Lower Risk, Higher Returns?

Every since i was young, it is almost a truth that in order to have higher returns, we need to take higher risk… Even the textbooks teaches it. I am going to perform a myth buster right here. My argument would be that in order to have higher returns, you need higher financial intelligence. And in fact, when you have higher financial intelligence, you lower your risk. Let me give …

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Options in Stock Investments?

Options in Stock Investments? I first learnt about options in my university in Business School. Options are used for hedging risk for investments traditionally, i.e. people use options to reduce their risk, so they pay others to take on their risks. Options are very like insurance. Stock owners wants people to insure them in event anything happens to their stock, e.g. stock price plunge, and they are willing to pay …

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Philosophy of Great Investors II

Philosophy of Great Investors II “Be fearful when others are greedy. Be greedy when others are fearful.”Warren Buffett. Chairman, Berkshire Hathaway   Don’t Let Emotions Guide Your Investment Decisions Great investors throughout history have recognized the value of making decisions that may not feel good at the time but that will bear fruit over the long term–such as investing in areas of the market that investors are avoiding and avoiding …

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Philosophy of Great Investors

Philosophy of Great Investors “Individuals who cannot master their emotions are ill-suited to profit from the investment process.” Benjamin Graham. Father of Value Investing Avoid Self-Destructive Investor Behavior Chasing the hot-performing investment category or making major tweaks to your long-term investment plan can sabotage your ability to build wealth. Instead, work closely with your financial advisor to outline your long-term goals, develop a plan to achieve them and set the …

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Warren Buffett’s Investment Rules | Why I Simply Stick to Rule #1?

Warren Buffett’s 2 Rules in Investing Warren Buffett has 2 rules in Investing. Rule #1: Don’t lose money. Rule #2: Refer to Rule #1. Personally, I love these 2 rules because losing money is not only painful, but it decreases your chance of your financial dreams dramatically. Imagine you started with $50,000. With the right rate of compounding of say 20% and when you let it compound long enough, you …

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Stupid in Small

Stupid in Small I once heard a story of Warren Buffett playing golf with Bill Gates and their group of friends, not sure if it is a true story, but I found the story behind it very powerful. And also, personally I don’t play Golf so please pardon me if certain terminology is inaccurate. The group of friends came to the Par 3, which is apparently the one which has …

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Why I don’t follow the Financial News?

Why I don’t follow the Financial News? Personally, I do not follow the financial news. I won’t know that the market had crashed until a friend tells me. I remembered that Warren Buffett’s teacher, Benjamin Graham once telling him to look at the stock market as a partner named, Mr Market. He also mentioned that Mr Market is a great partner, but is a lousy advisor. Mr Market had mood …

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The 4 steps of Stock Investing

The 4 Steps of Stock Investing Whenever friends ask me what stocks to buy? I will answer that if I tell them “what stocks to buy” is only 1 step out of the 4 steps of the investing process and it will not be complete unless I show them the entire 4 steps. Lets take a look at the 4 steps A-B-C-D stock investment process:   A – Assess: Going …

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Investment in Stocks

Investment in Stocks We all need to invest and I love to invest in various investments. Some of the investment vehicles could be: 1)     Stock 2)     Bonds 3)     Mutual Funds 4)     Real Estate 5)     Land Banking 6)     Precious Metals 7)     Collectibles 8)     Small Businesses   Of all these, I love the stock market for these reasons: 1)     Small Capital Outlay You need not have huge capital to start stock investments. …

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Understanding Financial Health of a Company

Understanding Financial Health of a Company In dissecting a business to check its “health”, we make use of the 3 Financial Statements: Balance Sheet Income Statement Cash Flow   In this post, we will look into the balance sheet:   The Balance Sheet The Balance Sheet is a financial statement that summarizes a company’s assets, liabilities and shareholders’ equity at a specific point in time. These three balance sheet segments give investors an idea as …

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