Monday, March 23, 2009

"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....

Saturday, November 1, 2008

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!

Friday, October 31, 2008

"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!!

Monday, September 15, 2008

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!

Sunday, August 17, 2008

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.

However, today gold are traded everywhere, in the share market, in unit trust and also traded by banks. Some are traded on paper value while others actually provide you with gold bullion. Do your own research and find out what would suit you better and also look into the charges incurred upon buying and selling. Each trading house has their own percentage level of charges…. Get your investment money’s worth by trading with the lowest in charges….but be wary of the security level as well.

Take a look at this chart --- Gold & The Dollar --- (this chart is borrowed) and you will notice the movement of gold and USD is in the opposite directions. This is another guide for you to consider if you so decide to trade in gold.

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:

  1. 2003 - Gold at $382 dropped to $319 (-16%)
  2. 2004 - Gold at $425 dropped to $375 (-13%)
  3. 2005 - Gold at $536 dropped to $489 (-9%)
  4. 2006 - Gold at $725 dropped to $560 (-22%)
  5. 2007 - Gold at $841 dropped to $778 (-8%)
  6. 2008 – Gold hit $1002 on Mar 17 then dropped to $786 on Aug 15 (-21.5%)

If you look at the above trend, you will see the fluctuated percentage is highest at 22% in a year and this year, gold has hit top value at $1002 per oz and has dropped back to $786 on 15 August, a reduction of 21.5%. Question is …. Is it at its lowest? Also, is it time to invest in gold yet?

Lets take a look at gold price compared to oil price…. Is there a trend for us to follow?

Gold in USD

Oil in USD

31 January 2008



29 February 2008



31 March 2008



30 April 2008



31 May 2008



30 June 2008



31 July 2008



15 August 2008



Alright now, I have done a simple research and a true to life comparison, now you are the one to decide whether its gold you want to invest in and if yes, is it now that you want to go into gold….. the decision is yours to make and the money is yours to earn.

Happy Gold Hunting!!

Wednesday, July 16, 2008

Investing is personal

At times like now, most investors especially those who are new and inexperience; or even those who have already taken some gains earlier are in a predicament not easy to rid off. If you are serious investors with little experience, your brain might now be functioning like a washing machine, round and round with all the unanswered questions:-

  • Dare I invest further?
  • If I dare, what shall I invest in?
  • Do I invest in gold, stock, share, bond, trust fund or commodities?
  • If recession is settling in, how long will it last?
  • Can inflation kill the economy?
  • What is affected, who will be affected?
  • What is the domino effect?
  • Fuel hike .... affects daily commodities .... affects interest rate

Don't even bother to think that anyone can give you a perfect answer; not even God.

For the right answers, search within, you should know yourself well and you just need to re-ask yourself some of these questions:-

  • What is my risk factor?
  • Is it worth all the stress you are getting?
  • Do you want to go on taking the risk?
  • Can you afford to invest long term?
  • How is your "gut" feeling right now?
  • How much profit shall I settle for?
  • How much loss (percentage and money wise) am I willing to take?

Frankly, investing is very personal. You and only you will be able to give you good advice. Use your logic.