8 Deadly Sins of Investing
1. Overlooking Fundamentals
In a haste to make a quick buck from the market, retail investors tend to overlook the fundamentals of the company they're planning to invest in.
2. Cheap, yet expensive
A successful investor looks for bargain stocks-the ones which are available for prices lower than their worth and have a strong growth potential.
3. Myopic Vision
Stock prices fluctuate wildly over short periods. Due to the turbulent nature of stock markets, it is difficult to profit in short time periods.
4. Ignoring a Portfolio
The economic environment and market scenario are very dynamic. Apart from global and local policies and macroeconomic factors, there can also be changes in company strategies or management.
5. Unwillingness to Book Losses
Investors eagerly cash out small profits on retail investments, but they are often unwilling to book losses on stocks that are sinking. Even when stock prices keep declining, they continue to hold on in the hope that the stock will bounce back and turn profitable sometime. This often results in bigger losses for the investor.
6. Entry at Peaks, Exits at Lows
The stock market always overreacts to news, be it while rising or falling. Successful investors always base their investment decisions on a shares' intrinsic value and hunt for bargain stocks. They will buy shares of a company with strong fundamentals when it's beaten in the market and sell when prices surge.
7. Following Tips
If you try to find trading tips on the Internet, you will get a large number of websites and blogs that offer you free advice. Don't take the advice on these sites as gospel. It's equally dangerous to buy shares because a friend told you that "its price is going to double in six months". Stock tips by analysts published in newspapers or aired on television should also be subjected to scrutiny. Always perform due diligence before placing an order with your broker.
8. Allowing your Broker to Trade
Unscrupulous brokers often use this opportunity to misuse clients' money.
Brokers don't get a commission on the profit you earn, but get paid for trade volume. There have been cases of brokers using investor money for intra-day trading without investors' consent. When you get a statement from your brokerage house, you might see your portfolio running losses with a huge amount paid as brokerage.
Thursday, June 30, 2011
Friday, June 17, 2011
Being destroyed by disappointment?
Read this article about how we deal with disappointment. Very interesting read.
Dealing with Disappointments In Destructive Manners
Many people are caught like fish out of water when they are faced with disappointment. Because they are not taught on how to deal with it, they end up adopting various destructive approaches instead.
1. Avoidance by numbing yourself with other activities
Some people try to drown out or tune out of their disappointment by engaging in anything that takes their mind off the subject. They may partake in activities such as partying, hanging out, sleeping. They push themselves into going through the motions of daily life so they can justoperate in auto-pilot mode without thinking. Some turn to addictions such as retail therapy, playing games, emotional eating, sex or even stimulants such as alcohol and drugs. These people seek solace in whatever that is within their radius, in their effort to avoid being alone with their disappointment. Rebound relationships are commonly formed for this reason, where the person tries to get over the previous relationship without having to deal with it directly.
While these give a temporal uplift in the short-run, they do not resolve the issue. Soon after, they face another situation which leads to disappointment again. Instead of properly resolving the problem, their immediate reaction is to turn to the same set of activities and actions to drown out the emotions. This eventually continues in a downward spiral.
2. Denying your goals and dreams
In the longer term, some block out their dreams and goals in life, pretending they don’t exist. They develop dual personality halves – on the outside, they erect a wall which serves as a form of defense mechanism; on the inside, they hide their real self and desires underneath. They condition themselves into not setting any expectations, since disappointment will not occur where there are no expectations.
For example, people who have been scarred by negative relationships tend to develop barriers to love. On the outside, they appear aloof and cool; however on the inside they long to find their special someone. Because they fear getting hurt, they deny their desire for relationships and refuse to let people into their lives. At some point in the future, this denial catches up with them and it creates a backlash. Have you ever met such people before? They look like they don’t care, but you know on the inside, they really do care. As they block out their desires, they in turn make themselves more miserable in the long-run instead.
3. Giving up on your goals and dreams
There is another group of people who give up on their goals and dreams. While they still long for their goals, these people resign to a fate where they will never reach them. They become depressed and self-depreciative, devaluing their own self worth and thinking they are not meant to achieve anything. They spend more effort everyday trying to convince themselves and people around them that they will never ever achieve their goals, as opposed to acting on them.
What Happens When You Deal With Disappointments Destructively
If you have ever dealt with disappointments in the above manner, you are not properly dealing with them.
In the first part of the series Why Disappointment Is Good, we discussed that one of the reasons disappointment is good is because it represents passion for a cause. The higher your disappointment, it means the stronger your passion is.
Whenever you try to drown out your disappointment, deny your goals and dreams or even give up on them, you are really just rejecting who you are on the inside. You are denying your desires, your wants, your goals, your dreams, your visions, your real self – everything. These desires originated from somewhere inside of you, for a reason – and that reason is not for them to be denied. To quote Esther and Jerry Hicks from the book Ask And It Is Given, “If you have the ability to imagine it, or even to think about it, this Universe has the ability and the resources to deliver it fully unto you.”
When you try to deny your real desires, you are just hollowing yourself from inside out. You can try to pretend everything is fine and lead your everyday life, but you cannot fool your subconsciousness. Everyday, living feels like an empty act. Over time, you will find yourself sinking from a state of disappointment and dissatisfaction to a state of apathy. You start living everyday in a lifeless, zombie-like manner, with no passion or zest. You feel like you are just swirvelled up on the inside; Everything through your lens just seems barren and empty.
The good news is, it doesn’t have to be this way at all. You are not alone in your disappointment. Everyone has faced disappointment at some point – your friends, family, teachers, managers, co-workers, etc. I have faced disappointments before as well, from all different areas of my life. It is not a phenomenon exclusive to you. As much as disappointment is an emotion triggered without your conscious undertaking, you can proactively deal with it in a conscious manner. As long as you learn how you address your disappointments properly and pick up from here, you can lead life the way it is meant to be led – in alignment with your passions and inner desires.
Source: http://celestinechua.com/blog/are-you-letting-your-disappointments-destroy-you/
Thursday, March 31, 2011
Harry Dent: “Major Crash” Coming for Stocks, Commodities Already Topping Out
Harry Dent, founder of HS Dent and The Dent Method predicts another crash coming in the Summer of 2011:-
The first quarter comes to a close today with major averages at or near multi-year highs. Expect "substantial" further gains for stocks before a "major top" occurs in late summer, says noted forecaster Harry Dent, founder of HS Dent and The Dent Method.
The good news, for those long, is Dent predicts the Dow will trade as high as 13,200 by mid-summer and the S&P 500 as high as 1430, or more-than 7% above current levels. The bad news is "then we could see another major crash," Dent says, forecasting the Dow could trade as low as 3300 in a worst-case scenario. "Bubbles go back to where they started or a little lower," he says. "The stock market bubble started at (Dow) 3800 in late 1994."
While Dent predicts the Dow's crash will play out over several years, he sees clear and present danger in gold, silver, oil and other commodities. "All investors should lighten up on or sell oil, silver, and gold as the U.S. dollar looks like it has bottomed and should rise ahead," he writes in the March issue of HS Dent Forecast.
Read more here:-
Monday, March 28, 2011
Goals
Set long-term and short-term goals.
There are six types of short and long-term goals you can include:
1. Your ultimate long-term goal
2. 12 month goal
3. Three month goals
4. Weekly goals (Weekly body composition test and weigh-in)
5. Daily goals (habits to develop, things to do every day repeatedly)
6. The goal of beating your personal best.
Burn the Fat, Feed The Muscle Quote # 1
Positive statements and empowering questions
How can I lose fat and enjoy the process?
What can I do today that will help me get closer to my weight loss goal?
What can I eat right now at this meal that will help me lose body fat?
How great am I going to feel after I finish my workout today?
My metabolism is getting faster every day.
I am getting leaner every day.
I like the way I look.
I am 100% responsible for my results.
Whatever it takes, I’ll do it.
I like eating healthy foods.
I love working out.
Training early in the morning is exhilarating.
I have time for anything I am committed to.
I like myself.
I can do it.
I’ll do it.
Sunday, March 20, 2011
NEW BALANCE MT573
I just bought a new New Balance hiking shoes MT573 yesterday in preparation for my Mount Kinabalu climb. I bought it from N-Concept at Sunway Pyramid for RM240.
Unfortunately i found that the shoe's sole loses grip on a smooth surface if it comes in contact with water!
After i had this problem, I went online to do some checking and came across this :-
"Furthermore, these shoes do not handle moisture very well. Any amount of water that meets the bottom of the shoe will cause slipping. The depressed-most portion of the tread is made of some material that traps and retains water up to 45 minutes after "first contact". Sidewalks with a dusting of snow, sealed concrete, tile, polished terrazzo, some rubber surfaces, wet or dry wood floors, and most non-porous surfaces, etcetera, become hazardous terrain. "
This is just how i felt when i was wearing the NB shoe as well! I'll try to exchange this shoe with another one....But i'm so very dissapointed....
Update: I've managed to convince N-Concept S. Pyramid to exchange MT573 with another shoe. They were hesitant at 1st and kept saying there's nothing wrong with the sole but i was adamant that I do not want to wish MT573 as I had already lost confidence in that flawed shoe. They suggested MT910 which i tried & tested on their treadmill. Although it had a good grip, it didnt feel comfortable and my foot felt really warm. Also my foot and ankle were starting to hurt after wearing it for a few minutes. I finally decided to go for MT813 which has very good reviews on websites like www.amazon.com. Hopefully this time it'll be okay. The MT813 after discount costs RM209 so i had to top up another rm5.70 to get a NB t-shirt. I'm getting the shoe on Thursday since their outlet @ S.Pyramid dont have the size i want and so they need to bring it in from another N-Concept outlet.
Sunday, February 20, 2011
Subscribe to:
Posts (Atom)