Archive

Lau

Insurance (Part 3 of 8)

February 16, 2010 by Lau
Insurance is the most common risk transfer technique in risk management. There are 3 layers of insurance protection. Firstly, the social layer, provided by national schemes. For Singapore, it will be the insurance from CPF like DPS, HPS, Medishield, Eldershild, CPF Life. They are usually the most basic required and premiums are most affordable. Secondly, [...]

in Categories: Insurance

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Risk Management (Part 2 of 8)

February 14, 2010 by Lau
Risk management in financial planning is the systematic approach to the discovery and treatment of risk. The objective is to minimize worry by dealing with the possible losses before they happen. The process involves: Step 1: Identification Step 2: Measurement Step 3: Method Step 4: Administration Risk Identification The process begins by identifying all potential [...]

in Categories: Featured, Insurance

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Financial Goals (Part 1 of 8)

February 11, 2010 by Lau
Dreams will remain dreams unless action is taken towards achieving them. Having financial goals, provides the direction to plan personal finances towards those goals and to measure the performance of achieving them. Goals should be SMART: Specific, Measurable, Achievable, Realistic and Timely. Areas to set goals: - To protect against financial risk - To protect [...]

in Categories: Personal Finance

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What Is A Good Company?

January 30, 2010 by Lau
I like to keep things simple. So when I look at a company, 5 characteristics that I focus on to determine a relatively safer company to invest in: 1. A Simple Business: The fewer things in motion, the fewer things that can go wrong. Businesses that focuses on maximizing profits from its core operations, rather [...]

in Categories: Featured, Investing

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What should I Invest In?

January 24, 2010 by Lau
The textbook answer, according to many “financial planners”, is to first determine your risk appetite and then design a portfolio of funds consisting of a proportion in equities and bonds depending on the results. In a nutshell: To determine the risk appetite, a standard questionnaire is normally used which covers areas like age, investment horizon, [...]

in Categories: Featured, Investing

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Should I Be A Trader?

January 18, 2010 by Lau
Many envy the life a trader. Who wouldn’t want to set their own hours and enjoy a nice income. So, should I be a trader? A trader is entirely a label that one adopts for himself. Even some people who lose money trading consider themselves traders. Generally, one decides to be a trader for two [...]

in Categories: Featured, Investing

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Investing In January

January 13, 2010 by Lau
When investing in January, do take note of the January Effect and pay special attention to the first five days of January. The January Effect is a calendar-related anomaly in the financial market where financial security prices increase in the month of January. This rally is generally attributed to an increase in buying, which follows [...]

in Categories: Featured, Investing

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Personal Finance Mistakes To Avoid

January 8, 2010 by Lau
Personal finance often is about the things you should do, but it is actually the things that you do not do that are easier to carry out. Some mistakes those just starting out to work should avoid. 1. Build any sort of consumer debt (credit card & credit line debt) This is an absolutely killer. [...]

in Categories: Featured, Personal Finance

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Fairness In Wealth Distribution

January 6, 2010 by Lau
The Pareto principle (also known as the 80-20 rule) states that, for many events, roughly 80% of the effects come from 20% of the causes. It has many applications. For example, in business “80% of your sales come from 20% of your clients”. Or for more related events, we wear our 20% most favored clothes [...]

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Predictably Irrational

December 30, 2009 by Lau
When we make decisions we think we’re in control, making rational choices. But are we? I recently came to know of an author, Dan Ariely, Professor of Behavioral Economics at Duke University. I watched one of his presentation and he gave some powerful examples of how many subconscious things affect our decision making process. As [...]

in Categories: Personal Finance

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Limitations Of Rational Thinking

December 21, 2009 by Lau
People make choices in financial matters like insurance and investment based on knowledge and rational thinking. However, the decision making process is affected by values and emotions. By understanding our inner limitations, we can try to overcome them to make better decisions. 1. Emphasis on recent events Rely more on information obtained more recently then [...]

in Categories: Investing

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How often do you lose when trading?

December 9, 2009 by Lau
Do you often have the feeling that whenever you enter into a trade, the price immediately turns against you? Even though all the fancy indicators show that it should move in your favor. How often does that happen? The common response is around 70% of the time, that is why they are losing money and [...]

in Categories: Active Trading, Featured

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Annuities

December 4, 2009 by Lau
With the increasing discussion of CPF Life, it led me to consider if there is an alternative. And it struck me that property investment could be viable. Why? By paying a huge lump sum to CPF/insurer, in return receiving a monthly payout. It is similar to purchasing a property and collecting rental every month. The [...]

in Categories: Personal Finance

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Shopping For Stocks

November 30, 2009 by Lau
A question often asked by my clients looking for the holy grail is “How to pick the right stocks?” It is still an ongoing debate if fundamental analysis (FA) or technical analysis (TA) is more superior. It is important to learn both, only by applying them together will you “FA TA” (mandarin for prosper). Long [...]

in Categories: Featured, Investing

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Psychology vs Probability

November 18, 2009 by Lau
When investing, ever wondered why most people take small profits instead of letting profits run and hold on to huge paper losses instead of taking a small loss early? A lot has to do with the human psychology towards money. Our rational mind knows probability, but our sub conscious mind knows emotions like fear and [...]

in Categories: Featured, Investing

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To Win In Investing, Think About Losing First

November 3, 2009 by Lau
What is the first thing that comes to mind when we talk about “Investing”? I believe to most it simply means money making money! Doesn’t that sounds exciting and attractive. However, it is time for the reality check, not all investments make money. In fact, many investments lose money. So, it is quite amazing that [...]

in Categories: Featured, Investing

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Is Investing Gambling?

October 24, 2009 by Lau
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Investment is holding an asset in a hope for some recurring or capital gains. We may not realize it, but breaking down to the fundamental level, [...]

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Children University Education

October 8, 2009 by Lau
Children’s Day just past and it serves as a timely reminder to parents to review plans for their children’s university education funding. With the economic crisis into its first year, has it affected the savings/investment targets for this crucial funding? Parents should take the time to evaluate where their investments status and their risk appetites [...]

in Categories: Featured, Personal Finance

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