Comparison With Other Investment Products 5 Sept 2011

There is a special highlight on how to handle the current challenges in present market conditions on the above mentioned date.  Do not miss it!

RECRUITMENT FOR DYNAMIC GROWTH

                         OV to share with team members on Recruitment For Dynamic Growth

The contents of the sharing

The highlight! Wow, the market is huge!

The commitment & cooperation amongst team members during workshop

GAMs also participate to give ideas & guidance during workshop discussion

                                           More brains, definitely more ideas.  TEAMWORK!

The fun of workshop to come out with more solutions!

Hey, team members always have chance to speak out!

 

                     

7 Common Investor Mistakes

Of the mistakes made by investors, seven of them are repeat offenses. In fact, investors have been making these same mistakes since the dawn of modern markets, and will likely be repeating them for years to come. You can significantly boost your chances of investment success by becoming aware of these typical errors and taking steps to avoid them.

1. No Plan

As the old saying goes, if you don't know where you're going, any road will take you there. Solution?

Have a personal investment plan or policy that addresses the following:

Goals and objectives - Find out what you're trying to accomplish. Accumulating $100,000 for a child's college education or $2 million for retirement at age 60 are appropriate goals. Beating the market is not a goal.

Risks - What risks are relevant to you or your portfolio? If you are a 30-year-old saving for retirement, volatility isn't (or shouldn't be) a meaningful risk. On the other hand, inflation - which erodes any long-term portfolio - is a significant risk.

Appropriate benchmarks - How will you measure the success of your portfolio, its asset classes and individual funds or managers?

Asset allocation - What percentage of your total portfolio will you allocate to U.S. equities, international stocks, U.S. bonds, high-yield bonds, etc. Your asset allocation should accomplish your goals while addressing relevant risks.

Diversification - Allocating to different asset classes is the initial layer of diversification. You then need to diversify within each asset class. In U.S. stocks, for example, this means exposure to large-, mid- and small-cap stocks.

Your written plan's guidelines will help you adhere to a sound long-term policy, even when current market conditions are unsettling. Having a good plan and sticking to it is not nearly as exciting or as much fun as trying to time the markets, but it will be more profitable in the long term.


2. Too Short of a Time Horizon

If you are saving for retirement 30 years hence, what the stock market does this year or next shouldn't be the biggest concern. Even if you are just entering retirement at age 70, your life expectancy is likely 15 to 20 years. If you expect to leave some assets to your heirs, then your


3. Too Much Attention Given to Financial Media

There is almost nothing on financial news shows that can help you achieve your goals. Turn them off. There are few newsletters that can provide you with anything of value. Even if there were, how do you identify them in advance?

Think about it - if anyone really had profitable stock tips, trading advice or a secret formula to make big bucks, would they blab it on TV or sell it to you for $49 per month? No - they'd keep their mouth shut, make their millions and not have to sell a newsletter to make a living.

Solution? Spend less time watching financial shows on TV and reading newsletters. Spend more time creating - and sticking to - your investment plan.


4. Not Rebalancing

Rebalancing is the process of returning your portfolio to its target asset allocation as outlined in your investment plan. Rebalancing is difficult because it forces you to sell the asset class that is performing well and buy more of your worst performing asset classes. This contrarian action is very difficult for many investors.

In addition, rebalancing is unprofitable right up to that point where it pays off spectacularly (think U.S. equities in the late 1990s), and the underperforming assets start to take off.

However, a portfolio allowed to drift with market returns guarantees that asset classes will be overweighted at market peaks and underweighted at market lows - a formula for poor performance. The solution? Rebalance religiously and reap the long-term rewards.


5. Overconfidence in the Ability of Managers

From numerous studies, including Burton Malkiel's 1995 study entitled, "Returns From Investing In Equity Mutual Funds", we know that most managers will underperform their benchmarks. We also know that there's no consistent way to select - in advance - those managers that will outperform. We also know that very, very few individuals can profitably time the market over the long term. So why are so many investors confident of their abilities to time the market and select outperforming managers?

Fidelity guru Peter Lynch once observed, "There are no market timers in the 'Forbes' 400'." Investors' misplaced overconfidence in their ability to market-time and select outperforming managers leads directly to our next common investment mistake.


6. Not Enough Indexing

There is not enough time to recite many of the studies that prove that most managers and mutual funds underperform their benchmarks. Over the long-term, low-cost index funds are typically upper second-quartile performers, or better than 65-75% of actively managed funds.

Despite all the evidence in favor of indexing, the desire to invest with active managers remains strong. John Bogle, the founder of Vanguard, says it's because, "Hope springs eternal. Indexing is sort of dull. It flies in the face of the American way [that] 'I can do better.'"

Index all or a large portion (70-80%) of all your traditional asset classes. If you can't resist the excitement of pursuing the next great performer, set aside a portion (20-30%) of each asset class to allocate to active managers. This may satisfy your desire to pursue outperformance without devastating your portfolio.


7. Chasing Performance

Many investors select asset classes, strategies, managers and funds based on recent strong performance. The feeling that "I'm missing out on great returns" has probably led to more bad investment decisions than any other single factor. If a particular asset class, strategy or fund has done extremely well for three or four years, we know one thing with certainty: We should have invested three or four years ago. Now, however, the particular cycle that led to this great performance may be nearing its end. The smart money is moving out, and the dumb money is pouring in. Stick with your investment plan and rebalance, which is the polar opposite of chasing performance.


Conclusion

Investors who recognize and avoid these seven common mistakes give themselves a great advantage in meeting their investment goals. Most of the solutions above are not exciting, and they don't make great cocktail party conversation. However, they are likely to be profitable. And isn't that why we really invest?

How to Reach Your Goals

Outlining a goal increases the probability it will be accomplished. Here are some guidelines and techniques to help you accomplish your goals:

• Focus on results and opportunities.

• Use positive, meaningful language.

• Personalize to your values and purpose.

• Write it down with a deadline.

• Use clear, simple and specific words.

• Make it exciting or challenging.

• Build in reminders and milestones.

• Create a contract with yourself or others.

• Craft a way to visualize the goal.

• Set short and long-term objectives.

• Analyze for problems and solutions.

Business Opportunity Preview Night on 18 July 20114e

Chit Chatting while having the refreshment ...

GAM, Cindy Ong & her associates ..

Fancy door gifts for prospect UTCs..

The Most Handsome MC in OV

Registration Counter

 GAM Ang, explaining the multi sources of income for UTCs

Interesting words by Ang to the audience ...

Invited Speaker, Wendy Cheong, gave an inspiring talk via her experience in PMB

Token of appreciation from OV President to Guest Speaker

Fill up stomach before listen to the talk ...

OV-Mid Year Review (4 July 2011)

GAM Cindy Ong - the 1st speaker to share her tips

Deanna, Yvonne, CP Tan, Cindy and Lee Peng - The Super Achievers

Henry, Melissa, Gillian, Marry, CK, Linda, Lianne & Susan - The Achievers

Sharing by Gillian

Participants listne attentively to the success story of Gillian : )

Sharing by Marry - Full of action and motivation!!

Miley Cyrus - The Climb

Something nice to share "A tale of Two Seas"

Sitting in the Geography class in school, I remember how fascinated I was when we were being taught all about the Dead Sea. As you probably recall, the Dead Sea is really a Lake, not a sea (and as my Geography teacher pointed out, if you understood that, it would guarantee 4 marks in the term paper!)
Its so high in salt content that the human body can float easily. You can almost lie down and read a book! The salt in the Dead Sea is as high as 35% - almost 10 times the normal ocean water. And all that saltiness has meant that there is no life at all in the Dead Sea. No fish. No vegetation. No sea animals. Nothing lives in the Dead sea.

And hence the name: Dead Sea.

While the Dead Sea has remained etched in my memory, I don't seem to recall learning about the Sea of Galilee in my school Geography lesson. So when I heard about the Sea of Galilee and the Dead Sea and the tale of the two seas - I was intrigued. Turns out that the Sea of Galilee is just north of the Dead Sea. Both the Sea of Galilee and the Dead Sea receive their water from river Jordan. And yet, they are very, very different.

Unlike the Dead Sea, the Sea of Galilee is pretty, resplendent with rich, colorful marine life. There are lots of plants. And lots of fish too. In fact, the sea of Galilee is home to over twenty different types of fishes.

Same region, same source of water, and yet while one sea is full of life, the other is dead. How come?

Here apparently is why. The River Jordan flows into the Sea of Galilee and then flows out. The water simply passes through the Sea of Galilee in and then out - and that keeps the Sea healthy and vibrant, teeming with marine life.

But the Dead Sea is so far below the mean sea level, that it has no outlet. The water flows in from the river Jordan, but does not flow out. There are no outlet streams. It is estimated that over a million tons of water evaporate from the Dead Sea every day. Leaving it salty. Too full of minerals. And unfit for any marine life.

The Dead Sea takes water from the River Jordan, and holds it. It does not give. Result? No life at all.
Think about it.

Life is not just about getting. Its about giving. We all need to be a bit like the Sea of Galilee.

We are fortunate to get wealth, knowledge, love and respect. But if we don't learn to give, we could all end up like the Dead Sea. The love and the respect, the wealth and the knowledge could all evaporate. Like the water in the Dead Sea.

If we get the Dead Sea mentality of merely taking in more water, more money, more everything the results can be disastrous. Good idea to make sure that in the sea of your own life, you have outlets. Many outlets. For love and wealth - and everything else that you get in your life. Make sure you don't just get, you give too. Open the taps. And you'll open the floodgates to happiness.

Make that a habit. To share. To give.
And experience life. Experience the magic!

China Stocks to Soar 20% in Second-Half: HSBC

This week, Goldman Sachs joined banks including JP Morgan in lowering their outlook for China's growth, but HSBC says the recent trend of softening commodity prices could actually help boost mainland equities by 20 percent in the second-half.
Read more.....
http://www.cnbc.com/id/43177605/

Why are reserves of central banks so big?

Trade protection is an ever present threat in the current economic climate. Politicians have become animated about currency "manipulation", unlevel playing fields and other obstacles to export led recoveries. One barometer that is often watched closely is the level of foreign exchange reserves accumulated by central banks around the world. Because foreign exchange reserve accumulation is (broadly) a consequence of intervention in markets, the accumulation of foreign exchange reserves is often used as a proxy for "unfair" competitive practices.

The accumulation of foreign exchange reserves is often cited by European and American politicians in their complaints against Asian trade and foreign exchange market practices. That global foreign exchange reserves have increased significantly is beyond doubt - though in a higher risk environment, this may simply reflect the realities of modern international trade.

One reason central banks may want to hold more reserves simply to protect themselves and their economies against the risks of problems with trade finance or problems in short-term foreign currency funding.

It makes sense for a central bank to hold a higher level of foreign exchange reserves than has been considered normal in the past, if there is an increased risk that the domestic economy will need foreign cash. Looking at other possible drivers for this reserve accumulation, however, it produces some interesting results.

The obvious place to start in looking at foreign exchange reserves is with current account surpluses. Countries that run fixed or managed exchange rate regimes (including many Asian economies) have collectively increased their foreign exchange rate reserves significantly in recent years.

Those countries that chose not to operate managed regimes are unlikely to have significantly added to their stock of reserves (barring shocks to the system, as with Japan recently). Therefore it is the managed exchange rate regimes of the world that are of most concern.

When we look at the countries with managed or fixed exchange rates, we find that they were running a collective current account surplus of around half a trillion dollars in 2009 (which was, generally speaking, a bad year for trade - which makes the size of the surplus all the more remarkable).

This would seem to support the contention of trade protectionists, who argue that central banks are building reserves in order to suppress the value of their currencies and boost their current account surpluses.

However, current account surpluses are not the only motive for accumulating foreign exchange reserves. Monetary authorities that are seeking to manage their exchange rates will have to offset not only the current account position, but also any capital inflows which are directed towards their countries.

To some extent, capital controls can contribute to the manipulation of capital flows by changing the risks and incentives to invest in a specific economy, but that may not be sufficient.

Capital flows into those countries with fixed and managed exchange rate regimes have been significant in the recent past. In 2009, portfolio flows (buying financial instruments, like shares) and foreign direct investment (for instance, investing in factories) accounted for roughly half a trillion dollars.

In other words, the capital inflows into countries that manage their exchange rates are exactly as important as the current account surpluses of those countries.

Of course, private sector outflows by local investors buying overseas assets may offset these capital inflows to some extent, but there is still a need for these capital flows to be compensated for if the monetary authorities wish to maintain a fixed or semi-fixed exchange rate regime.

Only half of the reason for building foreign exchange reserves is the current account surplus. The other half of the reason for building foreign exchange reserves in those countries than manage their exchange rates is that international investors want to invest in those countries.

This highlights a critical issue for the debate surrounding foreign exchange reserves, exchange rate regimes and trade protection: current account surpluses are not the overwhelming cause of reserve accumulation by those countries that seek to manage their foreign exchange rates. Capital inflows into fixed and managed exchange rate regimes assume as much importance as current account balances.

Foreign exchange reserve accumulation may still be a signal that a currency is undervalued - but it might be undervalued from a capital account perspective, rather than a current account perspective.

That is to say, controlling the exchange rate may make assets appear cheap to foreign investors, which may be more important than making domestically made goods appear cheap to foreign consumers.

It is perfectly possible that the accumulation of foreign exchange reserves could be curtailed through capital controls or shifts in expectations about asset market returns, without there being any noticeable rebalancing of current account positions.

The writer is managing director of global economics, UBS Investment Bank.