Financial Freedom SG

We look at four different strategies for investing for you to ponder this Sunday.

Strategy 1- Diversification- This article "Yes, diversification works- eventually" shows how one of the key tenets of investment still holds true using the example of Japanese investor. Watch for some witty example in the article. Written by William Bernstein, a medical doctor turned investor.

Strategy 2- Being Honest to Yourself- Think seriously about whether you have or are beating the market. Investing Edge by Kay talks about how most investors don't do well in the market because they follow the majority- that is listen to stock recommendation by brokers or rumours etc. He gives some useful examples of what you can do as an investor to improve your odds. Or just do the honest thing and buy index stock and leave analysis to the majority who will do badly and only some who will do well- and then not every time too.

Strategy 3- Not Accepting Everything You Read. Frank Curmudgeon's blog, Bad Money Advice, is one whom I subscribe to on Google Reader and is an entertaining and educational read. His article, Hedging for Beginners, pokes holes in a blog article he read, showing that one shouldn't just accept blindly whatever you read.

Strategy 4- Rethink What You are Doing and Change If Necessary. This Wall Street Journal article, Wary Investors Are Seeking Out Objective Voices, shows that investors are cottoning on to the fact that most investment advisors can't do better than index funds. Have you read any broker's recommendations that asks you to "hold" everything when all hell was breaking loose? More likely, they would have ask you to sell or buy something because if you sit on your stocks, they don't get the commission.