15 February 2013

My Investment Strategy - Hope Can Give You Some Ideas

I'm just nobody in this world. So what I am writing here would not be useful for you, but I just hope to give you some ideas on my investment strategy.

Not too long ago, I attended a seminar conducted by Thomson Reuters in Singapore office. It was about Japanese Yen Currency Policy changes made by new Japanese government. One of my friends made some fortune by betting on weakening yen and better Japanese Exporters shares price. I also knew that Soros just added another fresh 1B from his family office on betting a weakening yen.

Of course, I learnt it from CFA course. But in actual life, I never take any action on policy changes (Political Risk) made by the government. If we restrict ourselves on our region (e.g. Singapore / Malaysia), then we might miss a chance by putting ourselves in a better competitive edge.

Anyway, so to begin with my investment strategy, I would like to share with you on my ideal investment strategy plan:

  1. Cash - This is the important component. Be it in Foreign currency / local currency. Without cash, we could not purchase other asset classes. Of course, you may like to utilize on borrowing to get more assets under you, however, without this first step, we could not able to establish a good investment strategy plan. For most of us investors who are having a stable income job, you may like to fully utilize your "name" to get more cash to purchase more assets. You must decide when you want to have more cash or when you want to have more assets. These decision (asset allocation) by far is one of the important factors to determine your future investment return rate. 
  2. Your Asset Classes - This is another important component. Some of the investors still do not really understand what the risk is about. They only focus on the UP and DOWN of the prices of asset they are holding on, or focus on the future cash flow they forecast to get. However, I realize that the investment return rate is only base on two factors - your purchase price and your selling price. And of course the dividends / rental income you could receive every regular period. The traditional theory tells us the higher risk the higher potential return. But what I learnt from Graham was that, the "smarter" you are with the asset class that you are investing in, the better result you could get. Try to get more familiarize with the asset class. Just treat them as your girl friends / boy friends and fall in love with them. I do not really convinced a guy can get rich through investment / business if he does not like to spend most of his time in his investment / business. The more hard work you are (of course you must pose correct way of doing correct thing), the better result you could get. 
  3. You Yourself - Human factor is part of the behavioral finance I learnt from CFA course. Anyway, if you really like to know more about yourself on managing your personal finance, you could just go and meet any financial adviser / fund manager / financial consultant. I believe they can give some ideas to you on your risk/return behavior. 

1 comment:

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