Investment Advice

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  1. #51

    Join Date
    Dec 2006
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    HK - Aberdeen
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    Any bank who has branches in the US will say the same thing that Citibank said to you. US government really makes it difficult for their citizens. But they don't have a problem with the ease of obtaining credit cards and running up debt... thank god they are getting smart about it and drawing up a bill to deal with it... hopefully the "too little too late saying won't apply here". Well... the US debt situation is already in the shit hole so it probably will.

    But I digress.

    Check out this site:

    www.invested.hk

    It's run but the Hong Kong Securities & Futures Commission (equivalent of SEC in the US) and I recommend it to people who are just starting out. It tells you about what the types of investments are, what the investment industry and enviroment is like and advice advisors and what you should ask them.

    And if the majority of your assets are in cash, then I respectfully disagree with that as a good idea. Equity and bond markets are volatile as all knows. Take feb market reaction to China's comment about trying to cool the economy. So that's why you need assets with low correlation to the market. Obviously you need some cash, but if the bulk of it is a savings account, your money isn't even keeping up with inflation. So when this recession finally hits, you won't be much better off than the people invested, unless of course their portfolio is nicely diversified and are still achieving target returns


  2. #52

    Join Date
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    hmm.. what can be so decorrelated with a market panic ?
    MLM on tupperware ?

    while i am not so doomy yet.. there is really a level of uncertainty how this economy is going. further to that, the high level of available leverage masks out alot of traditionally clear indicator in the market..

    and of cos, the financial advisor is not going to provide anything outside their bank's mandate to sell... so.. live with it


  3. #53

    As Freeier said, there is little that is decorellated to a market crash if it came about, at least within the equity and bond markets. There are of course investments that traditionally have inverse correlation to the interest rate markets such as commodities, and currencies (dollar shorts) also look a good bet, but most investors won?t really touch them. So from that perspective, although it is true that inflation will erode buying power if you remain in cash, it is the lesser of two evils compared to ?investments? in stocks, bonds and property, where you run the risk of huge losses should the market falter. I get the feeling that people are very reluctant to operate outside of the sphere of property and stocks, so if people are not ready to take the plunge into alternative investments, then maybe it is best just to do nothing until some of the smoke clears, although that may take a while.


  4. #54

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    and another interesting point that traditional CFA or portfolio theory doesn't tell you, no matter how uncorrelated an asset is, in time of panic and clashes, the correlation of most asset just shoots up, and the direction down!

    so correlation is one of the least predictable fact in investment theory.

    unless, you go for a short of the index.. then that is really a negative correlation to the world market!


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