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Written by By: Adam Khoo
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Tuesday, 16 September 2008 |
Value Investing - The Strategy Used By The World's Greatest Investor
Value Investing - The Strategy Used By The World's Greatest Investor by Adam Khoo
Value Investing is the strategy employed by the world's greatest investor and also the second richest man in the world, Warren Buffett. I was first inspired by Buffett's ability to make money in the markets when I read a book that was written about him in 1993. I was so amazed by this man not just because he was worth US$52 billion (just US$4 billion behind Bill Gates), but because he made all his money without selling a single product or service. He made his fortune purely through investing in stocks.
From a very early age young, Warren Buffett was obsessed with making money and had a very clear dream of becoming the world's greatest investor. Born during the depression when his father was close to bankruptcy, Warren learnt about the value of money and the importance of being financially secure at an early age. Even before his teens, Warren knew that he wanted to be rich, very very rich. As early as elementary school and later on in high school, he would tell his classmates that he wanted to become a millionaire. before the age of 35 (when he turned 35, his net worth exceeded US$6 million). Inspired by his dream, he started researching on the secrets of wealth creation.
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Written by By: Steve Selengut
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Monday, 15 September 2008 |
Preventing Investment Mistakes: Ten Risk Minimizers
Preventing Investment Mistakes: Ten Risk Minimizers by Steve Selengut
Most investment mistakes are caused by basic misunderstandings of the securities markets and by invalid performance expectations. The markets move in totally unpredictable cyclical patterns of varying duration and amplitude. Evaluating the performance of the two major classes of investment securities needs to be done separately because they are owned for differing purposes. Stock market equity investments are expected to produce realized capital gains; income-producing investments are expected to generate cash flow.
Losing money on an investment may not be the result of an investment mistake, and not all mistakes result in monetary losses. But errors occur most frequently when judgment is unduly influenced by emotions such as fear and greed, hindsightful observations, and short-term market value comparisons with unrelated numbers. Your own misconceptions about how securities react to varying economic, political, and hysterical circumstances are your most vicious enemy.
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Written by By: Alexander West
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Friday, 12 September 2008 |
Is Share Investing Difficult?
Is Share Investing Difficult? by Alexander West
Let us begin by understanding what shares are. Shares are a part ownership of a public company like Microsoft, Coca Cola and the like. Any public company needs investment to begin operations and then to continue those operations. This investment is generally huge. For that reason, the company raises capital by announcing its public issue shares in the market. This is called as a Initial Public Offering (popularly called as IPO). Each share has a particular price that it is offered to the public and generally anyone is free to buy any amount of shares. So, if you buy a hundred shares in a company, in return you will get a share certificate as proof of ownership and you will have ownership rights within the company such as an invitation to the company Annual General Meeeting. You will get voting rights within the company, but your ownership will be restricted to one hundred shares. If there are a thousand shares issued by the company and you own one hundred of them, then you own 10% of the company.
The investment in shares is actually two fold. The first is when you buy the shares, you have invested that much capital in the company. As the company functions, it might make profits or losses. If it starts to make a profit, your shares become more valuable because the public want to buy into this company. The second is in the form of a dividend payment. If you kept the shares, particularly longerthan six months you also receive what is called a dividend payment. A Dividend payment is typically what a company gives to its shareholders when the company has made a profit.
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Last Updated ( Friday, 12 September 2008 )
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Written by By: Wilfrid Baptiste
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Thursday, 11 September 2008 |
Want To Invest? Stocks Are Your Best Friend
Want To Invest? Stocks Are Your Best Friend by Wilfrid Baptiste
History suggests that stocks are the best investment you can make when you're in it for the long haul. No matter the investment vehicle, be it bonds, cash, diamonds, silver, gold, in the long run stocks give the best returns. I read in a lot of places that stocks returns are higher than real estate returns but I don't personally agree. Real estate returns are calculated on the basis of the property's appreciation, but if you want to calculate your personal return on a real estate investment, you have to account for the fact that only part of your investment was financed with your own money... But I digress...
What happens if you compare stocks to cash over the long term? A good example of a cash investment is money invested in three-month Treasuries or a first-rate money market fund. A cash investment is NOT the emergency savings fund that is recommended you keep on hand for a rainy day. Over the past 60 years, cash has turned out to be a loser. After accounting for inflation, cash has returned an average 0.5% per year since 1926, compared to 6.9% for the S&P 500.
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