Sunday, 31 March 2019

Quote for the day

“Life is a gift, and it offers us the privilege, opportunity, and responsibility to give something back by becoming more.” – Tony Robbins

Saturday, 30 March 2019

Quote for the day

“In order to carry a positive action we must develop here a positive vision.” – Dalai Lama

Tuesday, 26 March 2019

Sunday, 24 March 2019

Quote for the day

“Change the changeable, accept the unchangeable, and remove yourself from the unacceptable.” - Denis Waitley

Saturday, 23 March 2019

Quote for the day

“The level of success you achieve will be in direct proportion to the depth of your commitment.” - Roy T. Bennett

Wednesday, 20 March 2019

Tips for avoiding the top 20 common investment mistakes

By Robert Stammers, CFA, Director, Investor Education

When learning how to invest, it is important to learn from the best, but it also pays to learn from the worst.

These top 20 most common mistakes have been compiled to help investors know what to watch out for. If any of these mistakes sound familiar, it is likely time to meet with a financial adviser.

1. Expecting too much or using someone else’s expectations

Investing for the long term involves creating a well-diversified portfolio designed to provide you with the appropriate levels of risk and return under a variety of market scenarios. But even after designing the right portfolio, no one can predict or control what returns the market will actually provide. It is important not to expect too much and to be careful when figuring out what to expect. Nobody can tell you what a reasonable rate of return is without having an understanding of you, your goals, and your current asset allocation.

2. Not having clear investment goals

The adage, “If you don’t know where you are going, you will probably end up somewhere else,” is as true of investing as anything else.

Everything from the investment plan to the strategies used, the portfolio design, and even the individual securities can be configured with your life objectives in mind. Too many investors focus on the latest investment fad or on maximizing short-term investment return instead of designing an investment portfolio that has a high probability of achieving their long-term investment objectives.

3. Failing to diversify enough

The only way to create a portfolio that has the potential to provide appropriate levels of risk and return in various market scenarios is adequate diversification. Often investors think they can maximize returns by taking a large investment exposure in one security or sector. But when the market moves against such a concentrated position, it can be disastrous. Too much diversification and too many exposures can also affect performance. The best course of action is to find a balance. Seek the advice of a professional adviser.

4. Focusing on the wrong kind of performance

There are two timeframes that are important to keep in mind: the dhort term and everything else. If you are a long-term investor, speculating on performance in the short term can be a recipe for disaster because it can make you second guess your strategy and motivate short-term portfolio modifications. But looking past near term chatter to the factors that drive long-term performance is a worthy undertaking. If you find yourself looking short term, refocus.

5. Buying high and selling low

The fundamental principle of investing is to buy low and sell high, so why do so many investors do the opposite? Instead of rational decision making, many investment decisions are motivated by fear or greed. In many cases, investors buy high in an attempt to maximize
short-term returns instead of trying to achieve long-term investment goals. A focus on near-term returns leads to investing in the latest investment craze or fad or investing in the assets or investment strategies that were effective in the near past. Either way, once an investment has become popular and gained the public’s attention, it becomes more difficult to have an edge in determining its value.

6. Trading too much and too often

When investing, patience is a virtue. Often it takes time to gain the ultimate benefits of an investment and asset allocation strategy.

Continued modification of investment tactics and portfolio composition can not only reduce returns through greater transaction fees, it can also result in taking unanticipated and uncompensated risks. You should always be sure you are on track. Use the impulse to reconfigure your investment portfolio as a prompt to learn more about the assets you hold instead of as a push to trade.

7. Paying too much in fees and commissions

Investing in a high-cost fund or paying too much in advisory fees is a common mistake because even a small increase in fees can have a significant effect on wealth over the long term. Before opening an account, be aware of the potential cost of every investment decision. Look for funds that have fees that make sense and make sure you are receiving value for the advisory fees you are paying.

8. Focusing too much on taxes

Although making investment decisions on the basis of potential tax consequences is a bit like the tail wagging the dog, it is still a common investor mistake. You should be smart about taxes—tax loss harvesting can improve your returns significantly—but it is important that the impetus to buy or sell a security is driven by its merits, not its tax consequences.

9. Not reviewing investments regularly

If you are invested in a diversified portfolio, there is an excellent chance that some things will go up while others go down. At the end of a quarter or a year, the portfolio you built with careful planning will start to look quite different. Don’t get too far off track! Check in regularly (at a minimum once a year) to make sure that your investments still make sense for your situation and (importantly) that your portfolio doesn’t need rebalancing.

10. Taking too much, too little, or the wrong risk

Investing involves taking some level of risk in exchange for potential reward. Taking too much risk can lead to large variations in investment performance that may be outside your comfort zone. Taking too little risk can result in returns too low to achieve your financial goals. Make sure that you know your financial and emotional ability to take risks and recognize the investment risks you are taking.

11. Not knowing the true performance of your investments

It is shocking how many people have no idea how their investments have performed. Even if they know the headline result or how a couple of their stocks have done, they rarely know how they have performed in the context of their portfolio. Even that is not enough; you have to relate the performance of your overall portfolio to your plan to see if you are on track after accounting for costs and inflation. Don’t neglect this! How else will you know how you are doing?

12. Reacting to the media

There are plenty of 24-hour news channels that make money by showing “tradable” information. It would be foolish to try to keep up. The key is to parse valuable information out of all the noise.

Successful and seasoned investors gather information from several independent sources and conduct their own proprietary research
and analysis. Using the news as a sole source of investment analysis is a common investor mistake because by the time the information has become public, it has already been factored into market pricing.

13. Chasing yield

A high-yielding asset is a very seductive thing. Why wouldn’t you try to maximize the amount of money you get back? Simple: Past returns are no indication of future performance and the highest yields carry the highest risks! Focus on the whole picture; don’t get distracted while disregarding risk management.

14. Trying to be a market timing genius

Market timing is possible, but very, very, very hard. For people who are not well trained, trying to make a well-timed call can be their undoing. An investor that was out of the market during the top 10 trading days for the S&P 500 Index from 1993 to 2013 would have achieved a 5.4% annualized return instead of 9.2% by staying invested. This difference suggests that investors are better off contributing consistently to their investment portfolio rather than trying to trade in and out in an attempt to time the market.

15. Not doing due diligence

There are many databases in which you can check whether the people managing your money have the training, experience, and ethical standing to merit your trust. Why wouldn’t you check them? Ask for references and check their work on the investments that they recommend. The worst case is that you trade an afternoon of effort for sleeping better at night. The best case is that you avoid the next “Madoff” scheme. Any investor should be willing to take that trade.

16. Working with the wrong adviser

An investment adviser should be your partner in achieving your investment goals. The ideal financial professional and financial service provider not only has the ability to solve your problems but shares a similar philosophy about investing and even life in general.

The benefits of taking extra time to find the right adviser far outweigh the comfort of making a quick decision.

17. Letting emotions get in the way

Investing brings up significant emotional issues that can impede decision making. Do you want to involve your spouse in planning your finances? What do you want to happen with your assets after you die? Don’t let the immensity of these questions get in the way. A good adviser will be able to help you construct a plan that works no matter what the answers to these questions are.

18. Forgetting about inflation

Most investors focus on nominal returns instead of real returns. This focus means looking at and comparing performance after fees and inflation. Even if the economy is not in a massive inflationary period, some costs will still rise! It is important to remember that what you can buy with the assets you have is in many ways more important than their value in dollar terms. Develop a discipline of focusing on what is really important: your returns after adjusting for rising costs.

19. Neglecting to start or continue

Individuals often fail to begin an investment program simply because they lack basic knowledge of where or how to start. Likewise, periods of inactivity are frequently the result of lethargy or discouragement over previous investment losses. Investment management is a discipline that is not overly complex, but requires continual effort and analysis in order to be successful.

20. Not controlling what you can

People like to say that they can’t tell the future, but they neglect to mention that you can take action to shape it. You can’t control what the market will bear, but you can save more money! Continually investing capital over time can have as much influence on wealth accumulation as the return on investment. It is the surest way to increase the probability of reaching your financial goals.


Quote for the day

“Time is what we want most, but what we use worst.” - William Penn

Sunday, 17 March 2019

Quote for the day

"Happiness is not the absence of problems; it's the ability to deal with them." - Steve Maraboli

Saturday, 16 March 2019

Quote for the day

"We can easily forgive a child who is afraid of the dark; the real tragedy of life is when men are afraid of the light." - Plato

Thursday, 14 March 2019

Buy and Sell Exchange Rates - 14-Mar-2019

Source: CBSL

Colombo Stock Exchange Trade Summary 14-Mar-2019

Quote for the day

"Embrace what you don't know, especially in the beginning, because what you don't know can become your greatest asset. It ensures that you will absolutely be doing things different from everybody else." - Sara Blakely

Sunday, 10 March 2019

Investment Vs Speculation Vs Gambling

By Sunil Sahdev

Many people do not differentiate between the following terms when they invest their hard-earned money in different asset classes, particularly in stock market and often get confused between;

1. Saving

2. Investment

3. Speculations

4. Gambling

We often use the word savings and investment interchangeably, while both are different and both are necessary to secure our future. Saving is done for purchases and emergencies while investment is being done for creation of wealth. I have heard from most of the people that they are savings for their retired life, we need to understand that if we are saving for our retired life we need to invest that money to create wealth. We need to allocate the money wisely between saving and investment, it depends upon behavior of each individual and allocation can be made accordingly. In general, we shall allocate equivalent of three to six months expenses for savings and any excess over it should be allocated for investment.

There is a razor thin differentiation between investment and speculations, in reality it depends upon our own behavior as an investor to differentiate between investment and speculation. Investment and speculative deals are generally done for real assets.

Investment can be defined as “The employment of funds to acquire certain assets after due diligence for mid to long period of time, with the objective of wealth creation and additional income in future”.

Speculative investment can be defined as “The employment of funds to acquire assets for shorter duration of time to take advantage of fluctuations in prices of underlying assets”.

However, Gambling can be defined as “The employment of funds for entertainment/fun with the chances of return depends upon probability of certain situation or events”. For example, deploying funds on horse racing can be defined as gambling.

Key differential of investment vs speculation vs Gambling is:

1. Risk Analysis and Risk appetite: Investor will generally rely on the fundamental analysis of financials and other factors which can affect the price of the asset class and their decision to invest in particular asset is based upon certain fundamental values associated with the asset. Investors do have long term risk and return perspective. While speculators generally rely on the flow of the wind without analysing any fundamentals. Speculators do take higher risk for expects higher returns in short period. Gambler risk entire capital on bet and relay mainly on luck. They are the highest risk takers and ready to lose original investment also.

2. Price of the asset: Investor does not look at the price of the asset rather it looks at the asset itself to determine the decision to allocate some money now to get some money back later on. Investor does not get influenced by daily fluctuations of the asset price, because his/her allocation of money decision is based on the intrinsic value of the assets rather then price. Speculators look at the price of the asset to allocate the money and they do get influenced by the daily fluctuations of the price of the assets, aim of the speculator is to get some quick reward. Gambling is based upon odds and bets are placed only on assumptions.

3. Time Horizon: Investors allocate money for a particular asset for longer period while speculators allocate money for shorter period, on the other hand gambler place bet for immediate gain.

4. Leverages: An investor allocates money from its own resources for investment while and speculators may also rely on borrowed money to allocate. This is applicable mainly to assets belongs to equity market. Gambler generally allocate their own money and place bet for entertainment or fun.

An individual’s approach towards investment identifies the individual either investor or speculators. If an individual is investing without fundamental analysis, only on the basis of market sentiments and certain news, for a shorter duration can be defined as speculative investor. An Individual who invests with proper fundamental analysis for longer period of duration can be defined as investor.

In conclusion, Investor will get stable return over a long run and I advise all my readers to invest wisely after proper analysis of the company to secure their hard money for fairly good chances for creation of wealth. If you are a speculator, make sure your entry and exit to the market is at right time and always be ready to higher risk of loss of original investment in worst circumstances. Gambling should be avoided always and in most of the cases gambling is not legal also.
Source: via twitter

Quote for the day

"What lies behind us and what lies before us are tiny matters compared to what lies within us." - Henry Stanley Haskins

Saturday, 9 March 2019

40 of the World’s Most Powerful Money Rules

Money is not random in nature it has principles and rules for where it ends up. No matter where you start out in life from a financial standpoint there are things you can do to create cash flow in your direction. Money flows from people that do not know how to manage it to people that do. Money seeks returns on capital through investments in stocks, businesses, bonds, and people. 

Here are 40 of the most powerful rules to earn more, keep more of what your earn, and put the money to work for you instead of you working for money your entire life,

40 of the World’s Most Powerful Money Rules

Your Financial Future
1. What are your financial goals? You have to plan your future. 

2. Look for a mission in life not a job.

3. Your spouse is your lifetime financial partner. Choose wisely. 

4. Work for personal growth not for just money.

5. You get paid on the value you create not what you think you are worth. 

6. Your net worth is the difference between your income and your spending. 

7. You need a budget or self-control.

8. What is your time and energy worth? Only work jobs that are worth the pay. 

9. Buy things that you value the most, do not buy for appearances to impress other people. 

10. Do you enjoy the way you earn a living? If not you are in the wrong job.

Low Stress Finances
11. Your standard of living should reflect your earnings power not your desires. 

12. Save enough money for Murphy’s law. 

13. Use other’s people money to buy assets not liabilities. 

14. The Power of ‘F@ck You Money’. Always be able to quit and seek other opportunities. 

15. Save 10% of your gross income. 

16. Put your money to work. 

17. Money flows from those who can’t manage it to those who can. 

18. Do not put money in things you do not fully understand. 

19. The fastest way to go broke is to try to get rich quick. 

20. Insurance is financial defense.

Building Wealth
21. Pay yourself before anyone else. 

22. The 100% return most employees are missing: 401K matches.

23. The hidden expense of taxes. Optimize for tax liability. 

24. High income is not the same as wealth. 

25. Looking rich is no the same as being rich. 

26. What creates wealth? Creating value for others or partnering with those who do. 

27. The stock market is a wealth builder. 

28. Home ownership can be a wealth builder. 

29. Always consider the risk and the reward in any endeavor. 

30. Invest in your knowledge and skills through education in whatever form that takes for your goals. 

31. Know your net worth.

Financial Freedom
32. Fire your boss if you hate your job. There are other jobs and ways to make money. 

33. You can’t ‘take it with you’ but you can enjoy freedom now when you have enough money. 

34. Build a business versus having a job. 

35. Plan for retirement as early as possible.

36. There are other ways to make money besides a job. 

37. When cash flowing assets are greater than bills you are free.

38. If I didn’t have a job what would you do? Whatever you wanted. 

39. Use capital to buy your time back. 

40. The greatest luxury item is financial freedom.

Source : 

Quote for the day

"Being challenged in life is inevitable, being defeated is optional." - Roger Crawford

Thursday, 7 March 2019