Would we ever be ready in the pursuit of life?

It has almost been 2 years since I left my first job in a startup which paid me handsomely as a fresh-grad to explore my own path in trading and writing.

To be honest, it is one of the scariest decisions I’ve made in my life so far.

I knew nothing about trading at all when I first started.

I had no clue on how I could build a website at all, other than my neglectable experience with free website builders back in university times.

So, I did whatever I could – take a deep breath, leap, make tones of (noob) mistakes, and keep learning.




Fast Forward to Present Day

2019 has been a challenging year – and an amazing one as well.

This year, I had the opportunity to embark on many great adventures.

For one, after months of effort and painstaking mistakes, I finally made some significant breakthroughs in the skills & mindset in my trading journey (read: strategy with edge, disciplined routine & risk management, strong desire to succeed).

As someone with the goal to pursue a professional career in proprietary trading firms, this massively boosted my confidence to keep going.

Not only that, No Money Lah also opened me up to various great experiences.

First radio station interview? Done. First podcast interview? Done. First REIT investing knowledge-sharing workshop (and another 2 more after that)? Done.

Even better, I got to know and meet many like-minded readers and equally, if not even more enthusiastic folks of the personal finance & investing scene.

The best of all?

I learned a ton and enjoyed most moments in this adventure.


Gathering with other personal finance folks in 2019, courtesy of the StashAway team.




Outcast of the Norms

Whatever I am doing, I guess that made me an outcast of the societal norms with ever reliance on certainties.

I have a clear goal, but I can’t be 100% certain where exactly I will be by the end of 2020.

For sure, I can’t be 100% certain that I will have a fixed amount of income by the end of every month (Do you really think that No money lah is just my website’s name?).

When it comes to trading, it is even more obvious that I can’t be 100% certain of the outcome of my trade results every month.

In short, the only thing that is certain in this journey is risks and uncertainties.


REIT Investing Workshop – September 2019 Intake Group Photo




Lessons Learned in 2019

With that in mind, I have to take aggressive actions and mindsets to keep me going on this journey.

It is easy for one to slack off when you have no one to be accountable to. Hence, to progress in my journey, I have to:


  1. Follow a very disciplined routine to optimize my productivity (more contents about routine in 2020).
  2. Create a systematic workflow around my trading and content creation work.
  3. Be mindful of my personal expenses & financial decisions.
  4. Develop a very strong purpose and desire to succeed to keep myself motivated, and whenever needed, pull myself out of challenging times.

Most importantly, I have to embrace the fact that uncertainties are the only certainty in my journey, and make this to my advantage.


The Future Belong in Those Who Believe in the Beauty of Their Dreams.




What are your goals in life?

To be more specific, what is the ideal life that you visualize yourself in whenever you close your eyes?

For me, I want to give my parents a retirement life where they do not have to worry about money at all. I also want to have flexibility in time where I can explore the world of experiences.

Even more so, I want to be in peace and happy in my very own way of living.




Are we ever truly ready in this pursuit of ‘life’?

Why do I ask and share with you this, you might guess?

The reason is simple.

This is because I’ve seen and talked to people that want to wait for the ‘moment’ when they are ready to take the necessary actions to pursue their goals or ideal life.

But would we ever be ready for life?

If there is one key takeaway that I got in my nearly-2 years’ journey pursuing my goals, I am almost certain that most people are never truly ready for the adventure.

The fact is, you will always find hundreds, if not thousands of excuses on why you are not ready to start.

For me, it was the fear of not being enough. Not enough of a writer, not enough in knowledge, not enough in relevant experiences.

NOT GOOD ENOUGH.

Truth is, you only need one of these reasons to make you feel overwhelmed to start. But since we are creatures with imagination, we flood ourselves with even more reasons for why we will not succeed.




You Don’t Have to Know Everything, and You Only Need One Reason to Start

Give this a thought:

Our parents never really asked if we are ready for school – we just adapt and learn along the way.

Our university never really asked if we are ready for that damn tough paper – we (most of us) just grit our teeth and went through it anyway.

Isn’t it obvious that for the most part of our lives, we have never really been fully prepared for anything at all?

Yet, we still make it through and conquered life like a pro – until now.

Now’s the time to decide if you really want to be ‘truly ready’ or ‘fully prepared’ to pursue that goal or ideal life in this new decade.

You will find strong mental resistance and excuses as it would be deeply uncomfortable.

But you only need one, and only one strong ‘WHY’ to go take the leap.

I wish you the very, very best – and I would love to hear your journey someday. 😊



2019 has been a great year, and it would not be possible without my supportive parents, 2 of my lifelong friends (Victor & Eddie), and of course – you.

Thank you for being such a great supporter and motivation to me – be it if you are a reader and/or attendee of my REIT Investing Workshop in 2019.

This journey is much more meaningful and fulfilling with all of you, and please accept my gratitude from the bottom of my heart.

Wishing you a great year, and the decade ahead!

Yi Xuan

 


I've Been Working Alongside a Personal Financial Planner - Here's My Experience with Them.

Back in October, I had the opportunity to work with my very own Personal Financial Planner to get my financials planned for the new year of 2020 – and I would like to share my experience with you today.

Now, it should be noted that I do have the habit of keeping track of my daily expenses. Plus, I do monthly reviews on my overall financial status and investments.

This means that I actually have a decent understanding of my personal financial state. That being said, why did I opt to work with a Personal Financial Planner?

The reason is simple: because I have a personal financial goal in mind, and I would like to seek professional opinion on how I can achieve my goal.


What is a Personal Financial Planner, really?

The best way to explain what a Personal Financial Planner is to compare one to an insurance agent.

Essentially, a Personal Financial Planner covers a wider aspect of personal finance aside from insurance. In addition, financial planners are usually brokers to multiple insurance companies which means that they are able to compare and filter for the best solution (from more than one insurance company) for their clients.

A crucial difference, though, is that Financial Planners earn mainly through charging their clients a consultation fee, while insurance agents earn mainly through the commission of the insurance solutions sold

Added together, working with a Personal Financial Planner ensures minimal conflict of interest in their services as they are only accountable to their clients and no one else.  

That said, there is no one-size-fits-all solution when it comes to financial planning, and one should go for the best-suited services by considering what’s best for him/her under their personal circumstances.

The difference between a Financial Planner & Insurance Agent.

What is it like to Work with a Personal Financial Planner? (My Experience)

Generally, a financial planning package (or service) is separated into 2 modes: a full financial planning package or a modular package.

A full financial planning package includes a comprehensive analysis of every aspect of personal finance from investment, insurance and estate planning (eg. Will writing and asset allocation).

On the other hand, a modular financial planning package includes a comprehensive analysis from either one of the 3 services (Investment OR Insurance OR Estate Planning).

Now, it is also important to note that both packages of financial planning also include an in-depth analysis of one’s cash flow status and financial health check – which is extremely crucial in helping us to understand our current financial strength for future planning.

Personally, I opted for a modular financial planning package from Wealth Vantage Advisory, specifically in investment as I want to explore how I can best optimize my cash on hand to achieve my financial goal.

A glimpse of my current financial strength, courtesy of Wealth Vantage Advisory's trademarked Wealth Vantage Score.

The Flow of Working of a Personal Financial Planner (Step-by-Step)

Personally, I find working with my Personal Financial Planners from Wealth Vantage Advisory (Stev & Catherine) really simple and straightforward (to be honest, I thought it was going to be a complicated process initially).

Step 1: First Engagement

It all starts with an initial meetup in October in Stev’s office after signing up for my financial planning package.

The objective of this meetup is to do some fact-finding, expectation, and goal-setting. Along with the meeting, I also sent in my personal financial details required to my Personal Financial Planner.

Now, it should be noted that not everyone is equally comfortable to share their personal financial details, even with a professionally trained Personal Financial Planner. I, for one, resonate with this very much as I felt vulnerable when I was asked to do so.

However, Stev and Catherine’s professionalism towards their work eventually made me really feel safe for doing so. Furthermore, the existence of legal paperwork in this financial planning process also ensures the privacy of our personal data.

Behind the Scene…

So, what happened after I submitted the details required by my Personal Financial Planner?

In Wealth Vantage Advisory, they have a team of certified & professionally-trained financial planners to analyze my financials and put up a detailed action-steps to help me achieve my goals.

Knowing this gives me peace of mind knowing that not just one, but a team of experts is working behind the scene to produce a solid financial plan that’s in my best interest.

Working with a Personal Financial Planner helped me to realign and be accountable for my financial goals.

Step 2: Implementation Meeting (1 month after first engagement)

About one month after our first meeting (October), I met up with Stev again for our first implementation meeting in November.

By now, my financial plan is prepared and Stev essentially, in detail, went through my (1) current financial health and (2) investments’ strengths and weaknesses with me.

The meeting was really an eye-opener as I have never been exposed to such detailed financial data of myself.

Essentially, I was given an aerial view of my current financial status including the health of my cash flow, net worth, asset allocation and more. With that, my financial plan also includes precise action steps in order for me to achieve my financial goals (more in ‘My Takeaways’ section).

What I really like about Wealth Vantage’s Personal Financial Planning session is that although I opted for a modular financial planning package in investment, Stev and the team also helped me analyze my insurance plans.

With that, they also provided me with suggestions on how to optimize my insurance expenses by comparing my current package with the other solutions in the market  – a nice touch indeed.

Behind the Scene…

Having a Personal Financial Planner is not just about giving you a plan and say bye-bye to each other.

In fact, the good thing about having a Personal Financial Planner is to assist and keep you accountable for the execution of your plan.

I find this very useful as it provided me with a push to get certain things that I’ve always wanted to do done after the meeting.

Detailed analysis of my personal financial status and precise action steps for me to achieve my financial goals are prepared.

Step 3: Follow-Up Review Meetings

Review Meetings are done to keep track of the execution of one’s financial plan. Not only that, it is set up to see if there is any further implementation needed to achieve one’s financial goals. 

For someone that is opting for a modular financial planning package like myself, Review Meetings are done on a half-yearly basis (twice in a year). For people that opt for a full financial planning package, Review Meetings are done once every quarter (4 times a year).

For sure, this is a great structure as you get all the accountability and support in getting your plans executed properly.

The full flow/timeline while working with a Personal Financial Planner, schedule courtesy of Stev from Wealth Vantage Advisory. (click to enlarge)

My Takeaways

An important takeaway for me in my financial planning session with Wealth Vantage Advisory comes in the form of my asset allocation. While I have been conscious of my financial status, I did not realize that I am not optimizing my assets to its full potential.

Namely, I have a relative sum of emergency cash reserves that could be put into Fixed Deposit (FD) alternative like Money Market Fund. Doing this will give me better returns on my cash reserves while still ensuring the liquidity of my cash (unlike FD).

In addition, I also like that the proposed action steps are precise and straightforward. In my case, the plan proposed a fixed % of cash allocated to the Money Market Fund. This is a sweet touch considering most people (okay, maybe it’s just me) are just too lazy to make decisions nowadays.

Not only that, going through a financial planning session also pushed me to rethink my approach towards my income stream. As in, how can I improve my active income flow while pursuing my goal to become a professional full-time trader?

This made me realized that sometimes all people need is a push and accountability to really do what it’s needed to achieve their financial goals – and engaging a Personal Financial Planner is no doubt a great way to do so.


Do You Really Need a Personal Financial Planner?

Now, I personally think that most people need a Personal Financial Planner more than they think.

Even for me that practice the habit of keeping my financials in check, I still found enormous value while engaging a Personal Financial Planner. The question is, do you need one?

If you are a young adult planning ahead for your wedding, family planning, and any other financial goals – go for it.

If you are a parent planning for your children’s future education and life – go for it.

If you are in your 30s, 40s or even 50s looking to retire earlier and/or manage your after-life asset allocation but not sure what to do – go for it.

Even more so, if you have a lot of savings in hand but have little to no clue on how to deal with them – GO FOR IT.

Getting a Personal Financial Planner will give you a clearer picture of your financial strengths and weaknesses – and support your journey towards achieving your financial goals.


Get Your First Financial Consultation Session Today – FREE OF CHARGE!

Before we continue, I think it is helpful for you to know that a 1-year Full Financial Planning package from Wealth Vantage Advisory is priced at RM3,000. Meanwhile, the 1-year Modular Financial Planning package (Investment/Insurance/Estate Planning) is priced at RM1,000.

To be clear, I DO NOT want you to pay for a Personal Financial Planner unless you are convinced that they are able to add value to you.

That said, I also want you to give yourself the chance (like what I did) to explore the potential where you are able to make the best use out of your hard-earned money and achieve your financial goals in life.

Hence, I am working together with Wealth Vantage Advisory to bring a FREE session of Financial Consultation Session to all No Money Lah’s readers!

Even better, if you sign up for the session, you will also get a FREE trial of MyPF’s Premier Site (one of Malaysia’s top Personal Finance site), where you also get access to exclusive personal finance tools & investment insights.

Essentially, you will be able to gauge if a Personal Financial Planner is going to add value to your pursuit of financial goals once you experience your FREE financial consultation session – so be sure not to miss out on this one!


Disclaimer

This article is made possible through a collaboration with Wealth Vantage Advisory. Special thanks to Stev and the team for making this collaboration such an impactful one.



Wealth Vantage Advisory did not receive copy approval rights on this article – that means they are reading this article for the first time, right alongside you. :)



p.s. This post may contain affiliate links, which afford No Money Lah a commission if you make a purchase.

 


Are the Newly Listed Leveraged & Inverse ETFs for You?

TradePlus by Affin Hwang Asset Management has recently listed their highly anticipated Leveraged & Inverse ETF (FANG+ 2x Leveraged, FANG+ Inverse, HSCEI 2x Leveraged, HSCEI Inverse) on Bursa – the first in Malaysia.

Essentially, this means that local traders now have the opportunity to be exposed to the foreign market (US Tech sector & Hong Kong’s listed Chinese companies) via local platform. In addition, local traders also have more versatility when it comes to trading the market – with the advantage of leveraging and the ability to profit with inverse ETF when the market goes south.

That said, are these ETF products for you? Let’s find out:

First of all, what is an ETF?

Exchange-Traded Fund, or ETF, is a fund that tracks a collective of specific securities that is traded on stock exchanges.

Simply put, instead of a single stock, look at ETF as a basket of stocks that are being sold in the stock market – tracking the collective performance of stocks within the basket.

A great illustration of ETF, credit to Investors.com

So…What are the newly listed Leveraged and Inverse ETFs?

For a typical ETF or stock investment, you earn 1% when the investment moves up by 1%.

Technical details (boring stuffs) aside, the newly listed FANG+ and HSCEI 2x Leveraged ETF allows one to double his or her return when the trade moves in one’s favor. Generally, it means that when the ETF moves up by 1%, your return would be 2%, which is twice (2x) the price movement.

On the other hand, the newly listed FANG+ and HSCEI Inverse ETF would allow a trader to profit when the price of the ETF goes down instead. Simply put, think of it as you are buying an Inverse ETF with the outlook that the price of the ETF is going to drop.

An illustration of Leveraged & Inverse ETF, courtesy of Equities Tracker and TradePlus

What are the stocks that the FANG+ and HSCEI ETFs track?

FANG+ 2x Leveraged & Inverse ETF tracks a basket of 10 US highly-renowned tech stocks, which is great if you have a specific trade idea on the US tech sector and is wondering how to trade the sector. (Interesting fact: FANG+ stands for Facebook, Amazon, Netflix, Google & Others)

An illustration of Leveraged & Inverse ETF, courtesy of Equities Tracker and TradePlus

On the other hand, HSCEI 2x Leveraged & Inverse ETF tracks a basket of the 50 largest Chinese companies that are listed in the Hong Kong’s stock exchange. Some of the notable companies include Tencent (tahu Wechat?) and Ping An insurance.

HSCEI ETFs are a great choice for traders with trade ideas towards Chinese companies.

An illustration of Leveraged & Inverse ETF, courtesy of Equities Tracker and TradePlus

Related Fees

Just like investing in a stock market via your broker, you’ll be charged your normal brokerage fee when buying the FANG+ and HSCEI 2x Leveraged & Inverse ETF.

Also, certain annual charges will be imposed too, kind of like mutual funds.

More details HERE

Is it For You? (and the Risks Involved)

Now, it is super clear that these ETF products are very niche and is NOT for everyone. Even in the product page itself, it has been stated specifically that Leveraged and Inverse ETFs are more suited to be traded short term instead of long term investing.

In particular, 2x Leveraged ETFs, while could deliver 2x the return, could also deliver a loss that is twice as much to traders when a trade goes wrong – hence should be carefully approached.

That said, this product is superb specifically for experienced traders with large capital. As such, these are traders that would like to profit from their short-term view of the US tech sector or from the thriving HK-listed Chinese companies via leveraged and inverse products.

That aside, Leveraged & Inverse ETFs are NOT for people who:

  1. Have little to no experience in trading.
  2. Do not understand the risk of leverage.
  3. Have small capital (because your brokerage fees alone could screw you up)

How to Trade?

For traders that are interested to trade these newly listed ETF products, you can do so today via your Malaysian stockbrokers - just search for the respective ETF names/stock code and you will be able to start trading them!

FANG+ 2x Leveraged (E830EA), FANG+ Inverse (E831EA), HSCEI 2x Leveraged (E832EA), HSCEI Inverse (E833EA)


No Money Lah’s Verdict

In short, it is very interesting that we are starting to see more interesting investment alternatives that are coming up in the local scene. While clearly not designed for most everyday investors, TradePlus’ Leveraged & Inverse ETF products are definitely there to fulfill the niche for certain traders in the market that are looking to profit from their view of the foreign market.

For the general everyday investors though, my recommendation to check out the normal (and equally exciting) locally listed ETFs or stocks like REITs to invest for the longer term.

Side note: For the niche group of traders who are interested in the Leveraged & Inverse ETFs, I will be trading them for a bit – and will write about my experience real soon – so stay tuned!


Real Estate Investment Trusts (REITs) is one of my favorites to invest in the stock market, as they provide relatively stable dividends – hence making them a great passive income source.


Disclaimer: This article is written based on my best research as of the time of writing, and should not be considered as a buy/sell recommendation. Please do your own due diligence and/or seek professional advice when making your investment decision.


Is Gold a Stable Investment?

A lot of people, especially among the Asian community, have a long conventional perspective where gold is a stable investment compared to other existing investment vehicles. I, for one, used to think so back when I was a teenager.

For a while, I have been intrigued by the conventional thinking of gold as a stable investment. Hence, I went on researching and managed to do some digging into this topic.

In this short yet important article, let’s explore if our conventional perspective is true, and do some myth-busting wherever necessary:


Gold is, in fact, not as stable as you think

To many, gold is thought to be a stable store of wealth. At the very least, gold should be something that, in our very own slang –


“Will not lose money one right?”

Apparently, that’s not the case.

Take SPDR Gold Shares (GLD), an ETF that tracks gold performance, as a benchmark – which has an mean annual return of 0.39% for the past 10 years (not too bad for a ‘stable’ investment, huh?).

However, just looking at the average annual return DOES NOT give us a clear picture of how stable gold has performed.




Now, instead, let’s look at the standard deviation value of gold – a measure that will give us a better view of how volatile is gold over a 10-year period.

With a standard deviation of 16.59, this provides us with a better picture of gold’s volatility.

Essentially, a standard deviation of 16.59 means that if you have held gold for the past 10 years, there is a probability that your return could go as high as 16.98% a year (0.39% + 16.59%), or as low as -16.2% (0.39% – 16.59%) a year.

In comparison, the S&P 500 index scored an mean annual return of 1.13% per year, with a standard deviation of 12.48 for the last 10 years.

This means that, if you have invested and held the US stock market for the past 10 years, your return could be as high as 13.61% (1.13% + 12.48%), or as low as -11.35% (1.13% – 12.48%) a year.

Simply put, gold’s movement to the upside and downside is huge and is definitely not as ‘stable’ as perceived by many. In fact, gold is a volatile asset – even when compared to the stock market.


Gold vs Stock Market Volatility over the past 10 years. (Source: Yahoo Finance)




Gold is Volatile, But…

It is not something you should overlook. This is because gold, even as a volatile asset, is a great portfolio diversifier with almost 0 correlation with the stock market. Also, gold is a great hedge of wealth against growing consensus towards global interest rate reduction.

Even more so, gold also plays an important part in the portfolio of prominent investors, namely as a hedge against inflation. In the All-Weather Portfolio by Ray Dalio (founder of investment firm Bridgewater Associates, one of the world’s largest hedge funds), gold makes up 7.5% of the total portfolio aggregation.

In other words, it still makes a lot of sense for one to include SOME proportion of gold into his or her portfolio as an effective way of wealth preservation. 

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Ray Dalio’s All-Weather Portfolio (Source: IWillTeachYouToBeRich)




No Money Lah’s Verdict

In short, gold is not the ‘stable’ investment as perceived conventionally. As such, gold is NOT SUITABLE to become the MAIN store of wealth and investment vehicle for most people, due to its volatility as mentioned above.

However, gold should not be overlooked, as it still has its advantages in diversifying your risks when it comes to the preservation of your wealth.

To end, here’s an interesting angle to look at gold, as shared by a friend of mine, Jason:


Gold should not be seen through the investment lens, but the preservation lens. And not the preservation of fiat value, but for value where fiat money cannot exist (meaning, the day when our paper money is no longer valuable as a means of exchange)



Meanwhile if you like this article and would like to invest in gold, open a HelloGold account today (and get RM5 off when you invest a min. of RM50 when you use my referral code ‘CHIN012W’!)





Real Estate Investment Trusts (REITs) is one of my favorites to invest in, as they provide relatively stable dividends – hence making them a great passive income source.




Disclaimer: This article is written based on my best research as of the time of writing, and should not be considered as a buy/sell recommendation. Please do your own due diligence and/or seek professional advice when making your investment decision.

 


Malaysians' Guide to Gold Investment

Gold is an asset that has been universally recognized as a store of wealth since ancient times. Despite not being a legal tender form of exchange (read: currency) these days, gold is still widely accumulated by the society and countries alike.

In this article, let’s look at some interesting (and lesser-known) facts about gold, WHY invest in them, and HOW to invest in gold as a Malaysian.

What Makes Gold So Attractive?

(1) Gold is uniquely beautiful

Gold is stunning on its own. As such, gold’s shinny and elegant nature make it an attractive choice for jewelry and life accessories alike.  

(2) Gold is scarce

Gold is a type of commodity. This means it is a rare metal and the amount of gold available to mankind is limited.

Not only that, the mining process of gold is also painstaking and expensive, making gold an even more valuable asset to own.

(3) Gold is durable and useful

Gold does not decay or rust – and it is almost indestructible. All the gold ever mined is still around in one form or another.

In addition, gold is a good reflector of light and an excellent electric conductor. This contributes to the extensive usage of gold in electronics such as circuits, dental fillings and more.

(4) Gold is homogeneous

One pure gram of gold is similar in value to the next gram. This makes it easy for people to ascertain gold’s value and utilizing it in trade and commerce.

Having understood the characteristics of gold, it is useful for us to understand WHERE gold is being supplied and HOW gold is being used in the world.

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Characteristics that make gold such a special commodity.

Supply & Demand of Gold

Have you ever wonder how is gold being supplied all around the world?

According to the World Gold Council (WGC), around 75% of the world’s gold demand is contributed by gold mining. Unlike paper money which can be printed with relative ease, the only known way to produced gold is to mine them.

That said, gold that is mined is usually not enough to meet the demand for gold. Hence, the remaining 25% of gold demand is met by the recycling of gold. These recycled gold supplies come mainly from jewelry (~90%) and gold extracted from technological hardware.

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Gold supplies all around the world

If that’s the case, WHO is buying gold around the world?

There has been 4 main use of gold worldwide.

The first use of gold, which takes up around 50% of the total demand, comes from (you’ve guessed it)jewelry.

This is followed by investment-related purposes (eg. Gold-backed ETFs), which contribute to around 25% of total gold demand. In addition, gold is also accumulated by central banks all around the world. This takes up around 13% of total gold demand.

Lastly, gold usage for industrial production takes up the rest of the demand.

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Gold demand around the world

Which country holds the most gold?

Now, as mentioned, gold is highly accumulated by the central banks of many countries. Gold is being held as part of a nation’s reserves, mainly due to gold’s nature as a safe haven asset and an effective diversification of their portfolio.

The role of gold to central banks (Source: World Gold Council)

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With that in mind, let’s make a smart guess before you proceed – which are the countries that hold the most gold?

As of October 2019, the United States holds the most gold in its national reserves (8133.5 tonnes!) – which takes up near to 78% of the total reserves. The far second is Germany with a total gold reserve of 3366.8 tonnes, making up 72.9% of the country’s total reserves.

Countries like China and India have a gold reserve of 1942.4 tonnes and 618.2 tonnes respectively, making up less than 8% of these countries’ total reserves.

Back in Malaysia, we are placed at 53rd (out of 100 countries) when it comes to our total gold holdings. This translates to a total gold holding of 38.9 tonnes – which is 1.8% of Malaysia’s total reserves.

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Malaysia is ranked #53 in global gold reserves.

Why invest in gold?

(a) Hedge against the drop in interest rate & geopolitical uncertainties

With global powerhouses like the US reducing its interest rate, it is inevitable that there will be a drop in return (or yield) of major bonds in the market. This will cause the return of bonds less attractive in the eyes of investors.

Adding on to various geopolitical uncertainties, this makes gold especially appealing as a safe-haven asset for institutions and retail investors alike in search of protection against uncertainties.

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(b) Portfolio Diversification 

Gold is also an effective instrument for you to diversify your investment portfolio. This is because, for the past 10 years, gold has almost no correlation (0.04) with the stock market movement.

In short, this means that gold price is generally not affected by the ups and downs in the stock market, making it a good wealth diversification vehicle.

Useful link: S&P 500 vs Gold price movement for the past 10 years

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There are many solid reasons to have gold as part of your portfolio

How can Malaysians Invest in Gold?

#1 Recommended – HelloGold 

HelloGold is a mobile app that allows you to buy and sell gold for as little as RM1. This is really a big plus point, considering that the other offerings in the market have a barrier of entry of a minimum of 1 gram of gold (~RM200). Some of the advantages of HelloGold are:

  • Low barrier of entry - Invest in gold starting at just RM1!
  • No-hassle account opening - The easiest way to get started in gold investing. Open your account via HelloGold's mobile app - no need to be physically present at counters to do so. 
  • Shariah-Compliant
  • Automated investment - If needed, you can automate your monthly gold investment via HelloGold’s SmartSaver plan.
  • Flexibility in managing your gold holdings - With HelloGold, you can buy and sell gold via the app anytime, and even send gold to your family and friends via the app.

This flexibility is a huge thumbs up considering that I used to have to visit the Maybank counter myself to withdraw my gold investment as a Maybank Gold Investment Account holder.

In terms of security, every gold bought is yours and is held at HelloGold’s vault provider in Singapore (which, you can redeem them if needed), and is well-insured by insurance company.

With that in mind, unless you really need to hold solid gold, I definitely recommend HelloGold to most people that are keen to invest in gold. 

 

#2 Physical Gold

Should you fancy physical gold bars and coins, you can also get them via sites like BuySilverMalaysia. That said, I personally feel that unless one has specific needs for physical gold, I do not recommend them due to safety and storage hassles. 

#3 Gold-backed Exchange Traded Fund (ETF)

TradePlus Shariah Gold Tracker (Code: 0828EA) is Malaysia’s first shariah-compliant commodity ETF that tracks the performance of gold. Essentially, think of it as investing in a fund that goes up and down with the price movement of gold.

With some fees, you can invest in gold without having to take care of physical gold. 

#4 Banks’ Gold Investment Accounts (GIA)

Alternatively, you can also purchase gold through banks’ gold investment account (eg. Maybank, CIMB). That said, GIAs usually charge a spread when you buy and sell gold.

Also, just a personal experience from using Maybank’s GIA: while I could purchase my gold online, I have to visit the counter should I wish to sell my gold holdings, which is a real hassle by today’s standard.

Note: (1) **Refer HERE (2) CIMB GIA has an annual fee of RM5 if year-end gold balance <5g (3) Details about Gold-backed ETF HERE

No Money Lah Verdict

With gold being an effective portfolio diversifier for your wealth, there is no doubt that one should accumulate gold as part of his or her portfolio.

However, the million-dollar question has yet to be answered: Is now a good time to buy gold?

In the next article, I will discuss about the price of gold and if it is a good time to invest in gold - Stay tuned!

Meanwhile if you like this article and would like to open a HelloGold account (and get RM5 off when you invest a min. of RM50, be sure to click HERE and use my referral code ‘CHIN012W’!)


Real Estate Investment Trusts (REITs) is one of my favorites to invest in, as they provide relatively stable dividends hence making them a great passive income source.

Click HERE to find out HOW you can pick and invest in quality REITs!


Disclaimer: This article is written based on my best research as of the time of writing, and should not be considered as a buy/sell recommendation. Please do your own due diligence and/or seek professional advice when making your investment decision.

 


If/Then Mindset: How this Hugely Overlooked Mental Skill will Transform Your Investing Performance

Have you ever been in a situation, where you were looking at a stock that you think you should buy, yet did not pull the trigger and ended up regretting your inaction?

How about the times when you think you should get out of an investment, yet too clouded by emotions to do so and ended up taking a huge loss?

When I first started in the market, I faced the similar problem over and over again. Not only it was frustrating, the huge emotional swings involved were also extremely tiring.

As times went by, I have learned an important, yet hugely overlooked mental skill by many that have since helped me improve my investing and trading performance alike.


What is the If/Then Mindset?

If/Then mindset is a simple, yet critical mental skill that is hugely overlooked by new investors and traders in the market.

In essence, the If/Then mindset is a mental simulation of the possible outcomes given a particular set of scenarios, and the actions that you will take should any of these outcomes happen:

“If A happens, I will do X. If B happens, I will do Y.”


Okay, So How Will the If/Then Mindset Improve My Investing Performance?

Let’s look at a simple ranging chart pattern, and how the If/Then mindset could help improve your performance:

What we are looking above is a stock price in a ranging (or zig-zag) pattern. For an inexperienced investor or trader, it is easy to conclude that there is no trend going on with this particular stock and hence no ‘excitement’ in the price.

This chart would be super boring to untrained minds.

However, using the If/Then mindset, one could easily simulate the potential price movements of the stock (scenarios A, B, C). With that, various interesting opportunities could be identified prior to any price movement at all.

Different possibilities can be simulated with If/Then mindset.

As an example, if scenario A happens, then one could buy at the pullback upon a small retracement. However, should scenario B happen, then one could look to buy at the support level. That said, if scenario C plays out, then one could look to sell upon a mini retracement.

Investors can plan ahead and respond to price movement accordingly with If/Then mindset.

Benefits of If/Then mindset

Believe it or not, there are many benefits if you are able to build up your If/Then mental skill:

(1) Early Anticipation of Price Movement

Training your If/Then mental skill will help you to anticipate price movement effectively.

We can never predict with absolute certainty where the price of a stock will move. However, we can use the If/Then mindset to anticipate the different possibilities of price movement, and devise our actions should any of the scenarios play out.

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(2) Reduce Mental Stress & Emotions in Decision-Making

By simulating the possible outcomes prior to price movement, an investor could plan ahead of what could be done should different scenarios play out.

This might look like a simple thing, yet it is extremely helpful in reducing any form of emotional bias (eg. Fear of losing, Ego) and mental stress in comparison to the times when you have to make an immediate investment decision on your feet.

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(3) Improve Consistency in Investing Performance

As you make progress in developing your If/Then mental skill, you can expect consistency in your performance.

Reason being, a strong If/Then mental skill will provide you with a consistent execution process (eg. If A happens, then I will do X) by filtering out a lot of unnecessary biases involved.

We can never predict with 100% certainty what will happen, but we can always anticipate the possible outcomes and respond accordingly.


How to Apply If/Then Mindset in Investing & Trading

By now, it should be obvious that If/Then mindset is a mental skill that is applied prior to making any investment decisions.

As such, most application of the If/Then mindset should be done during the preparation phase of your investing workflow:

If you are a fundamental investor (read: Value Investing), your If/Then mindset could be “I will only invest in a company IF it has a consistent profit growth over a 5-year period”.

If you are a technical trader, your If/Then mindset could be applied in a way IF price movement A happens, THEN I will do X”.

In short, practice and apply the If/Then mindset BEFORE you have to make any investment or trading decision live.

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"If A, then X. If B, then Y. If C, then Z."

No Money Lah’s Verdict:

If/Then mindset is a mental skill that is crucial for an investor or trader’s development to perform better and more consistent in the market.

That said, many tend to undermine the practice of this skill as it seems to be simple. However, ask yourself: How many times have you ever go through the If/Then thought process before making an investment decision?

If any, the If/Then mindset does not require one to be right at predicting the direction of a price. Rather, it trains a person’s mind to anticipate and be open to different possibilities of outcome and respond accordingly.

Personally, I think this is an important skill to develop, and one that I strive to improve on a daily basis.

I certainly hope you do, too.


Read my articles on REIT Investing HERE.

Every now and then, I organize sharing sessions to share insights on how I invest in the market. Book your slot for my upcoming session HERE!

 


Why Are You Still Suck with Investing after Paying Thousands for Courses?

Have you ever attended any of those investing or trading courses out there, and yet not getting the returns you expected?

Even worse, you paid thousands, and sometimes millions for those damn courses!

Hey wait, if this is not hurtful already, those experts even promised you a ‘consistent’ return if you learn their strategies!

If that’s the case, why are you – in spite of the hope and promises (not to mention an initial burn to your pocket) – still not making any money out of what you’ve learned?


Yup, You Are not Alone

I was there.

Sometime before graduating from university, I enrolled in my first ever 3-days investing course (in thousands). Just like many paying for these courses, I thought I will be able to make damn a lot of money (read: immediately) with my initial investment into my investing education.

You bet I was wrong. Super, duper wrong.

Instead of starting to make money from the stock market, I lost money instead. What the hell?


Can you relate?

Then, after losing money with the strategies that we paid thousands to learn, we embark on the journey to look for another course that could promise us a strategy that could provide us consistent and high returns.

Sounds familiar?

The irony is, for most of us, the cycle will continue to roll, and yet we will never find the one holy grail strategy that will make us huge and consistent returns.

Seriously, why is it so? Why do we pay that bloody money and yet not getting the returns we are promised?


‘Experts’ Overpromising Is Real

If you resonate with what I’ve written so far, I bet you will find what I am going share next even more relatable:

Firstly, there will be testimonies of students making X% within 3 months after attending the course. This gives people hope (the most important element in marketing courses).

Then, there will be a pitch to for you eventually quit your job through your returns from the market. This touches the soft spot of most people nowadays.

Wait, there’s more.

How about for everything above, you only need to ‘spend 5 minutes in front of the chart every week/month’? Or ‘get a sure-win stock-pick with a click of a button’ with their trademarked proprietary investing system (or some premium strategy with macam yes bombastic name)?

“Holy sh*t, this looks like something that I could sign up to I fire my boss sometime soon!”

Sounds like something that has slipped through your mind before? Well, it certainly did for me.


Marketers Tell Stories their Customers Want to Listen

Give what you’ll be reading up next a thought:

A weight management company will NEVER market their product as something that’ll produce results slow.

A hair-loss control company will NEVER market their services as something that’ll take a long time to see any effect.

However, we all know that both weight management and hair growth doesn’t happen overnight! In fact, it takes a grueling commitment and dedication to really get the results that you want (depending on your condition too, of course).

In short, a lot of marketing materials are likely not a reflection of the real deal. Rather, those are stories that leverage consumers’ emotions and desires in order to convert them.

It could be a ‘true story’ though. But it is likely not the WHOLE story.

Now, think about how an investment ‘expert’ that is real good in marketing would market his/her expensive courses:

Would you rather sign up for a course that claims that their students make 30% return consistently?

Or would you rather sign up for a course that claims that their students make 30% return consistently, BUT you will need to put a lot of practice and time into the system?

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"Earn quick and guaranteed profit by using our system and strategy!"

‘Experts’ Marketing Stories is NOT the most important reason WHY you still lose money in investing/trading

Humans are naturally born to the desire for instant gratification.

If any, I am willing to bet that 95% of the people sign up for investment/trading courses as a means to learn how to earn money – fast.

And again, I was there as well. The idea of seeing the ‘experts’ flashing their Ferraris, luxury houses and cash is simply too irresistible in a time where most people hate or dislike their jobs.

As a result, people are more inclined to succumb to too-good-to-be-true money games and overpromising marketing ads for investment courses.

The idea of earning money easy and fast from the market touches all our desire for an easy way out.

You may not like what you have been reading so far, but you know there is certain truth to these words.

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Humans, are unfortunately born with the tendency for instant gratification - especially when it comes to quick bucks.

Investing & Trading is a Skill That Needs to be Built Over Time and Practices

Now, think about one of your biggest achievement in life thus far.

It could be your piano grades, your career in consulting or a sports achievement. Did you achieve them by just spending ‘5 minutes’ honing your skills everyday?

Hell no!

The skills that you have today, is a result of the time and effort that you put into building that particular skill. It is the practices that you’ve poured whole-heartedly into your work that led to your mastery in that particular skill.

Becoming good in piano is a skill. Mastering the art of consulting is a skill. Becoming a pro in football is a skill.

If that’s the case, what makes investing and trading any different?

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Investing & trading are both skills that need to be developed over time and effort.

There is no Holy Grail in Investing & Trading

It took me a long time, but it eventually hits on me that there is no shortcut to investing and trading mastery.

They are skills that need time, discipline and practices to develop. They require passion so that you can persevere through the steep learning curves and losing streaks.

More importantly, no one strategies taught by courses out there will bring you results unless you are patient enough to allow for your skills to catch up to what you want to achieve.

If you haven’t got it by now, there is no holy grail to quick wealth in investing or trading.

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Can you become a world-class footballer by practicing 5 minutes everyday? Now relate this back to investing & trading.

The Takeaways

There are many factors that led to us not making any money from the market, even after signing up for expensive investing or trading courses.

If there is one key problem, though, then I would say that it is unfortunate that most of us that signed up for investing or trading courses started off with a wrong mindset.

We wanted to profit from the market quickly, and we thought it was easy. Then, course marketers make it seems like it is really that easy with stories we want to listen to.

But here’s the thing:

Investing and trading are skills that need to be developed over time, practices, consistency, and discipline.

Until we can accept this fact, chances are we will still see people jumping over courses and strategies, in hope to look for the quickest way to well, lose their fortune.


Disclaimer: The article above is not by any means a suggestion to sign up (or to not sign up) for any investment courses out there. It is just a personal opinion on the stated topic and does not reflect any interest in any particular party.


Always Remember: Live Your Own Life, Walk Your Own Pace (No Money Lah’s 1st Anniversary)

Always remember: Live your own life, Walk your own pace. 

The past 1 year or so has been like a roller-coaster ride for me. As a start, No Money Lah’s growth as a passion project has been amazing. I have always like to write and share my learnings and thoughts with people, and No Money Lah allows me to do just that in my new stage of life – adulthood.

As an added bonus, No Money Lah has opened me up to various opportunities and the chance to meet many fantastic people behind the entrepreneurial and personal finance scenes.

Furthermore, my little goal to share what I know about investing also comes true. The tremendous support from the friends and readers to my Breakthrough Your Wealth – REIT Investing workshop have made all 3 workshops, so far, a fully-occupied (and fun) one.

My June 2019 Intake Group Photo :)
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That said, there are times where I just got overwhelmed with fear, doubt, and uncertainties.

The overwhelming fear that people would dislike what I write. The miserable self-doubt where I couldn’t even convey my feelings in words. The struggle against uncertainties towards, well, everything – from my career, my future, time and basically stuffs that could choke one out of breath.


Remember the Times Where You Kinda Messed Up Everything?

Can you relate?

Looking at your peers rising to the ranks in their jobs while you kept on hitting bricks. Or maybe, when you start to receive (more) wedding invitations while you are still getting your own life sorted out. How about those friends who seem like they got everything under control when you are literally losing them?

If you do not feel any of these, good for you. But I feel right about all these emotions playing in my head every now and then.

Have you ever feel like a loser in life? I do.
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At times, they come and go just in a blink. But there are times when it hits, it breaks down even the strongest mental barrier within myself. It is suffocating. Suffocating, knowing that all these efforts could be going nowhere.

But despite all circumstances, these are the times where I felt more alive than ever. Alive, knowing that I hit bricks, yet I am progressing whenever I overcome them. Alive, knowing that I feel these emotions, yet I am not running away from them. Alive, knowing that I am vulnerable, yet I do everything to pursue my beliefs regardless.

Being alive means acknowledging both the good and shitty part of the journey - and still living a kick-ass life.

Here's the thing:

We'll never be perfect in the face of norms. Any attempt to do otherwise is never a smooth journey - filled with uncertainties, fear, and self-doubt.

You are 'lagging behind' if you take a one-year gap year in between college.

You are 'too slow' if you haven't become a senior manager by 25.

You are 'too late' if you haven't get married by 30.

You are 'too old' if you decided to start your own business by 45.

Everyone is different. But norms expect us to walk the same pace in life.


It's Never About People Outrunning You (or Otherwise), It's About Discovering Your Own Pace in Life

I used to run half-marathons (21km) quite frequently (until I have some knee issues). And unless you are the top Kenyan runners, chances are you will be outpaced and outrun by people along the journey.

At first, it sucks whenever someone outpaced you. The feeling is especially real when the person is someone you know, and I experienced that first-hand when my best friends just outpaced me during the journey.

Then, I’ve come to a realization that being emotional when someone outpaced you is not just physically tiring, but even more so, mentally exhausting at the same time.

Slowly, I started to run at my own pace, being totally okay with people getting ahead of me. When I do so, I enjoyed my journey a little bit more. I made some new friends along the way. I challenged myself to outpace not anyone else but myself. Most importantly, I appreciate the fact that for each step I take, I am still moving forward towards the finishing line.

Not all paths are smooth - you just got to believe that you will eventually get to where you want to be. 

The more you run a marathon, the more you'll realize that it is not a race between you and someone else. Rather, it is a race between you and yourself - just like life.

Your Life, Your Path, Your Pace

If that’s not clear enough: Yes, I Do.

Whenever I am not mindful, I will still get overwhelmed with emotions. I will still get anxious about uncertainties. And at times, I could even mess things up.

But it is at these times that, I get to learn to acknowledge my vulnerabilities, strengthen my self-belief and intuition, outgrow myself – all at my very own pace.

And I hope you do, too.


No Money Lah is now 1 Year Old!

If you haven't realized it already, No Money Lah turned 1 last month! 

If you are reading this, I would like to extend my full gratitude to each of you. Your tremendous support has been one of my main motivations to keep writing throughout this year. Regardless of how you got to know No Money Lah, I am hopeful that my articles will keep bringing new insights and values to you, just like how your support kept me going in this amazing year.

Here are my 3 Books Recommendation to Massively Transform Your Life:

Before leaving this article, I thought of sharing with you 3 books that have transformed my life in one way or another throughout this year. If you are looking to a massive breakthrough in life, I cannot recommend these books enough for you:

From left: 

(1) The Miracle Morning by Hal Elrod, (2) Atomic Habits by James Clear, (3) Grit by Angela Duckworth                  


 

 

 


Knowing WHEN to Pat Yourself on The Back is the Key to Personal Breakthrough

As a table tennis enthusiast, I have been coaching on and off since my time at university. Now, as a certified coach by the International Table Tennis Federation (ITTF), my focus is mainly on coaching children during the weekends.

Having interacted with children for more than a year now, I have come to realize that acknowledgment, when done properly, could be one’s key to lasting breakthroughs.


Melvin is one of my youngest students during my weekend session. At 6 years old, Melvin has been with me since early this year.

As a relatively new coach, I have been facing one major challenge when it comes to interacting with kids:

Being pretty new with children, my initial assumption was that the more you acknowledge them, the faster they’ll improve. In turn, I have been using words like “Well done” and “Good job” too frequently during my coaching session.

As a result, I actually ‘Well-Done-d’ and ‘Good Job-ed’ Melvin way too much, even when he was only hitting 3 rallies in a row while he could already do more than 10.

In short, what followed was a series of stagnation in progress and improvement.

Praises & acknowledgment are like sweets - as much as we like them, too much of them are, well, not exactly helpful.

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Frustrated with my initial approach, I started to give fewer to none praises. I thought by being more critical, Melvin would eventually improve.

Well, as it turned out, Melvin did not achieve much progress. Even worse, he started to show less interest during the practice.

Luckily for me, I eventually found a crucial balance between when to acknowledge and provide critical feedback for Melvin.

So, knowing that Melvin could hit at least 10 rallies in a row, I set goals that are a little over Melvin’s comfort zone (eg. 11 rallies).

Then, I proceed to acknowledge him whenever he managed to achieve his goals. On the flip side, at times when he is unable to hit his goals, I will provide more constructive feedbacks rather than overpouring him with unconstructive praises.

When that happened, Melvin (along with the other kids) have been able to show steady breakthroughs and interest during the practice.

Finding the right mindset and balance between constructively critical and acknowledgment are the key to breakthroughs.

Alright, so what does that mean for us all?

You see, very much like the story of me coaching Melvin above, we tend to face similar ironies in our daily life:

As a human, we tend to be over-critical with ourselves when it comes to our goals. It could’ve been the failure to achieve your yearly goal of losing 5kg in weight, or missing an important career mark for the year.

Regardless, we tend to self-talk ourselves into thinking that we are ‘not good enough’ when we make some mistakes or fail in our attempt to achieve our goals – a.k.a. demotivating ourselves.

Being overly critical is killing our morale and motivation - don't you agree?

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On the other hand, on a daily basis, many of us are also prone to making it too easy for ourselves when it comes to the effort of pursuing our goals.

Remember the days when you tried to convince yourself that you have ‘done a good job’ for swimming 3 laps instead of the pre-planned 10? Or the times where you call it a day when you just made 1 presentation rehearsal instead of a decent 3?

In return, so many of us are denied our full potential – not by anyone else, but ourselves.  

In life, you become what you tolerate.

Now, let's face it: In life, we don't always get what we want, but we are most likely going to get what we tolerate. On the flip side, being overly critical to ourselves could also lead to demoralizing self-talks.  

Essentially, everyone's tolerance towards mediocrity and desire towards breakthrough is different. As such, we got to find a balance and the right timing on when to acknowledge our own effort – and pat ourselves on the back.

The problem is, it is easy for us to know when to acknowledge and be constructively critical to someone else. However, it is definitely not the case when it comes to ourselvesYET it is not impossible to do so:


Pat Yourself on the Back to Personal Breakthrough

  • Set realistic goals that are a little over your comfort zone

Firstly, whenever you set to start something – be very realistic with your current capability and dedication.

If you are new to running and you can only practice once a week, you cannot expect yourself to complete your first full-marathon below 4 hours, right?

That said, you could always test your capability by starting with a 5km run, followed by 10km and then 21km before really pursuing a full marathon.

Setting mini targets in line with your final goal is a great way to achieve breakthrough in stages without being overwhelmed.

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  • Strive to do your best – every single day

I consider this a mindset and attitude in living our lives. Imagine the satisfaction if you end your day knowing that you have given it everything you got – at least it feels much better than the opposite.

Regardless of the outcome of our effort throughout the day – we could have the best day ever, or we could screw up here and there, yet no one could deny us from giving our best.

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  • Keep a journal on your progress

Very important. Keep your goals in writing and your action plan towards achieving them.

On a daily basis, write down what you are on to do before starting your day, and check them out throughout the day – it is very satisfying!

Keeping a written journal will ensure your focus with your own progress – and appreciate your own effort along the way.

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  • Once you have done your best, give yourself a pat on the back!

Last but not least, give yourself a well-deserved pat on the back!

Repeat this daily, I am confident that you will achieve some form of breakthrough in terms of progress, skill or mindset real soon.


Hey Wait…

Here’s the thing:

You do not always have to be making huge progress every day. In fact, you should not expect yourself to do so.

At times, there are circumstances where things are simply against our favor regardless of our effort.

That said, doing our best is a mindset. Doing our best is our attitude towards life. Doing our best is a promise that we made to ourselves that, no matter how things turn out to be, we make it a point to not disappoint ourselves by giving everything we got.

Live up with that attitude, and you deserve a huge pat on your back – including the personal breakthrough that follows.


Fundamental vs Technical Analysis (& How To Use BOTH of Them to Invest)

Disclaimer: I do not claim to be an expert in any of the methodologies mentioned in this article. This article is just my general opinion on FA and TA, and should not be treated as Buy/Sell call by any means.


One of the most interesting discussion, when I get to meet stock investors, is definitely one’s application of Fundamental Analysis (FA) or Technical Analysis (TA) in investing – and which is better.

While there is no right or wrong answer to this discussion (of which, sometimes turn into a debate), I thought that maybe I can share my 2 cents on this matter in this article:


First Thing First: What is Fundamental Analysis (FA), and What is Technical Analysis?

FA and TA are essentially 2 different schools of thoughts when it comes to investing. Simply put, they are two different approaches towards achieving the same financial goal in investing – to profit from our investments.

  • Fundamental Analysis (FA)

FA is an approach used by investors to identify the underlying intrinsic value (a.k.a. the real worth) of a company or stock via studies on industry and company’s data & financial statements, economic cycle and seasonality and more.

Ideally, investors that use FA aim to invest in a company while its shares are being sold at a price lower than its intrinsic value. As such, investors will then profit from the dividend returns and when the price of the shares increases down the line - a.k.a. Value Investing.

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Fundamental Analysis (FA) - the use of economic and financial data to study a company inside out.

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  • Technical Analysis (TA)

TA, on the other hand, is another approach towards investing via the analysis of price charts. Through price charts, investors are able to identify important details such as the price trend and the momentum of a company's price.

From that, investors will be able to gauge their ideal entry and exit price.

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Technical Analysis (TA) - the use of price charts to study trends and momentum.

So…Which Approach is Better?

Simply google for this topic and you will get a lot of heated debate between pure FA and TA investors criticizing the approach by the other party – and for good reasons.

  • The Problem with FA

For one, while FA takes into account of various data from financial statements, economic outlook and cycles and, heck, even project future growth with projection models, it CANNOT run away from making underlying assumptions (eg. Assuming X% growth annually, Assuming company X gets this government contract…).

Meaning, assumptions made MAY or MAY NOT come true – hence affecting the outcome of a particular investment decision.

In addition, buying into undervalued stocks with high intrinsic value DO NOT mean that your investment will increase in value the next day (psst..it may take years).

Reason being, the market (reaction between buyers & sellers) is not rational, and may not reflect the underlying intrinsic value of a stock’s price. As such, for certain investing decisions made purely on FA, it will take a lot of patience for things to work out in one’s favor.

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Do you have the patience to wait for your investment decision to reach its potential?
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  • The Problem with TA

On the other hand, the use of TA is widely subjective on 2 underlying elements: time horizon and techniques. Let me explain:

The time horizon of an investor when it comes to TA can affect one’s view on the market for a various degree. As an example, a long-term investor (5 – 10 years) may look into the below chart and have a bullish (a.k.a. positive) view on a particular stock, yet a shorter-term investor may have a bearish (a.k.a. negative) view on the stock.

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Another thing when it comes to TA is that there are so many different methodologies (Price Action, Turtle, Ichimoku, Elliot Wave, etc.) and indicators (MACD, RSI, Bollinger Band, etc.) out there, it is almost impossible for all TA investors to come into agreement for one particular set of price chart.


Why Do I Use Both FA and TA in Making My Investing Decision?

So far, it is not hard to see both the strengths and weaknesses of each approach when it comes to investing:

FA enables us to study a company inside out via financial data and economic/industry outlook, yet lack the precision needed for investors to enter the market.

On the flip side, TA allows us to look into price charts and time our entry into the market with the help of price action and indicators. However, TA methodologies could be different depending on who’s using them, hence making it very subjective.

But hey, WHY NOT leverage on the strength of both FA and TA to improve our overall investment decision?

As in, WHY NOT leverage on FA to help analyze a stock inside out and obtain its underlying intrinsic value (which TA lacks), and apply TA to assist us in our entry into the market (of which FA is weak in)?

Make (a lot of) sense?


Example

A very common way of identifying if a REIT’s intrinsic value is through comparing a REIT’s market place against its Net Asset Value Per Unit (NAVPU). Generally, a REIT that is sold at a market price less than the NAVPU is considered undervalued.

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Note: Market price is RM1.38 as of the time of writing. (Source: i3investor)

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Now, considering that due-diligence has been done and given that YTL REIT has a NAVPU of RM1.606 – meaning, rationally, this is where the market should price YTL REIT in an ideal scenario. Yet, on the price chart below, even at an obvious upward trend, market is still pricing YTL REIT (RM1.38) way below its NAVPU of RM1.606.

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NAVPU (RM1.606) > Market Price (RM1.38) - Undervalued.

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In general, as an investor that purely use FA in his/her investing decision, any price below intrinsic value would be a decent buy. However, one may find it challenging to identify a relatively better entry without the use of TA. (eg. While buying at an all-time high of RM1.38 is still a fundamentally lower price, yet wouldn’t it be better if you are able to enter at, say, RM1.20?)

Now, after using FA to identify undervalued stocks, I’ll normally apply one simple TA method call Moving Averages (MA) cross (refer to picture below). This method would help me identify trend changes on price charts:

Simply put, when the 50-Days MA (Green line) crosses above 150-Days MA (Yellow line) and both MAs are sloping upward, it would signify an uptrend movement and would be an ideal entry point for me.

Therefore, even when YTL REIT is valued below its intrinsic value (RM1.606), with a simple TA method, I can identify a relatively better entry. This is a better gauge for entry for sure, if you were to ask me.

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The use of Technical Analysis (TA) provide investors guidance on a relatively better entry and exit.

No Money Lah’s Verdict

So here you go! This week’s article goes a little more in-depth about investing methodologies and approaches, and I genuinely hope that you learn or gain something out of this!

With that in mind, if you find this article useful, do consider SHARING this article out, and be sure to subscribe for more value-adding content from No Money Lah!