Finances 2008 make money now: Financial markets 2008
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Tuesday, November 11, 2008
Monday, November 3, 2008
Hi again TWO METHODS TO MAKE MONEY NOW
One way to make money from these serious downturns now is available if you have cash. If you acted on good financial advice and got into bonds and cash before the collapse you're in a great position. You simple set up an automatic transfer of money back into the markets. I suggest equal amounts once a month over the next two years. If you think you are going to hold off and guess when it has hit bottom you’ll probably miss the first 20% of growth. Market timers rarely win.
If you do these transfers as a system and leave no decision to be made every month you'll probably catch the ultimate bottom of the market. (The best buy) That will occur sometime in the next two years if we haven't hit it already. I expect markets to drop lower yet. Anytime over the next two years should get you a good buy in equities.
Why do it as a system? It takes the emotions out of the picture. Most guesses for market timing don't pay off. I've been in the business long enough to know that no one knows what the markets will do next week. It depends on what happens in the world. The best we can do is focus on the mid term (2 to 5 year term) that is what we can get a reasonable good feel for at any time. I try to ignore day-to-day news bytes. They will drive you crazy or give you ulcers and very few people make money from a short term focus.
Use managed funds that have been solid performers when compared with the rest of the market. If you can't find such charts an advisor should be able to get charts comparing any fund to every other fund in the country. You want one better than average but perhaps not the best, since the best earners this year can fall short next year. Steady and above average is what I shoot for. I believe it is easier to get a good fund manager than it is to do good research on individual stocks for most investors.
The second method of making money may take more guts and should be well understood - but now is the time (if invested gradually as explained above) to borrow money to invest. You get a write off of your interest as a deduction and you stand to make more money. This isn't a short term venture so you should be capable of servicing the interest payments of this loan for up to ten years. There are some risks that you need to understand about this so ask your advisor.
As always I don't assume any responsibility for any actions taken - this is not advice to act upon but merely discussion points for you and your advisor. If you want personal advice send me an email at FinanialPlan@GordonHughes.ca
http://www.gordonhughes.ca/ for more articles
One way to make money from these serious downturns now is available if you have cash. If you acted on good financial advice and got into bonds and cash before the collapse you're in a great position. You simple set up an automatic transfer of money back into the markets. I suggest equal amounts once a month over the next two years. If you think you are going to hold off and guess when it has hit bottom you’ll probably miss the first 20% of growth. Market timers rarely win.
If you do these transfers as a system and leave no decision to be made every month you'll probably catch the ultimate bottom of the market. (The best buy) That will occur sometime in the next two years if we haven't hit it already. I expect markets to drop lower yet. Anytime over the next two years should get you a good buy in equities.
Why do it as a system? It takes the emotions out of the picture. Most guesses for market timing don't pay off. I've been in the business long enough to know that no one knows what the markets will do next week. It depends on what happens in the world. The best we can do is focus on the mid term (2 to 5 year term) that is what we can get a reasonable good feel for at any time. I try to ignore day-to-day news bytes. They will drive you crazy or give you ulcers and very few people make money from a short term focus.
Use managed funds that have been solid performers when compared with the rest of the market. If you can't find such charts an advisor should be able to get charts comparing any fund to every other fund in the country. You want one better than average but perhaps not the best, since the best earners this year can fall short next year. Steady and above average is what I shoot for. I believe it is easier to get a good fund manager than it is to do good research on individual stocks for most investors.
The second method of making money may take more guts and should be well understood - but now is the time (if invested gradually as explained above) to borrow money to invest. You get a write off of your interest as a deduction and you stand to make more money. This isn't a short term venture so you should be capable of servicing the interest payments of this loan for up to ten years. There are some risks that you need to understand about this so ask your advisor.
As always I don't assume any responsibility for any actions taken - this is not advice to act upon but merely discussion points for you and your advisor. If you want personal advice send me an email at FinanialPlan@GordonHughes.ca
http://www.gordonhughes.ca/ for more articles
Friday, October 31, 2008
Financial markets 2008
Welcome.
It amazes me how many people got caught with their investments dropping in Oct 2008. Did their investment advisor not see this coming? I did. I moved my clients to bonds and daily interest in 2007. They were told we would see 'at least' a 40% drop in North American stock markets during 2008 and 2009. It had to happen. It wasn't just a lucky guess - it was inevitable.
Many financial people appear to pass on the 'sales pitch' offered up by investment bankers, fund managers and politicians. Representatives don't seem to know that a fund manager is never going to tell us it is time to get out of equities now, if they did investment gurus would be fired in a minute because it could start a run on stocks. It's wise to stay invested for the long term except when we see a major systemic flaw coming in the markets. Systemic flaws cost you up to five years of your retirement plan. You can never catch up to someone who got out before the crash and bought back in after the decline in markets!
Every few years we see it. In 1989 Japan's banking system collapsed. Their stock exchange dropped from 39,000 to the teens. Black Monday in Oct 1987 markets dropped 22% because stocks were over priced, the Bre-X story was in 1990's, the dot.com craze of the late 1990's collapsed in 2001 and 2002, and now the sub-prime mortgage fiasco. You can suffer needless deep losses every five to ten years and each one wipes out from three to five years of growth. You never make up for getting out in advance and buying back in when it is low.
IT IS NOT MARKET TIMING: Market timing is reacting to daily, weekly or monthly fluctuations in the market and most people fail at that. Being alert to systemic flaws that build up over time and then implode requires you to keep your eye on the two to five year period ahead. No one knows what next week will bring, but with proper training and a certain talent you can reasonably predict the mid term market range.
Did you lose money this October?
It amazes me how many people got caught with their investments dropping in Oct 2008. Did their investment advisor not see this coming? I did. I moved my clients to bonds and daily interest in 2007. They were told we would see 'at least' a 40% drop in North American stock markets during 2008 and 2009. It had to happen. It wasn't just a lucky guess - it was inevitable.
Many financial people appear to pass on the 'sales pitch' offered up by investment bankers, fund managers and politicians. Representatives don't seem to know that a fund manager is never going to tell us it is time to get out of equities now, if they did investment gurus would be fired in a minute because it could start a run on stocks. It's wise to stay invested for the long term except when we see a major systemic flaw coming in the markets. Systemic flaws cost you up to five years of your retirement plan. You can never catch up to someone who got out before the crash and bought back in after the decline in markets!
Every few years we see it. In 1989 Japan's banking system collapsed. Their stock exchange dropped from 39,000 to the teens. Black Monday in Oct 1987 markets dropped 22% because stocks were over priced, the Bre-X story was in 1990's, the dot.com craze of the late 1990's collapsed in 2001 and 2002, and now the sub-prime mortgage fiasco. You can suffer needless deep losses every five to ten years and each one wipes out from three to five years of growth. You never make up for getting out in advance and buying back in when it is low.
IT IS NOT MARKET TIMING: Market timing is reacting to daily, weekly or monthly fluctuations in the market and most people fail at that. Being alert to systemic flaws that build up over time and then implode requires you to keep your eye on the two to five year period ahead. No one knows what next week will bring, but with proper training and a certain talent you can reasonably predict the mid term market range.
Did you lose money this October?
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