Saturday 16 November 2013

Herd instinct can be a detriment to investing success

On the one hand, one's own 'personal' approach to making an investment decision may suggest one course of action; on the other, the lure of the 'herd instinct' may be pulling entirely in the opposite direction. Even professionals can be swayed by popular opinion at times when ignoring the crowd would ultimately be more profitable.

Today, the instinct to listen to the group and follow the crowd is often useful. For example, you may choose a restaurant based on reviews , book a room at an inn after referencing feedback on TripAdvisor, or choose a plumber by following recommendations from Facebook friends.
This instinct to favor what is popular and well-liked among family, friends, and neighbors was crucial in the human race's early days. Common group knowledge supported survival. For example, if everyone drank from a certain body of water or ate a strange food and lived happily afterward, then the water or food was deemed safe to consume. Following the crowd simplified decision making, offering an easy and secure way to live.
Today, however, we may suffer harm when we apply such thought processes to investing decisions. That is, favoring what is popular or following the crowd may not be the best way to invest our money. Specifically, we often wrongly chase performance, buying shares of stocks, mutual funds, or other assets based on recent past performance and unloading them from our portfolio when everyone else is selling.
We need to retrain our instincts not to ignore the crowd altogether but to place a much greater weight to a disciplined investment approach.

Tuesday 16 July 2013

Are Singapore residential rents really going downhill ?

The prime reason?

Huge unit supply gives tenants bargaining power. In its latest analysis of the Singapore residential rental market, Knight Frank Singapore said that there are over 16,000 private residential units launching island-wide in 2013. 

Rents are anticipated to see downward pressure this year as prospective tenants are presented with ample housing options. 

Leasing demand for residential units in prime districts has been moderating for the past 2 quarters, as accommodation budgets for many Singapore expatriates are constrained amid a challenging global business environment. Budget-conscious expatriates are also seen to be opting for units in the city fringe and suburban locations

Tuesday 25 June 2013

Do you know how to invest wisely?

There’s a fine line between optimism and ignorance. We love investment of any kind.... but are we over-investing ? that means putting more money into an asset (whether it’s a house, courses, etc.) than the asset is actually worth.
1.  Properties
It's our favourite national past time. People talk about properties being the best means to hedge against inflation. Yes it probably is, but it’s not for the rookies. But now even rookies are at it, the reason? Home loans are at its record low.
But what they don’t understand is, even though it’s low now, you are taking a 25 to 35 yrs. loan & along the way it’s going up. Especially after your 2nd or 3rd year lock in period. And did you factor in the interest increasing in a few years time when you buy your dream home? Then there's the agent fee, stamp duty these are money that could be substantial. If you think of flipping your apt, these are costs that will set you back quite a bit.
As for rental, it is not predictable at all. Expats come& go, economy rises & fall- all these would affect you if you are looking to this rental income to help in paying for the mortgage. What if no one wants to rent your apartment & you have to leave it empty for months? You  hear there's an over supply now right?
 
2. Renovations

I don’t understand why someone would blow a cool 100k into a brand new apt. If it's old & need work ok... but a brand new place???? In the past only the rich living in condos or landed properties hires an interior decorator or designer. Today the bulk of their business comes from HDB dwellers.

The most popular renovations involve walk-in wardrobes, “open concept” layouts, and kitchen islands. Truth is a HDB room is already so small what’s the point having a walk-in wardrobe? The cost involved in creating something so impractical is mind boggling!! And in the future any appreciation in property value is diminished by that extra cost. Worst is if you have to take up a renovation loan to do all that!
3. Get Rich Seminars
Just open the papers & you see  a ton of these.  Someone wants to impart their secret to you on how to make a million. It's really getting very popular these days. We all desperately wanted to buy some get rich secrets from the experts.
I’ve been to a few. They are essentially the same. A charismatic motivational speaker talks to you- it’s all very positive & feel good.  They don’t have any real information to give you. They just remind you that if “they” can do it ( they & other very rich people lah…) so can you! You pay $2500- for someone to tell you that!!!!  Truth is,  they make the money from just telling you : you can do it- you have it in you- dont let obsticales stand in your way & a bunch of crap like that!!! I can do that for free!!! Or just buy a book any book from some financial guru, it's just as good- can buy second some more...lol....
Oh....If you think you can do some networking there, well you’ll be disappointed, everyone there, is just like you……
Still you'll excited make plans and phone calls, and give it up a few days later. All that’s left is that big heavy file & $2500- poorer!

Wednesday 24 April 2013

Hackers attacking banks

These  hackers usually struck late on Friday & it’s giving European & US banks a really hard time. The worst is though these attacks are  2 prongs. The first is just a  smokescreens. As the staff is busy fighting the attack, hackers struck again, exploiting the openings to steal account information and create counterfeit debit cards. 

It’s like when you are focusing dealing with someone at the  front door, his buddy enters from the back & robs you! 
 
One attack was so fast that, within two hours, US$9 million was withdrawn from the ATMs  in 46 cities, according to Francis deSouza, president of products and services for Symantec, the Mountain View-based information security company that investigated the incidents. 

Symantec's findings show that the attacks, are not new, but have evolved from nuisances causing temporary disturbance to website  into one of the cheapest and most effective ways to rob banks. 

Millions of dollars were stolen in the past year in two-pronged attacks that banks did not notice until customers complained or investigators later uncovered the breaches, said Samir Kapuria, a Symantec vice-president who led the research. 

While some European & US banks have acknowledged that the attacks have damaged their websites, Symantec's research shows that hackers have reached deeper than institutions have been willing to acknowledge. It is still not clear what losses these banks and their customers have lost in these attacks. 

So my advise, double check your bank statements every month. Why I said that, my parents admitted to me, they NEVER check their statements as to them Spore banks will never be wrong! Oh boy, you never know right? I trust the banks but those hackers are really good!!!!

Wednesday 27 March 2013

Investment for retirement

Everyone knows the secret to investment success is to buy low and sell high. The problem is most of us lack clairvoyance. While it's easy to see that chasing hot stocks -- the most frequently cited mistake -- would be an exercise in futility, there are other pitfalls to watch out for on the road to retirement.  There are never any guarantees when investing, but avoiding  some common mistakes  will help you lots!

Matching Goals with your investments
Need that money for retirement in the next couple years? Don't put it in a hot emerging-markets fund. Consider when you'll need access to your money. This will help you avoid unnecessary transaction fees, penalties and risk. For some goals, such as paying for college, it may make sense to use a mix of investments . Experts say: If you are saving for college and your child is within three years of going to college, you've still got seven years until that last year of college.
So while the bulk of short-term college savings should probably be very safe in CDs or short-term bonds or a high-yielding savings account, maybe some of that money could be invested in stocks. "Just remember the rule of thumb, that money you'll need within five years shouldn't be in stocks."
Asset Diversification
You bought a bunch of different funds -- so that means you're diversified, right? Not necessarily. You don't want to find out that you're overexposed to a particular market sector after it hits a rough patch.
Understanding the different types of asset classes will help you strategize. Different asset classes do better at different times. Bonds may do well while the stock market is suffering and large-cap firms may weather tough times better than small caps. Boring bonds will never match stocks in a hot market and small caps may be better poised to take off like a shot than their larger, lumbering counterparts.
Don’t Ignore your portfolio
Buy and hold can be a smart strategy, but buy and ignore won't serve you in the long run.  Without reviewing your holdings, you won't know if your portfolio remains balanced, and you won't shift your holdings to achieve retirement goals or help you cope with changing life events.  The experts says  it's important to review your holdings at least once a year, whether they're within a company-sponsored retirement plan or outside of one.

Sunday 20 January 2013

Some weird companies that make it!

It seems like you can publicly trade anything these days!  When we think of Public companies, we usually think of  Google,  Coca-Cola,  Microsoft etc…. , but we all know  there are a lot more public companies in the equity market than just the household names.

Here are just some
1.Does your pet have stinky bedding? International Absorbents Inc. (NYSE:IAX) makes animal care absorbent products that reduce odors and last longer than wood shavings. They also have a line of small pet food and are moving into the cat litter business as well. This still may not be enough to get you to buy a guinea pig, but any improvement in the absorbency area should be welcome news.
2.When you are stuck in traffic all kinds of ideas can pass though your head about how to avoid this in the future. The traffic management industry thinks about this all of the time. In fact, that's all Iteris, Inc. (NYSE:ITI) focuses on as they develop applications of technologies that reduce traffic congestion. Speaking on behalf of everyone in a major city: work faster!
3.Kids love Rollerblades, skateboards and just about anything with wheels. So when Heelys, Inc. (Nasdaq:HLYS) put the wheels in the shoes themselves, they really had something. While kids moving through streets, shopping centers and classrooms at faster speeds may not be appealing to some adults, it's likely they are just jealous they didn't have them when they were kids.
4.Have you ever brought home a big balloon for a birthday or holiday? If so, then you may be a customer of CTI Industries (Nasdaq:CTIB). Along with other things, it produces and distributes foil and latex balloons in more than 30 countries. You'll never think of that heart shaped Valentine's day balloon the same way again.
While there are thousands of publicly traded companies, it's mostly the larger, well-known brands that we recognize. As this list shows, there are no restrictions on the types of companies that can go public and list their securities for sale on a stock exchange. Well it could happen to you! If you have a great idea, do something about it!!!