StockTalk: Beating the market with common sense
Tuesday, June 06, 2006
Unless you are born rich, or earning obscene amount of money consistently, the only hope to achieve financial freedom in your mortal life is through investment. There are only a few investment options available to general Malaysian public like you and me, and Genting is not of them, mind you. As far as I am concern, real property and equity market are the only two valid options to consider. I'll leave out the topic of real property and concentrate only on stock market (and maybe some derivatives) in this blog.
Investment in KLSE can either be direct trading or through buying mutual funds, unit funds, closed end funds and/or investment linked funds. Many people entrust their investments to the professionals, hoping to get decent profits. The sad truth is, most 'professionals' performed badly. It is no secret that most funds underperform, yet still a lot of people are paying the 'professionals' with a false sense of security. This article gone through an elaborated calculation to prove that point http://www.efficientfrontier.com/ef/997/tough.htm . I am too lazy to do that type of calculation. I just flipped through one of the Monday's paper, scanned through the list of unit funds and mutual funds and get a rough idea: only about 10% of the funds outperform the KLSE's market index. And the top performer give less than 20% annual return. So, do you think direct trading in the market is risky? More risky than buying unit trust funds?
Think about it, investing through 'professionals', you have about 1 in 10 chance of winning, and the windfall is only 20%. For that, you pay about 1% annual fee! While if you invest in the market directly, and you happened to pick the top perfomers, the return could easily be more than 100%! And the brokerage less than 1%.
I know, this is an oversimplification of the situation. The point is, direct investment in KLSE's stocks is not as risky as it sounds.
We believe that investment objectives could best be achieved via sound strategies, reliable knowledges, careful researches, reasonable amount of diligence, common sense, skills and a little bit of luck. Insiders tips, rumours etc have no place.
With this in mind, we have gathered a doctor, an economist, and two engineers to form an investment team with the objective of beating the market. We hope to outperform the professionals and achieve the annual return of >20%. Recognizing luck as indispensible factor, though by no means the main ingredient, of success, we pick this day to kick start our quest. Yes, we all believe in luck; and no, IRIS is not her name.
Winning is in our pulse!
Day of Luck,Month of Luck and Year of 200Luck
posted by winpulse @ 12:07 PM,
7 Comments:
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At 11:26 PM,
hasan said...
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We believe that investment objectives will be achieved via sound strategies, reliable knowledges, sensetive survey, reasonable amount of diligence, common sense, skills and a little bit of luck. Insiders tips, rumours etc have no place.
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At 2:25 AM,
rain bow said...
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At 9:17 AM,
hasan said...
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There are only a few investment options available to general only on stock market (and maybe some derivatives) in this blog buying mutual funds, unit funds, closed end funds and/or investment farm land as an investment Win pulse Stock Research Group .
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At 12:31 AM,
Unknown said...
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Reasonable amount of diligence, common sense, skills and a little bit of luck. Insiders tips, rumours etc have no place, in this blog buying mutual funds, unit funds, closed end funds and/or investment farm land as an investment Win pulse Stock Research Group .
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At 7:25 PM,
rain bow said...
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At 1:42 PM,
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At 9:28 PM,
hasan said...
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There are some benefits in stock market like,if investor wants to immediate buy/sell so you can sell part of your investment any time,the freedom to work at your own place,at your pace in your own time,Considerable tax advantages.
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