Showing posts with label Financially Happy. Show all posts
Showing posts with label Financially Happy. Show all posts
Tuesday, June 5, 2012
Thursday, May 31, 2012
Timing the Market of 2012
For many investors, the global stock market crash of 2008 show why timing the market is necessary, Since 1997 market crashed, the Asian financial crisis 1997, the technology crash 1999 and the sub prime-led financial crisis 2008 and many Asian Markets fell by as much as 50% from their peak to bottom each time.
The Strategy
The stock markets long term upward curve is filled with many short lived peaks and valleys isn't it smarter in the market only when price are going up?
If you believe in timing the market, the answer is Yes. You should only invest at the low and get out at the top. Then park your money and cash is till stock hit another low before reinvesting and selling high, you will make a lot of money.
But there's only one problem with this strategy : Nobody yet knew how to do it right!
But to benefit from this strategy, you have to get it right not once, but twice. You have to chose a correct entry point (when to exit the market is high).
Right point to buy
When the market is nearing or at it's bottom, it's the best time to invest. But most the people around you wont't be talking much about the market. If they do, it's most likely that they would be complaining about how much they lost from their stock or unit trust.
When they share with your honor stories of their huge losses, it is extremely difficult emotionally to ''enter'' the market at point. Further more, it's likely to be when the underlying economy is in a recession, when their are plenty of bad news.
To buy at right time is tough because you feel that you're wrong in the short term, even if you have made right decision at the right time. The market full further before recovering. The timing may be right if you're prepared to wait patiently for the recovery.
But most get impatient or start second-guessing themselves if the market does not immediately go up after they buy in on dips. That's why it's not easy to buy at the right time.
Right point to sell
To time the market properly, you have to sell when the market is high. But when the market is at it's peak, most will be boasting about their big gains, and it's only human nature to think the gain will grow even more and get good times will continue (or at least that they will get out in time!).
The will many factors to enter the market , at precisely the wrong time! instead of getting out of the market, many called market timers will enter the market at this point.
The reality
Retail investors tend to go with their emotions, As a result, they end up buying, when prices are expensive, and selling, when prices are cheap. Instead of following ''buy low,sell high'' , they end up doing the opposite.
To succeed in timing the market, you need a good grip on your emotions and good sense of the history of stock markets. But if you think it's to be difficult to overcome the pitfalls, it's best to explore other investment strategies.
The Strategy
The stock markets long term upward curve is filled with many short lived peaks and valleys isn't it smarter in the market only when price are going up?
If you believe in timing the market, the answer is Yes. You should only invest at the low and get out at the top. Then park your money and cash is till stock hit another low before reinvesting and selling high, you will make a lot of money.
But there's only one problem with this strategy : Nobody yet knew how to do it right!
But to benefit from this strategy, you have to get it right not once, but twice. You have to chose a correct entry point (when to exit the market is high).
Right point to buy
When the market is nearing or at it's bottom, it's the best time to invest. But most the people around you wont't be talking much about the market. If they do, it's most likely that they would be complaining about how much they lost from their stock or unit trust.
When they share with your honor stories of their huge losses, it is extremely difficult emotionally to ''enter'' the market at point. Further more, it's likely to be when the underlying economy is in a recession, when their are plenty of bad news.
To buy at right time is tough because you feel that you're wrong in the short term, even if you have made right decision at the right time. The market full further before recovering. The timing may be right if you're prepared to wait patiently for the recovery.
But most get impatient or start second-guessing themselves if the market does not immediately go up after they buy in on dips. That's why it's not easy to buy at the right time.
Right point to sell
To time the market properly, you have to sell when the market is high. But when the market is at it's peak, most will be boasting about their big gains, and it's only human nature to think the gain will grow even more and get good times will continue (or at least that they will get out in time!).
The will many factors to enter the market , at precisely the wrong time! instead of getting out of the market, many called market timers will enter the market at this point.
The reality
Retail investors tend to go with their emotions, As a result, they end up buying, when prices are expensive, and selling, when prices are cheap. Instead of following ''buy low,sell high'' , they end up doing the opposite.
To succeed in timing the market, you need a good grip on your emotions and good sense of the history of stock markets. But if you think it's to be difficult to overcome the pitfalls, it's best to explore other investment strategies.
Tuesday, May 22, 2012
Thinks like Fundamentalist and Trade like Technical Analysis
Thinks like Fundamentalist and Trade like Technical Analysis:
savings in stocks and bonds. (Source: Dictionary.com)
How to start investing?
First, you must ensure you have enough savings of at least 3-6 months of your monthly salary for
investment before you decide to invest in the stock market. Make sure you have some cash funds
that are not meant for investment in case of emergency.
Convenience
With the advances in technology, you can trade anywhere at any time as long as the markets you
trade in are open. You can also monitor and manage your investment online should you decide to
trade online.
Know your objective for investing
Keep your objective clear – whether it is for your children’s education or for your own future
savings, your investment should be focus on stocks that offers good capital growth. Meanwhile, if
you are investing for your retirement fund, you should focus investing in stocks that offers a
consistent income stream.
Know your risk appetite…
Are you a high risk taker or low risk taker? Investing in stocks that provide high returns tend to
have higher risk while stocks which have steady growth (low risk) may provide with lower
investment returns. You can also diversity your investment by having a mixture of high to low risk
stocks.
Discipline
You must be disciplined in your investment plan/strategy and stick to it. If your stock is losing
money, ensure that you have a stop loss strategy in place (between 3-5% is recommended,
depending on your risk appetite).
Do not put all your eggs in one basket…
Learn to manage your risk. Never put all you money onto one stock. Always diversify your
investment so that you can still have some investment returns if one of your investments turns out
bad.
Know what you are getting into
You should always research the company you invest in – what business are they in, competitive
edge of the company, how do they generate income, the company’s business cycle, whether they
are a financial stable company. You should study the fundamentals of the company to ensure that
you are investing in a financially sound company. You can also look at technical studies to
determine the best entry and exit points in your investment.
Say ‘NO’ to rumours
Never buy a stock based on rumours. The stock could be subjected to speculative play, which
normally ends very fast. You could end up in the losing end once the speculators exit the stock.
Volatility
Do note that the stock market is a volatile place. Stocks may be affected by regional and/or global
markets, economics news, cancellation of contracts, commodities prices, political stability and etc.
Beside the returns of your investment…
The company may reward shareholders through dividends, bonus issues, right issues and etc.
How do you select stocks?
Again, it depends on your investment plan and risk appetite. You can choose to invest in (i)
developing companies (just started its business – high risk), (ii) growing companies (strong growth
in sales and profits – huge potential returns), (iii) maturing companies (growth not as exciting as
growth stock, potential return lower – low risk) or (iv) declining companies (unable to grow as fast
the economy/industry growth rate – high risk, low returns). It is best to invest in companies that
have high demand in products or services, low debt to equity ratio, efficient management of
shareholders fund and ability to survive the ups and downs of the market despite increase in
competition.
Fundamental Analysis
A method of evaluating a security by attempting to measure its intrinsic value by examining related
economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to
study everything that can affect the security’s value, including macroeconomic factors (like the
overall economy and industrial conditions) and individually specific factors (like the financial
condition and management of companies). The end goal of performing fundamental analysis is to
produce a value that an investor can compare with the security’s current price in hopes of figuring
out what sort of position to take with that security – i.e. underpriced – buy, overpriced – sell.
Fundamental analysts use real data to evaluate a security’s value – such as financial statement to
evaluate stocks.
Investing
Investing means to commit (money or capital) in order to gain a financial return: invested their savings in stocks and bonds. (Source: Dictionary.com)
How to start investing?
First, you must ensure you have enough savings of at least 3-6 months of your monthly salary for
investment before you decide to invest in the stock market. Make sure you have some cash funds
that are not meant for investment in case of emergency.
Convenience
With the advances in technology, you can trade anywhere at any time as long as the markets you
trade in are open. You can also monitor and manage your investment online should you decide to
trade online.
Know your objective for investing
Keep your objective clear – whether it is for your children’s education or for your own future
savings, your investment should be focus on stocks that offers good capital growth. Meanwhile, if
you are investing for your retirement fund, you should focus investing in stocks that offers a
consistent income stream.
Know your risk appetite…
Are you a high risk taker or low risk taker? Investing in stocks that provide high returns tend to
have higher risk while stocks which have steady growth (low risk) may provide with lower
investment returns. You can also diversity your investment by having a mixture of high to low risk
stocks.
Discipline
You must be disciplined in your investment plan/strategy and stick to it. If your stock is losing
money, ensure that you have a stop loss strategy in place (between 3-5% is recommended,
depending on your risk appetite).
Do not put all your eggs in one basket…
Learn to manage your risk. Never put all you money onto one stock. Always diversify your
investment so that you can still have some investment returns if one of your investments turns out
bad.
Know what you are getting into
You should always research the company you invest in – what business are they in, competitive
edge of the company, how do they generate income, the company’s business cycle, whether they
are a financial stable company. You should study the fundamentals of the company to ensure that
you are investing in a financially sound company. You can also look at technical studies to
determine the best entry and exit points in your investment.
Say ‘NO’ to rumours
Never buy a stock based on rumours. The stock could be subjected to speculative play, which
normally ends very fast. You could end up in the losing end once the speculators exit the stock.
Volatility
Do note that the stock market is a volatile place. Stocks may be affected by regional and/or global
markets, economics news, cancellation of contracts, commodities prices, political stability and etc.
Beside the returns of your investment…
The company may reward shareholders through dividends, bonus issues, right issues and etc.
How do you select stocks?
Again, it depends on your investment plan and risk appetite. You can choose to invest in (i)
developing companies (just started its business – high risk), (ii) growing companies (strong growth
in sales and profits – huge potential returns), (iii) maturing companies (growth not as exciting as
growth stock, potential return lower – low risk) or (iv) declining companies (unable to grow as fast
the economy/industry growth rate – high risk, low returns). It is best to invest in companies that
have high demand in products or services, low debt to equity ratio, efficient management of
shareholders fund and ability to survive the ups and downs of the market despite increase in
competition.
Fundamental Analysis
A method of evaluating a security by attempting to measure its intrinsic value by examining related
economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to
study everything that can affect the security’s value, including macroeconomic factors (like the
overall economy and industrial conditions) and individually specific factors (like the financial
condition and management of companies). The end goal of performing fundamental analysis is to
produce a value that an investor can compare with the security’s current price in hopes of figuring
out what sort of position to take with that security – i.e. underpriced – buy, overpriced – sell.
Fundamental analysts use real data to evaluate a security’s value – such as financial statement to
evaluate stocks.
Trade and Invest in Stock Market
Trade and Invest in Stock Market:
Fundamental of Investment is cause,demand and supply,intrinsic value,has to know why.The problem is speed and quantity,interpretation,insider effect.In Technical Analysts it's show market action,price movement and trend,historical and effect of speculative.
Having selected shares to include in your portfolio you must then have an Exit Strategy in the event that these shares show signs of reversing. Simply set an Early Exit price to ensure that the stocks you buy never generate losses.
This is a simple description of a Trading Plan. It holds the basics for selecting stocks that have a good probability of increasing in price and risk management to protect your capital. These three ingredients are the key to success in stock trading.
The Plan will set certain guidelines for:
What stocks to buy
When to buy
When to sell
Investing is making your money work for you by getting your money to generate more money. Investing in stocks has consistently proven to be one of the most profitable forms of investment available.
The benefits include:
Immediate Buy/Sell so you can sell part of your investment any time.
Very low transaction cost.
The freedom to work at your own place, at your pace in your own time.
Easy monitoring — log in to the market from anywhere in the world.
Being able to maximise returns whilst spreading your risk.
A predictable form of investment if you know what you’re doing.
Putting you in control and freeing you of fund management fees.
Considerable tax advantages.
Things to watch out for:
The market can be a volatile place.
But with the right strategy and commitment anytime is the right tome to invest.The decission is most important thing in a market trade;-buy,sell or hold,but many are investors make a wrong decission buy at the high price then sell the low price.Always trade in the market trend but a lot of investors facing difficulty in exit with the rigth time at the end they miss the boat.So the better way to invest is think like fundamentalist and trade like a technical analysts.Warren Buffet always said ''Be greedy when people are afraid and Be afraid when people are greedy.If you follow this way it's gonna show you a better rezult on your portfolio of investment.Eventhought in bull or bear market trend you can still make money from your investment,but don't not put all your eggs in one busket,always diversified your investment in different sector of business.The Rich people invest the money while the poor people spend their money.Whether you want to choose rich way class or poor way class the decission on your hand.You keep the answer and think abuot it,do not answer for myself but answer for your self.Here are some photos I'm share with you how the market is function and works;
Fundamental of Investment is cause,demand and supply,intrinsic value,has to know why.The problem is speed and quantity,interpretation,insider effect.In Technical Analysts it's show market action,price movement and trend,historical and effect of speculative.
Having selected shares to include in your portfolio you must then have an Exit Strategy in the event that these shares show signs of reversing. Simply set an Early Exit price to ensure that the stocks you buy never generate losses.
This is a simple description of a Trading Plan. It holds the basics for selecting stocks that have a good probability of increasing in price and risk management to protect your capital. These three ingredients are the key to success in stock trading.
The Plan will set certain guidelines for:
What stocks to buy
When to buy
When to sell
Investing is making your money work for you by getting your money to generate more money. Investing in stocks has consistently proven to be one of the most profitable forms of investment available.
The benefits include:
Immediate Buy/Sell so you can sell part of your investment any time.
Very low transaction cost.
The freedom to work at your own place, at your pace in your own time.
Easy monitoring — log in to the market from anywhere in the world.
Being able to maximise returns whilst spreading your risk.
A predictable form of investment if you know what you’re doing.
Putting you in control and freeing you of fund management fees.
Considerable tax advantages.
Things to watch out for:
The market can be a volatile place.
But with the right strategy and commitment anytime is the right tome to invest.The decission is most important thing in a market trade;-buy,sell or hold,but many are investors make a wrong decission buy at the high price then sell the low price.Always trade in the market trend but a lot of investors facing difficulty in exit with the rigth time at the end they miss the boat.So the better way to invest is think like fundamentalist and trade like a technical analysts.Warren Buffet always said ''Be greedy when people are afraid and Be afraid when people are greedy.If you follow this way it's gonna show you a better rezult on your portfolio of investment.Eventhought in bull or bear market trend you can still make money from your investment,but don't not put all your eggs in one busket,always diversified your investment in different sector of business.The Rich people invest the money while the poor people spend their money.Whether you want to choose rich way class or poor way class the decission on your hand.You keep the answer and think abuot it,do not answer for myself but answer for your self.Here are some photos I'm share with you how the market is function and works;
Friday, May 4, 2012
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