We know this is rather abrupt, but to tap on the capabilities of weblogging, we decided to move to Wordpress:
http://themoneyminder.wordpress.com
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Prediction: This Will Be Palantir's Stock Price in 5 Years
51 minutes ago
Thursday, June 11, 2009
Your attitude towards money determines how much you make...or not.
Believe it or not, your views and attitudes about money can, and will, shape the way you make decisions about how much money you make or lose.
More often than not, our everyday decisions—what to buy or sell, how much to invest or save, how we make decisions on spending and/or investments—they're all consciously or sub-consciously based on what we perceive money to be, or how we make our money decisions.
Many people are brought up with the notion that "money is the root of all evil", or that "money can't buy you happiness". It is therefore not surprising that most people make bad judgement calls when it comes to spending or investing their money funds.
I've always been dead set against any notion that money is a "bad" thing to have. In my opinion, anyone who thinks "money can't buy you happiness" either has a lack of it, or has never experienced what it is like to have excess funds and money resources that allows him/her to purchase material tangibles that can directly or indirectly make them happy because they're better off than without.
Robert Kiyosaki, author of Rich Dad, Poor Dad puts a nice perspective: it is the lack of money that is the root of all evil. Odd that there are people who actually feel guilty about having money in their hands, and one reprieve is to try to get rid of their excesses instead of thinking how to further increase their resources on the one hand, yet at the same time, they constantly fret and wonder why is it that they never seem to get enough of money—particularly at times when they face an urgent need to cough up cash or have liquidity issues.
Here's a thought: money is neutral. It is a tool, an instrument, and a vehicle to help you get from point to point in your life, and enables you to have more options when it comes to lifestyle choices.
Not surprising too, that in light of the current financial crisis, many people find themselves not having enough to spend even on daily necessities, and surveys have indicated more than half the working population in Singapore don't have emergency funds (normally benchmarked at three times of their current salaries). So if anything should happen, like getting retrenched or should they resign from their current jobs, people get stuck in embarrassing financial situations—and I see that in many clients, particularly those in the 20-30 year old age group: the young executives trying to make their mark in their careers, and too caught up chasing the 4Cs (condo, car, club membership and cash) that pretty much shapes your social status here in Singapore (or most of Asia).
We get too caught up in consumerism and material pursuits, and on the one hand, while we would like to accumulate wealth, on the other, we give in to flashy advertisements and commercials who tell you to spend now and worry about money issues later.
Note that while I say money can buy you happiness, I would like to emphasise the need for informed choices and smart money spending and investing. For many young consumers who just joined the working world, they seem to get the notion they are infallible—I'm young enough to continue working for a long time, so why not buy whatever I want? Interestingly, it's this 20-30 year old age group of consumers who have virtually no savings or investments in financial products that help them accumulate future spending power, and HR professionals will tell you that this is also the age group that face the prospect of facing their first job retrenchments within the first 5 years of their careers—a worrying thought, if you asked me.
But back to money notions and attitudes: I think one thing we need to recognise and acknowledge is that the concept of "being employed" as we know it has changed over the past decade, and job stability is no longer something we can be certain of, particularly in the past couple of years.
I'll be introducing a new series designed to help you with money management matters, and recommend strategies and tactics to help you better regain control of your finances and help you accumulate wealth.
The overall strategy looks like this:
- Eliminate debt quickly
- Leverage on CPF
- Ensure your future expenses are taken care of
- Build stability
- Include additional sources of income
I'm not promoting a get-rich quick scheme here, but rather, I'm offering a down-to-earth approach to accumulating and consolidating your wealth, and am targeting those with low or moderate risk tolerances. If you're interested to learn more, look out for posts tagged under "Money Management".
Wednesday, June 10, 2009
CNBC: Buying Stocks or Bonds is ‘Gambling’
Nobody should buy a stock and nobody should buy a bond, said John Bogle, founder and former CEO of The Vanguard Group.
“You’re betting on prices — you’re betting on buying them from those who don’t know how much they’re worth and selling them to somebody who thinks they’re worth more,” Bogle told CNBC.
“That’s speculation and it’s short term. It’s influenced and driven by supply and demand, and not by the worth of those companies whose value lies underneath that stock price.”
“You’re betting on prices — you’re betting on buying them from those who don’t know how much they’re worth and selling them to somebody who thinks they’re worth more,” Bogle told CNBC.
“That’s speculation and it’s short term. It’s influenced and driven by supply and demand, and not by the worth of those companies whose value lies underneath that stock price.”
Don't sweat the small stuff
The problem: mixed reactions in the market and uncertainty.
Our strategy view: Strengthen your bases and raid for occasional profits; adopt a wait-and-see strategy and focus on wealth accumulation in the mean-time.
In other words, look at instruments that help strengthen your financial base for the mid- to long-term (e.g. bonds, mutual funds and investment-linked insurance products) Real assets like property are also a good idea, especially given mortgage interest rates are still low at the moment, and should provide you some amount of leverage. Our take is that since investors in the market can’t seem to make up their minds at the moment, this is probably a good time for you to take a step back and focus on strengthening your mid- and long-term financial objectives—in other words, build future capabilities for yourself and accumulate your wealth.
It's essentially building a larger war-chest for the future when others are depleting their in current battles and taking even larger losses.
The problem is that many of us are so focused on short-term gains and profits and wave away the need to think about the mid- and long-term even though we know it’s important, and very often it’s the short-term focus that gets us stuck. I have to admit, the mid- and long-term view isn’t attractive, and certainly you don’t get to see the sexy returns, but given the current climate, planning for the future isn’t a bad idea after all.
Of course, that is not to say you can’t get a slice of the action that’s going on at the moment: sporadic “raids” would help you realise some short term gains. If stocks are something you’re staying off at the moment, try commodities, especially gold.
But the idea here is to remain focused for the mid- and long-term, strengthen (for some it’s re-build, even) your financial base, and pretty much wait for the market to sort itself out. Particularly for those of us who picture ourselves kicking off shoes, laying down on a tanning chair and sipping tequilas by the beach as the ideal lifestyle, it makes sense to think about protection and security for now until we get a better idea of where the market’s headed.
Our strategy view: Strengthen your bases and raid for occasional profits; adopt a wait-and-see strategy and focus on wealth accumulation in the mean-time.
In other words, look at instruments that help strengthen your financial base for the mid- to long-term (e.g. bonds, mutual funds and investment-linked insurance products) Real assets like property are also a good idea, especially given mortgage interest rates are still low at the moment, and should provide you some amount of leverage. Our take is that since investors in the market can’t seem to make up their minds at the moment, this is probably a good time for you to take a step back and focus on strengthening your mid- and long-term financial objectives—in other words, build future capabilities for yourself and accumulate your wealth.
It's essentially building a larger war-chest for the future when others are depleting their in current battles and taking even larger losses.
The problem is that many of us are so focused on short-term gains and profits and wave away the need to think about the mid- and long-term even though we know it’s important, and very often it’s the short-term focus that gets us stuck. I have to admit, the mid- and long-term view isn’t attractive, and certainly you don’t get to see the sexy returns, but given the current climate, planning for the future isn’t a bad idea after all.
Of course, that is not to say you can’t get a slice of the action that’s going on at the moment: sporadic “raids” would help you realise some short term gains. If stocks are something you’re staying off at the moment, try commodities, especially gold.
But the idea here is to remain focused for the mid- and long-term, strengthen (for some it’s re-build, even) your financial base, and pretty much wait for the market to sort itself out. Particularly for those of us who picture ourselves kicking off shoes, laying down on a tanning chair and sipping tequilas by the beach as the ideal lifestyle, it makes sense to think about protection and security for now until we get a better idea of where the market’s headed.
Wall Street gains capped by bond fears
NEW YORK: US stocks sputtered to a mixed finish on Tuesday as fears about rising interest rates that could hamper an economic recovery offset upbeat news from the tech sector.
The market also mulled the impact of news some major banks would be able to repay the government for capital injections, in another sign the financial system was stabilising.
The Dow Jones Industrial Average fell 1.43 points (0.02 percent) to close at 8,763.06 after a choppy session that saw swings in and out of positive territory.
The Nasdaq composite rose a solid 17.73 points (0.96 percent) to 1,860.13 and the Standard & Poor's 500 index edged up 3.29 points (0.35 percent) to 942.43.
The market gave a mixed response to a decision allowing 10 major US banks to repay the Treasury 68 billion dollars for capital injections made to stabilise the financial system.
"This is a clear signal that the government isn't intent on nationalising the banking system as was feared earlier this year," said Ed Yardeni at Yardeni Research.
"It also demonstrates that the government needs the money to shore up other financial institutions, but can't get any more funds from Congress."
But Elizabeth Harrow at Schaeffer's Investment Research said some traders were skeptical despite upbeat comments from Treasury Secretary Timothy Geithner.
"Geithner called the repayments 'an encouraging sign of financial repair,' but traders weren't so easily convinced," she said.
"Many sector heavyweights, including Bank of America and Citigroup, won't be eligible to start paying off Uncle Sam for at least five more months. In the interim, these banks will face tight government scrutiny."
The market remained worried on Tuesday about rising bond yields that could put pressure on interest rates kept at virtually zero levels to help boost economic activity and jolt the economy from prolonged recession.
"Interest rates, particularly between two-year and 10-year maturities, continue to drift up in anticipation of the huge supply of new paper coming to market and questions as to the willingness of foreign buyers to step in and pick up the new supply," said Fred Dickson at DA Davidson & Co.
"The recent rise in interest rates will place more pressure on the US deficit projections as it will cost more to fund government programmes."
Wall Street's worry on yields even eclipsed a better-than-expected mid-quarter update from Texas Instruments, a key semiconductor firm.
Bond prices ended mixed after a rocky session a day earlier. The yield on the 10-year Treasury bond fell to 3.858 percent from 3.889 percent on Monday and that on the 30-year bond rose to 4.653 percent from 4.635 percent. Bond yields and prices move in opposite directions.
Texas Instruments, which said late Monday that it expected higher sales and profits in the current quarter, jumped 6.3 percent to 21.02 dollars.
Banks that were allowed to repay their government aid were mixed.
Morgan Stanley fell 1.3 percent to 30.98 dollars, JPMorgan Chase was down 0.37 percent to 35.26 dollars and US Bancorp shed 0.93 percent to 18.18 dollars while BB&T was up 2.37 percent at 22.45 dollars and Capital One added 2.6 percent to 24.05 dollars. - AFP/de
The market also mulled the impact of news some major banks would be able to repay the government for capital injections, in another sign the financial system was stabilising.
The Dow Jones Industrial Average fell 1.43 points (0.02 percent) to close at 8,763.06 after a choppy session that saw swings in and out of positive territory.
The Nasdaq composite rose a solid 17.73 points (0.96 percent) to 1,860.13 and the Standard & Poor's 500 index edged up 3.29 points (0.35 percent) to 942.43.
The market gave a mixed response to a decision allowing 10 major US banks to repay the Treasury 68 billion dollars for capital injections made to stabilise the financial system.
"This is a clear signal that the government isn't intent on nationalising the banking system as was feared earlier this year," said Ed Yardeni at Yardeni Research.
"It also demonstrates that the government needs the money to shore up other financial institutions, but can't get any more funds from Congress."
But Elizabeth Harrow at Schaeffer's Investment Research said some traders were skeptical despite upbeat comments from Treasury Secretary Timothy Geithner.
"Geithner called the repayments 'an encouraging sign of financial repair,' but traders weren't so easily convinced," she said.
"Many sector heavyweights, including Bank of America and Citigroup, won't be eligible to start paying off Uncle Sam for at least five more months. In the interim, these banks will face tight government scrutiny."
The market remained worried on Tuesday about rising bond yields that could put pressure on interest rates kept at virtually zero levels to help boost economic activity and jolt the economy from prolonged recession.
"Interest rates, particularly between two-year and 10-year maturities, continue to drift up in anticipation of the huge supply of new paper coming to market and questions as to the willingness of foreign buyers to step in and pick up the new supply," said Fred Dickson at DA Davidson & Co.
"The recent rise in interest rates will place more pressure on the US deficit projections as it will cost more to fund government programmes."
Wall Street's worry on yields even eclipsed a better-than-expected mid-quarter update from Texas Instruments, a key semiconductor firm.
Bond prices ended mixed after a rocky session a day earlier. The yield on the 10-year Treasury bond fell to 3.858 percent from 3.889 percent on Monday and that on the 30-year bond rose to 4.653 percent from 4.635 percent. Bond yields and prices move in opposite directions.
Texas Instruments, which said late Monday that it expected higher sales and profits in the current quarter, jumped 6.3 percent to 21.02 dollars.
Banks that were allowed to repay their government aid were mixed.
Morgan Stanley fell 1.3 percent to 30.98 dollars, JPMorgan Chase was down 0.37 percent to 35.26 dollars and US Bancorp shed 0.93 percent to 18.18 dollars while BB&T was up 2.37 percent at 22.45 dollars and Capital One added 2.6 percent to 24.05 dollars. - AFP/de
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