Although most of my posts are related to mutual funds, there are other ways to grow your wealth. These are some alternative methods:
- Stocks
- Forex
- Bonds
- Internet Marketing
Most people are already familiar with stock trading. I will not go into detail here. I will discuss more about Forex in this post.
Foreign Exchange, or better known as Forex, involves the buying of one currency and selling of another simultaneously. The Forex market is the biggest market in the world. It is even bigger than the stock market and the market is open 24 hours a day from Monday to Friday. Forex can be traded online and the buying and selling process is simple and easy, similarly to stock.
Forex unlike stock market is open 24 hours a day. It is suitable for you if you have a fulltime job. You will always be able to find a time window for trading after work. You also just need to be familiarised with four major currency pairs. Thus analysis time will be shorter compare to stocks. The 4 major currency pairs are Euro/USD, GBP/USD, USD/CHF and USD/JPY. Of course, you are also free to just concentrate on buying or selling just one currency pair. These 4 pairs account for the major volume transacted per day. There are also other currency pairs available.
There are many reasons why currency rate changes. Some of the reasons include: change in interest rate of a country, economic data, political uncertainties and natural disasters.
If you are interested in trading forex, you should equipped yourself with the relevant knowledge on Forex. There are many books on Forex trading and valuable knowledge can be gained from them. Likewise there are also online course available on Forex trading.
Saturday, September 11, 2010
Friday, September 3, 2010
My recent account statement
Shown here is my recent account statement with an online mutual fund investment portal, Fundsupermart. I don't recommend invest via Fundsupermart as they start charging a quarterly platform fee recently for cash holdings and I have since transferred out my funds. I like their interface but it didn't justify the additional fees that I need to pay for using their platform. Click on the image to zoom in. I have blacked out some of the info.
I started the investment portfolio in Sep 01 2005 with an initial investment capital of $15000 divide equally into 3 funds. The profit shown in the screenshot is not the overall paper profit that I made. I had sold and cashed in profits in the past. :) Although investment is for longterm, I still like to lock in profits once in a while to safeguard my profits. We never know when's the next crisis and I don't want to see my profits turn into dust. I would start to buy again during market downturn. Besides growing our wealth, we also need to protect it.
How time flies! It's been a rollercoaster ride for the past 5 years. I have seen ups and downs in the market. When times are bad, I don't panic. I still sleep well at night. That's because I always believe the market will eventually recover and I only invest spare cash and not money which I may need in the short term. I would see bad times as opportunities to invest.
I am back!
Hi folks! It's been a while since my last posting. I had to admit I had been lazy to update this blog but I will try to make it a point to update more regularly from now on. I hope everyone is still doing fine despite the global financial crisis of 2008. Fortunately, my investment portfolio has since recovered from the global financial meltdown. Although some of my mutual funds are still in the negative territory, overall I am still making decent paper profits. Whew! I shall post some screenshots of my mutual fund investment account statement in my subsequent postings.
Sunday, October 21, 2007
Product Understanding
The Product here refers to the way or methods in which would help you to increase your wealth. You have to know the risks involved, if any. You should invest your money that could give you the projected returns at the risk level and time horizon that you are comfortable with. If you worry about your investments and can't sleep well at night, then it's not the right one for you. Before you start investing your money, you have to understand the Product first. Remember, don't invest blindly.
Saturday, October 13, 2007
Where to go for Knowledge?
In my earlier post, I said that Knowledge is Power. Once you have the Knowledge (Power), you can use it to your advantage, be it trading or investing. Without the proper Knowledge, you could just be taking a gamble with your money.
Some of the ways to increase your knowledge include:
-Books. They are many books on Finance, Investments and Trading which you could buy or borrow from the library.
Tips: Before I buy a book, sometimes I would go to Amazon.com to read user reviews for that book. If the review is not good, I would give it a miss. I would then find another book which cover similar topics but with better and positive reviews. I would also compare the prices to see if it's cheaper if I buy it online. I also compare the prices between online bookstores to see which is cheaper. I will also factor in the shipping fees. Books sold in Singapore are generally more expensive than in US and if you order a few items, you could actually save a tidy sum of money!
-Internet. Internet is a great source of Knowledge. You can get all sorts of info regarding Investments and Trading. Just do a google search and you should be able to find what you are looking for.
Tips: If you are interested to know more about Investments and Trading, Investopedia.com is one website you should check out. The website has articles for Beginners and you can also sign up for free newsletters.
-Courses and ebooks. You can also sign up for courses. There are courses related to financial planning, stock trading and forex. They could be conducted offline or online. You could also purchase ebooks which you could print out and read during your leisure time. Check out some of my Google ads on the right!
Tips: If you are interested in some online courses, try do a google search for the course review for comments about the course.
Some of the ways to increase your knowledge include:
-Books. They are many books on Finance, Investments and Trading which you could buy or borrow from the library.
Tips: Before I buy a book, sometimes I would go to Amazon.com to read user reviews for that book. If the review is not good, I would give it a miss. I would then find another book which cover similar topics but with better and positive reviews. I would also compare the prices to see if it's cheaper if I buy it online. I also compare the prices between online bookstores to see which is cheaper. I will also factor in the shipping fees. Books sold in Singapore are generally more expensive than in US and if you order a few items, you could actually save a tidy sum of money!
-Internet. Internet is a great source of Knowledge. You can get all sorts of info regarding Investments and Trading. Just do a google search and you should be able to find what you are looking for.
Tips: If you are interested to know more about Investments and Trading, Investopedia.com is one website you should check out. The website has articles for Beginners and you can also sign up for free newsletters.
-Courses and ebooks. You can also sign up for courses. There are courses related to financial planning, stock trading and forex. They could be conducted offline or online. You could also purchase ebooks which you could print out and read during your leisure time. Check out some of my Google ads on the right!
Tips: If you are interested in some online courses, try do a google search for the course review for comments about the course.
Thursday, September 27, 2007
Is Investing and Trading Risky?
A common misconception and reason why people are unwilling to invest is because of they think that investing is very risky. This is absolutely untrue. It is only risky when you invest or trade blindly. Risk comes from not knowing what you are doing and this applies not just to investing. Of course, it is not totally without risk. But they are ways to minimise the risks and enhance your profits. Below are general points to take note before you start to invest:
-Product understanding. You have to understand the product that you invest or trade in. How profits are generated and the possible losses that could be incurred. If you are interested in stock trading, read some books or take some courses to learn how to trade.
-Strategy (Risk Management). When to cut your losses or lock in your profits. Most people lose because they do not have a strategy. They do not know when to cut losses and let profits run (especially in trading).
-Time Horizon. If you have a longer time horizon, you can take on higher risk investment which may take a longer time for profits to be seen. However, this also depends on your risk appetite.
-Risk appetite. If you are of very low risk tolerance and lose sleep when you see some paper losses, you may want to look for safer investments such as bonds or money markets.
I will elaborate more on these points in my future posts.
-Product understanding. You have to understand the product that you invest or trade in. How profits are generated and the possible losses that could be incurred. If you are interested in stock trading, read some books or take some courses to learn how to trade.
-Strategy (Risk Management). When to cut your losses or lock in your profits. Most people lose because they do not have a strategy. They do not know when to cut losses and let profits run (especially in trading).
-Time Horizon. If you have a longer time horizon, you can take on higher risk investment which may take a longer time for profits to be seen. However, this also depends on your risk appetite.
-Risk appetite. If you are of very low risk tolerance and lose sleep when you see some paper losses, you may want to look for safer investments such as bonds or money markets.
I will elaborate more on these points in my future posts.
Sunday, September 23, 2007
Why I invest in mutual funds
I started diy investing in mutual funds in August 2005. I was not satisfied with the miserable interest rate I got from my bank savings so I decided to do something about it. I am glad I did. I invested around US$10000 at that time but increased the amount was increased gradually.
Benefits of mutual funds:
-less risky than stocks due to diversification (Money from investors are pooled together and invest among different stocks and managed by a fund manager)
- Global and Sector investment. Your investment objective can be based on region (e.g Europe, Asia or even individual country) or sector (e.g technology, resources) which you think has potential.
- Professionally managed by fund manager. (Although a fund is already diversified into a number of stocks and/or bonds, you should also invest into a number of funds which has little correlation to each other. In case one of your fund underperforms, your overall portfolio would not be much affected.)
Disadvantages of mutual funds
- High sales charge plus an annual charge. In Singapore, I pay typically 1.5 - 2 % sales charge when I buy a fund online. However, this is still cheaper compared to buying from banks even though you could be buying the same fund!
- You do not know the actual price that you buy and sell unlike stocks. The price of a fund is only known on the next day.
Even though there are some disadvantages, the benefits far outweigh them.
Benefits of mutual funds:
-less risky than stocks due to diversification (Money from investors are pooled together and invest among different stocks and managed by a fund manager)
- Global and Sector investment. Your investment objective can be based on region (e.g Europe, Asia or even individual country) or sector (e.g technology, resources) which you think has potential.
- Professionally managed by fund manager. (Although a fund is already diversified into a number of stocks and/or bonds, you should also invest into a number of funds which has little correlation to each other. In case one of your fund underperforms, your overall portfolio would not be much affected.)
Disadvantages of mutual funds
- High sales charge plus an annual charge. In Singapore, I pay typically 1.5 - 2 % sales charge when I buy a fund online. However, this is still cheaper compared to buying from banks even though you could be buying the same fund!
- You do not know the actual price that you buy and sell unlike stocks. The price of a fund is only known on the next day.
Even though there are some disadvantages, the benefits far outweigh them.
Millionaire Traits
These are the common qualities that millionaires possess
1. Be passionate and love what you do
2. Confident, Postive and Self-motivated
3. Invest not only money but your time and effort
4. Always keen to learn and try out new stuff
5. Set goals and targets. Have the discipline to follow them.
6. Be persistence and not afraid of failures. In fact, learn from your failures.
Follow these guidelines and you will be on the way to a successful and rich life!
1. Be passionate and love what you do
2. Confident, Postive and Self-motivated
3. Invest not only money but your time and effort
4. Always keen to learn and try out new stuff
5. Set goals and targets. Have the discipline to follow them.
6. Be persistence and not afraid of failures. In fact, learn from your failures.
Follow these guidelines and you will be on the way to a successful and rich life!
When to Start?
When would be a good time to learn to grow your wealth? When do you start saving? The answer is as early as possible. Do not give yourself excuse that you would start saving when your financial situation improves or after you get a pay rise. A dollar saved is a dollar earned. If you save $100 per month, this amount would grow to $1200 in a year! You can start small but be consistent. You can increase the amount that you save gradually. In the meantime while you save, you can do more research on possible ways to further increase your wealth such as investing in mutual funds or stocks.
Knowledge is Power
To become a money magnet, you have to equip yourself with the knowledge of becoming one. You will have to learn the tools and ways that people use in becoming rich. Study their ways and pick up their mindset. If you are interested in investing, read books on Warren Buffett and George Soros. Learn their investment habits and strategies. Of course, you may also consider taking some related courses (depending on your area of interests). Invest in knowledge will bring you closer to your goals.
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