Only for investors ... and for speculators who need to invest their profits.
Lesson One: Asset Allocation is an Investment Planning Tool, not an Investment Strategy ... few investment professionals understand the distinction, because most think that Investment Planning and Financial Planning are the same. Financial Planning is a wider concept, and that such non-investment considerations Wills and Estates, insurance, budgeting, Trusts implies, etc. Investment Planning takes place within the Trusts, Donations, IRAs, and other Brokerage Accounts arising as a result of, or without, Financial Planning.
Lesson Two: Asset Allocation is a planning tool that allows the asset (you, if you have not rented a) to structure in a way most likely to achieve the objectives of each specific investment portfolio and the investment portfolio as a whole. Asset Allocation is the process of planning how a portfolio should be divided between the two basic classes (and only these two classes) of investment securities: Equity and Fixed Income. Security sub-classes have little relevance.
Lesson Three: Shares are the riskier of the two classes of securities, but not because of the price fluctuations that their fundamental trait. They are riskier because they represent ownership in a business venture that might fail. The risk of capital loss can be moderated or minimized in the security selection process and a management control activity called diversification. The primary purpose of buying shares is to sell for capital gains, not to save as to brag about in chat rooms. Trophies they they They are less risky than other non-fixed income efforts.
Fixed income securities are less risky because they represent the debt of the issuing entity, and owners have a claim on the assets of the issuer that is superior to that of shareholders and their drooling class action lawyers. With proper selection and diversification, the risk of capital loss is negligible and price fluctuations can be ignored, except the trade opportunities that they provide. The primary goal of these effects is to generate income, either for current consumption or for use later in life. Gains here should be taken ... and boasted in chat rooms!
Lesson Four: An Asset Allocation Formula is a long-range, semi-permanent, planning decision absolutely nothing to do with market timing or covering of any kind has. It is designed to provide a combination of capital growth and income that will achieve the long-distance personal (to pay bills) to produce. Goals of the individual So it should not be tampered with because expectations about something, or arbitrarily reassessed because of the natural changes in the market value of an asset class or the other. Thus, an asset allocation fund is an oxymoron.
Lesson five: Asset Allocation is the only proven cure for inflation. If this is managed using "The Working Capital Model", well, it will almost certainly increase the level of income portfolio by more than inflation, which is a measure of the purchasing power of the dollar, not the dollar value of your securities purchased. Six figures portfolios allocated 100% of Shares are not nearly as inflation proof as those who are more in balance ... see Les Six.
Lesson Six: In addition to the possibilities of not keep up with inflation using an Equity Only asset allocation, regardless of your age, greed management is much more of a problem. In a rising market, according to more profit taking opportunities than lower priced bargains, investors tend to positions in lower quality issues, current story stocks, newer issues, etc. to take .. just to be there. A 30% or so Fixed Income allocation can be an important consideration factor. How's that for throwing cold water on an old Wall Street maxim.
Lesson Seven: These are just some of the lessons that can be learned about asset allocation.
Thursday, 30 January 2014
Wednesday, 15 January 2014
The Switzerland of Asia Shines
In many ways, Singapore is the Switzerland of Asia.
Started in 1819 as a British trading colony, the Republic of Singapore was founded in 1965 under the leadership of the current Prime Minister's father, Mr Lee Kuan Yew. Although it is only one fifth the size of Rhode Island and three times the size of Washington DC, it's perhaps the most strategically important global trading, finance and service nexus in Asia.
Here is why you should consider investing in Singapore.
While Hong Kong and Shanghai will argue, Singapore is the busiest port in Asia next to the vital trading channel, the Straits of Malacca located.
Unlike South Korea and Taiwan, which are heavily dependent on the cyclical electronics industry, Singapore has a well-diversified economy. 70% of GDP is attributable to finance and services.
Accounting rules and regulations of Singapore are among the most conservative in the world. For example, the rules on inventory accounting and expense are stock options are more conservative than those in the United States.
Trade surplus
Despite only 1.6% of its land suitable for agricultural activities and having to import almost everything including water, Singapore manages a trade surplus have.
Singapore has a balanced budget, a stable currency and still manages to defend for 5% of GDP to be allocated.
It represents a multi-ethnic society with 77% Chinese, 14% Malay and 8% Indian.
Singapore has a parliamentary form of government, an English common law legal system and is corruption and drug free. Slowly but surely, a freer political climate is developing with a Speaker's Corner set in 2000 and the possibility to express freely everywhere, except the sensitive issues of race and religion you believe
Performance of Singapore is legendary. The fact that twice as many Internet users as television sets is telling.
Singapore's New Resorts
Singapore is also changing with time. To more investment, tax revenue, and add to generate a bit of sparkle Singapore recently approved the development of two large casinos. It is part of a strategy to reduce the dependence of the country on the production and positioning itself as a vibrant tourist destination. Of course there will be limitations. Singaporeans will pay a $ 60 entry fee and the gambling areas will be limited to only 5% of the resort. According to projections, the resorts lead to $ 4 billion in investments, $ 3.5 billion in annual revenue, 35,000 jobs and $ 350 million a year in taxes.
Singapore has also made great progress in patching up misunderstandings with its neighbor to the north, Malaysia, from whom to split in 1965. The Tax issues are water supply agreements and transportation arrangements all moving much more smoothly.
Singapore is adept at holding on to its manufacturing base even as several large semiconductor manufacturers such as National Semiconductor announced plans to move to China and Malaysia. Factories For thirty years, Singapore on electronics as the backbone of the manufacturing sector, but is making the transition to a more service and R & D economy. Electronics is about 40% of industrial production, but accounts for only 5% of employment. Surprisingly, some companies are moving production from China to Singapore because of the infrastructure, logistics and laws protecting intellectual property. ExxonMobil, Shell and Sumitomo are expanding petrochemical facilities and Singapore added 27,000 jobs in the industry last year by moving the food chain.
After a 8.4% GDP growth in 2004 and a weak start to the year, Singapore's economy posted 12% plus growth in the second quarter and should be a solid performer in the coming years. Continued strong global demand for transport, communications and logistics services, increasing IT spending, rising consumer spending and real estate prices and extensive tourism all point to further growth.
An easy and smart way to invest in Singapore by the iShares Singapore (EWS) that the Singapore Straits Index follows. It is an increase of 26% over the past year and to 9.4% year-to-date. His biggest positions are in Singapore Telecom, United Overseas Bank and DBS Bank. Even better, it is tax efficient and has an annual expense ratio of only 0.59%. Trading at 14 times expected earnings, the Singapore market is still attractive. By comparison, the market and iShares Switzerland (EWL) is trading at 18 times earnings.
The epitome of quality and getting creative, Singapore is a great core holding for every global portfolio.
Carl Delfeld is head of global consulting firm Chartwell Partners and editor of Chartwell Advisor and the Asia Investor Intelligence newsletters. He served on the Board of Directors of the Asian Development Bank and is the author of The New Global Investor (iUniverse: 2005). For more information go to
Carl Delfeld is head of global consulting firm Chartwell Partners and is editor of the "Chartwell Advisor" and "Asia Investor Intelligence" newsletters. He served on the Board of Directors of the Asian Development Bank in Manila and is the author of The New Global Investor (iUniverse: 2005). For more information go to
Started in 1819 as a British trading colony, the Republic of Singapore was founded in 1965 under the leadership of the current Prime Minister's father, Mr Lee Kuan Yew. Although it is only one fifth the size of Rhode Island and three times the size of Washington DC, it's perhaps the most strategically important global trading, finance and service nexus in Asia.
Here is why you should consider investing in Singapore.
While Hong Kong and Shanghai will argue, Singapore is the busiest port in Asia next to the vital trading channel, the Straits of Malacca located.
Unlike South Korea and Taiwan, which are heavily dependent on the cyclical electronics industry, Singapore has a well-diversified economy. 70% of GDP is attributable to finance and services.
Accounting rules and regulations of Singapore are among the most conservative in the world. For example, the rules on inventory accounting and expense are stock options are more conservative than those in the United States.
Trade surplus
Despite only 1.6% of its land suitable for agricultural activities and having to import almost everything including water, Singapore manages a trade surplus have.
Singapore has a balanced budget, a stable currency and still manages to defend for 5% of GDP to be allocated.
It represents a multi-ethnic society with 77% Chinese, 14% Malay and 8% Indian.
Singapore has a parliamentary form of government, an English common law legal system and is corruption and drug free. Slowly but surely, a freer political climate is developing with a Speaker's Corner set in 2000 and the possibility to express freely everywhere, except the sensitive issues of race and religion you believe
Performance of Singapore is legendary. The fact that twice as many Internet users as television sets is telling.
Singapore's New Resorts
Singapore is also changing with time. To more investment, tax revenue, and add to generate a bit of sparkle Singapore recently approved the development of two large casinos. It is part of a strategy to reduce the dependence of the country on the production and positioning itself as a vibrant tourist destination. Of course there will be limitations. Singaporeans will pay a $ 60 entry fee and the gambling areas will be limited to only 5% of the resort. According to projections, the resorts lead to $ 4 billion in investments, $ 3.5 billion in annual revenue, 35,000 jobs and $ 350 million a year in taxes.
Singapore has also made great progress in patching up misunderstandings with its neighbor to the north, Malaysia, from whom to split in 1965. The Tax issues are water supply agreements and transportation arrangements all moving much more smoothly.
Singapore is adept at holding on to its manufacturing base even as several large semiconductor manufacturers such as National Semiconductor announced plans to move to China and Malaysia. Factories For thirty years, Singapore on electronics as the backbone of the manufacturing sector, but is making the transition to a more service and R & D economy. Electronics is about 40% of industrial production, but accounts for only 5% of employment. Surprisingly, some companies are moving production from China to Singapore because of the infrastructure, logistics and laws protecting intellectual property. ExxonMobil, Shell and Sumitomo are expanding petrochemical facilities and Singapore added 27,000 jobs in the industry last year by moving the food chain.
After a 8.4% GDP growth in 2004 and a weak start to the year, Singapore's economy posted 12% plus growth in the second quarter and should be a solid performer in the coming years. Continued strong global demand for transport, communications and logistics services, increasing IT spending, rising consumer spending and real estate prices and extensive tourism all point to further growth.
An easy and smart way to invest in Singapore by the iShares Singapore (EWS) that the Singapore Straits Index follows. It is an increase of 26% over the past year and to 9.4% year-to-date. His biggest positions are in Singapore Telecom, United Overseas Bank and DBS Bank. Even better, it is tax efficient and has an annual expense ratio of only 0.59%. Trading at 14 times expected earnings, the Singapore market is still attractive. By comparison, the market and iShares Switzerland (EWL) is trading at 18 times earnings.
The epitome of quality and getting creative, Singapore is a great core holding for every global portfolio.
Carl Delfeld is head of global consulting firm Chartwell Partners and editor of Chartwell Advisor and the Asia Investor Intelligence newsletters. He served on the Board of Directors of the Asian Development Bank and is the author of The New Global Investor (iUniverse: 2005). For more information go to
Carl Delfeld is head of global consulting firm Chartwell Partners and is editor of the "Chartwell Advisor" and "Asia Investor Intelligence" newsletters. He served on the Board of Directors of the Asian Development Bank in Manila and is the author of The New Global Investor (iUniverse: 2005). For more information go to
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