Wednesday, July 9, 2008

How to Achieve your Dreams in this high Inflation situation?

Sharing a thought...

From my past blogs, you'll noticed that I have been harping on the issues of investing in the current low priced equity market. The current market conditions, brought about by the States' mortgage prime issue, seems to have domino effects on other countries' equity market even though they do not have the same problem back home. That's baffling isn't it? Its surprising that the State could be saddled with such problem despite not too long ago, Asian countries were saddled with somewhat 'similar' financial crisis. The States apparently do not practice what they had preached to the East who viewed them as their 'panadol' to their various ailments. Well, since our usual panadol has a problem, I wonder who will be bringing the next remedy to cure the current ailment?

I heard over the news that the crude oil price is expected to go as high as USD180 this year and could even touch USD200 next year! What does this mean? Worse equity market and higher inflation?! So which is your greatest fear?

I recalled when I was working in an office building in Kuala Lumpur between 1992 - 1994 which houses a share trading company and a very chic chinese restaurant. During lunch time, the same restaurant could either be very busy or very quiet depending on the share market of the day. When the market was doing very well, one of my colleagues used to take leave to sit in the trading house together with many retirees who even carried their own foldable stool as there were insufficient seats due the house being full. The office lifts were also packed and the only conversation that was swirling in that little lift cabin is guessed right and with lots of excitement too! The restaurant would be housepacked and being a chinese restaurant, whether its chic or otherwise, the noise was impeccable! That was the good times. The opposite holds true when the market was down and weak. Reserving a table in that same restaurant for lunch was very easy.

What's the effect on me at that time when the equity market was good or bad? Well, at that time, I was very ignorant about share market but knew that good money could be made if we choose the right share. But being a non investor, I could only feel the excitement or the quietness of the market only. However, over the years, I had noticed that the money that I had been hoarding in the bank's account gave very low return that it was insufficient to buy what I've desired ie a house or good holiday. This had caused me to be bold to dabble in the share market but of course I piggyback on one of my relatives who used to make lots of money from share market. Guessed what? Called it back luck, I lost everything and as the chinese used to say, there's no dust left!

The moral of the story is......whatever happens to the share market, it does not affect the non investors. However, all of us, living mortals, have dreams ie to buy house, dream holiday, retire comfortably, start a business, etc and all these requires money. We do hope to achieve our dreams quickly and safely.

We knew that placing our money in a place that's safe ie bank would not help us to achieve our dreams in this lifetime and therefore, we need to invest to earn greater cash and at shorter time so that we could enjoy our fruit whilst we are still here. Besides, if we are to place our money in a place that does not give us higher return than our inflation rate, our cash purchasing power will depletes and we need to work extra hard and longer to ensure that we have enough cash to buy our dreams. All these are vicious cycle and if we are not careful, we may end up chasing for more and more money and no time for ourselves or family.

Being ignorant about investment does not mean we do not invest.

Based on my experience, since investment is necessary, we need to piggyback on someone who is the expert ; no, I don't mean an "expert" investor according to our definition but a professional person who has good track record and has a mission to create and accummulate wealth for its investors.

Dabbling in the share market is too risky for most of us due to various reasons, therefore, my recommendation is to place your "future" with a mutual fund company with good track record. Furthermore, the risk is minimal, diversified and managed by professionals. That frees you to do what you are skilled in and let the experts take care of your money.

I am able to recommend mutual fund with certainty based my experience with one who is currently still managing my money. Right now, I am even promoting their services to those who care enough about their future and prefer their money to work hard for them.

As always, invest with long term in mind, and with the current bearish market, there's no better time but now to gradually pick and invest in your favourite funds. Do regular savings and you'll be rewarded in due time on this new habits of yours .

Happy realising your dreams!

p/s: Am able to post this blog as am right now confined to the house due to bad cough and loss of voice. Might as well use my down time to share my 2sen worth of thoughts!

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