.

Remember that Arabs rarely say a direct ‘no’ to a proposition, if the response is ‘Leave it with me’ or ‘I’ll think about it’, there’s a good chance that the project will go nowhere.

Local Chambers of Commerce can advise about start-ups. Winning the confidence and support of a Chamber of Commerce will help your cause. Contact details are as follows:

Dubai Chamber of Commerce and Industry, PO Box 1457, UAE
(Tel. 971-4-221 181)

Federation of UAE Chambers of Commerce and Industry, PO Box 8886, Dubai, UAE (Tel. 971-4-212 977)


Dubai Department of Economic Development (DED)

You can contact Expats in Dubai by visiting this Website


By adma Dababneh
More Information on Investing in Dubai

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Make Money

Make Money the Easy Way

Having a good selection of investments is good, but having too big a selection can intimidate investors, especially if you’re just starting out. If you’re looking for a simple way to invest for retirement, you don’t need any more new investments. You just need ones you can trust.

For many investors, that one-stop retirement investment was the target-date retirement fund. But during the market meltdown, target fund investors were betrayed by what turned out to be more aggressive investing than some expected. Now, the big question for those looking at target funds is whether they’ve fixed their inherent problems — and whether they’ll be safe the next time the market swoons.

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Sounding the All-Clear

The good news for target fund investors is that after the long bull run in stocks, many target funds have finally recouped the losses they suffered in 2008 and early 2009. According to Morningstar, target funds aimed at those retiring in 2010 have risen by 5% between October 2007 and mid-February 2011.

For a long time, though, it looked like target funds would prove to be one of the colossal failures of the lost decade. The idea behind them was simple: tailor an asset allocation strategy based on a person’s age or expected retirement date, and adjust the allocations over the years to grow more conservative as the fund approached its target date.

Given that one of the fundamental tenets of financial planning is that you should invest less aggressively as you get older, many target fund shareholders made the mistake of assuming that with just two years left to go before their target date, 2010 target funds would have little or no exposure to the stock market. But as it turned out, many funds had relatively high percentages of their assets in stocks, and therefore the funds suffered big losses as the stock market collapsed.

Are They Safe?

In response to the controversy, many target fund companies, including Schwab (SCHW), took steps to reduce stock allocations in their target funds. Others, including Principal Financial (PFG) and (ING), expanded their funds to add alternative investments like commodities, real estate, and even hedge-fund-style investments.

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In judging the quality of a target fund, low expenses are essential. That’s why Morningstar awarded top ratings to target funds from T. Rowe Price (TROW), American Funds, and Vanguard while hitting higher-cost providers AllianceBernstein (AB) and Oppenheimer Holdings’ (OPY) OppenheimerFunds unit with low rankings.

But in the end, the key component of whether a target fund is safe enough for you depends on its unique way of allocating your money over time. Some companies believe that even retirees need substantial stock allocations in order to make sure their money continues to grow throughout their golden years. Others take less aggressive stances on the assumption that if you need more growth, you can get it on your own.

The Best Way to Make Easy Money

In fact, given how easy it is to use exchange-traded funds to set up your own asset allocation strategy, coming up with a tailor-made allocation might be even better than relying on a target fund. With expenses on many ETFs from Vanguard, Schwab, and BlackRock (BLK) at rock-bottom levels, cost isn’t a big issue with asset allocation. And with many brokers offering their ETFs at no commission, you can adjust your allocation over time without worrying about paying an arm and a leg to do it.

With thousands of stocks and funds littering the investment landscape, it’s easy to understand how target funds would be attractive to novice investors. But with a little extra effort, you can get exactly the exposure to various types of investments that you want without worrying about what your fund manager might do wrong. That’s the best way to make sure you’ll hit your target for financial success.

By Dan Caplinger, The Motley Fool

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Make Money the Easy Way

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