Stock Market & money related sharing

Just read one article, you know how the author describe Fundamental and Technical Analyst? In a shopping mall, a fundamental analyst would go to each store, study the product being sold and then decide whether to buy it or not. A technical analyst would sit on the bench in the mall and watch people go into stores, then he study the patterns or activities of people going into each store. So, we can actually combine both: 1. Fundamental analysis shows us What To Buy 2. Technical analysis shows us When To Buy . Below two eBook from CIMB, feel free to download: 1. Fundamental Analysis 2. Technical Analysis  .

Last few days, we saw the market having fun, crash like crazy, people panic selling like no tomorrow. Yesterday we saw US Dow Index down by 283 points, at the time I write this notes, it's down by another 350 points, Dow Index currently stand at 10,774. Many investors force to shake out in this volatile market with one of question in their mind, if the market go down further, should he continue to average down, or should he cut loss? . To a new investor, he will confuse, as many will suggest to “Cut Loss”, whereas, someone might say, no, it's time to buy more so that you can average down to reduce the cost. I think in order to do the right thing (let do not care if this's correct way or not), one must understand what's the purpose or intention when he bought the stock. Is it for short term speculating purpose? Or is it for long term investment purpose? Also, he may want to find out if the share he bought is mean for speculate or investing grade. . You should ...

Nothing is so great in life by making others happy and making all people happy. Many success and rich people like to shares with others. Life is no meaning, the meaning is what you "Give" it. There's why the more you give, the more you will expect in return. How I can help others to enjoy happy life? Money is important, but doesn't mean having a lot of money equal to happy life. Sharing with people to turn their dream into reality is going to make you more happy once you have reach the level.  . Investing will become simple if you write down the purpose and strategy. Once these points properly spell out, the direction is very clear, you will know why taken certain action. The strategy will help you making money in relax way, much simple, easy and less worry. . Just like journey of life, stock market going up and coming down every day.  Some day it will continue to go up for few months, whereas some months it will go down. This is the beauty of the stock market, tr...

Not long ago, I shared about rotten company   (just click on Rotten if want to view the article)  and there are at least 5 of them since then.  Today's local news paper announced, “Sumatec Resource Bhd fell after being told by Bursa Malaysia to restore its finances or risk being delisted”. It share price down almost 50%, at the close was 13 cents only, all time low. I foresee this counter will going to drop in next few days. Many people fail to realize the fact, they just speculate the counter and think it is very 'cheap'. I can tell, you will find tomorrow's price is even cheaper. Investment is similar to doing business, not just buy or sell share, at least you need to know what sort of company you are buying. Today, if your friend ask you to join him open a restaurant, would you just simple give him the money, without asking any question? One must try to understand what's the return, is the restaurant can survive in next few years, the profit margin and try to f...

Dividend Reinvestment Plan (DRP) is very new concept in Malaysia, till now, only two company provide DRP,  namely Maybank and AMMB (one more REIT company going to implement DRP soon). This is suitable for those who think they do not have time to monitor the stock market or read through the research reports and ideally want to keep on invest the great company for next few years. From the history record, in US, if someone invested Pepsi in 1980, $2000 with became $150,000 at 2004. (start with 80 shares will become 2800 shares through DRP)    If invested Philip Morris in 1980, $2000 will worth $300,000 at the end of 2004. (start with 58 shares, turn to 4300 shares) - data took from Ibbotson Associates: What is the advantage DRP to investor? Since last year, Maybank gave share holder an option to choose, share or cash during dividend announcement. Those who opt for DRP will entitle to buy share with the dividend pay at 10% discount from VWAP.  For example, current sha...

If you need the money and the only option is to sell some of your shares, which counters would you sell first? The one that already making money or the one that is in the losing position? You might take out the list and compare the cost with the current market price, most of the people tend to sell the stock that already making profit and retain the worst performing stock in their portfolio.  Almost 90% of people will do this, that's why only 10% of winner making money in stock market because the winner let the profit run but cut the loser very early to limit their down side. Listen to the market, it can talk to you. When you buy a stock and is making money, the market is telling you are right, so let the profit run. When the trade is losing money and getting worse, the market is telling you to get out. A bad trade is like a dead fish, the longer keep it, the worse it smell. Investor need to think like a winner, the winner don't add to or "average" losing position...

Local market started go down, many stocks fall below 30 days moving average, experience investor know opportunity will come. One of the strategy for short term trader is “Sell when stock go down, Buy when stock go up”.  Many will think they should buy when market go down, but experience trader only buy when a stock started to move up. . The reason is if you buy when a stock price start to move down, you might end up catch a falling knife. For example, a stock fall from $3.30 to $2.80, would you buy at $2.80? If someone buy at $2.80 and the next day the stock price rebound, I would say he is a lucky guy. He may not so lucky every time. What if after he buy the stock, it keep falling to $2.50 and further down to $2.00 after few more days. What if the stock price stall at $2.80 for few months? Hence, it's wise to buy near the bottom and the best is only buy when the price just start to move up. . If you say, nevermind, I am rich and can afford to average down, I will keep on buyi...

Invest in stock market is similar to sailing, there's no smooth sail, we always face with storm and bad weather, hence our boat or ship is always shaky. While stock market is making it's all time high in terms of index performance, actually not many investor making all time high earning. The reason? I understand from one of my client, because he could not stand with the shaking situation and fear factor, he sold the share too early. Will you jump down from the ship before reaching the destination? We can not predict the weather and do not know when the storm going to come. Weather forecast in TV quite ofter goes wrong. Similar to stock market investment, we do not know when is the right time to buy or sell, but we can prepare for it. Always ask a question, if a stock price goes down after you buy it, what is your plan? Many people would like to ask, is tomorrow stock price will go up or down? What happen if North Korea start a WAR? If you are a short term trader, not even ne...

Further to my blog of “ Invest for future ”, take the example of the tables. Let assume investor B start the investment at age 19. For first 7 years, he put $6,000 every year at an average growth rate of 10%. (7% interest plus growth) After 7 years he stop his contribution but let the Principal continue to grow at the rate of 10%. A second investor, A, start invest at age of 26 (age when B finished with his contribution) A continue to contribute $6,000 every year until age of 50. The result shows that B who made the contribution early and who make contribution for 7 years only ends up with more money than A who made the contribution at a LATER TIME with 24 years! The rich know how to use TIME and MONEY with the power of compounding to generate more wealth! That is what we always say, Start early and invest for long term. You can view my sample portfolio of how to build stable income over years: Malaysia REIT report

Recently one of my friends asks a question, “Market is quite high now, you see the Index almost reach all time high record of 1500, do you think I should invest in stock market right now?” This is a typical question, yes; market is highly unpredictable and volatile. Let’s assume short tem stock price will move in 3 directions, up, down or unchanged. Hence, if you say stock price is high and expect it will go down, the chance for you to get it right is about 33%. Economy will grow, population will grow and the great business will grow big too. Past records show that, banking, consumer product, Energy Company, health cares are growing bigger each year. The idea is to choose the leader in these industries and invest the first 20% of your fund if you afraid too high to invest now. Ask yourself a question, "if the share price of the company you invested going down by 10% in next few weeks, would you going to buy some more?" If the answer is 'NO' or 'NOT SURE', th...

Let say now you having a lump sum of fund and plan to invest in shock market. You know market is hot for quite some time, the price of many stocks already moved up, those who bought earlier have quite significant of profit. You know currently is not best time to buy a stock as correction might come any time, it just a matter of time. Hence you wait, wait and wait for correction, hopefully can invest when stock price pull down a bit. One week, two weeks and three weeks, but there’s no pull back or correction. You can not wait any longer, as the price keep on going higher. Finally you decide to buy now, hopefully can make a quick profit when the price go higher, maybe it will continue to go up for few weeks and take profit to sell it for quick money, buy back when it go down. This is very good idea, ya?, what’s a perfect plan. However, most of the time, you tend to buy at high price when the stock price is up and sell when the price go down, though sometime you earn some pocket money....

Many think that they don't have any money, there's no point to investing. The truth, investing is the process of building wealth, you can start with any amount, $100, $200 or $500, the earlier the better. Do you know that what ever amount you invest per month for 7 years at 10% is the same amount you can withdraw per month for-ever without touching the principal? If you set aside $500 per month for 7 years, you can take $500 per month - forever. (as long as you able to get 10% annual return)  This is the way how to build stable monthly income!

Recently noticed a lost making investment product from my father, guess what -- Mutual Fund. Invested 12 years ago with principal of $4000, today the market value is worth $1512. ( OMG, a loss of 62% ) Why invest in Mutual Fund and there are still many invest in Mutual Fund, they might not aware of common myths: 1. Fund management said for people who know nothing about investment, mutual fund is best for them. This is not true, as for the case of my father, he bought and kept it for more than 12 years but end up in lost position. One still need to learn what's fund management and how to invest in the fund than simply listen to sales agent. 2. Buy the fund and keep it for long term will profit in the end. Sales agent always tell investor to invest for long term, but the Fund never guarantee with profit not to mentioned about benefit from compound interest. ( also read the disclaimer clause, past performance never guarantee the future... ) 3. The best time to buy fund is ...

Investing is a process of building wealth. In stock market, many think that investing is try to buy low and sell high. Those try to buy low and sell high, we call them trader (or speculator) but not investor. There's nothing wrong to buy low and sell high (be a trader), as long as you can make money, who cares,  but this is not the right concept for investor. Investing should be buying an asset or business that can generate stable income. The famous investor, Warren Buffer, became billionaire by investing in good and monopoly company. Let's take a look at local millionaire, do you see Genting or Public Bank's owner sell their business today and buy back tomorrow and sell again next week? No matter how high or low the share price, they are doing nothing with their share holding. As they know their company will keep on growing and business will expand every year, why bother about their share price. Some of my friends came and ask me to recommend some good stock for inves...