Terrible June for Stock Market

arrow-down.jpgLet’s be thankful that it’s the 4th of July and the market can take a break from tumbling. The terrible June has left everyone staring at some bloody red balance sheets. Hopefully the market fares better in the 2nd half of the year.

I do not look forward to calculating my networth for June. Oh well.

Now is even more critical to be reminded once again of the important idea of investing long term, instead of dumping the all the stocks and funds at huge loss. As long as you maintain the idea of finding solid investment that provide modest gain and not some get-rich-quick-thingie, whether you went with index fund or not, you should be alright in the long term and hence, best to stay put.

Keyword being “should” because let us not forget that buying into the market does not guarantee return. Even if you buy index funds. Even if you diversify. There is always systemic risk. Perhaps a major catastrophe causes the downfall of the sector of your funds, or the Wall Street somehow disappears, or the global market gets destroyed all together ,or our money system simply disintegrates! Give me your best guess. These are not likely scenario but who knows. Pessimistic? Perhaps. But I am just reminding you that no form of investment guarantees return. It is not a privilege.

Actually, the results of the above-stated disasters may not be that bad. First of all, people are screwed all together in those cases, and as result, we may live in better harmony supporting each other. Yeah, I can be a dreamer sometimes. On another thought, the idea of money may disappear and could return people to the true state of living. Or we may return to an age of the survival of the fittest, which will force people to be physically healthy and capable. Alright, I digress. I am done exercising my imagination.

The current market is a mangled pile of mess that is the result of people desiring unsustainable amount of growth in a short period of time and many of these so-called growth are a result of manual fabrication through layers and layers of abstraction (ie. CDOs). A dozen drunken monkeys in a room probably cause less chaos that that. My opinion is that it will take awhile for it all to untangle. It may even take the next 2-3 years during which we see little to no growth, if no losses, in our investment. But like I said again, we should be looking long-term.

Speaking of long-term, people always quote that the market returns somehwere between 10-12%. I don’t really like that. Past pattern does not predict future, especially the future of a speculative market that is a projection of the ficklest human minds. And when you really think about it, a few decades of data is not even that big of a sample either. People just love pulling statistics out of their donkeys to justify arguments.

Here is the thing, I took a look at the Vanguard Wellington fund that has been around since 1929 and Vanguard’s website said the average return is 8.3%. That gives me some idea and helps set my expectation. I do my diligence in investing — studying, carefully selecting, diversify a good chunk through funs — and I shall be happy if I get a 5-8% return in the long run.

I am in no rush to become rich. The journey is the fun part.

Originally posted 2008-07-03 23:19:44. Republished by Blog Post Promoter

New Year Resolution is Silly

It’s that time of the year again. It’s that time of the year where everyone sets grandeur plans and shouts that those plans shall get accomplished. It’s that time of the year where gym is all jammed, albeit temporarily. Oh, new year resolution, allow me to say a few words about how silly that is.

It’s ok to talk and have fun talking about it… it’s still silly though.

Silliness of Emphasis on Weight Loss

As much as we always talk about positive thinking and affirmations and as much as we emphasize aggression in our society, losing weight on the contrary is such a defensive maneuver while positivity in this context implies becoming healthy. Losing weight does not mean becoming healthy.

While losing weight is usually a natural side effect in the process of becoming healthier, the way people lose weight often neglects the restoration of the body to a healthy state and worse yet, they sometimes do things that further undermines health, JUST to lose weight. As such, speaking, we are missing the point logically and pragmatically.

Silliness of Emphasis on New Year Resolution

What I really mean is not that new year resolution is completely and utterly silly. It is symptomatic for the fact that people cannot act or achieve without setting a goal.

I mean that the way we are emphasizing new year resolution is silly because in doing so, we completely neglect to look at our entire life as a complete process. We are treating our lives as a repeated process of going from point A to point B. It is easier to think like that but it is also far from reality. When we get so narrow-minded by goal, it is equivocate to mistaking a tree for the whole forest.

I mean that because, we had so focused on these small steps, milestones, we never get down to thinking about the character that we want to be as a person and what we really want to in life. The importance of character to a person is like what a wine connoisseur called “body” in wine.

So maybe instead of new year resolution, we should have life resolution and that is to an on-going effort to work on our characters.

The difference in questions is “What am I going to do this year?” vs. “What am I going to do with myself in life?” or “What kind of person shall I become?”. Which one is more aspiring?

A more concrete example is the questions “How do I become president?” vs. “How can I serve my fellow citizens?” Note the difference.

Who you are and aspire to be drives your behaviors and habits. You cannot change who you are without first facing who you are, in its entirety, without self-deceit. And then go from there.

Silliness of Rugged Individualism

It is too easy to say it’s all genetics and that we are born and grown up in certain way and that is that. But genetics and conditions only afflict on us a tendency which does not have to be, and to say otherwise, you are surrendering to the belief that there is no free will.

If you had not sit down and take the time and effort to re-examine yourself, you are not going to create any real and permanent change. You’ll forever be a random juxtaposition of concepts and ideas that happened upon or drilled into you. You can enforce short-term change that may work for a little while but never lasts. Change by repression without understanding does not liberate. That’s why there’s what is call the “rebound.”

You cannot change who you are until you see who you are. It sounds simple but what is simple is always most difficult. It boils down to…

(And if you continue living your life without ever done a self-examining process, you will forever be either what others want you to be and/or a pretension of who you THINK you are.)

Rugged individualism – to shout “I am who I am” – without ever first discover who it is that you are, is silly and leads to insecurity in ourselves, and insecurity turns us into sheeps and conformists because we will feel that need to band together (and eliminate those who are different) to feel a bit more secure. And that is the state of affair we are in. And that is what we are teaching the next generation by being great “role models”.

Silliness is that rugged individualism leads to conformity.

Self-Examining

People who rebound had never internalize their change… they didn’t really change in the first place because they had not discover the inner character that drives their behaviors.

Who you are shows. As Emerson once said, “Who you are screams so loudly into my ears that I cannot hear what you say.” That is indeed true that your character will be obvious to someone who pays attention and is aware.

Thus, it is helpful to: Focus not on what you said you will do. Focus not on what you think you did. Focus on observing your own action in various contexts to understand who you really are. Likewise, if you care to observe and understand others.

We, national and global populace (even most of our so-called leaders), are so accustomed to focusing on very short-term and “me-me-me” while I sincerely believe, a complete human being (shall we say an evolved, wise, and intelligent human being?) requires also the ability to think far and wide.

The prediction is: Until we, as individual, as fellow earth dweller, as global citizen, go through a period of self-examination and only after follow with actions that is base on self-understanding and thus also our connection with our surrounding world, the world will continue to get worse, before it gets better. There will still be more and more man-made crisis – be it medical, environmental, financial, etc. – (and probably made even worse by natural phenomena) in the coming years, until we had confronted ourselves. That’s the prediction.

Happy new year and I wish everyone a wonderful, peaceful year ahead/
vs.

Originally posted 2012-01-01 00:15:38. Republished by Blog Post Promoter

Saving Interest Rate Is Not Low Enough

I’m sure that’s what all the banks think. “If only we can somehow make it 0% interest and still get people to deposite their money…”

This post is provoked as I am doing my monthly accounting and noticed this in my ING Direct Saving account.
ing_july_rate

So 1.5% is not low enough and they make it 1.4%, whaaaa….

They are really being unhelpful for those of us who are saving their money.

There are those people who think, “I will lose my money if I put them in stock market. I will not make any interest if I put them in saving. I will also lose money to inflation if I put them under my mattress. To hell with it, I’m going to spend it all.”

For sure that is not the right mentality to have, respective to saving and being frugal, but surely, we can all see why people feel that way, no?

PS. Hope everyone had a good July 4th weekend.

Originally posted 2009-07-05 16:01:24. Republished by Blog Post Promoter

10 Rules Piggy Lives by Financially

10 rules that I live by in financial aspect (I didn’t know I could come up with 10, yay!):

  1. Spend less than what you make.
  2. Use credit cards wisely – pay off credit card bills each month, make use of 0% APR offer for financing, use reward cards that accumulate points or have % cash back.
  3. Pay off “bad” debt – this includes any high interest rate debt that is not tax deductible, which is credit card debt for most people (there are pay-day loans which should be avoided at all cost anyways because of outrageous interest).
  4. Contribute to and fully utilize 401k – Most employers provide 401k these days, so contribute some or at least the % of employer matching (free money!) but also educate yourself of the available funds and pick wisely (hence the “fully utilize” part).
  5. Contribute regularly to saving.
  6. Develop your own investment portfolio – whether it be individual stocks or funds, but educate yourself first and invest in a style that suits you. I said “your own” because you should never just follow what others do because our needs, situations, and personalities are all different, so understanding yourself is essential here.
  7. Have a spending budget – this allows you to afford hobbies, gadgets, travelling, etc.
  8. Distinguish “want” vs. “need” – this is the most important to keep myself from spending too much because of how I LOOOOOOOOVE gadgets :)
  9. Invest in ourselves – classes, books, or things that contribute to our general well-being.
  10. Remember the ultimate goal – a reminder to be frugal and financial-smart but yet not becoming cheap :) In other words, balance is everything.

Originally posted 2007-04-12 21:40:49. Republished by Blog Post Promoter

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