Monday, December 24, 2007
Wednesday, November 28, 2007
DJIA up 331 points on 28.11.07
DJIA up 331 points on 28.11.07, see whether it can cross the 22 ma - 13278 pts for tonight trade(29/11)
PEG
Price/Earnings To Growth (PEG Ratio)
A ratio used to determine a stock's value while taking into account earnings growth. The calculation is as follows:
PEG is a widely used indicator of a stock's potential value. It is favored by many over the price/earnings ratio because it also accounts for growth. Similar to the P/E ratio, a lower PEG means that the stock is more undervalued.Keep in mind that the numbers used are projected and, therefore, can be less accurate. Also, there are many variations using earnings from different time periods (i.e. one year vs five year). Be sure to know the exact definition your source is using.
PEG rato = Price/Earning Ratio
Annual EPS Browth
How The PEG Ratio Can Help Investors
The PEG (price/earnings to growth) ratio is a tool that can help investors find undervalued stocks. It's not as well known as its cousins, the P/E and P/B ratios, but it is just as valuable. When used in conjunction with other ratios, it gives investors a perspective of how the market views a stock's growth potential in relation to EPS growth.
What the PEG Ratio IsThe PEG ratio compares a stock's price/earnings ("P/E") ratio to its expected EPS growth rate. If the PEG ratio is equal to one, it means that the market is pricing the stock to fully reflect the stock's EPS growth. This is "normal" in theory because, in a rational and efficient market, the P/E is supposed to reflect a stock's future earnings growth. If the PEG ratio is greater than one, it indicates that the stock is possibly overvalued or that the market expects future EPS growth to be greater than what is currently in the Street consensus number. Growth stocks typically have a PEG ratio greater than one because investors are willing to pay more for a stock that is expected to grow rapidly (otherwise known as "growth at any price"). It could also be that the earnings forecasts have been lowered while the stock price remains relatively stable for other reasons.If the PEG ratio is less than one, it is a sign of a possibly undervalued stock or that the market does not expect the company to achieve the earnings growth that is reflected in the Street estimates. Value stocks usually have a PEG ratio less than one because the stock's earnings expectations have risen and the market has not yet recognized the growth potential. On the other hand, it could also indicate that earnings expectations have fallen faster than the Street could issue new forecasts.It is important to note that the PEG ratio cannot be used in isolation. As with all financial ratios, investors using PEG ratios must also use additional information to get a clear perspective of the investment potential of a company. Investors must understand the company's operating trends, fundamentals and what the expected EPS growth rate reflects. Additionally, to determine if the stock is overvalued or undervalued, investors must analyze the company's P/E and PEG ratios in relation to its peer group and the overall market. The GE ExampleWe will use General Electric (GE) as a brief example. GE is currently trading at $31 per share and the Street consensus estimate for this year's (2002) EPS was $1.65. This earnings forecast represents 17% growth from the previous year's (2001) EPS of $1.41. The current P/E on 2002 estimated EPS is 18.8x ($31 divided by $1.65). This results in a PEG ratio of 1.11 (18.8 divided by 17). One interpretation of this PEG ratio being greater than one is that the stock retains its "growth" classification, despite the recent bad news surrounding GE, because it is still expected to outperform the rest of the market. Another hypothesis is that institutions are reluctant to sell because GE is considered a core holding and there is currently nothing to replace GE in their portfolios; however, a "normal" stock under normal circumstances would experience a more significant decline in the share price.
FREE Report: 7 Things Every Investor Must Know!The Investopedia Advisor analyst team wants to share with you 7 time tested tenets that they use to uncover market stomping stock ideas. This is a must-read report for anyone serious about controlling their financial destiny. Click here to access your FREE report online right now!A comparison of GE's PEG to other indexes shows that the market is not expecting much from GE. The current PEG ratio for the Dow Industrials is 1.30 and indicates that the market expects more out of the Dow index than from GE. The PEG ratio for the S&P 500 is 1.88 and reflects the market's continued demand for growth at any price.Based upon this limited analysis, we can conclude that, despite GE's current challenges, the stock still commands somewhat of a premium PEG ratio (1.10). The market, however, will pay more for the potential growth in the Dow (1.30) than for GE. We can also conclude that, despite the recent crash, the S&P 500 still commands top dollar (1.88) for each percentage of potential future earnings growth.Is GE undervalued or is it the last blue chip to succumb to a slow and painful death like Cisco's? Finding that answer requires more digging on your part.
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Move Over P/E, Make Way For The PEG
Updated March 27, 2007It is common practice for investors to use the price-to-earnings ratio (P/E ratio or price multiple) to determine if a company's stock price is over or undervalued. Companies with a high P/E ratio are typically growth stocks. However, their relatively high multiples do not necessarily mean their stocks are over priced and not good buys for the long term.
Let's take a closer look at what the P/E ratio tells us:
P/E Ratio =
Market Value per Share
Earnings per Share (EPS) There are two primary components here, the market value (price) of the stock and the earnings of the company. Earnings are very important to consider. After all, earnings represent profits, for what every business strives. Earnings are calculated by taking the hard figures into account: revenue, cost of goods sold (COGS), salaries, rent, etc. These are all important to the livelihood of a company. If the company isn't using its resources effectively it will not have positive earnings, and problems will eventually arise. Besides earnings, there are other factors that affect the value of a stock. For example:
Brand - The name of a product or company has value. Brands such as Proctor & Gamble are worth billions.
Human Capital - Now more than ever, a company's employees and their expertise are thought to add value to the company. It's about time!
Expectations - The stock market is forward looking. You buy a stock because of high expectations for strong profits, not because of past achievements.
Barriers To Entry - For a company to be successful in the long run, it must have strategies to keep competitors from entering the industry. Coca-Cola, for example, has built a very extensive distribution channel--anybody can make pop, but getting that product to the market like Coke does, is very costly. All these factors will affect a company's earnings growth rate. Because the P/E ratio uses past earnings (trailing twelve months), it gives a less accurate reflection of these growth potentials.The relationship between the price/earnings ratio and earnings growth tells a much more complete story than the P/E on its own. This is called the PEG ratio and is formulated as:
PEG Ratio =
Price/Earnings Ratio
Annual EPS Growth*
*The number used for annual growth rate can vary. It can be forward (predicted growth) or trailing, and either a one- to five-year time span. Check with the source providing the PEG ratio to see what kind of number they use. Looking at the value of PEG of companies is similar to looking at the P/E ratio: a lower PEG means that the stock is more undervalued. Comparative ValueLet's demonstrate the PEG ratio with an example. Say you are interested in buying stock in one of two companies. The first is a networking company with 20% annual growth in net income and a P/E ratio of 50. The second company is in the beer business. It has lower earnings growth at 10% and its P/E ratio is also relatively low at 15.
FREE Report: 7 Things Every Investor Must Know!The Investopedia Advisor analyst team wants to share with you 7 time tested tenets that they use to uncover market stomping stock ideas. This is a must-read report for anyone serious about controlling their financial destiny. Click here to access your FREE report online right now!Many investors justify the stock valuations of tech companies by relying on the assumption that these companies have enormous growth potential. Can we do the same in our example? Networking Company: P/E ratio (50) divided by the annual earnings growth rate (20) = PEG ratio of 2.5 Beer Company: P/E ratio (15) divided by the annual earnings growth rate (10) = PEG ratio of 1.5 The PEG ratio shows us the sexier high-tech company, compared to the beer company, doesn't have the growth rate to justify its higher P/E, and its stock price appears overvalued, particularly when this comparison is made.Take Google, for example, which provides us with an opposing angle of vision when applying the PEG ratio to its current pricing. Google's share price, since its IPO, has headed straight for the stratosphere. At time of writing it had a P/E of 47 and an expected earnings growth next year of 33%, which gives us a PEG of 1.40. The Nasdaq 100 Index a P/E of 30 and an estimated earnings growth rate of 15%, which produces a PEG of 2.0. Judging by the PEG ratio, Google is relatively undervalued compared to its pricier Nasdaq 100 benchmark. . ConclusionSubjecting the traditional P/E ratio to the impact of future earnings growth produces the more informative PEG ratio, which provides more insight about a stock's current valuation. By providing a forward-looking perspective, the PEG is a valuable evaluative tool for investors attempting to discern a stock's future prospects
A ratio used to determine a stock's value while taking into account earnings growth. The calculation is as follows:
PEG is a widely used indicator of a stock's potential value. It is favored by many over the price/earnings ratio because it also accounts for growth. Similar to the P/E ratio, a lower PEG means that the stock is more undervalued.Keep in mind that the numbers used are projected and, therefore, can be less accurate. Also, there are many variations using earnings from different time periods (i.e. one year vs five year). Be sure to know the exact definition your source is using.
PEG rato = Price/Earning Ratio
Annual EPS Browth
How The PEG Ratio Can Help Investors
The PEG (price/earnings to growth) ratio is a tool that can help investors find undervalued stocks. It's not as well known as its cousins, the P/E and P/B ratios, but it is just as valuable. When used in conjunction with other ratios, it gives investors a perspective of how the market views a stock's growth potential in relation to EPS growth.
What the PEG Ratio IsThe PEG ratio compares a stock's price/earnings ("P/E") ratio to its expected EPS growth rate. If the PEG ratio is equal to one, it means that the market is pricing the stock to fully reflect the stock's EPS growth. This is "normal" in theory because, in a rational and efficient market, the P/E is supposed to reflect a stock's future earnings growth. If the PEG ratio is greater than one, it indicates that the stock is possibly overvalued or that the market expects future EPS growth to be greater than what is currently in the Street consensus number. Growth stocks typically have a PEG ratio greater than one because investors are willing to pay more for a stock that is expected to grow rapidly (otherwise known as "growth at any price"). It could also be that the earnings forecasts have been lowered while the stock price remains relatively stable for other reasons.If the PEG ratio is less than one, it is a sign of a possibly undervalued stock or that the market does not expect the company to achieve the earnings growth that is reflected in the Street estimates. Value stocks usually have a PEG ratio less than one because the stock's earnings expectations have risen and the market has not yet recognized the growth potential. On the other hand, it could also indicate that earnings expectations have fallen faster than the Street could issue new forecasts.It is important to note that the PEG ratio cannot be used in isolation. As with all financial ratios, investors using PEG ratios must also use additional information to get a clear perspective of the investment potential of a company. Investors must understand the company's operating trends, fundamentals and what the expected EPS growth rate reflects. Additionally, to determine if the stock is overvalued or undervalued, investors must analyze the company's P/E and PEG ratios in relation to its peer group and the overall market. The GE ExampleWe will use General Electric (GE) as a brief example. GE is currently trading at $31 per share and the Street consensus estimate for this year's (2002) EPS was $1.65. This earnings forecast represents 17% growth from the previous year's (2001) EPS of $1.41. The current P/E on 2002 estimated EPS is 18.8x ($31 divided by $1.65). This results in a PEG ratio of 1.11 (18.8 divided by 17). One interpretation of this PEG ratio being greater than one is that the stock retains its "growth" classification, despite the recent bad news surrounding GE, because it is still expected to outperform the rest of the market. Another hypothesis is that institutions are reluctant to sell because GE is considered a core holding and there is currently nothing to replace GE in their portfolios; however, a "normal" stock under normal circumstances would experience a more significant decline in the share price.
FREE Report: 7 Things Every Investor Must Know!The Investopedia Advisor analyst team wants to share with you 7 time tested tenets that they use to uncover market stomping stock ideas. This is a must-read report for anyone serious about controlling their financial destiny. Click here to access your FREE report online right now!A comparison of GE's PEG to other indexes shows that the market is not expecting much from GE. The current PEG ratio for the Dow Industrials is 1.30 and indicates that the market expects more out of the Dow index than from GE. The PEG ratio for the S&P 500 is 1.88 and reflects the market's continued demand for growth at any price.Based upon this limited analysis, we can conclude that, despite GE's current challenges, the stock still commands somewhat of a premium PEG ratio (1.10). The market, however, will pay more for the potential growth in the Dow (1.30) than for GE. We can also conclude that, despite the recent crash, the S&P 500 still commands top dollar (1.88) for each percentage of potential future earnings growth.Is GE undervalued or is it the last blue chip to succumb to a slow and painful death like Cisco's? Finding that answer requires more digging on your part.
-----------------------------------------
Move Over P/E, Make Way For The PEG
Updated March 27, 2007It is common practice for investors to use the price-to-earnings ratio (P/E ratio or price multiple) to determine if a company's stock price is over or undervalued. Companies with a high P/E ratio are typically growth stocks. However, their relatively high multiples do not necessarily mean their stocks are over priced and not good buys for the long term.
Let's take a closer look at what the P/E ratio tells us:
P/E Ratio =
Market Value per Share
Earnings per Share (EPS) There are two primary components here, the market value (price) of the stock and the earnings of the company. Earnings are very important to consider. After all, earnings represent profits, for what every business strives. Earnings are calculated by taking the hard figures into account: revenue, cost of goods sold (COGS), salaries, rent, etc. These are all important to the livelihood of a company. If the company isn't using its resources effectively it will not have positive earnings, and problems will eventually arise. Besides earnings, there are other factors that affect the value of a stock. For example:
Brand - The name of a product or company has value. Brands such as Proctor & Gamble are worth billions.
Human Capital - Now more than ever, a company's employees and their expertise are thought to add value to the company. It's about time!
Expectations - The stock market is forward looking. You buy a stock because of high expectations for strong profits, not because of past achievements.
Barriers To Entry - For a company to be successful in the long run, it must have strategies to keep competitors from entering the industry. Coca-Cola, for example, has built a very extensive distribution channel--anybody can make pop, but getting that product to the market like Coke does, is very costly. All these factors will affect a company's earnings growth rate. Because the P/E ratio uses past earnings (trailing twelve months), it gives a less accurate reflection of these growth potentials.The relationship between the price/earnings ratio and earnings growth tells a much more complete story than the P/E on its own. This is called the PEG ratio and is formulated as:
PEG Ratio =
Price/Earnings Ratio
Annual EPS Growth*
*The number used for annual growth rate can vary. It can be forward (predicted growth) or trailing, and either a one- to five-year time span. Check with the source providing the PEG ratio to see what kind of number they use. Looking at the value of PEG of companies is similar to looking at the P/E ratio: a lower PEG means that the stock is more undervalued. Comparative ValueLet's demonstrate the PEG ratio with an example. Say you are interested in buying stock in one of two companies. The first is a networking company with 20% annual growth in net income and a P/E ratio of 50. The second company is in the beer business. It has lower earnings growth at 10% and its P/E ratio is also relatively low at 15.
FREE Report: 7 Things Every Investor Must Know!The Investopedia Advisor analyst team wants to share with you 7 time tested tenets that they use to uncover market stomping stock ideas. This is a must-read report for anyone serious about controlling their financial destiny. Click here to access your FREE report online right now!Many investors justify the stock valuations of tech companies by relying on the assumption that these companies have enormous growth potential. Can we do the same in our example? Networking Company: P/E ratio (50) divided by the annual earnings growth rate (20) = PEG ratio of 2.5 Beer Company: P/E ratio (15) divided by the annual earnings growth rate (10) = PEG ratio of 1.5 The PEG ratio shows us the sexier high-tech company, compared to the beer company, doesn't have the growth rate to justify its higher P/E, and its stock price appears overvalued, particularly when this comparison is made.Take Google, for example, which provides us with an opposing angle of vision when applying the PEG ratio to its current pricing. Google's share price, since its IPO, has headed straight for the stratosphere. At time of writing it had a P/E of 47 and an expected earnings growth next year of 33%, which gives us a PEG of 1.40. The Nasdaq 100 Index a P/E of 30 and an estimated earnings growth rate of 15%, which produces a PEG of 2.0. Judging by the PEG ratio, Google is relatively undervalued compared to its pricier Nasdaq 100 benchmark. . ConclusionSubjecting the traditional P/E ratio to the impact of future earnings growth produces the more informative PEG ratio, which provides more insight about a stock's current valuation. By providing a forward-looking perspective, the PEG is a valuable evaluative tool for investors attempting to discern a stock's future prospects
Wednesday, October 24, 2007
Sunday, October 21, 2007
DOW Worst Days
Brutal sell-off on Wall Streets on 19/10/2007, which registered its third worst day of the year '07.Fears about credit and housing sector, earnings, record-high oil prices, slide in dollar.And what the Fed would do next is to cut interest by 0.25 basis pt, understand Fed do not want to see itself as though it is encouraging speculators of the housing market, neither, does it want the fears about credit and housing sector to linger on.
Monday, October 15, 2007
Sunday, October 14, 2007
Chinese Equity Funds Stole Limelight In First 3Q of 2007 - 14/10/07
Chinese Equity Funds Stole Limelight In First 3Q of 2007 - 14/10/07
http://www.fundsupermart.com/main/research/viewHTML.tpl?lang=en&articleNo=2336
One market occurrence which definitely left a deep impact on investors during the third quarter this year would be the sharp correction in the global equity markets, spanning end-July to mid-August. Investors were shaken by worries over the US sub-prime credit issues — the result of offering easy credit to US mortgage borrowers with bad credit track record in the last few years. However, market sentiments turned for the better when the Federal Reserve decided to cut target benchmark rates by a higher-than-expected 50 basis points to 4.75% on 18 September. Following this swift twist of market climate, the performance of a number of equity funds has also improved. In the first three quarters of 2007, 86% of the 336 funds distributed on our electronic platform had delivered positive returns.
Unlike the first two quarters of the year in which Southeast Asian equity funds performed very well, funds which invest in China and Greater China equities came out tops in the best-performing funds scoreboard for the first three quarters of 2007. On our platform, the best-performing Chinese equity fund in the period was the DWS China Equity Fund Class A SGD — the fund returned a stunning 68.9%. All returns are in SGD terms.
Table 1: Top-Performing Funds In First 3Q of 2007
Fund Name
Returns As At end-September 2007
Sector / Regions
DWS China Equity Fund Class A SGD
68.9%
China
HGIF Chinese Equity-A SGD
60.5%
China
Fidelity China Focus USD
60.0%
China
UOB United Greater China Fund
57.9%
Greater China
SGAM Golden China Fund S$
56.0%
Greater China
Fidelity S East Asia A-SGD
52.7%
Asia ex-Japan
United Asian Growth Opportunities
51.3%
Asia ex-Japan
PRU Dragon Peacock Fund
50.8%
India/China
Franklin Templeton F-Asian Equity
50.4%
Asia ex-Japan
DWS Noor China Equity CL A USD
50.3%
China
Lion Capital China Growth
47.8%
China
First State Regional China
47.0%
Greater China
ABN AMRO Brazil Equity Fund A USD
46.7%
Brazil
First State Global Resources
45.2%
Global Resources
Legg Mason Asian Enterprise
45.0%
Asia ex-Japan
Franklin Templeton F-China
44.6%
Greater China
Fidelity Greater China USD
44.1%
Greater China
Schroder Greater China Fund
43.3%
Greater China
Legg Mason SEA Special Sits
42.9%
Southeast Asia
UOB United Asia Fund
42.7%
Asia ex-Japan
Source: Fundsupermart.com compilations; performance figures in the tables are calculated in SGD terms using bid-to-bid prices, with any income or dividend reinvested.
The strength in Greater China and Chinese equity funds corresponds to the strength of their underlying equity markets' performance, represented by the Hang Seng Mainland Composite Index (HSMLCI) — Fundsupermart.com's proxy for Chinese equities. As mentioned in the report ' Top Performing Markets in the First Three Quarters of 2007', Chinese equities were the top scorer among all other equity markets we cover, chalking up a return of 54.4% in the first 3Q of 2007. Of the top 20 best-performing funds featured on Table 1, 11 are either invested in Chinese or Greater China equities.
Three of the best-performing Chinese equity funds include the DWS China Equity Fund Class A, the HGIF Chinese Equity-A SGD and the Fidelity China Focus USD. In the first nine months of the year, these funds returned more than 60%. Referring to our benchmark index for Chinese equities, the telecommunications, banking and finance as well as the property sectors were the stronger performers within the index. An important piece of news which has boosted market sentiment, in our opinion, was the Chinese government's pilot scheme to allow larger fund inflows from the Mainland Chinese investors into the Hong Kong Exchange. Due to the restrictions placed on the Mainland Chinese investors to invest their monies outside of the country, both the Shanghai and Shenzhen stock indices have skyrocketed in the past one year, as most retail investors could only invest in stocks listed in these exchanges.
In SGD terms, the Shenzhen and Shanghai A-share indices were up 184.3% and 108.2% respectively as at end-September 2007. The estimated PE for both indices was at 44.4X and 53.6X respectively, based on 2007's earnings growth — both at their all-time highs. At one glance, investors might be concerned about whether these two markets are turning bubblish; the silver lining, however, is that the Chinese equity funds distributed on our platform are largely invested in Hong Kong-listed Chinese companies and H-shares. Based on the factsheets, and as at end August 2007, these funds invest approximately 90% to 98.2% into H-shares or Chinese companies listed in the Hong Kong market.
Based on our PE estimates, the valuations for the H-shares are far lower than those of the A-shares listed in the Shenzhen and Shanghai stock exchanges. The estimated PE for the HSMLCI were 27.5X and 23.4X for 2007 and 2008 respectively (as at end-September 2007). Thus, the H-shares appear to be more attractively valued at this point of time, and we maintain a 3-star or 'Attractive' rating on the Chinese equity markets (primarily H-shares and Chinese companies listed in the Hong Kong market). However, investors who wish to invest in Chinese equity funds should be aware that these funds would experience greater volatility compared to the market conditions a few years ago, as the Chinese bourses are no longer trading at inexpensive levels.
Aside from the Chinese equity funds, other funds listed on the list of top 20 best-performing funds include equity funds which invest in regions including Southeast Asia, Asia ex-Japan, India/China and Brazil. On a year-to-date basis, Asia ex-Japan equity funds were the best-performing regional equity funds.What About The Regional Funds?
The Asia ex-Japan equity funds delivered a strong average return of 33% in the first nine months of 2007 – the highest among all regions we cover. Two of the best-performing Asia ex-Japan equity funds on our platform include the Fidelity South East Asia A-SGD and the United Asian Growth Opportunities Fund; as at end-September, these funds returned 52.7% and 51.3% respectively. The next best performing regional equity funds would be the emerging market equity funds, which returned an average of 25.5% in the first nine months of the year. The Fidelity Emerging Market A-SGD Fund, for instance, returned 31.3% during this period. All regional equity funds enjoyed positive returns, except for the Japanese equity funds which have lost an average of 5.7%. Only the regional funds distributed on the Fundsupermart.com platform have been taken into consideration when computing the average returns figures above.
Table 2: Performance of the Regional Equity Funds
Region
Average Fund Returns (%)
Index
Performance (%)
Asia ex-Japan
33.0%
MSCI Asia ex-Japan
31.8%
Emerging Market
25.5%
MSCI Emerging Markets
27.7%
Europe
7.9%
DJ Stoxx 50
7.9%
US
6.3%
S&P 500
4.1%
Japan
-5.7%
Nikkei 225
-2.2%
Source: Fundsupermart.com compilations; the performance figures in the tables are calculated in SGD terms using bid-to-bid prices, with any income or dividend reinvested.Japanese Equity & European Property Funds Were Disheartening
Of the ten worst-performing funds on our platform, two were invested in property equities and five were invested in either Japanese equities or Japanese small- and mid-sized company equities. To be specific, two of the worst-performing funds were the Henderson European Property Securities and PRU Japan Smaller Companies fund; the funds lost 16.4% and 19.1% respectively.
The Tokyo Stock Exchange (TSE) 2nd Section Index, which represents Japanese smaller-cap equities, tumbled 12.4% in the first nine months of 2007. Small-to-mid cap Japanese stocks fared poorer than the large caps, represented by the Nikkei 225 index; the index lost only 2.2% in the same period. The weak consumer confidence and capital spending had also kept market sentiments low. Corporate capital spending declined in the second quarter and consumer confidence remained generally subdued as a result of higher taxes and falling wage levels. With the estimated market PE at 23.7X and 21.9X for 2007 and 2008 respectively (fiscal year ending March 2008 and 2009), we think the market remains reasonably priced. However, as we find other regional markets more attractive, we maintain a neutral view on the Japanese equity market.
European and Global Property funds have been hit hard this year. European properties did not do well this year as the European Central Bank (ECB) hiked their benchmark refinancing rate from 3.5% at end-December 2006 to 4.0% as at end-September 2007. The European benchmark rates have been rising to a higher-than-expected level. Thus, investors of the European property sector equities might have grown wary of the potential impact of these rate hikes on the borrowers' ability to repay their property loans, and feel that the yield premium (on top of the risk-free rate of return in Europe) offered by European property Real Estate Investment Trusts (REITs) may not be attractive enough to compensate investors for the additional risks they are taking on when investing in European property equities. These and other reasons might have prompted investors of European equities to switch to other sectoral plays within the region.
On global property funds, as many of these have a higher proportion of their assets in American property, they have thus been affected by the contagion effect of the US sub-prime mortgage crisis. It is important to consider that the US property prices have rallied over the past 5 years, owing to the initial favourable credit environment in the US after the 911 Incident, where buyers were able to buy properties at very low interest rates. However, the property market has seen declines from its highs, as highly leveraged borrowers were hit hard by the rising interest rates. Property shares also dived lower by momentum selling when the market panic set in. Commercial REITs — which most global property funds invest in — are now highly priced and offer low yields, making them unattractive for the investors. We maintain a negative view on the outlook for the global property funds, especially so when such funds invest a large proportion of their assets in US properties.
Table 3: Ten Worst-Performing Funds in First 3Q of 2007
Fund Name
Returns
Sector / Regions
Schroder Emerging Markets Bond Fund
-4.3%
Emerging Market Bonds
DBS Global Property Securities Fund
-4.7%
Global Property
Franklin Floating Rate Fund-Class A
-5.9%
Floating Rate Bonds
Franklin Templeton F-Japan
-6.5%
Japan
Henderson Japanese Equity
-8.6%
Japan
ABN AMRO GEM Bond USD A
-9.4%
Emerging Market Bonds
Aberdeen Japan Equity
-10.1%
Japan
DWS Japan Small/Mid Cap A SGD
-15.7%
Japanese Small-Mid Cap
Henderson European Prop Securities
-16.4%
European Property
PRU Japan Smaller Companies Fund
-19.1%
Japanese Small-Mid Cap
Source: Fundsupermart.com compilations; the performance figures in the tables are calculated in SGD terms using bid-to-bid prices, with any income or dividend reinvested.
The Best-sellers
Table 4 shows the list of regional or sectoral funds which have garnered the highest levels of subscription at Fundsupermart.com. China/Greater China and Asia ex-Japan equity funds — which were the strongest performing funds in the first three quarters — were the most popular funds among our investors. Southeast Asian, Malaysian and Singaporean equity funds were also some of the most favoured among our investors.
One very well-received fund not shown on this list was the Cash Fund; this is a fund used as a parking tool for the investors when they switch-sell out of any of their funds or take profits. Since its inception on 23 January 2007, the size of the fund has upsurged to S$174.2 million as at end-August 2007.
The most popular investment regions by volume examines the funds with the top sales volume in the first three quarters of the year. This serves as a reference to the level of interest which the investors have on these funds which are distributed on our platform; however, investors are reminded not to solely consider the information published in this table when deciding which fund to invest in. It would be advisable for investors to find out more on our research views toward some of these markets, available in the 'Markets Update' section of our web portal.
Table 4: Most Popular Investment Regions by Volume in First 3Q of 2007
Region / Sector
China / Greater China
Asia ex-Japan
Asia Balanced
Malaysia
Southeast Asia
Singapore
Source: Fundsupermart.com compilations
Greater China & Asia ex-Japan Equities Remain Attractive
Chinese equity funds stood resilient during the recent correction led by the sub-prime woes in the mid-July to early August period. Out of the twenty best-performing equity funds on our platform, more than half were either invested in the Chinese or Greater China equities. The best-performing Chinese equity fund was the DWS China Equity Fund Class A SGD which returned 68.9% in the first nine months of the year. As the Chinese equity funds on our platform are largely invested in H-shares or Chinese companies listed in the Hong Kong bourse, instead of the A-shares listed in the Shenzhen and Shanghai exchanges, we think Chinese equities will remain attractive. Based on 2007's earnings growth, the estimated PE for the HSMLCI is at 27.5X — a level more attractive than the A-shares in the Shenzhen and Shanghai markets. The next best-performing regional equity funds were the Asia ex-Japan equity funds, which were driven by the strong performance of Greater China and Southeast Asian equities. The estimated PE of the Asia ex-Japan region is 19.1X and 17.2X for 2007 and 2008 respectively, and their earnings growth remain at healthy levels of 17.9% and 14.5% respectively for both years. We are of the view that the fundamentals still remain sound for the Asia ex-Japan equities, and hence, we have retained our 'Attractive' rating for the region.
http://www.fundsupermart.com/main/research/viewHTML.tpl?lang=en&articleNo=2336
One market occurrence which definitely left a deep impact on investors during the third quarter this year would be the sharp correction in the global equity markets, spanning end-July to mid-August. Investors were shaken by worries over the US sub-prime credit issues — the result of offering easy credit to US mortgage borrowers with bad credit track record in the last few years. However, market sentiments turned for the better when the Federal Reserve decided to cut target benchmark rates by a higher-than-expected 50 basis points to 4.75% on 18 September. Following this swift twist of market climate, the performance of a number of equity funds has also improved. In the first three quarters of 2007, 86% of the 336 funds distributed on our electronic platform had delivered positive returns.
Unlike the first two quarters of the year in which Southeast Asian equity funds performed very well, funds which invest in China and Greater China equities came out tops in the best-performing funds scoreboard for the first three quarters of 2007. On our platform, the best-performing Chinese equity fund in the period was the DWS China Equity Fund Class A SGD — the fund returned a stunning 68.9%. All returns are in SGD terms.
Table 1: Top-Performing Funds In First 3Q of 2007
Fund Name
Returns As At end-September 2007
Sector / Regions
DWS China Equity Fund Class A SGD
68.9%
China
HGIF Chinese Equity-A SGD
60.5%
China
Fidelity China Focus USD
60.0%
China
UOB United Greater China Fund
57.9%
Greater China
SGAM Golden China Fund S$
56.0%
Greater China
Fidelity S East Asia A-SGD
52.7%
Asia ex-Japan
United Asian Growth Opportunities
51.3%
Asia ex-Japan
PRU Dragon Peacock Fund
50.8%
India/China
Franklin Templeton F-Asian Equity
50.4%
Asia ex-Japan
DWS Noor China Equity CL A USD
50.3%
China
Lion Capital China Growth
47.8%
China
First State Regional China
47.0%
Greater China
ABN AMRO Brazil Equity Fund A USD
46.7%
Brazil
First State Global Resources
45.2%
Global Resources
Legg Mason Asian Enterprise
45.0%
Asia ex-Japan
Franklin Templeton F-China
44.6%
Greater China
Fidelity Greater China USD
44.1%
Greater China
Schroder Greater China Fund
43.3%
Greater China
Legg Mason SEA Special Sits
42.9%
Southeast Asia
UOB United Asia Fund
42.7%
Asia ex-Japan
Source: Fundsupermart.com compilations; performance figures in the tables are calculated in SGD terms using bid-to-bid prices, with any income or dividend reinvested.
The strength in Greater China and Chinese equity funds corresponds to the strength of their underlying equity markets' performance, represented by the Hang Seng Mainland Composite Index (HSMLCI) — Fundsupermart.com's proxy for Chinese equities. As mentioned in the report ' Top Performing Markets in the First Three Quarters of 2007', Chinese equities were the top scorer among all other equity markets we cover, chalking up a return of 54.4% in the first 3Q of 2007. Of the top 20 best-performing funds featured on Table 1, 11 are either invested in Chinese or Greater China equities.
Three of the best-performing Chinese equity funds include the DWS China Equity Fund Class A, the HGIF Chinese Equity-A SGD and the Fidelity China Focus USD. In the first nine months of the year, these funds returned more than 60%. Referring to our benchmark index for Chinese equities, the telecommunications, banking and finance as well as the property sectors were the stronger performers within the index. An important piece of news which has boosted market sentiment, in our opinion, was the Chinese government's pilot scheme to allow larger fund inflows from the Mainland Chinese investors into the Hong Kong Exchange. Due to the restrictions placed on the Mainland Chinese investors to invest their monies outside of the country, both the Shanghai and Shenzhen stock indices have skyrocketed in the past one year, as most retail investors could only invest in stocks listed in these exchanges.
In SGD terms, the Shenzhen and Shanghai A-share indices were up 184.3% and 108.2% respectively as at end-September 2007. The estimated PE for both indices was at 44.4X and 53.6X respectively, based on 2007's earnings growth — both at their all-time highs. At one glance, investors might be concerned about whether these two markets are turning bubblish; the silver lining, however, is that the Chinese equity funds distributed on our platform are largely invested in Hong Kong-listed Chinese companies and H-shares. Based on the factsheets, and as at end August 2007, these funds invest approximately 90% to 98.2% into H-shares or Chinese companies listed in the Hong Kong market.
Based on our PE estimates, the valuations for the H-shares are far lower than those of the A-shares listed in the Shenzhen and Shanghai stock exchanges. The estimated PE for the HSMLCI were 27.5X and 23.4X for 2007 and 2008 respectively (as at end-September 2007). Thus, the H-shares appear to be more attractively valued at this point of time, and we maintain a 3-star or 'Attractive' rating on the Chinese equity markets (primarily H-shares and Chinese companies listed in the Hong Kong market). However, investors who wish to invest in Chinese equity funds should be aware that these funds would experience greater volatility compared to the market conditions a few years ago, as the Chinese bourses are no longer trading at inexpensive levels.
Aside from the Chinese equity funds, other funds listed on the list of top 20 best-performing funds include equity funds which invest in regions including Southeast Asia, Asia ex-Japan, India/China and Brazil. On a year-to-date basis, Asia ex-Japan equity funds were the best-performing regional equity funds.What About The Regional Funds?
The Asia ex-Japan equity funds delivered a strong average return of 33% in the first nine months of 2007 – the highest among all regions we cover. Two of the best-performing Asia ex-Japan equity funds on our platform include the Fidelity South East Asia A-SGD and the United Asian Growth Opportunities Fund; as at end-September, these funds returned 52.7% and 51.3% respectively. The next best performing regional equity funds would be the emerging market equity funds, which returned an average of 25.5% in the first nine months of the year. The Fidelity Emerging Market A-SGD Fund, for instance, returned 31.3% during this period. All regional equity funds enjoyed positive returns, except for the Japanese equity funds which have lost an average of 5.7%. Only the regional funds distributed on the Fundsupermart.com platform have been taken into consideration when computing the average returns figures above.
Table 2: Performance of the Regional Equity Funds
Region
Average Fund Returns (%)
Index
Performance (%)
Asia ex-Japan
33.0%
MSCI Asia ex-Japan
31.8%
Emerging Market
25.5%
MSCI Emerging Markets
27.7%
Europe
7.9%
DJ Stoxx 50
7.9%
US
6.3%
S&P 500
4.1%
Japan
-5.7%
Nikkei 225
-2.2%
Source: Fundsupermart.com compilations; the performance figures in the tables are calculated in SGD terms using bid-to-bid prices, with any income or dividend reinvested.Japanese Equity & European Property Funds Were Disheartening
Of the ten worst-performing funds on our platform, two were invested in property equities and five were invested in either Japanese equities or Japanese small- and mid-sized company equities. To be specific, two of the worst-performing funds were the Henderson European Property Securities and PRU Japan Smaller Companies fund; the funds lost 16.4% and 19.1% respectively.
The Tokyo Stock Exchange (TSE) 2nd Section Index, which represents Japanese smaller-cap equities, tumbled 12.4% in the first nine months of 2007. Small-to-mid cap Japanese stocks fared poorer than the large caps, represented by the Nikkei 225 index; the index lost only 2.2% in the same period. The weak consumer confidence and capital spending had also kept market sentiments low. Corporate capital spending declined in the second quarter and consumer confidence remained generally subdued as a result of higher taxes and falling wage levels. With the estimated market PE at 23.7X and 21.9X for 2007 and 2008 respectively (fiscal year ending March 2008 and 2009), we think the market remains reasonably priced. However, as we find other regional markets more attractive, we maintain a neutral view on the Japanese equity market.
European and Global Property funds have been hit hard this year. European properties did not do well this year as the European Central Bank (ECB) hiked their benchmark refinancing rate from 3.5% at end-December 2006 to 4.0% as at end-September 2007. The European benchmark rates have been rising to a higher-than-expected level. Thus, investors of the European property sector equities might have grown wary of the potential impact of these rate hikes on the borrowers' ability to repay their property loans, and feel that the yield premium (on top of the risk-free rate of return in Europe) offered by European property Real Estate Investment Trusts (REITs) may not be attractive enough to compensate investors for the additional risks they are taking on when investing in European property equities. These and other reasons might have prompted investors of European equities to switch to other sectoral plays within the region.
On global property funds, as many of these have a higher proportion of their assets in American property, they have thus been affected by the contagion effect of the US sub-prime mortgage crisis. It is important to consider that the US property prices have rallied over the past 5 years, owing to the initial favourable credit environment in the US after the 911 Incident, where buyers were able to buy properties at very low interest rates. However, the property market has seen declines from its highs, as highly leveraged borrowers were hit hard by the rising interest rates. Property shares also dived lower by momentum selling when the market panic set in. Commercial REITs — which most global property funds invest in — are now highly priced and offer low yields, making them unattractive for the investors. We maintain a negative view on the outlook for the global property funds, especially so when such funds invest a large proportion of their assets in US properties.
Table 3: Ten Worst-Performing Funds in First 3Q of 2007
Fund Name
Returns
Sector / Regions
Schroder Emerging Markets Bond Fund
-4.3%
Emerging Market Bonds
DBS Global Property Securities Fund
-4.7%
Global Property
Franklin Floating Rate Fund-Class A
-5.9%
Floating Rate Bonds
Franklin Templeton F-Japan
-6.5%
Japan
Henderson Japanese Equity
-8.6%
Japan
ABN AMRO GEM Bond USD A
-9.4%
Emerging Market Bonds
Aberdeen Japan Equity
-10.1%
Japan
DWS Japan Small/Mid Cap A SGD
-15.7%
Japanese Small-Mid Cap
Henderson European Prop Securities
-16.4%
European Property
PRU Japan Smaller Companies Fund
-19.1%
Japanese Small-Mid Cap
Source: Fundsupermart.com compilations; the performance figures in the tables are calculated in SGD terms using bid-to-bid prices, with any income or dividend reinvested.
The Best-sellers
Table 4 shows the list of regional or sectoral funds which have garnered the highest levels of subscription at Fundsupermart.com. China/Greater China and Asia ex-Japan equity funds — which were the strongest performing funds in the first three quarters — were the most popular funds among our investors. Southeast Asian, Malaysian and Singaporean equity funds were also some of the most favoured among our investors.
One very well-received fund not shown on this list was the Cash Fund; this is a fund used as a parking tool for the investors when they switch-sell out of any of their funds or take profits. Since its inception on 23 January 2007, the size of the fund has upsurged to S$174.2 million as at end-August 2007.
The most popular investment regions by volume examines the funds with the top sales volume in the first three quarters of the year. This serves as a reference to the level of interest which the investors have on these funds which are distributed on our platform; however, investors are reminded not to solely consider the information published in this table when deciding which fund to invest in. It would be advisable for investors to find out more on our research views toward some of these markets, available in the 'Markets Update' section of our web portal.
Table 4: Most Popular Investment Regions by Volume in First 3Q of 2007
Region / Sector
China / Greater China
Asia ex-Japan
Asia Balanced
Malaysia
Southeast Asia
Singapore
Source: Fundsupermart.com compilations
Greater China & Asia ex-Japan Equities Remain Attractive
Chinese equity funds stood resilient during the recent correction led by the sub-prime woes in the mid-July to early August period. Out of the twenty best-performing equity funds on our platform, more than half were either invested in the Chinese or Greater China equities. The best-performing Chinese equity fund was the DWS China Equity Fund Class A SGD which returned 68.9% in the first nine months of the year. As the Chinese equity funds on our platform are largely invested in H-shares or Chinese companies listed in the Hong Kong bourse, instead of the A-shares listed in the Shenzhen and Shanghai exchanges, we think Chinese equities will remain attractive. Based on 2007's earnings growth, the estimated PE for the HSMLCI is at 27.5X — a level more attractive than the A-shares in the Shenzhen and Shanghai markets. The next best-performing regional equity funds were the Asia ex-Japan equity funds, which were driven by the strong performance of Greater China and Southeast Asian equities. The estimated PE of the Asia ex-Japan region is 19.1X and 17.2X for 2007 and 2008 respectively, and their earnings growth remain at healthy levels of 17.9% and 14.5% respectively for both years. We are of the view that the fundamentals still remain sound for the Asia ex-Japan equities, and hence, we have retained our 'Attractive' rating for the region.
Comparison Of REITs in Singapore 19 sep 07
Allco Reit has yield of 6.04% for FY07E and 6.40% for FY08E.
Drawing on its coffers for KeyPoint acquisitionBuy S$1.04; Price Target : 12-Month S$ 1.65 (Prev S$1.39)
Saturday, September 22, 2007
Unit Trust To Consider
UOB United Asia Fund (Risk Rating:8) (C,O)
The United Asia Fund was the second-best performing Asia ex-Japan equity fund in both 2001 and 2006. Since the fund was incepted in March 1992, it has outperformed its benchmark index - the MSCI AC FE ex Japan USD index – historically, up till 28 February 2007. However, the fund only performed averagely on the aspect of resiliency. During the market correction, which lasted from 5 May to 16 June 2006, the fund lost -12.5%, similar to the average of -12.6%. Nonetheless, we think that there are still certain merits to the fund. These include its strong performance during market upturns and its low expense ratio. The expense ratio of the fund was at 1.72% (as at end-December 2006) - lower than the average expense ratio of 2% of its peers. Similar to most Asia ex-Japan equity funds, this fund invests in a myriad of Asian markets and is recently skewed towards the North Asian markets. These markets include China, South Korea and Taiwan. Based on the fund’s factsheet as at 28 February 2007, these three markets form 62% of its total portfolio. Within the regional funds category, the Asia ex-Japan funds tend to exhibit greater levels of volatility vis-Ã -vis global, European or US funds. We think that as valuations for the Asia ex-Japan markets are still at reasonable levels and that earnings growth still remains at healthy levels, the region still exhibits good potential in the medium-to-long run
Lipper Asia rating - No 2 in Capital Preservation and Leader in Consistent Return score for Equity Asia Pac ex Japan on 22/09/07
http://www.fundsupermart.com/main/admin/buy/factsheet/factsheet370033.pdf
--------------- I 'm a millionaire $$$$$$$ ------------------------
Aberdeen Pacific Equity (Risk Rating:8) (C,O)
Aberdeen Pacific Equity Fund is the most resilient fund during periods of market slumps. Out of the four periods data was available, there were three periods that it was the second most resilient fund. When the Asia ex-Japan market experienced a market downturn from 30 April 2002 to 28 December 2003, the fund lost 15%, much less than the average loss of 24.4%. Performance of this fund, however, tends to lag behind others during periods of strong market upturns. In 2006, the fund returned only 20.1%, slightly lower than the average return of 23.4% delivered by peers. However, we still like this fund because of its resilience and consistent performance. In the period from 2001 to 2006, it emerged as the second best performing Asia ex-Japan fund in 2002, 2004 and 2005. Expense ratio for the fund is 2.1% as at end December 2006, slightly higher than the average of 2% among its peers. Unlike other Asia ex-Japan equity funds, part of this fund invests into Asian single country funds managed by Aberdeen. Funds that appeared in the top ten holdings as at end February 2007 include Aberdeen Singapore Equity Fund, Aberdeen Thailand Equity and other single country funds. It is also exposed to individual Asian equities. We think that this fund is suitable for investors looking for an Asia ex-Japan equity fund that is able to weather strong market volatility in the medium to long-term.
Lipper Asia rating - No 2 in Capital Preservation and No 4 in Consistent Return score for Equity Asia Pac ex Japan on 22/09/07
http://www.fundsupermart.com/main/admin/buy/factsheet/factsheet370091.pdf
--------------- I 'm a millionaire $$$$$$$ ------------------------
Fund with low expense ratio - United Growth Fund, Equity Singapore
FUND INFO
Launch Date
March 2, 1990
Launch Price
-
Pricing Basis
Forward Pricing
Latest NAV Price
SGD 3.789 (September 20, 2007)
Included under CPFIS OA
Yes
Included under CPFIS SA
No
Included under SRS
Yes
CPF Risk Classification
Higher Risk
Fundsupermart Risk Rating
8-High Risk
Fund Size
SGD 173.85 million (as at June 29, 2007)
Minimum Initial Investment
SGD 500.00
Minimum Subsequent Investment
SGD 500.00
Minimum RSP InvestmentSGD 100-->
SGD 100
Minimum Redemption Amount
100Units
Minimum Holding
500Units
= 4) { win.window.focus(); }
}
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(SNAPSHOT) (CHARGES & PROSPECTUS) (PERFORMANCE)
UOB UNITED GROWTH FUND (Risk Rating: 8)
INVESTMENT OBJECTIVE
The fund aims to achieve long term capital appreciation and regular income through investing in shares of companies listed on the Stock Exchange of Singapore Limited (SGX) and SES CLOB international.
Asset Class
Equity
Sector
General
Geographical Allocation
Singapore
FUND INFO
Launch Date
March 2, 1990
Launch Price
-
Pricing Basis
Forward Pricing
Latest NAV Price
SGD 3.789 (September 20, 2007)
Included under CPFIS OA
Yes
Included under CPFIS SA
No
Included under SRS
Yes
CPF Risk Classification
Higher Risk
Fundsupermart Risk Rating
8-High Risk
Fund Size
SGD 173.85 million (as at June 29, 2007)
Minimum Initial Investment
SGD 500.00
Minimum Subsequent Investment
SGD 500.00
Minimum RSP InvestmentSGD 100-->
SGD 100
Minimum Redemption Amount
100Units
Minimum Holding
500Units
Fund Manager
UOB Asset Management
YOUR HOLDINGS
You do not have this fund in your holdings.
FUND CHARGES
Fundsupermart's Discounted Initial Sales Charge
2.0 %
Annual Management Charge
1.0 %
Annual Management Charge (Mother Fund)
-
Other Significant Fees
-
Annual Expense Ratio *
1.18%* Source: IMAS quarterly report. (Includes
Lipper Asia rating - No 2 in Capital Preservation and No 4 in Consistent Return score for Equity Singapore on 22/09/07
http://www.fundsupermart.com/main/admin/buy/factsheet/factsheet370034.pdf
--------------- I 'm a millionaire $$$$$$$ ------------------------
DWS SINGAPORE EQTY FD (Risk Rating: 8)
INVESTMENT OBJECTIVE
The investment objective of the Sub-Fund is to achieve capital appreciation in the medium to long term by investing in a diversified portfolio of equity and equity-related securities (including warrants and convertible securities) (i) issued by entities listed or to be listed on the Recognised Stock Exchanges of Singapore; (ii) of entities domiciled or organised under the laws of Singapore; and/or (iii) of entities (whether domiciled or organised in Singapore or elsewhere) which, in the opinion of the Managers, have significant assets, business,production activities, trading or other business interests in Singapore.
Asset Class
Equity
Sector
General
Geographical Allocation
Singapore
FUND INFO
Launch Date
December 12, 2003
Launch Price
SGD 1
Pricing Basis
Forward Pricing
Latest NAV Price
SGD 2.6047 (September 20, 2007)
Included under CPFIS OA
Yes
Included under CPFIS SA
No
Included under SRS
Yes
CPF Risk Classification
Higher Risk
Fundsupermart Risk Rating
8-High Risk
Fund Size
SGD 313.71 million (as at June 30, 2007)
Minimum Initial Investment
SGD 1,000.00
Minimum Subsequent Investment
SGD 100.00
Minimum RSP InvestmentSGD 100-->
SGD 100
Minimum Redemption Amount
1,000Units
Minimum Holding
1,000Units
FUND CHARGES
Fundsupermart's Discounted Initial Sales Charge
2.0 %
Annual Management Charge
1.5 %
Annual Management Charge (Mother Fund)
-
Other Significant Fees
Remarks
Annual Expense Ratio *
1.75%
The United Asia Fund was the second-best performing Asia ex-Japan equity fund in both 2001 and 2006. Since the fund was incepted in March 1992, it has outperformed its benchmark index - the MSCI AC FE ex Japan USD index – historically, up till 28 February 2007. However, the fund only performed averagely on the aspect of resiliency. During the market correction, which lasted from 5 May to 16 June 2006, the fund lost -12.5%, similar to the average of -12.6%. Nonetheless, we think that there are still certain merits to the fund. These include its strong performance during market upturns and its low expense ratio. The expense ratio of the fund was at 1.72% (as at end-December 2006) - lower than the average expense ratio of 2% of its peers. Similar to most Asia ex-Japan equity funds, this fund invests in a myriad of Asian markets and is recently skewed towards the North Asian markets. These markets include China, South Korea and Taiwan. Based on the fund’s factsheet as at 28 February 2007, these three markets form 62% of its total portfolio. Within the regional funds category, the Asia ex-Japan funds tend to exhibit greater levels of volatility vis-Ã -vis global, European or US funds. We think that as valuations for the Asia ex-Japan markets are still at reasonable levels and that earnings growth still remains at healthy levels, the region still exhibits good potential in the medium-to-long run
Lipper Asia rating - No 2 in Capital Preservation and Leader in Consistent Return score for Equity Asia Pac ex Japan on 22/09/07
http://www.fundsupermart.com/main/admin/buy/factsheet/factsheet370033.pdf
--------------- I 'm a millionaire $$$$$$$ ------------------------
Aberdeen Pacific Equity (Risk Rating:8) (C,O)
Aberdeen Pacific Equity Fund is the most resilient fund during periods of market slumps. Out of the four periods data was available, there were three periods that it was the second most resilient fund. When the Asia ex-Japan market experienced a market downturn from 30 April 2002 to 28 December 2003, the fund lost 15%, much less than the average loss of 24.4%. Performance of this fund, however, tends to lag behind others during periods of strong market upturns. In 2006, the fund returned only 20.1%, slightly lower than the average return of 23.4% delivered by peers. However, we still like this fund because of its resilience and consistent performance. In the period from 2001 to 2006, it emerged as the second best performing Asia ex-Japan fund in 2002, 2004 and 2005. Expense ratio for the fund is 2.1% as at end December 2006, slightly higher than the average of 2% among its peers. Unlike other Asia ex-Japan equity funds, part of this fund invests into Asian single country funds managed by Aberdeen. Funds that appeared in the top ten holdings as at end February 2007 include Aberdeen Singapore Equity Fund, Aberdeen Thailand Equity and other single country funds. It is also exposed to individual Asian equities. We think that this fund is suitable for investors looking for an Asia ex-Japan equity fund that is able to weather strong market volatility in the medium to long-term.
Lipper Asia rating - No 2 in Capital Preservation and No 4 in Consistent Return score for Equity Asia Pac ex Japan on 22/09/07
http://www.fundsupermart.com/main/admin/buy/factsheet/factsheet370091.pdf
--------------- I 'm a millionaire $$$$$$$ ------------------------
Fund with low expense ratio - United Growth Fund, Equity Singapore
FUND INFO
Launch Date
March 2, 1990
Launch Price
-
Pricing Basis
Forward Pricing
Latest NAV Price
SGD 3.789 (September 20, 2007)
Included under CPFIS OA
Yes
Included under CPFIS SA
No
Included under SRS
Yes
CPF Risk Classification
Higher Risk
Fundsupermart Risk Rating
8-High Risk
Fund Size
SGD 173.85 million (as at June 29, 2007)
Minimum Initial Investment
SGD 500.00
Minimum Subsequent Investment
SGD 500.00
Minimum RSP InvestmentSGD 100-->
SGD 100
Minimum Redemption Amount
100Units
Minimum Holding
500Units
= 4) { win.window.focus(); }
}
// End -->
(SNAPSHOT) (CHARGES & PROSPECTUS) (PERFORMANCE)
UOB UNITED GROWTH FUND (Risk Rating: 8)
INVESTMENT OBJECTIVE
The fund aims to achieve long term capital appreciation and regular income through investing in shares of companies listed on the Stock Exchange of Singapore Limited (SGX) and SES CLOB international.
Asset Class
Equity
Sector
General
Geographical Allocation
Singapore
FUND INFO
Launch Date
March 2, 1990
Launch Price
-
Pricing Basis
Forward Pricing
Latest NAV Price
SGD 3.789 (September 20, 2007)
Included under CPFIS OA
Yes
Included under CPFIS SA
No
Included under SRS
Yes
CPF Risk Classification
Higher Risk
Fundsupermart Risk Rating
8-High Risk
Fund Size
SGD 173.85 million (as at June 29, 2007)
Minimum Initial Investment
SGD 500.00
Minimum Subsequent Investment
SGD 500.00
Minimum RSP InvestmentSGD 100-->
SGD 100
Minimum Redemption Amount
100Units
Minimum Holding
500Units
Fund Manager
UOB Asset Management
YOUR HOLDINGS
You do not have this fund in your holdings.
FUND CHARGES
Fundsupermart's Discounted Initial Sales Charge
2.0 %
Annual Management Charge
1.0 %
Annual Management Charge (Mother Fund)
-
Other Significant Fees
-
Annual Expense Ratio *
1.18%* Source: IMAS quarterly report. (Includes
Lipper Asia rating - No 2 in Capital Preservation and No 4 in Consistent Return score for Equity Singapore on 22/09/07
http://www.fundsupermart.com/main/admin/buy/factsheet/factsheet370034.pdf
--------------- I 'm a millionaire $$$$$$$ ------------------------
DWS SINGAPORE EQTY FD (Risk Rating: 8)
INVESTMENT OBJECTIVE
The investment objective of the Sub-Fund is to achieve capital appreciation in the medium to long term by investing in a diversified portfolio of equity and equity-related securities (including warrants and convertible securities) (i) issued by entities listed or to be listed on the Recognised Stock Exchanges of Singapore; (ii) of entities domiciled or organised under the laws of Singapore; and/or (iii) of entities (whether domiciled or organised in Singapore or elsewhere) which, in the opinion of the Managers, have significant assets, business,production activities, trading or other business interests in Singapore.
Asset Class
Equity
Sector
General
Geographical Allocation
Singapore
FUND INFO
Launch Date
December 12, 2003
Launch Price
SGD 1
Pricing Basis
Forward Pricing
Latest NAV Price
SGD 2.6047 (September 20, 2007)
Included under CPFIS OA
Yes
Included under CPFIS SA
No
Included under SRS
Yes
CPF Risk Classification
Higher Risk
Fundsupermart Risk Rating
8-High Risk
Fund Size
SGD 313.71 million (as at June 30, 2007)
Minimum Initial Investment
SGD 1,000.00
Minimum Subsequent Investment
SGD 100.00
Minimum RSP InvestmentSGD 100-->
SGD 100
Minimum Redemption Amount
1,000Units
Minimum Holding
1,000Units
FUND CHARGES
Fundsupermart's Discounted Initial Sales Charge
2.0 %
Annual Management Charge
1.5 %
Annual Management Charge (Mother Fund)
-
Other Significant Fees
Remarks
Annual Expense Ratio *
1.75%
Lipper Asia rating - Leader in Capital Preservation and Leader in Consistent Return score for Equity Singapore on 22/09/07
http://www.fundsupermart.com/main/admin/buy/factsheet/factsheetDESGEQ.pdf
--------------- I 'm a millionaire $$$$$$$ ------------------------
FIRST STATE REG CHINA (Risk Rating: 8)
INVESTMENT OBJECTIVE
To achieve long term capital appreciation by investing all or substantially all of its assets in the First State Greater China Growth Fund (a Dublin-domiciled fund) which invests primarily in securities issued by companies with either assets in, or revenues derived from, the People's Republic of China, Hong Kong and Taiwan.
Asset Class
Equity
Sector
General
Geographical Allocation
Greater China
FUND INFO
Launch Date
September 27, 1993
Launch Price
-
Pricing Basis
Forward Pricing
Latest NAV Price
SGD 2.1585 (September 20, 2007)
Included under CPFIS OA
Yes
Included under CPFIS SA
No
Included under SRS
Yes
CPF Risk Classification
Higher Risk
Fundsupermart Risk Rating
8-High Risk
Fund Size
SGD 429.20 million (as at June 29, 2007)
Minimum Initial Investment
SGD 1,000.00
Minimum Subsequent Investment
SGD 100.00
Minimum RSP InvestmentSGD 100-->
SGD 100
Minimum Redemption Amount
1,000Units
Minimum Holding
SGD 1,000
FUND CHARGES
Fundsupermart's Discounted Initial Sales Charge
2.0 %
Annual Management Charge
1.5 %
Annual Management Charge (Mother Fund)
-
Other Significant Fees
-
Annual Expense Ratio *
1.85%
Lipper Asia rating - Leader in Capital Preservation and No 3 in Consistent Return score for Equity China on 22/09/07
http://www.fundsupermart.com/main/admin/buy/factsheet/factsheet370047.pdf
--------------- I 'm a millionaire $$$$$$$ ------------------------
LION CAPITAL CHINA GROWTH (Risk Rating: 8)
INVESTMENT OBJECTIVE
The fund's principal objective is to achieve medium to long term capital growth of assets of the fund by investing primarily in equity-linked securities of companies with assets in or earnings derived from the People's Republic of China.
Asset Class
Equity
Sector
General
Geographical Allocation
Greater China
FUND INFO
Launch Date
March 10, 1994
Launch Price
-
Pricing Basis
Forward Pricing
Latest NAV Price
SGD 1.915 (September 20, 2007)
Included under CPFIS OA
Yes
Included under CPFIS SA
No
Included under SRS
Yes
CPF Risk Classification
Higher Risk
Fundsupermart Risk Rating
8-High Risk
Fund Size
SGD 251.90 million (as at June 29, 2007)
Minimum Initial Investment
SGD 1,000.00
Minimum Subsequent Investment
SGD 100.00
Minimum RSP InvestmentSGD 100-->
SGD 100
Minimum Redemption Amount
100Units
Minimum Holding
1,000Units
FUND CHARGES
Fundsupermart's Discounted Initial Sales Charge
2.0 %
Annual Management Charge
1.25 %
Annual Management Charge (Mother Fund)
-
Other Significant Fees
-
Annual Expense Ratio *
1.64%
Lipper Asia rating - Leader in Capital Preservation and No 2 in Consistent Return score for Equity China on 22/09/07
http://www.fundsupermart.com/main/admin/buy/factsheet/factsheet370015.pdf
--------------- I 'm a millionaire $$$$$$$ ------------------------
Success Built to Last
Become consciously aware of what matters to you and then rally your thought and action to support your definition of meaning.That is what we call alignment.
Friday, September 21, 2007
Intelligent Investor
1. Be humble
When you do not know a thing, to allow that you do not know it--this is knowledge.--ConfuciusInvesting is a big bet on an unknowable future. The mark of wisdom is accepting just how unknowable it is. Granted, that's not easy. Our brains are built to think the future will be like the near past. And we're too ready to act on the predictions of pundits, who are no more clued in than we are about what lies ahead. Being humble in the face of uncertainty keeps you from costly mistakes. You won't jump on yesterday's bandwagon. And before you invest, you'll be more likely to ask a key question: "What if I'm wrong?"
Intelligent Investor, by Jason Zweig
2. Take calculated risks
He that is overcautious will accomplish little. --Friedrich von SchillerThe returns you get are proportionate to the risk you take. This is a fundamental law of the markets. It's why five-year CDs typically pay more than six-month ones and why you're disappointed if your emerging markets fund does no better than its stodgy blue-chip stablemate. History unequivocally supports this "no free lunch" principle. Going back to 1926, stocks (high risk) have paid more than government bonds (medium risk), which in turn have beaten low-risk Treasury bills. Among many, many other things, this law suggests:
To earn returns high enough to build true wealth, you have to put some of your money in risky assets like stocks--the only investment to handily beat inflation over time.
If a financial salesperson tries to tell you his product offers a high return with no risk, get that claim in writing. Then send it and his business card to the SEC.
3. Have an emergency fund
For age and want, save while you may; no morning sun lasts a whole day.--Benjamin FranklinThe first step in constructing any serious financial plan is to create an emergency cash fund--ideally, three to six months' living expenses--stashed in a low-cost ultrasafe bank account or money-market fund. Without this financial cushion, any unexpected expense can derail your long-term plans. These days, happily, that emergency stash won't just sit idle. Top bank accounts like the one at UFB Direct (888-580-0049) and perennially competitive money funds like Vanguard Prime (800-851-4999) now pay more than 5%.
4. Mix it up
It is the part of a wise man to keep himself today for tomorrow and not to venture all his eggs in one basket.--Miguel de CervantesNothing can break the law of risk and reward, but a diversified portfolio can bend it. When you spread your money properly among different asset types, a rise in some will offset a fall in others, muting your overall risk without a commensurate drop in return. It's the closest thing to a free lunch there is in investing. To make the alchemy work, you must load up on assets whose up and down cycles don't run in sync: stocks (both U.S. and foreign, as well as large-company and small), bonds (of varying maturities), cash, real estate and commodities.
5. It's the portfolio, stupid
Asset allocation...is the overwhelmingly dominant contributor to total return. --Gary Brinson, Brian Singer and Gilbert BeebowerMost investors concentrate on trying to choose the best stock and pick the perfect moment to buy or sell. It's a waste. What really matters to your long-term returns is asset allocation--that is, how you split up your portfolio. Since researchers dropped this bombshell 20 years ago, experts have debated the size of the asset-allocation factor. Some say it accounts for 40% of the variation in investors' returns; others (like the original researchers) say 90%. But no one refutes that it's major. For help getting the best mix for your goals and risk tolerance, see the Asset Allocator tool.
6. Average is the new best
The best way to own common stocks is through an index fund.--Warren BuffettHere's the logic behind index funds, which aim simply to match the return of a market index: The average fund in any market will always earn that market's return (because in aggregate investors are the market) minus expenses. Since index funds match the market but have much smaller expenses than other funds, they will always beat the average fund in the long run. It's hard to argue with the math, and history bears it out (see the performance stat at right). Besides, if the Greatest Investor of Our Time believes that index funds are superior for most investors, shouldn't you?
7. Practice patience
It never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!--Edwin LefevreThis blunt warning was issued in Lefevre's 1923 fictional memoir, reportedly based on legendary trader Jesse Livermore and treated by many financial advisers like the Bible. Some 77 years later, behavioral finance professors Terrance Odean and Brad Barber's research into transactions by some 66,000 households between 1991 and 1996 found that those who traded least earned seven percentage points a year more than the most frequent traders. Moral: Once you arrange your assets into your ideal allocation, don't tinker. Rebalance once a year to keep your mix on track, but otherwise, listen to Livermore and sit tight.
8. Don't time the market
The real key to making money in stocks is not to get scared out of them.--Peter LynchIt would be so nice, wouldn't it, to sell before every market downdraft and then get back in just as the good times roll again. But it's too hard to pull off. Nobody knows when markets will turn (see Rule No. 1). And when they do, they tend to move in quick bursts. By the time you realize an advance has begun, most of it's over. Miss that initial stretch and you'll miss out on most of the gains. The lesson: The surest way to investing success is to buy, then stick to your guns.
9. Be a cheapskate
Performance comes and goes, but costs roll on forever.--Jack BogleIf you choose a fund that eats up 1.5% a year in expenses over one that costs 1% (let alone the 0.2% that index funds may charge), your fund's return will have to beat the other's by half a point a year just for you to come out even. Past returns are no guarantee of the future, but today's low-cost funds are likely to stay low cost. Buying them is the only sure way of giving yourself a leg up.
10. Don't follow the crowd
Fashion is made to become unfashionable.--Coco ChanelOr, as the legendary financier Sir James Goldsmith has said, "If you see a bandwagon, it's too late." In the late 1990s, there was no more fashionable bandwagon for investors than Firsthand Technology Value fund. It returned 23.7% in 1998, but investors really piled into it after it rocketed an incredible 190.4% in 1999. But by then, the bust of 2000 was about to unfold, and Firsthand was soon to become as passé as plaid trousers. The result was a chilling example of the perils of following the herd: While the fund posted a respectable 16% annualized gain over the four years through 2001, the average shareholder in the fund actually lost more than 31.6% a year.
11. Buy low
If a business is worth a dollar and I can buy it for 40 cents, something good may happen to me.--Warren BuffettThe best Dow stocks of the past 10 years don't include Microsoft or Intel. But Caterpillar (Cat) makes the cut with a 212% return. In 1997, in the midst of tech madness, the market was so bored by the company's industrial-machinery business that investors paid just $11.50 for each dollar of earnings. If the stock's current value of 16.1 times earnings is right, that's nearly a 30% discount. Smart investors didn't need to foresee the coming construction boom. They only needed to call a bargain a bargain and trust the market to eventually wise up.
12. Invest abroad
The World is a book, and those who do not travel read only a page.--St. AugustineOver the 10 years through 2006, a portfolio split 80%-20% between U.S. and international large-cap stocks would have returned an average 8.4% a year, roughly the same as a portfolio invested 100% in domestic stocks. But because U.S. and foreign markets partially offset one another's ups and downs, the global portfolio was 4% less risky than the all-American (see Rule No. 4). Most Americans have less money in foreign funds than the 15% to 25% experts recommend. But you don't have to be like most Americans
13. Keep perspective
There is nothing new in the world except the history you do not know.--Harry TrumanWhen the Dow sheds 300 points in a day, it's natural to feel doomed. And when the market surges, it's easy to be convinced that stocks have entered "a new paradigm," to echo a bubble-era phrase. Don't delude yourself. As Sir John Templeton notes, "The four most expensive words in the English language are, `This time it's different.' " To keep your perspective, remember:
In every bull market since 1970, stocks have dropped by 10% or more at least once. Average time to get back to even: 107 days.
Over time, markets tend to stick close to their long-term trends, called "regression to the mean." Manias and panics never last.
14. Just do it
It takes as much energy to wish as it does to plan. --Eleanor RooseveltFinancial planning is an unnatural act. The brain is wired to make us undervalue long-term goals and exaggerate the cost of short-term sacrifice. Yet studies show that people who do even a little retirement planning had twice the savings of those who did almost none. Heed the words attributed to Mrs. Roosevelt by doing the following:
Set concrete, attainable goals. "I'll pay an extra $100 a month on my credit card" is more likely to succeed than "I'm going to get my act together."
Then commit. Tell someone your plan and agree to a penalty--you'll do your spouse's chores for a month if you haven't saved $10,000 extra by June
15. Borrow responsibly
As life closes in on someone who has borrowed far too much money on the strength of far too little income, there are no fire escapes. --John Kenneth GalbraithFace this truth: If you let them, lenders are only too willing to advance you more than is good for your family. Mortgage banks and credit-card issuers don't care if your monthly payment makes it impossible for you to sock away money in your 401(k) or fund your kid's 529 plan. You need to set your own rules, including:
No credit-card debt. Period. It's never okay to pay 15% to borrow for consumption.
Borrow only to buy assets that appreciate. A home, yes. Education, sure. A vacation, a fancy dinner or even a 50-inch flat-screen TV? No way.
16. Talk to your spouse
"In every house of marriage there's room for an interpreter."--Stanley KunitzYour most important financial partner isn't your broker. It's your spouse--you know, the one who probably owns half of all you do and whose fate is inextricably linked with yours. But research shows that spouses often don't agree on even such basic info as their income and savings. Wake-up call: To make smart decisions, you need to talk, and if you're like most couples, to do a better job at it.
Men: Don't assume she doesn't care about this stuff. She does. But you need to lay off the jargon and speak English.
Women: Don't just leave it all to him. At a minimum, know where the key papers are and how your money is invested. ˙
Both: Focus on goals, not on being right. It's not a contest.
17. Exit gracefully
Only put off until tomorrow what you are willing to die having left undone. --Pablo PicassoDespite the words he reportedly uttered, Picasso was willing to die without planning his estate. It took years for his heirs to reach a settlement with French authorities. Although you may not have masterpieces to bequeath, you have no excuse not to take elementary steps to make life easier on those you'd leave behind. Covering the basics shouldn't cost more than $1,500. To find a lawyer, ask friends and colleagues for recommendations or get referrals online at the website of the American Academy of Estate Planning Attorneys (aaepa.com). For tips on dividing emotion-laden personal belongings--more often the flash point for family tension than money or big-ticket items--check out the website Who Gets Grandma's Yellow Pie Plate? (yellowpieplate.umn.edu).
18. Pay only your share
The avoidance of taxes is the only intellectual pursuit that carries any reward.--John Maynard KeynesIt's all well and good to put time into choosing the right investments. But being conscious of taxes puts money in your pocket too (at least it keeps it from being taken from your pocket, which amounts to the same thing), and the payoff is swift, certain and there for the taking. So take full advantage of tax-deferred benefits at work, like 401(k)s and flexible spending accounts. Stick with tax-efficient investments like index funds. And claim every deduction you're entitled to. According to the Government Accountability Office, taxpayers who could itemize but chose not to ended up overpaying by $450. Don't be one of them.
19. Give wisely
The time is always right to do the right thing.--Martin Luther King Jr.Granted, Dr. King did not have money on his mind when he spoke these words. But they also ring true in your financial life, since giving back is always the right thing. Still, there are more right and less right ways to do it.
Look beyond the headlines. It's fine to give money to disasters like the tsunami, but don't forget about smaller charities that go wanting.
Don't give over the phone. Telemarketers often take a cut of 50% or more.
Focus. Identify a cause that really speaks to you. Then devote most of your energy and charitable dollars to the organizations that best support it.
20. Keep money in its place
A wise man should have money in his head, but not in his heart. --Jonathan SwiftPeople who say they value money highly report that they are less happy in life than those who care more about love and friends. Enough said.
7 Wealth building tips
1. No guts, no glory
To grow your savings faster than inflation (average annual rate: 3.1%), you've got to invest in stocks for the long haul.
Don't try so hard
72% of actively managed large-cap funds have failed to beat the stock market over the past five years.
Miss a day, pay the price
The S&P 500 gained 11.8% a year between 1982 and 2001. But only investors who stayed the course managed to earn that big a return.
The toll of high fees
The more you pay in management fees and other expenses, the less you'll earn over time.
Hot fund, cold comfort
Between 1998 and 2001, Firsthand Technology Value fund fared well. Its investors? Not so much.
If you make only the minimum payments on a $5,000 balance, you'll be paying that debt forever - and shelling out a ton in interest along the way.
More money ≠ more happiness
After you cover the basics, being much richer doesn't make you much happier.
When you do not know a thing, to allow that you do not know it--this is knowledge.--ConfuciusInvesting is a big bet on an unknowable future. The mark of wisdom is accepting just how unknowable it is. Granted, that's not easy. Our brains are built to think the future will be like the near past. And we're too ready to act on the predictions of pundits, who are no more clued in than we are about what lies ahead. Being humble in the face of uncertainty keeps you from costly mistakes. You won't jump on yesterday's bandwagon. And before you invest, you'll be more likely to ask a key question: "What if I'm wrong?"
Intelligent Investor, by Jason Zweig
2. Take calculated risks
He that is overcautious will accomplish little. --Friedrich von SchillerThe returns you get are proportionate to the risk you take. This is a fundamental law of the markets. It's why five-year CDs typically pay more than six-month ones and why you're disappointed if your emerging markets fund does no better than its stodgy blue-chip stablemate. History unequivocally supports this "no free lunch" principle. Going back to 1926, stocks (high risk) have paid more than government bonds (medium risk), which in turn have beaten low-risk Treasury bills. Among many, many other things, this law suggests:
To earn returns high enough to build true wealth, you have to put some of your money in risky assets like stocks--the only investment to handily beat inflation over time.
If a financial salesperson tries to tell you his product offers a high return with no risk, get that claim in writing. Then send it and his business card to the SEC.
3. Have an emergency fund
For age and want, save while you may; no morning sun lasts a whole day.--Benjamin FranklinThe first step in constructing any serious financial plan is to create an emergency cash fund--ideally, three to six months' living expenses--stashed in a low-cost ultrasafe bank account or money-market fund. Without this financial cushion, any unexpected expense can derail your long-term plans. These days, happily, that emergency stash won't just sit idle. Top bank accounts like the one at UFB Direct (888-580-0049) and perennially competitive money funds like Vanguard Prime (800-851-4999) now pay more than 5%.
4. Mix it up
It is the part of a wise man to keep himself today for tomorrow and not to venture all his eggs in one basket.--Miguel de CervantesNothing can break the law of risk and reward, but a diversified portfolio can bend it. When you spread your money properly among different asset types, a rise in some will offset a fall in others, muting your overall risk without a commensurate drop in return. It's the closest thing to a free lunch there is in investing. To make the alchemy work, you must load up on assets whose up and down cycles don't run in sync: stocks (both U.S. and foreign, as well as large-company and small), bonds (of varying maturities), cash, real estate and commodities.
5. It's the portfolio, stupid
Asset allocation...is the overwhelmingly dominant contributor to total return. --Gary Brinson, Brian Singer and Gilbert BeebowerMost investors concentrate on trying to choose the best stock and pick the perfect moment to buy or sell. It's a waste. What really matters to your long-term returns is asset allocation--that is, how you split up your portfolio. Since researchers dropped this bombshell 20 years ago, experts have debated the size of the asset-allocation factor. Some say it accounts for 40% of the variation in investors' returns; others (like the original researchers) say 90%. But no one refutes that it's major. For help getting the best mix for your goals and risk tolerance, see the Asset Allocator tool.
6. Average is the new best
The best way to own common stocks is through an index fund.--Warren BuffettHere's the logic behind index funds, which aim simply to match the return of a market index: The average fund in any market will always earn that market's return (because in aggregate investors are the market) minus expenses. Since index funds match the market but have much smaller expenses than other funds, they will always beat the average fund in the long run. It's hard to argue with the math, and history bears it out (see the performance stat at right). Besides, if the Greatest Investor of Our Time believes that index funds are superior for most investors, shouldn't you?
7. Practice patience
It never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!--Edwin LefevreThis blunt warning was issued in Lefevre's 1923 fictional memoir, reportedly based on legendary trader Jesse Livermore and treated by many financial advisers like the Bible. Some 77 years later, behavioral finance professors Terrance Odean and Brad Barber's research into transactions by some 66,000 households between 1991 and 1996 found that those who traded least earned seven percentage points a year more than the most frequent traders. Moral: Once you arrange your assets into your ideal allocation, don't tinker. Rebalance once a year to keep your mix on track, but otherwise, listen to Livermore and sit tight.
8. Don't time the market
The real key to making money in stocks is not to get scared out of them.--Peter LynchIt would be so nice, wouldn't it, to sell before every market downdraft and then get back in just as the good times roll again. But it's too hard to pull off. Nobody knows when markets will turn (see Rule No. 1). And when they do, they tend to move in quick bursts. By the time you realize an advance has begun, most of it's over. Miss that initial stretch and you'll miss out on most of the gains. The lesson: The surest way to investing success is to buy, then stick to your guns.
9. Be a cheapskate
Performance comes and goes, but costs roll on forever.--Jack BogleIf you choose a fund that eats up 1.5% a year in expenses over one that costs 1% (let alone the 0.2% that index funds may charge), your fund's return will have to beat the other's by half a point a year just for you to come out even. Past returns are no guarantee of the future, but today's low-cost funds are likely to stay low cost. Buying them is the only sure way of giving yourself a leg up.
10. Don't follow the crowd
Fashion is made to become unfashionable.--Coco ChanelOr, as the legendary financier Sir James Goldsmith has said, "If you see a bandwagon, it's too late." In the late 1990s, there was no more fashionable bandwagon for investors than Firsthand Technology Value fund. It returned 23.7% in 1998, but investors really piled into it after it rocketed an incredible 190.4% in 1999. But by then, the bust of 2000 was about to unfold, and Firsthand was soon to become as passé as plaid trousers. The result was a chilling example of the perils of following the herd: While the fund posted a respectable 16% annualized gain over the four years through 2001, the average shareholder in the fund actually lost more than 31.6% a year.
11. Buy low
If a business is worth a dollar and I can buy it for 40 cents, something good may happen to me.--Warren BuffettThe best Dow stocks of the past 10 years don't include Microsoft or Intel. But Caterpillar (Cat) makes the cut with a 212% return. In 1997, in the midst of tech madness, the market was so bored by the company's industrial-machinery business that investors paid just $11.50 for each dollar of earnings. If the stock's current value of 16.1 times earnings is right, that's nearly a 30% discount. Smart investors didn't need to foresee the coming construction boom. They only needed to call a bargain a bargain and trust the market to eventually wise up.
12. Invest abroad
The World is a book, and those who do not travel read only a page.--St. AugustineOver the 10 years through 2006, a portfolio split 80%-20% between U.S. and international large-cap stocks would have returned an average 8.4% a year, roughly the same as a portfolio invested 100% in domestic stocks. But because U.S. and foreign markets partially offset one another's ups and downs, the global portfolio was 4% less risky than the all-American (see Rule No. 4). Most Americans have less money in foreign funds than the 15% to 25% experts recommend. But you don't have to be like most Americans
13. Keep perspective
There is nothing new in the world except the history you do not know.--Harry TrumanWhen the Dow sheds 300 points in a day, it's natural to feel doomed. And when the market surges, it's easy to be convinced that stocks have entered "a new paradigm," to echo a bubble-era phrase. Don't delude yourself. As Sir John Templeton notes, "The four most expensive words in the English language are, `This time it's different.' " To keep your perspective, remember:
In every bull market since 1970, stocks have dropped by 10% or more at least once. Average time to get back to even: 107 days.
Over time, markets tend to stick close to their long-term trends, called "regression to the mean." Manias and panics never last.
14. Just do it
It takes as much energy to wish as it does to plan. --Eleanor RooseveltFinancial planning is an unnatural act. The brain is wired to make us undervalue long-term goals and exaggerate the cost of short-term sacrifice. Yet studies show that people who do even a little retirement planning had twice the savings of those who did almost none. Heed the words attributed to Mrs. Roosevelt by doing the following:
Set concrete, attainable goals. "I'll pay an extra $100 a month on my credit card" is more likely to succeed than "I'm going to get my act together."
Then commit. Tell someone your plan and agree to a penalty--you'll do your spouse's chores for a month if you haven't saved $10,000 extra by June
15. Borrow responsibly
As life closes in on someone who has borrowed far too much money on the strength of far too little income, there are no fire escapes. --John Kenneth GalbraithFace this truth: If you let them, lenders are only too willing to advance you more than is good for your family. Mortgage banks and credit-card issuers don't care if your monthly payment makes it impossible for you to sock away money in your 401(k) or fund your kid's 529 plan. You need to set your own rules, including:
No credit-card debt. Period. It's never okay to pay 15% to borrow for consumption.
Borrow only to buy assets that appreciate. A home, yes. Education, sure. A vacation, a fancy dinner or even a 50-inch flat-screen TV? No way.
16. Talk to your spouse
"In every house of marriage there's room for an interpreter."--Stanley KunitzYour most important financial partner isn't your broker. It's your spouse--you know, the one who probably owns half of all you do and whose fate is inextricably linked with yours. But research shows that spouses often don't agree on even such basic info as their income and savings. Wake-up call: To make smart decisions, you need to talk, and if you're like most couples, to do a better job at it.
Men: Don't assume she doesn't care about this stuff. She does. But you need to lay off the jargon and speak English.
Women: Don't just leave it all to him. At a minimum, know where the key papers are and how your money is invested. ˙
Both: Focus on goals, not on being right. It's not a contest.
17. Exit gracefully
Only put off until tomorrow what you are willing to die having left undone. --Pablo PicassoDespite the words he reportedly uttered, Picasso was willing to die without planning his estate. It took years for his heirs to reach a settlement with French authorities. Although you may not have masterpieces to bequeath, you have no excuse not to take elementary steps to make life easier on those you'd leave behind. Covering the basics shouldn't cost more than $1,500. To find a lawyer, ask friends and colleagues for recommendations or get referrals online at the website of the American Academy of Estate Planning Attorneys (aaepa.com). For tips on dividing emotion-laden personal belongings--more often the flash point for family tension than money or big-ticket items--check out the website Who Gets Grandma's Yellow Pie Plate? (yellowpieplate.umn.edu).
18. Pay only your share
The avoidance of taxes is the only intellectual pursuit that carries any reward.--John Maynard KeynesIt's all well and good to put time into choosing the right investments. But being conscious of taxes puts money in your pocket too (at least it keeps it from being taken from your pocket, which amounts to the same thing), and the payoff is swift, certain and there for the taking. So take full advantage of tax-deferred benefits at work, like 401(k)s and flexible spending accounts. Stick with tax-efficient investments like index funds. And claim every deduction you're entitled to. According to the Government Accountability Office, taxpayers who could itemize but chose not to ended up overpaying by $450. Don't be one of them.
19. Give wisely
The time is always right to do the right thing.--Martin Luther King Jr.Granted, Dr. King did not have money on his mind when he spoke these words. But they also ring true in your financial life, since giving back is always the right thing. Still, there are more right and less right ways to do it.
Look beyond the headlines. It's fine to give money to disasters like the tsunami, but don't forget about smaller charities that go wanting.
Don't give over the phone. Telemarketers often take a cut of 50% or more.
Focus. Identify a cause that really speaks to you. Then devote most of your energy and charitable dollars to the organizations that best support it.
20. Keep money in its place
A wise man should have money in his head, but not in his heart. --Jonathan SwiftPeople who say they value money highly report that they are less happy in life than those who care more about love and friends. Enough said.
7 Wealth building tips
1. No guts, no glory
To grow your savings faster than inflation (average annual rate: 3.1%), you've got to invest in stocks for the long haul.
Don't try so hard
72% of actively managed large-cap funds have failed to beat the stock market over the past five years.
Miss a day, pay the price
The S&P 500 gained 11.8% a year between 1982 and 2001. But only investors who stayed the course managed to earn that big a return.
The toll of high fees
The more you pay in management fees and other expenses, the less you'll earn over time.
Hot fund, cold comfort
Between 1998 and 2001, Firsthand Technology Value fund fared well. Its investors? Not so much.
If you make only the minimum payments on a $5,000 balance, you'll be paying that debt forever - and shelling out a ton in interest along the way.
More money ≠ more happiness
After you cover the basics, being much richer doesn't make you much happier.
Three rules to invest
Three rules to invest by
So how do you put all the innovations of the past 35 years to the best use for you, not Wall Street? Follow these rules:
If there's a cheap way and an expensive way to solve an investing problem, stick with the cheap one. The typical hedge fund gouges clients but produces mediocre returns. As for mutual funds, a recent study found that each 1 percent increase in annual expenses reduces performance by 1.6 percent; managers may be taking on more risk to overcome the drag of higher costs.
High returns and low risks don't come in the same package. As Milton Friedman said, "There's no such thing as a free lunch." Just this summer, bank-loan and long-short funds became the latest "low risk, high return" products to flame out.
If you are presented with too many choices, you'll end up afraid to choose at all. Psychologists have shown that having to pick among dozens of options not only makes it much harder for us to make up our minds, but it also fills us with regret. No matter what we choose, we worry that another choice must have been better. So don't bother scouring among thousands of mutual funds and packing your 401(k) and other accounts with 78 of them. Instead, own a handful of low-cost, diversified index funds, add to them every month and do nothing else.
The bottom line
Despite Wall Street's unrelenting efforts to complicate it, investing can be simple. But it isn't easy. In 2007 as in 1972, building wealth is very much like losing weight. Eat less, exercise more: That's simple! But it's not easy, because the world is teeming with chocolate cake and Cheetos. Likewise, buy a diversified basket of index funds and do nothing: That's simple! But it's not easy because the world is full of TV touts, cold-calling brokers and (temporarily) hot funds.
Realize that what's good about the difference between 1972 and 2007 is also what's bad. Lower cost is great if you trade rarely and wisely, but not if it tempts you into buying and selling constantly. More choice is great if you add a few selected good things to your portfolio in moderation, but not if you end up with an unplanned jumble of investments. More convenience is great if you use it to make your life easier, but not if you take time away from family and friends to update your stock portfolio.
Lower cost, more choice and greater convenience are not means to an end, they are the end. Use them to achieve some other result, and you will fritter away the advantages the past 35 years have brought. You might as well be back in 1972, wearing plaid bell-bottoms and driving a Dodge Dart.
Jason Zweig is the author of the new book "Your Money and Your Brain." E-mail him at investor@moneymail.com.
So how do you put all the innovations of the past 35 years to the best use for you, not Wall Street? Follow these rules:
If there's a cheap way and an expensive way to solve an investing problem, stick with the cheap one. The typical hedge fund gouges clients but produces mediocre returns. As for mutual funds, a recent study found that each 1 percent increase in annual expenses reduces performance by 1.6 percent; managers may be taking on more risk to overcome the drag of higher costs.
High returns and low risks don't come in the same package. As Milton Friedman said, "There's no such thing as a free lunch." Just this summer, bank-loan and long-short funds became the latest "low risk, high return" products to flame out.
If you are presented with too many choices, you'll end up afraid to choose at all. Psychologists have shown that having to pick among dozens of options not only makes it much harder for us to make up our minds, but it also fills us with regret. No matter what we choose, we worry that another choice must have been better. So don't bother scouring among thousands of mutual funds and packing your 401(k) and other accounts with 78 of them. Instead, own a handful of low-cost, diversified index funds, add to them every month and do nothing else.
The bottom line
Despite Wall Street's unrelenting efforts to complicate it, investing can be simple. But it isn't easy. In 2007 as in 1972, building wealth is very much like losing weight. Eat less, exercise more: That's simple! But it's not easy, because the world is teeming with chocolate cake and Cheetos. Likewise, buy a diversified basket of index funds and do nothing: That's simple! But it's not easy because the world is full of TV touts, cold-calling brokers and (temporarily) hot funds.
Realize that what's good about the difference between 1972 and 2007 is also what's bad. Lower cost is great if you trade rarely and wisely, but not if it tempts you into buying and selling constantly. More choice is great if you add a few selected good things to your portfolio in moderation, but not if you end up with an unplanned jumble of investments. More convenience is great if you use it to make your life easier, but not if you take time away from family and friends to update your stock portfolio.
Lower cost, more choice and greater convenience are not means to an end, they are the end. Use them to achieve some other result, and you will fritter away the advantages the past 35 years have brought. You might as well be back in 1972, wearing plaid bell-bottoms and driving a Dodge Dart.
Jason Zweig is the author of the new book "Your Money and Your Brain." E-mail him at investor@moneymail.com.
Friday, August 10, 2007
Investing Tips
Investing Tips So, now that we know it is nearly impossible to time the market, let's take a quick look at how to start building a solid stock portfolio:
Buy into well-managed companies and hold them for the long term as long as they keep growing.
Regularly invest set amounts regardless of short-term price movements.
Always buying on weakness and what's cheap right now.
Reinvest all dividends and capital gains to put the power of compounding to work for you.
Diversify by invest in 8-10 stocks, more if you can afford it (but not more than you can easily follow), in 8 or more different sectors.
Start investing NOW! Don't wait for a good time. All times are good times.If you follow these basic principles then you should have no problem building a long-term nest egg and being safely isolated from market fluctuations.
Buy into well-managed companies and hold them for the long term as long as they keep growing.
Regularly invest set amounts regardless of short-term price movements.
Always buying on weakness and what's cheap right now.
Reinvest all dividends and capital gains to put the power of compounding to work for you.
Diversify by invest in 8-10 stocks, more if you can afford it (but not more than you can easily follow), in 8 or more different sectors.
Start investing NOW! Don't wait for a good time. All times are good times.If you follow these basic principles then you should have no problem building a long-term nest egg and being safely isolated from market fluctuations.
Investing Tips - Now is the time to invest
So, now that we know it is nearly impossible to time the market, let's take a quick look at how to start building a solid stock portfolio:
Buy into well-managed companies and hold them for the long term as long as they keep growing.
Regularly invest set amounts regardless of short-term price movements.
Always buying on weakness and what's cheap right now.
Reinvest all dividends and capital gains to put the power of compounding to work for you.
Diversify by invest in 8-10 stocks, more if you can afford it (but not more than you can easily follow), in 8 or more different sectors.
Start investing NOW! Don't wait for a good time. All times are good times.
If you follow these basic principles then you should have no problem building a long-term nest egg and being safely isolated from market fluctuations. But, be FLEXIBLE ! "Times change, and we change them."
Buy into well-managed companies and hold them for the long term as long as they keep growing.
Regularly invest set amounts regardless of short-term price movements.
Always buying on weakness and what's cheap right now.
Reinvest all dividends and capital gains to put the power of compounding to work for you.
Diversify by invest in 8-10 stocks, more if you can afford it (but not more than you can easily follow), in 8 or more different sectors.
Start investing NOW! Don't wait for a good time. All times are good times.
If you follow these basic principles then you should have no problem building a long-term nest egg and being safely isolated from market fluctuations. But, be FLEXIBLE ! "Times change, and we change them."
Monday, July 30, 2007
Rules Of Investing
10 Investing Mistakes To Avoid
1. Don't confuse a company with its stock.
2. Don't pay excessive attention to the overall market.
3. Don't put much faith in forecasts.
4. Don't buy junk.
5. Don't reach for yield.
6. Don't underestimate dividends.
7. Don't trade too frequently.
8. Don't join a standpede.
9. Don't get impatient.
10. Don't do anything that makes you fundamentally uncomfortable.
1. Don't confuse a company with its stock.
2. Don't pay excessive attention to the overall market.
3. Don't put much faith in forecasts.
4. Don't buy junk.
5. Don't reach for yield.
6. Don't underestimate dividends.
7. Don't trade too frequently.
8. Don't join a standpede.
9. Don't get impatient.
10. Don't do anything that makes you fundamentally uncomfortable.
Friday, July 6, 2007
My Dream Of Being A Millionaire
I hereby decide to become an Enlightened Millioniare so I can eliminate my financial pressures, enjoy a life of complete financial freedom, and share my abundance with others.
6th Of Jul 07
I am abundant in every good way,
Infinite money is mine to earn, save, invest, exponentially multiply, and share.
My abundance is making everyone better off.
I embrace abundance and abundance embraces me.
From The One minute Millionaire - Mark Victor Hansen
"Givers Get" - Giving taps into the spiritual dimension that multiplies us, our thinking, and our results.
You may like to donate to these charity organisations:
- Community Chest - http://www.comchest.org.sg/ncss/donate/comchest_home.asp
- Christian Care Services(Singapore) - http://www.care-centre.org/
- Christian Outreach To The Handicapped - http://web.singnet.com.sg/~cotth/
- Ren Ci Domiciliary Care - http://www.renci.org.sg/about_developments.asp
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8th Of Jul 07
8th Of Jul 07
Today Lesson
1. Knock and it shall be opened - "I declared to stay committed to be an enlighten millionaire - whatever it takes, for however long it takes".And as long as I 'm committed, an invisible signal goes forth, resonating with whatever resources are necessary to complete the task"
2. Rich people act inspite of fear. Poor people let fear stop them. Susan Jeffers wrote a book called "Feel the fear and do it anyway".Do not make the biggest mistake by waiting for the feeling of fear to subside or disappear before the willingness to act.
3. Putting it all together by getting my act together is the final key to manifesting what I want. The three parts:desire, belief and self-esteem.
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