Saturday, August 23, 2008

Market Down – How to Survive

Most of the investor knows the theory, “buy low, sell high.”  However, with the fear of an economic slowdown the market now moving up and down – volatility is back. The rapid downward movement makes it difficult for investors to fulfill the buy low sell high strategy. If you are not selling high, you are not freeing up cash to invest in the bargains that are becoming available in generally falling market.


However, there’s always active cash machine – dividend paying stocks become popular and powerful in down market. Those dividends get paid regardless of what direction stocks move. Less know, but important, is that dividends themselves can give you a tremendous rate of return, with no stock gains required. So even market stay flag or down for years, you can still get a decent return on your investment --- dividends. The true power and returns from dividends come from the rise over time as the companies behind those dividends grow and prosper.


In the down market, you can reinvest those dividends and accumulate more shares at cheaper prices. Or you can switch to an income strategy and take the cold, hard cash. You can rest assured that even as the market flips flops and falls, your cash will keep rolling in.


Sunday, August 17, 2008

Investing is similar to taste of Strong Wine

Many people like to ask, how much money should one invest into Stock Market is considered appropriate with good return? There’s no definite answer, to me, if one can afford to loss money in Stock Market and he can still enjoy the meal with good appetite, then it should be fine.

 Most of people enjoy drinking, not only one bottle, but kind of few bottles in one short. I don’t know how people really enjoy with this kind of bottom up drinking, but for sure, if buying Share with this kind of behavior, your pocket is going to bottom up! (Chinese say Gang Pei, let the glass empty)

 Actually, buying share is like tasting of X.O., little by little, with this slowness drinking, one can enjoy the process, taste it at least. Normally if drinking too much too fast, the only possibility is vomiting.


One should only invest with the money that intended to keep in Bank’s Fix Deposit account, say about 40% of net worth. Every month review the investment result before making any decision, in this case break your investment timing into separate portion, and don’t buy at one time. Again, look for long team… would like to use the investment Guru’s words, “Buy into the Company because you want to own it, not because you want the Stock to go up”. 

Sunday, August 3, 2008

The purpose of Investment

Many people when ask why they invest… the first answer is to earn money. Yes, many of the advisor or instructor when given speech on investment, the answer is “Making Money”. Is that so simple?
Few years ago, there’s an old man migrated to America, he felt life was boring there. As he didn’t know English, didn’t know how to drive, life was meaningless until he meat a man who told him to invest in Stock Market.
Temple Pagoda...
God never promise sky will always blue!
 At the years of eighty, he start to invest part of his money, about 100 thousand in stock market. Investing in stock market has changed his life. First, he started to read news paper. He subscribed to 3 news paper and search the dictionary on any word which he didn’t understand. After 3 years, his English standard had improved a lot! Beside, he start to listen to TV news in order not to miss out any important event. This had improved his English literacy as well.
 Quite strange, the hearing problem was being cured after few months watching and hearing TV news. The gastric problem also improved a lot and now he need to take one big bowl of rice for each meal. At night, he did home work, drawing chart, study PE ratio, reading company’s Financial Report and perform analysis.
 At last, someone ask, after so many year of investing, how much money did he earn? He say, still at the learning stage… after so many years, he lost 2 thousand. He further explained that he learn so many thing and feel life full of meaning. If 2 thousand can buy the happiness, this is very cheap lesson to pay for 2 thousand only.
 As investor, do you still think the purpose for investment is “making Money”? The main reason for investing should be enjoy life and increase value of it. Of course, if you can obtain both, then you are the most Happy Person in the world!