Review: Fundamentals in Investing Seminar

The 6hr moneySENSE seminar I attended comprised of three separate lectures.

1. Investing in Securities- Back to Basics
   • Fiscal Policy – Government reducing taxes (more for tweaking internal economy )
   • Monetary Policy – MAS printing money , Central bank setting SIBOR interest rate, controlling exchange of SGD over a trade weighted basket ( for tweaking external ecnonomy)
   • Exchanges is a more liquid market with No counter party risk compared to OTC
   • 2 Different Investments Goals – a) Capital Gains : b) Yield
   • Capital Gain for longer investment horizon.
   • Sometimes Options come with Commercial Bond issues.
   • Business Cycles – Investment by Sectors
     Up cycle
     6> Transportation
     7> Technology
     8> Capital Goods
     9> Raw Materials ( commodities :- Dry Baltic Index )
     10> Energy & Resources
     Down cycle
     1> Consumer Non Cyclical ( perishables – luxury/food)
     2> healthcare
     3> utilities
     4> Consumer cycliclas
     5> Financials
2. Making SENSE of Technical Analysis & Risk Control
   • Different TA tools
   • Chart Patterns
3. Creating a MoneySensible Financial Plan
   • Ballpark Figure for Financial Independence
     Lifestyle $36,000
     Housing Loan $100,000
     2 Local uni education $300K
     + Total = $1.7M
   • Cash Flow Statement
   • Basic liquidity ratio
   • Saving ratio
   • Debt Service ratio
   • Non-mortgage debt service ratio
   • Budgeting
   • Undertanding a) Need b) Willingness c) Ability to take risk before making any investments
   • Create own recipe for % returns and % volatility
   • Medical Insurances
     • Term plan for loss of income
     • small 90/99 year critical illness term for AM
     • “shield” plan for medical expenses

All in all the 3 lectures refreshed my understanding of what I’ve already knew , especially on the credit crisis and TA charts. The last lecture was extremely useful to learn how to create a personal financial plan, as well as different stages in life to watch out for.

Comments : Singapore Budget 2009

This has been late due to the Chinese new year and my interim preparations , so here are my short thoughts on the recent budget 2009 which was brought forward earlier in the financial year before companies close their books.

The MOF reeks of keynesian economists ,  believing that big short-term stimulus to break the economy out of a vicious downward spiral. Loss of Jobs -> cut in spending -> Further retrenchment due to recession.

What is different from our  US counterpart’s TARP (trouble asset relief program) is that fortunately our government is not funding budget by borrowing on future earnings, by not issuing bonds and flooding the market with extra bond paper  , thereby depressing bond prices and yield.

Banks should start to lend in order to stimulate the economy, since the government is has already made guarantees on all bank deposits as well as other fiscal measures.

No Personal income tax cut , but good also no CFP cut so it does not affect the long term burden on workers.

I read somewhere that the school of Keynesian economics grew from elitist perspectives on how government systems should be run by a few ‘good’ men in Cambridge.

The original perpertrator John Maynard Keynes believed that the government should dictate what you eat , how many babies you should have etc…

If I’ve the time , I’ll download ‘The General Theory of Employment, Interest and Money’ to my reader.

http://www.marxists.org/reference/subject/economics/keynes/general-theory/