Patience & Courage

“Patience” is said to be a virtue!

So, you may ask, what has this so called “virtue” has to do with investing?  Plenty!!

You must have heard so many times of lost of potential earnings due to rash decisions, impatient to get rid of those slow performing stocks, those properties, or the currencies you have been hanging on to at the start of an upward trend for a little earnings or even for a small percent lost!  Yes, even our investment guru, Warren Buffet had made this mistake in his early days of investing.

“Patience” can be mastered, it is a learned art.  Probably it is difficult at the very start but you have to learn to distract yourself from making a decision.  Busy yourself with something unrelated, look away and wait out…. breath a little. Yes, its easier said than done, but it is possible; can be done!

In order to practise this art called “patience” you also must have the stomach for risk taking ~~ you already have or why else are you in this predicament ~~ and resource of time and money!

However, a word of caution “one can never buy at the lowest and sell at the peak” but who knows you may just be lucky while your patience pays…..

Patience and courage equate to better success rate!

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Give Back to Society

After reading what best-selling author, international speaker, consultant, environmental activist Mary Buffett said in her speech at a recent Kuala Lumpur conference entitled “Dawn of the New Decade: Alternative Investments in Asia”, I fully agree with her.  Investing is not just for personal gains.  We have to give before we can receive!

This is not asking you to give all your earnings away but at least set aside some to donate to some worthy cause.  Giving will always channel a flow of energy….. you feel good after giving to those who deserves to be given.  After giving you will feel lighter, not only in the pocket but in the heart and in the soul.  With that kind of emotional situation you will definitely make good and sound decisions when you are investing.

Giving is a very good de-stress mechanism…………try it!

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Market Trend

If you are keeping an eye on the world’s market lately, you will find that the market situation is just like the sea.  It comes in waves; sometimes strong and powerful but at times it will just lash around. And of late it has been coming around positively but with no real concrete sense or trend.

The million dollar question would be “Is it time to buy or sell?” And truly, no one has the right answer.  Once again trading in the market is dependent on a lot of gut feel as fundamentals are out.  If I can say, the market has gone crazy!  So are you one of the crazy participants? Are you game enough to put your finger in the pie?

Personally, I would ride with the tide, go for short term low gain rather than going for the deep kill; greed should be out of this equation.  Go for fundamentals if you have spare cash and waits patiently for the dividends payment while keeping your stockpile for your hopefully early retirement.

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Financial Cycle

Doesn’t this sounds like a familiar environment today?……..

It is the month of August, on the shores of the Black Sea.  It is raining, and the little town looks totally deserted.  It is tough times, everybody is in debt, and everybody lives on credit.

Suddenly, a rich tourist comes to town.

He enters the only hotel, lays a 100 Euro note on the reception counter, and goes to inspect the rooms upstairs in order to choose one.

The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher.

The butcher takes the 100 Euro note, and runs to pay his debt to the pig grower.

The pig grower takes the 100 Euro note, and runs to pay his debt to the supplier of his feed and fuel.

The supplier of feed and fuel takes the 100 Euro note and runs to pay his debt to the town’s prostitute that in these hard times, gave her “services” on credit.

The hooker runs to the hotel, and pays off her debt with the 100 Euro note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.

The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything.

At that moment, the tourist comes down after inspecting the rooms, and takes his 100 Euro note, after saying that he did not like any of the rooms, and leaves town.

No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism…..

And that, ladies and gentlemen, is how the United States Government is doing business today.

Wow, this sounds simple enough!!

Basically, it just means that when recession hits, one should not stop spending, in fact, everyone should be spending, spending, spending in order to allow the cash to flow.

No one should be guilty of putting the brakes on this “cash flow” machinery………

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“Cash is King”

I was watching an interview of the Australian champion “butterfly” swimmer who won USD1 million in a swimming championship and was asked by the interviewer what she did with the money she won.  She said she heard that “Cash is King” so her money is still tucked safe in her saving account!

Is that what you are doing as well?  I guess with the madness in the world now and whichever corner of the world you are in, it does seem not safe to put your cash anywhere, even in the bank.  What a predicament nowadays for people with plenty of cash!!  It does seems like there is no where to go; definitely not safe under your mattress!

Let truth be told, it is definitely better to still have cash than a whole portfolio of investments that is worth a quarter of what you have invested. But, nevertheless, take to heart that you are not the only one in this dismay situation, even the best investors, people like our investment guru Warren Buffet have lost money in their investments, have made a bad judgment to the “what will be in the future” prediction.  So hang in there, I believe that time cannot get any much worst if not better.

Meantime,  people with hard cash should make some good, safe and sure-win investments to earn some profits while waiting for the good and better times.  A lot of people will just take the easy way out by putting cash in FDs, it is, no doubt, a good, safe and sure-win investment but definitely not earning your cash’s worth…. so think about it and make a harder effort to source for better “sure-win” ways….

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Are you hoarding your Cash?

Another point to ponder!  Is keeping cash a good move?  Cash is liquidable and a lot of things else.  But is it wise to hoard them?   Not so …. according to Mr Warren Buffet; this is what he said … maybe we should listen to him:-

Today people who hold cash equivalents feel comfortable.  They shouldn’t.  They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.  Indeed, the policies that government will follow in its efforts too alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

By the sound of this report which was extracted from “The New York Times”, looks like it is wise to look at Equities especially now….

Yes,  I know…. decision, decision and decision… That’s what life is all about!

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“The Worst is Yet to Come!”

With today’s economic situation, we are all in quandary and I am sure even the most experienced and expert investors are finding it hard to make the right decision or any decisions at all. We kept on reading and hearing that “The worst is yet to come!” Nobody knows when this perplexity is going to bottom out. We can all just give it our good guess and your guess is as good as mine!!

But after reading what was written by the financial guru, Mr Warren Buffet, on “Buy America, I am” in The New York Times on 16 October 2008, I guess we have to be brave to ride out the turbulence!!  I kind of like his simple rule ~~ mind you simple and yet very powerful ~~ “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.”

Mr Warren Buffet further mentioned as follows:

“Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.”

Mr Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company. Do read about him and his success and then his advice will be more valuable to you.

So like everyone said “The Worst is Yet to Come!”  Are you waiting for the rock bottom before deciding to buy? The decision rest on you and you alone!!

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Dual Currency Structured Investment

This type of investment is pretty new in Malaysia and is offered by banks; not all banks. It is a short-term investment linked to the currency market.

This investment pays investors a fixed interest with the possibility that at maturity, investors will receive back the original sum invested plus interest in a different currency. At the time of Investment, the Investor will know the amount that will be received at maturity in the Base Currency and in the Linked Currency. What is not known is in which of these two currencies the Investor will be repaid.

The Tenor of this investment can be for a period of 1 week, 2 weeks, 1 month, 2 months or 3 months. It may vary from bank to bank, country to country.

You have to select 2 currencies; Base Currency and Linked Currency. The “live” system in the bank will show a range of 10 different sets of conversion rates against the investment return (% of interest to be paid).  The price is only valid for 35 seconds; meaning that you will have to click the category you choose before the 35-second is up otherwise the rates will change upon the next refresh.

A Current Spot Rate will be fixed usually higher than the list of 10 set of rates given you to select. You will have a choice of selecting the rate you want to convert and your investment return will depends on the set of conversion rate and interest percentage you chose.

Warning: If at maturity the Redemption is paid by the Bank in the Linked Currency and the Investor intends to convert this sum back into the Base Currency, this conversion will have to be made at the then-prevailing exchange rate, which may be less favourable than the Conversion Rate which the Bank converted the Redemption into the Linked Currency.

After conversion back into the Base Currency, the overall return may also be less than the Investment Return.  In some circumstances, the Investor could even receive less than the original Investment Amount.  This simply means that the Investment is ultimately not principal protected!

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Gold Value versus the Greenback

If you are considering investing in gold you may wonder “how am I supposed to invest in gold?”. Some people will rush to buy gold jewelleries because they serve dual purposes; as an ornament and a great gift, it will appreciate in value – good investment.

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Invest in Gold?

Have you heard of this term “Old is Gold”? When human grows old, their functions slowed, their values are compromised, their memories waned and their usefulness may be reduced tremendously. Then the term “old is gold” had been coined to add value to aging people. Gold then became the measuring tool. Why GOLD? As everyone knows, gold is an unfading metal of great and undiminishing value.

With that in mind, shall we say that “Gold” is a valuable metal sort after by all. In other words we can summarise that “Gold” has value. Lets take a look at how much the value of gold has been moving from year 2003 till current:

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