What is missing in your financial plan?

A financial plan is an on-going process of fact finding, analyzing your current budget and financial goals to accomplish the final financial goal or a set of circumstances, e.g. elimination of debt, retirement preparedness, etc.

If you have a sound financial plan, you could probably ignore the rest but please send me a bouquet if you find something that is 'of thought' in my post. Thanks in advance. In addition, if you have been following my posts, you would find my articles 'unique and rare' in the sense that other professionals do not post in their blog mainly because they 'charged' exorbitantly for professional charges. You get free, NO obligation in my blog.

Most often than not, most Singaporean do not have a financial plan which includes a budget & balance sheet, risk management or insurance plan, investment plan, will and income tax plan, etc.

·         Most often than not, most Singaporean do not have a financial plan which includes a budget & balance sheet, risk management or insurance plan, investment plan, will and income tax plan, etc.

·         I am not surprised to find out If, most of you, who have an impressive portfolio of insurance policies but have not make any plans for any nomination or will planning!

·         If you do have a will, were you advised the advantages of making your insurance nomination through the will or ‘nomination of beneficiaries’ framework such that you can decide intelligently given ‘that’ knowledge? If not, you need to find out where the difference is?

·         If you do not have a will, are you familiar with the ISA? Do you have a wish on how you like your assets to be distributed or leave it to the Act?

Whichever, what were your pending instructions for your investments through the insurance companies and various investment platforms after our demise? Would you leave it to the Executor or the Estate? How long would it take to identify and nominate an Administrator to manage your investment when you do not have a will (given the volatility of the market since March 2012)?

·         If you don’t understand what I am saying to any or all of the above

·         If you do not have a ‘valid’ CPF nomination, will or nomination of beneficiaries

·         If you do not have an insurance plan, investment plan, tax plan

·         If you do not have a financial plan

Why then do you

1.    Buy insurance for risk management

2.    Invest your hard earned savings for a comfortable retirement???

In the midst of your heavy schedule climbing up the corporate ladder, in search of a higher standard of living and comfort but you may not have realized that you may have paid the least attention to having a proper financial plan for yourself, your loved ones, siblings or dependants???. Most of us would deem this as least important but will realize it is too late when the unexpected event occurs. Pardon me for saying but the reality is some of you do not understand or know where your family priorities are!

What’s next? Having a plan is similar to having a health screening report. Without taking the prescription or executing the recommendation is equally pointless.

Last but not least, having an on-going financial plan is equally important as there are various and different aspects/stages in the life cycle that we have to go through as we become ‘wiser’!

Or would you blame it on your incompetent insurance agent, legal advisor or financial planner who forgot to tell/advise you in your reviews? Or are you probably waiting for snow to fall in Singapore?

Whatever is your journey, I hope you will come to realize the importance of planning and executing your financial plan soon. While for some, seeking a fresh or second opinion will help you realize what is missing! If you have any further queries, I am sure you’ll know who to contact. Happy planning!

Why financial markets are not going your trend?

Financial markets are not predictable.

Financial markets are not logical most of the times.

Most would wonder why Asian equity markets plunge while US Dow rallied for a third day or US markets ended mixed.

While

·         China’s ‘good news’ rate cut spooks market from MarketWatch

·         Bernanke Sees Easing Options While Not Specifying Them from Bloomberg

·         Spanish Banks Need $50 Billion: IMF Report from CNBC.....

The rate cut was NOT a surprise. My post on China Making Contingency Plans for a Greek Exit would have pre-empted you that China was on to something! Though missed by many while interpreted with a different mindset would have resulted otherwise.

Bernanke is Bernanke. How well do you read Mr. Bernanke? As in my earlier post, he is a patient strategist. His moves and actions are well supported. My opinion is that his decision to utilise the appropriate tool or tools would be when he has sufficient data to react. Meanwhile the FOMC is not convinced to react given the current financial market. It means there is room to fall.

IMF. Is $50 Billion sufficient?

Markets movements are based on ‘speculations’ and hopes. If speculated wrongly which I believe the current speculation is WRONG, the reality takes control.

In addition, was that a coordinated Central Banks action? Is there volatility? Or is there more uncertainty? What’s going to happen on June 17^th or 18^th?

Why are my posts different from others? My question to the audience is do you see, hear, smell the ‘happenings’ in the financial markets? Do you utilise your senses? Hence, you would be able to TASTE the success in the journey of investing!

Learn and educate yourself at a higher level – above average. Outsource - if you do not have time or if it is not your cup of tea. Doors are always open to queries. Have a great weekend!

China Making Contingency Plans for a Greek Exit

The above post was just released from CNBC. It discusses a call for contingency plans from the China authorities for a possible Greek exit.

As you probably know, news providers are eager to broadcast the latest news. There are times when they do not verify the source of information. Do you recall the Spain-IMF rescue which was later denied?

Whichever, we too, have a contingency plan.

If the above is true, how would this relate to ‘global investors call for coordinated Central Bank intervention’? The pieces of the jigsaw puzzle does not add up!

·         Would China participate with Central Banks for a coordinated Central Bank intervention?

·         If no, why not?

·         If China were too, wouldn’t the stock market rally? If yes, why would there still be a call for a contingency plan?

·         It’s possible; there may not be a coordinated Central Bank intervention before June 17^th.

·         If it were to happen, then the call for a contingency plan cautions any market rally as it may be short lived. Hence, be very careful for (many) multiple bull traps following rallies.

The discussion goes on...

The above is just part of my daily process, monitoring financial markets and putting pieces together. I am not sure if it would help you but we need to contribute and put our brains together such that Singapore investors are not suckered into bull rallies and lose their hard earned savings.

As usual, the above are my personal opinions and do not demonstrate any form of advice or recommendation. And if you find the above interesting, please remember to add me, like me or forward the article to your friends. Otherwise, I would assume that these posts do not add any value to the audience and hence I would put my effort in better areas of interest.

I would monitor the above 'news' closely and if were true than it would affect the current strategy in place. That is how important it is to monitor global news constantly, interpret what it means and to verify if the news sounds logical or otherwise.

Have a great week ahead!

Think deep and hard before you invest

Think deep and hard before you invest / advise / share.

The markets had been tough since 2010. Most (if not all) investors are losing their capital. Even if you are a ‘pro’, your experience would have assisted you to cushion the fall in value.

I am suggesting that you leave your investment to the ‘experienced’ professionals. Let me try to explain. Are you able to replace the professional experience of a certified doctor or lawyer? Of course not! Got it?

However, most of you try to educate yourself by reading books and attending investment seminars. You think it is just as simple as that. The question is that after you ‘think’ you have enough experience, do you think you could replace the doctor or the lawyer?

Investing is like going to war. It is hell out that. Try going to war without two years of national service. Most of you do not know you’re going to war. If you want to make money, you need to put in effort, time and dedication. It is not for part timers. I hope you realize the above at THIS point.

By the time you realize that if it’s not your profession to be a personal trader most of you are bound to pay ‘school fees’ forever.

Where did you go wrong? Your reason for seeking and managing your own investment could be as a result that your financial institution, ‘insurance agent’, ’financial planner’, ’wealth planner’, etc recommended this product or that AND they  lost your money. They lost your investment. And you have a long list of bloggers who would suggest that you manage your own investments. After the above, try investing by yourself?

The fact is that are you stupid, crazy, mad or an idiot?

If you still don’t get it, read the above paragraph again. Are they investment advisers? NO!

If you still do not know how to differentiate, they are retail outlets, distributors, salesman, etc. And even if they are investment advisers, their recommendation would be based on your risk profile. ‘PERIOD’. Is it just that simple?

If you think they could help you to potentially enhance your investments, the next question is

·         Do they monitor financial markets?

·         Do they understand what’s happening?

·         Do they know what’s logical or otherwise? Even so, do they have a strategy?

·         Are they discipline to execute the strategy?

·         Do they inform you what is happening? The best part is do you bother to read your emails and acknowledge his opinions?

Otherwise, all the above are successful ingredients for you to FAIL. I can’t blame most of you, as most of you do not have a ‘degree’ in investments. However, you need to be smart enough to ask the ‘right’ set of questions AND to identify and if you have chosen the ‘right’ product – the professional advice.

The other issue is that most of us are not custom to making payment for professional advice. Hence, you get ‘peanuts’! And up to this point, I can safely say that most of you are still not able to identify the real ‘Mc Coy’. I hope the relevant authorities are able to note my comments and assist Singaporeans in the above matter.

The above is not an exhaust list of why people lose their investment or they got burnt. There are many other reasons. Please share your thought if you have any.

Audience, please be reactive. If you agree to the above points, click ‘like me’ ‘add Google’ and share the article with your friends. Between two audience and if one forwards the article, my statistics would increase by 50%. Bear in mind. Thank you.

Read next--> China Making Contingency Plans for a Greek Exit

 

2012 Q1 was a bull trap

The Year 2011 was indeed a difficult year for the financial markets. We had the earthquake, tsunami, US credit rating and Europe issues, etc.

To cushion the fall in 2011 Q3, major economies intervened. The effects started to materialise in late 2011 Q4 as it takes time. Most of 2012 Q1 rally was spanned by the massive pumping of liquidity from major economies not forgetting from Japan and TWO (2) LTROs from Europe!

Amidst the rally in 2012 Q1, most of you who followed my posts would have realised the rally could not last as explained in buy HIGH sell LOW! Following which, Economic data starts to weaken

·         Weak PMI spanning from China to Europe

·         IP grows at a slower pace

·         Trend in exports and imports start to weaken in major economies

·         Negative GDP is noticed in most economies

·         Technical recession is found in most countries in Europe, etc

The ‘Risk ON’ tap was shut. Risk OFF was then laid on the table. As you probably know, this was triggered after the US data released in May 2012 coupled with several elections in Europe. Henceforth, most data released from Japan, China and Europe not forgetting the US starts to deteriorate. This coincided with 'Sell in May and Go away'.

Where did all the money go? Valuations in equities, gold, commodities, crude oil, etc. fell. Most of this was channelled to safe haven instruments like the Japanese Yen, US dollar, Treasuries and equivalents. With the rise in the US dollar, commodity currencies, crude oil, etc fell. This is a ripple effect. Unless Risk OFF is taken off the tap, the US dollar will continue to be of choice. Have you noticed the strength of the US dollar index?

Hence, we will have to wait until the laws of economics is triggered – Demand and Supply. Until then, be very (very) prudent on where, when, how much you might want to risk. Gold will be of choice BUT not at this time.

With no catalyst in sight or for that matter, QE3, LTRO, China stimulus can you find a reason to take risk? Bargain hunting is for the novice. If you do, please share with the audience.

While most of your investment tools may differ from mine, I strongly advise that you do not ignore my speculations. The current environment may not be visible to you but is very visible to me. The situation is totally different from what you understand. Be very careful if shampoo salesman tells you to buy because it is cheap. If you do without understand what you're going into, it is like burning your assets.

With total uncertainty in Europe, major trading partners will suffer the same fate (in trade). Even China will not be spared (in the near term) as China needs time to react to the situation. Hence, the global economy will slow down at a rapid pace.

From now Singapore time until Friday, 930pm I would expect the markets to be in a tight trading range despite the fact that PMI data from China, UK and Europe came out weaker than expected. The major focus for the week would be US data on ISM Index, nonfarm payrolls and Unemployment. The EZ joblessness data which just hit headlines rose to the highest level ever. I wouldn't be surprise if the US nonfarm payroll data completes the puzzle of weak unemployment. Otherwise, i'll be very surprised but am very sure any rally will be short lived.

Unless major economies work in tandem, coordinated (not individual) economies launch growth directions, any rally in the near future will be short lived. Greece is the focus and the giunea pig, put your focus in SPAIN - "Spexit". Falling currencies leading to higher inflation coupled with growth concerns is a crucial problem to most economies!

If you find my post of substance, please forward it to your friends to avoid any unnecessary damage to their investment plan or retirement funding! Thanking you in advance.

The following is a comical narrative of how Greece wins the world cup-->
Read next. and
China Making Contingency Plans for a Greek Exit

2014 FIFA World Cup

Since the last World Cup in 2010, it is widely rumored that Greece would emerge as champions in the 2014 FIFA World Cup. There’s somehow a twist to the World Cup. Instead of playing with a soccer ball, the players are kicking the can!

Greece is widely rumored to reach the finals. In the Year 2010, they scored a goal allowing them to qualify the qualifying rounds. A goal is their first bailout package.

In 2011, Greece scored another goal making it a 2-0 and received the next bailout package. Hmmm, it looks like Greece is getting better with the game.

In the Year 2012, after having 2 years of experience, Greece seems to be improving game after game, year after year, amidst them following/not following the rules(austerity) of the game. They were widely rumored to make it the Q finals. The latest result in favor of Greece is 3-0. They continued receiving their 2^nd anniversary bailout package.

Would Greece reach the semi-finals in 2013 or the finals in 2014? The situation is crucial. In fact the situation is very crucial by the volatility in financial markets.

Would the election in mid June create an impact/earthquake that is currently not measurable on the Richter scale? No one is able to calculate the impact currently.

For three years, Greece had been allowed, bailout after bailout, of course with terms and condition. Is it getting better?

We have the experience with PIGS, scores of meeting with France & Germany, from the EU summit, Euro zone, ECB, ESFS, ESM. On top of that we have Financial Ministers meeting, global leaders – G3, G7, G8, G20, etc.

Greece was ‘allowed’ to win game after game, year after year. Greece was allowed, I repeat Greece was allowed to win.

The question is, how long will Greece be allowed to kick the can? Oops! I mean, how long would leaders be allowed to kick the can, Until 2014 FIFA World Cup?

I have been using the word ‘allowed’. Can they be stopped? In other words, why were they not stopped from reaching the finals? Aren’t there sufficient leaders to stop this small little country with little or no knowledge of soccer? Isn’t there a team of experience soccer players to stop this giant-killer?

Wouldn’t global team from Fort Knox, Panda nor the Samurais or 'sum of the above' come up with a game strategy to stop Greece from winning the next game.

If Greece were to reach the finals in 2014, it was allowed to win. Losing a game does not mean Greece won. The opponents lost. Three own goals scored 3 different years. That’s a hat-trick!

Wake up, wake up! Where’s your coach? Build your morale and stop Greece from triggering the next financial meltdown! Or are Global leaders are executing a plan for a financial meltdown???

From the look of the volatility in financial markets, the reading is that global investors do not have the confidence at all! Dear audience: Is there anything to comment? FIFA 2014?

In my humble opinion, this is a situation where the storm is brewing before the sunrise.

If I am proven wrong, you know where the world when wrong. Have you heard about the joke? where in one of those emerging economies, they amputated the head of the President, replace it with a coconut and the President could still rule the country!

Declines in Asian Bank, Property Stocks Yield Rich Dividends

The above headline is extracted from CNBC.

Pause. (While you are reading the headline thru the hyperlink generated). Hyperlink - fixed; There were amendments to the original title and hence the link!

What comes into your mind? Think out of the BOX?

There are several (many, in fact) that crosses my mind. I like to post, just two points that cross my mind.

First of all, many would agree that the current market situation is volatile, very volatile to be correct. Hence, one of the options in diversification as suggested by the author is ‘income’, dividend or interest.

However, investors should know their risk profile, time horizon and investment objectives. More importantly in relation to the above are your investment objectives.

Investment objectives could be

·         Capital appreciation, moderate, aggressive, etc

·         Stream of income

·         Or both.

Hence, the above is more suitable for investors whose investment objectives are a stream of income.

In the article, did you notice the range of dividends being declared?

Question? Which investment of yours generates an average dividend as declared in the article. Would your

·         savings account,

·         CPF account,

·         SRS account, etc

Generate a similar amount of dividend? The point suggested here is stream of income and NOT capital appreciation or otherwise. So no arguement can be generated.

(I find most investors do not have a clear investment objective, hence the investment advisor has a more difficult task to respond to.)

Now that you may (may not) have understood the above, you may wish to decide (or otherwise) to diversify your investment portfolio accordingly.


However, there's still a worry! Are you familar with the current rate of inflation in Singapore? Whatever, the value of your assets are being eroded! Are you taking going to take risk or simply watch your purchasing power loses it's value?

Point (2). Dividends are attractive. Have you ever notice how much your insurance cash value is generated on an annual basis for your whole life policies? I am trying to relate dividends and whole life policies declaration of bonuses, if any. Are there any whole life policies that generate more than 3% (just plucking a figure) on an annual yield basis?

Is the above ‘food for thought’? An avenue to your insurance portfolio diversification? Is your insurance advisor recommending similar alternatives? Does he have the license to advice on most investment solutions? Did he put 1 plus 1 together?

I am just sharing a penny’s worth of thoughts or advice while monitoring the market and pending my thoughts for the audience. Or perhaps, some audience still do not know what my point is?

Have a great day!

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