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| 06/25/02 | re: re: re: Global Investing - Pros & Cons # |
Keith Butler
 |
FACT: In the past 20 years, the United States has never been the top performing market in the world in any calander year.
> Ken Nakagama wrote:
> Okay this is all great stuff.
>I may not have cought the complete picture though.
>
>But Adrian- if we didn't have diversification, the industry wouldn't have a better reason to churn our big investment funds for more commissions. J/K
>
>What I can note is that International markets are mostly outpacing our own. (US)
>
>For Institutions, it is more a part of accepted business practice that guides.
>
>For Personal investing, it is a matter of comfort level.
>
>I don't buy bonds or CDs or any of the other instruments that are safe ; ) I probably only have some of that Indirectly through Mutual funds.
>
>Another crack on Federal Retirement is that I am in the Federal 401K program as well. I couldn't believe how poorly the mutual fund performance was compared to other programs I am active in or vested from. They have changed that(this year) to offer more; but FED employees money hasn't really grown for a very long time.
>
>So when Senator "whoever" looks at retirement changes,(isn't part of the dot.com generation and hasn't left DC in 15 years as the Majority Whip) scratches his\her head and wonders if individuals would do a better job than a financial professional. (that didn't take ethics in College)
>
>> Adrian Scott wrote:
>> ok, one question is, who believes in portfolio theory?
>>
>>the other important thing is that people realize we are all exposed to foreign exchange risk and
>>are investing in currencies whether we realize it or not! :)
>>
>>i think diversification is bunk as a risk mgmt strategy. :)
>>
>>-a
>>
>>ps (ishares are cool)
>>
>>> Guan Seng Khoo wrote:
>>> Global Investing (extracted from PremierInvestor.com)
>>>
>>>The decision to invest in foreign markets depends on many personal factors. Portfolio size, investment horizon, and financial goals can all play an important role in the decision to invest globally. In many cases, unfamiliarity with foreign market investment vehicles tends to dissuade investors from actively pursuing international diversification. However, there are many easy ways to invest in foreign markets for the average investor. We will talk about these products as well as the benefits and risks associated with international equity investing.
>>>
>>>The primary argument in favor of global equity investing is diversification. Diversification across the world's equity markets can produce a portfolio with more appealing risk/return characteristics. Portfolio theory tells us that two assets that are not perfectly positively correlated will reduce the risk in a portfolio of assets, as measured by the variance of returns. The incentive to invest globally is analogous to diversifying a domestic stock portfolio across different geographic regions to reduce exposure to one particular economic locality.
>>>
>>>However, the benefits of global diversification are not cut and dry. Some studies find that during adverse market events such as crash, currency crisis, and war, the correlation between global markets actually increases. So just when you needed it most, the portfolio diversification benefits are falling as the correlation among the world markets increase.
>>>
>>>Another argument against lower global market correlation is the increasing interdependence of the world's economies. No longer is Japan or Europe isolated from a U.S. economic slowdown. As communications and technology tie our economies closer together, the argument for diversification among the world's equity markets doesn't hold as much water.
>>>
>>>While you can probably find a study that refutes almost every accepted investment principle there is, the currently accepted investment tenet holds that there is some benefit to international equity diversification. With that having been said, let's discuss some potential risks to foreign market investing and then go over some investment strategies that can be used in international investing.
>>>
>>>Risks
>>>
>>>An investor faces a whole host of new risks when considering foreign markets for a potential equity investment. The most obvious risk is currency risk. Even though a portfolio of international assets might outperform an equivalent domestic portfolio, any currency movements could actually result in the international assets underperforming the domestic portfolio. Hedges can be implemented but they are costly and can cut into potential returns.
>>>
>>>Another risk the individual investor faces is different international accounting standards. Different countries might have different asset valuation standards and revenue recognition principles. For this reason, investors should not attempt to us ratio analysis to evaluate international stocks. Since the ratios can't be compared across borders, this valuation technique could result in severely impaired investment decisions. Instead, investors should focus on identifying relevant cash flows and applying them to a discounted equity valuation model.
>>>
>>>An additional hurdle to international investing is potentially different tax treatment. Investors should consider any additional tax burdens from investing and taking profits in foreign countries.
>>>
>>>International investors also face operational risk. Foreign exchanges have different clearing procedures and in some cases can limit or forbid the repatriation of foreign capital, as was the case recently in Malaysia.
>>>
>>>Investment Strategies
>>>
>>>An investor pursuing international exposure should decide initially whether or not to employ the services of a professional money manager. International investing is prone to many hazards and pitfalls and takes a lot of time and effort. If the decision to use a professional money manager is made, the investor must decide on the type of investment philosophy before deciding on a specific money manager. Money managers either pursue active or passive investment strategies. An active manager makes decisions concerning market allocation, security selection, and currency bets in an attempt to increase return. Passive investment managers attempt to mimic the performance of an international or country specific index. The main issue a passive manager faces is minimizing tracking error between the their portfolio and the actual index.
>>>
>>>Additional strategic alternatives need to be decided such as the decision to hedge and which markets should be weighted the heaviest. These long-term decisions should be made prior to investing. Also, the extent to which tactical adjustments are made in the international portfolio should be discussed in advance, so that manager and investor share the same philosophy.
>>>
>>>Many economies around the world are growing at incredible rates. These developing countries can offer excellent investment potential if the investors educate themselves about the risks and rewards of international equity investing.
>>>
>>>Investment Vehicles
>>>
>>>There are many vehicles available for investors wishing to pursue international diversification. International mutual funds offer instant firm-specific diversification due to the large number of stocks in their portfolios. Further, their focus can be market specific, such as Japan funds, or regional (Far East fund) or global in perspective. Finally the investor receives professional management for 1-2% of assets.
>>>
>>>Another option available to investors is specialized products offered by financial firms or exchanges, e.g., Barclay's Global Investors has developed a new exchange traded product called iShares. These securities are index funds that can be actively traded like stocks. These products offer an easy way to invest in many of the world's larger markets. For more information, investors should visit www.ishares.com.
>>>
>>>
>>
>>
>
>Post Reply Reply by Private Message (new win) |
| 06/24/02 | re: re: Global Investing - Pros & Cons # |
Ken Nakagama
 |
Okay this is all great stuff.
I may not have cought the complete picture though.
But Adrian- if we didn't have diversification, the industry wouldn't have a better reason to churn our big investment funds for more commissions. J/K
What I can note is that International markets are mostly outpacing our own. (US)
For Institutions, it is more a part of accepted business practice that guides.
For Personal investing, it is a matter of comfort level.
I don't buy bonds or CDs or any of the other instruments that are safe ; ) I probably only have some of that Indirectly through Mutual funds.
Another crack on Federal Retirement is that I am in the Federal 401K program as well. I couldn't believe how poorly the mutual fund performance was compared to other programs I am active in or vested from. They have changed that(this year) to offer more; but FED employees money hasn't really grown for a very long time.
So when Senator "whoever" looks at retirement changes,(isn't part of the dot.com generation and hasn't left DC in 15 years as the Majority Whip) scratches his\her head and wonders if individuals would do a better job than a financial professional. (that didn't take ethics in College)
> Adrian Scott wrote:
> ok, one question is, who believes in portfolio theory?
>
>the other important thing is that people realize we are all exposed to foreign exchange risk and
>are investing in currencies whether we realize it or not! :)
>
>i think diversification is bunk as a risk mgmt strategy. :)
>
>-a
>
>ps (ishares are cool)
>
>> Guan Seng Khoo wrote:
>> Global Investing (extracted from PremierInvestor.com)
>>
>>The decision to invest in foreign markets depends on many personal factors. Portfolio size, investment horizon, and financial goals can all play an important role in the decision to invest globally. In many cases, unfamiliarity with foreign market investment vehicles tends to dissuade investors from actively pursuing international diversification. However, there are many easy ways to invest in foreign markets for the average investor. We will talk about these products as well as the benefits and risks associated with international equity investing.
>>
>>The primary argument in favor of global equity investing is diversification. Diversification across the world's equity markets can produce a portfolio with more appealing risk/return characteristics. Portfolio theory tells us that two assets that are not perfectly positively correlated will reduce the risk in a portfolio of assets, as measured by the variance of returns. The incentive to invest globally is analogous to diversifying a domestic stock portfolio across different geographic regions to reduce exposure to one particular economic locality.
>>
>>However, the benefits of global diversification are not cut and dry. Some studies find that during adverse market events such as crash, currency crisis, and war, the correlation between global markets actually increases. So just when you needed it most, the portfolio diversification benefits are falling as the correlation among the world markets increase.
>>
>>Another argument against lower global market correlation is the increasing interdependence of the world's economies. No longer is Japan or Europe isolated from a U.S. economic slowdown. As communications and technology tie our economies closer together, the argument for diversification among the world's equity markets doesn't hold as much water.
>>
>>While you can probably find a study that refutes almost every accepted investment principle there is, the currently accepted investment tenet holds that there is some benefit to international equity diversification. With that having been said, let's discuss some potential risks to foreign market investing and then go over some investment strategies that can be used in international investing.
>>
>>Risks
>>
>>An investor faces a whole host of new risks when considering foreign markets for a potential equity investment. The most obvious risk is currency risk. Even though a portfolio of international assets might outperform an equivalent domestic portfolio, any currency movements could actually result in the international assets underperforming the domestic portfolio. Hedges can be implemented but they are costly and can cut into potential returns.
>>
>>Another risk the individual investor faces is different international accounting standards. Different countries might have different asset valuation standards and revenue recognition principles. For this reason, investors should not attempt to us ratio analysis to evaluate international stocks. Since the ratios can't be compared across borders, this valuation technique could result in severely impaired investment decisions. Instead, investors should focus on identifying relevant cash flows and applying them to a discounted equity valuation model.
>>
>>An additional hurdle to international investing is potentially different tax treatment. Investors should consider any additional tax burdens from investing and taking profits in foreign countries.
>>
>>International investors also face operational risk. Foreign exchanges have different clearing procedures and in some cases can limit or forbid the repatriation of foreign capital, as was the case recently in Malaysia.
>>
>>Investment Strategies
>>
>>An investor pursuing international exposure should decide initially whether or not to employ the services of a professional money manager. International investing is prone to many hazards and pitfalls and takes a lot of time and effort. If the decision to use a professional money manager is made, the investor must decide on the type of investment philosophy before deciding on a specific money manager. Money managers either pursue active or passive investment strategies. An active manager makes decisions concerning market allocation, security selection, and currency bets in an attempt to increase return. Passive investment managers attempt to mimic the performance of an international or country specific index. The main issue a passive manager faces is minimizing tracking error between the their portfolio and the actual index.
>>
>>Additional strategic alternatives need to be decided such as the decision to hedge and which markets should be weighted the heaviest. These long-term decisions should be made prior to investing. Also, the extent to which tactical adjustments are made in the international portfolio should be discussed in advance, so that manager and investor share the same philosophy.
>>
>>Many economies around the world are growing at incredible rates. These developing countries can offer excellent investment potential if the investors educate themselves about the risks and rewards of international equity investing.
>>
>>Investment Vehicles
>>
>>There are many vehicles available for investors wishing to pursue international diversification. International mutual funds offer instant firm-specific diversification due to the large number of stocks in their portfolios. Further, their focus can be market specific, such as Japan funds, or regional (Far East fund) or global in perspective. Finally the investor receives professional management for 1-2% of assets.
>>
>>Another option available to investors is specialized products offered by financial firms or exchanges, e.g., Barclay's Global Investors has developed a new exchange traded product called iShares. These securities are index funds that can be actively traded like stocks. These products offer an easy way to invest in many of the world's larger markets. For more information, investors should visit www.ishares.com.
>>
>>
>
>
Post Reply Reply by Private Message (new win) |
| 06/23/02 | re: re: Global Investing - Pros & Cons # |
Guan Seng Khoo
 |
Yup, diversification is bunk but only if it's passive diversification. If it's dynamic, it helps. Best,
> Adrian Scott wrote:
> ok, one question is, who believes in portfolio theory?
>
>the other important thing is that people realize we are all exposed to foreign exchange risk and
>are investing in currencies whether we realize it or not! :)
>
>i think diversification is bunk as a risk mgmt strategy. :)
>
>-a
>
>ps (ishares are cool)
>
>> Guan Seng Khoo wrote:
>> Global Investing (extracted from PremierInvestor.com)
>>
>>The decision to invest in foreign markets depends on many personal factors. Portfolio size, investment horizon, and financial goals can all play an important role in the decision to invest globally. In many cases, unfamiliarity with foreign market investment vehicles tends to dissuade investors from actively pursuing international diversification. However, there are many easy ways to invest in foreign markets for the average investor. We will talk about these products as well as the benefits and risks associated with international equity investing.
>>
>>The primary argument in favor of global equity investing is diversification. Diversification across the world's equity markets can produce a portfolio with more appealing risk/return characteristics. Portfolio theory tells us that two assets that are not perfectly positively correlated will reduce the risk in a portfolio of assets, as measured by the variance of returns. The incentive to invest globally is analogous to diversifying a domestic stock portfolio across different geographic regions to reduce exposure to one particular economic locality.
>>
>>However, the benefits of global diversification are not cut and dry. Some studies find that during adverse market events such as crash, currency crisis, and war, the correlation between global markets actually increases. So just when you needed it most, the portfolio diversification benefits are falling as the correlation among the world markets increase.
>>
>>Another argument against lower global market correlation is the increasing interdependence of the world's economies. No longer is Japan or Europe isolated from a U.S. economic slowdown. As communications and technology tie our economies closer together, the argument for diversification among the world's equity markets doesn't hold as much water.
>>
>>While you can probably find a study that refutes almost every accepted investment principle there is, the currently accepted investment tenet holds that there is some benefit to international equity diversification. With that having been said, let's discuss some potential risks to foreign market investing and then go over some investment strategies that can be used in international investing.
>>
>>Risks
>>
>>An investor faces a whole host of new risks when considering foreign markets for a potential equity investment. The most obvious risk is currency risk. Even though a portfolio of international assets might outperform an equivalent domestic portfolio, any currency movements could actually result in the international assets underperforming the domestic portfolio. Hedges can be implemented but they are costly and can cut into potential returns.
>>
>>Another risk the individual investor faces is different international accounting standards. Different countries might have different asset valuation standards and revenue recognition principles. For this reason, investors should not attempt to us ratio analysis to evaluate international stocks. Since the ratios can't be compared across borders, this valuation technique could result in severely impaired investment decisions. Instead, investors should focus on identifying relevant cash flows and applying them to a discounted equity valuation model.
>>
>>An additional hurdle to international investing is potentially different tax treatment. Investors should consider any additional tax burdens from investing and taking profits in foreign countries.
>>
>>International investors also face operational risk. Foreign exchanges have different clearing procedures and in some cases can limit or forbid the repatriation of foreign capital, as was the case recently in Malaysia.
>>
>>Investment Strategies
>>
>>An investor pursuing international exposure should decide initially whether or not to employ the services of a professional money manager. International investing is prone to many hazards and pitfalls and takes a lot of time and effort. If the decision to use a professional money manager is made, the investor must decide on the type of investment philosophy before deciding on a specific money manager. Money managers either pursue active or passive investment strategies. An active manager makes decisions concerning market allocation, security selection, and currency bets in an attempt to increase return. Passive investment managers attempt to mimic the performance of an international or country specific index. The main issue a passive manager faces is minimizing tracking error between the their portfolio and the actual index.
>>
>>Additional strategic alternatives need to be decided such as the decision to hedge and which markets should be weighted the heaviest. These long-term decisions should be made prior to investing. Also, the extent to which tactical adjustments are made in the international portfolio should be discussed in advance, so that manager and investor share the same philosophy.
>>
>>Many economies around the world are growing at incredible rates. These developing countries can offer excellent investment potential if the investors educate themselves about the risks and rewards of international equity investing.
>>
>>Investment Vehicles
>>
>>There are many vehicles available for investors wishing to pursue international diversification. International mutual funds offer instant firm-specific diversification due to the large number of stocks in their portfolios. Further, their focus can be market specific, such as Japan funds, or regional (Far East fund) or global in perspective. Finally the investor receives professional management for 1-2% of assets.
>>
>>Another option available to investors is specialized products offered by financial firms or exchanges, e.g., Barclay's Global Investors has developed a new exchange traded product called iShares. These securities are index funds that can be actively traded like stocks. These products offer an easy way to invest in many of the world's larger markets. For more information, investors should visit www.ishares.com.
>>
>>
>
>
Post Reply Reply by Private Message (new win) |
| 06/23/02 | re: Retirement plan Changes # |
Adrian Scott
 |
i like opening up investment options to people.
would also like to see more effort by brokerages on educating (helping) their
customers learn risk mgmt strategies such as limiting losses. (companies
shouldn't have to take that education burden on, though some may wish to).
-a
> Brian Maude wrote:
> What are people's thoughts on opening up investment options in 401k's, 403b's etc...
>
>I know some firms have done so - but it is rare. I'm totally in favor of it - give people options and if they screw up - it's their own fault - personal responsibility baby!
>
>When I was layed off I rolled mine into a self-directed IRA and love the flexibility.
>
>In fact I'd open them up to allow for options trades as well - hell I would have loved to have some index puts as insurance the past few years (I did outside, but that was taxable)
>
>Look forward to folks thoughts on this - both financial planning pro's and just others like me with retirement accounts who desire maximum flexibility.
>
Post Reply Reply by Private Message (new win) |
| 06/23/02 | re: Global Investing - Pros & Cons # |
Adrian Scott
|
ok, one question is, who believes in portfolio theory?
the other important thing is that people realize we are all exposed to foreign exchange risk and
are investing in currencies whether we realize it or not! :)
i think diversification is bunk as a risk mgmt strategy. :)
-a
ps (ishares are cool)
> Guan Seng Khoo wrote:
> Global Investing (extracted from PremierInvestor.com)
>
>The decision to invest in foreign markets depends on many personal factors. Portfolio size, investment horizon, and financial goals can all play an important role in the decision to invest globally. In many cases, unfamiliarity with foreign market investment vehicles tends to dissuade investors from actively pursuing international diversification. However, there are many easy ways to invest in foreign markets for the average investor. We will talk about these products as well as the benefits and risks associated with international equity investing.
>
>The primary argument in favor of global equity investing is diversification. Diversification across the world's equity markets can produce a portfolio with more appealing risk/return characteristics. Portfolio theory tells us that two assets that are not perfectly positively correlated will reduce the risk in a portfolio of assets, as measured by the variance of returns. The incentive to invest globally is analogous to diversifying a domestic stock portfolio across different geographic regions to reduce exposure to one particular economic locality.
>
>However, the benefits of global diversification are not cut and dry. Some studies find that during adverse market events such as crash, currency crisis, and war, the correlation between global markets actually increases. So just when you needed it most, the portfolio diversification benefits are falling as the correlation among the world markets increase.
>
>Another argument against lower global market correlation is the increasing interdependence of the world's economies. No longer is Japan or Europe isolated from a U.S. economic slowdown. As communications and technology tie our economies closer together, the argument for diversification among the world's equity markets doesn't hold as much water.
>
>While you can probably find a study that refutes almost every accepted investment principle there is, the currently accepted investment tenet holds that there is some benefit to international equity diversification. With that having been said, let's discuss some potential risks to foreign market investing and then go over some investment strategies that can be used in international investing.
>
>Risks
>
>An investor faces a whole host of new risks when considering foreign markets for a potential equity investment. The most obvious risk is currency risk. Even though a portfolio of international assets might outperform an equivalent domestic portfolio, any currency movements could actually result in the international assets underperforming the domestic portfolio. Hedges can be implemented but they are costly and can cut into potential returns.
>
>Another risk the individual investor faces is different international accounting standards. Different countries might have different asset valuation standards and revenue recognition principles. For this reason, investors should not attempt to us ratio analysis to evaluate international stocks. Since the ratios can't be compared across borders, this valuation technique could result in severely impaired investment decisions. Instead, investors should focus on identifying relevant cash flows and applying them to a discounted equity valuation model.
>
>An additional hurdle to international investing is potentially different tax treatment. Investors should consider any additional tax burdens from investing and taking profits in foreign countries.
>
>International investors also face operational risk. Foreign exchanges have different clearing procedures and in some cases can limit or forbid the repatriation of foreign capital, as was the case recently in Malaysia.
>
>Investment Strategies
>
>An investor pursuing international exposure should decide initially whether or not to employ the services of a professional money manager. International investing is prone to many hazards and pitfalls and takes a lot of time and effort. If the decision to use a professional money manager is made, the investor must decide on the type of investment philosophy before deciding on a specific money manager. Money managers either pursue active or passive investment strategies. An active manager makes decisions concerning market allocation, security selection, and currency bets in an attempt to increase return. Passive investment managers attempt to mimic the performance of an international or country specific index. The main issue a passive manager faces is minimizing tracking error between the their portfolio and the actual index.
>
>Additional strategic alternatives need to be decided such as the decision to hedge and which markets should be weighted the heaviest. These long-term decisions should be made prior to investing. Also, the extent to which tactical adjustments are made in the international portfolio should be discussed in advance, so that manager and investor share the same philosophy.
>
>Many economies around the world are growing at incredible rates. These developing countries can offer excellent investment potential if the investors educate themselves about the risks and rewards of international equity investing.
>
>Investment Vehicles
>
>There are many vehicles available for investors wishing to pursue international diversification. International mutual funds offer instant firm-specific diversification due to the large number of stocks in their portfolios. Further, their focus can be market specific, such as Japan funds, or regional (Far East fund) or global in perspective. Finally the investor receives professional management for 1-2% of assets.
>
>Another option available to investors is specialized products offered by financial firms or exchanges, e.g., Barclay's Global Investors has developed a new exchange traded product called iShares. These securities are index funds that can be actively traded like stocks. These products offer an easy way to invest in many of the world's larger markets. For more information, investors should visit www.ishares.com.
>
>
Post Reply Reply by Private Message (new win) |
| 06/23/02 | Retirement plan Changes # |
Brian Maude
 |
What are people's thoughts on opening up investment options in 401k's, 403b's etc...
I know some firms have done so - but it is rare. I'm totally in favor of it - give people options and if they screw up - it's their own fault - personal responsibility baby!
When I was layed off I rolled mine into a self-directed IRA and love the flexibility.
In fact I'd open them up to allow for options trades as well - hell I would have loved to have some index puts as insurance the past few years (I did outside, but that was taxable)
Look forward to folks thoughts on this - both financial planning pro's and just others like me with retirement accounts who desire maximum flexibility.
Post Reply Reply by Private Message (new win) |
| 06/22/02 | Global Investing - Pros & Cons # |
Guan Seng Khoo
|
Global Investing (extracted from PremierInvestor.com)
The decision to invest in foreign markets depends on many personal factors. Portfolio size, investment horizon, and financial goals can all play an important role in the decision to invest globally. In many cases, unfamiliarity with foreign market investment vehicles tends to dissuade investors from actively pursuing international diversification. However, there are many easy ways to invest in foreign markets for the average investor. We will talk about these products as well as the benefits and risks associated with international equity investing.
The primary argument in favor of global equity investing is diversification. Diversification across the world's equity markets can produce a portfolio with more appealing risk/return characteristics. Portfolio theory tells us that two assets that are not perfectly positively correlated will reduce the risk in a portfolio of assets, as measured by the variance of returns. The incentive to invest globally is analogous to diversifying a domestic stock portfolio across different geographic regions to reduce exposure to one particular economic locality.
However, the benefits of global diversification are not cut and dry. Some studies find that during adverse market events such as crash, currency crisis, and war, the correlation between global markets actually increases. So just when you needed it most, the portfolio diversification benefits are falling as the correlation among the world markets increase.
Another argument against lower global market correlation is the increasing interdependence of the world's economies. No longer is Japan or Europe isolated from a U.S. economic slowdown. As communications and technology tie our economies closer together, the argument for diversification among the world's equity markets doesn't hold as much water.
While you can probably find a study that refutes almost every accepted investment principle there is, the currently accepted investment tenet holds that there is some benefit to international equity diversification. With that having been said, let's discuss some potential risks to foreign market investing and then go over some investment strategies that can be used in international investing.
Risks
An investor faces a whole host of new risks when considering foreign markets for a potential equity investment. The most obvious risk is currency risk. Even though a portfolio of international assets might outperform an equivalent domestic portfolio, any currency movements could actually result in the international assets underperforming the domestic portfolio. Hedges can be implemented but they are costly and can cut into potential returns.
Another risk the individual investor faces is different international accounting standards. Different countries might have different asset valuation standards and revenue recognition principles. For this reason, investors should not attempt to us ratio analysis to evaluate international stocks. Since the ratios can't be compared across borders, this valuation technique could result in severely impaired investment decisions. Instead, investors should focus on identifying relevant cash flows and applying them to a discounted equity valuation model.
An additional hurdle to international investing is potentially different tax treatment. Investors should consider any additional tax burdens from investing and taking profits in foreign countries.
International investors also face operational risk. Foreign exchanges have different clearing procedures and in some cases can limit or forbid the repatriation of foreign capital, as was the case recently in Malaysia.
Investment Strategies
An investor pursuing international exposure should decide initially whether or not to employ the services of a professional money manager. International investing is prone to many hazards and pitfalls and takes a lot of time and effort. If the decision to use a professional money manager is made, the investor must decide on the type of investment philosophy before deciding on a specific money manager. Money managers either pursue active or passive investment strategies. An active manager makes decisions concerning market allocation, security selection, and currency bets in an attempt to increase return. Passive investment managers attempt to mimic the performance of an international or country specific index. The main issue a passive manager faces is minimizing tracking error between the their portfolio and the actual index.
Additional strategic alternatives need to be decided such as the decision to hedge and which markets should be weighted the heaviest. These long-term decisions should be made prior to investing. Also, the extent to which tactical adjustments are made in the international portfolio should be discussed in advance, so that manager and investor share the same philosophy.
Many economies around the world are growing at incredible rates. These developing countries can offer excellent investment potential if the investors educate themselves about the risks and rewards of international equity investing.
Investment Vehicles
There are many vehicles available for investors wishing to pursue international diversification. International mutual funds offer instant firm-specific diversification due to the large number of stocks in their portfolios. Further, their focus can be market specific, such as Japan funds, or regional (Far East fund) or global in perspective. Finally the investor receives professional management for 1-2% of assets.
Another option available to investors is specialized products offered by financial firms or exchanges, e.g., Barclay's Global Investors has developed a new exchange traded product called iShares. These securities are index funds that can be actively traded like stocks. These products offer an easy way to invest in many of the world's larger markets. For more information, investors should visit www.ishares.com.
Post Reply Reply by Private Message (new win) |
| 06/20/02 | re: List of venture capitalist in the bay area. # |
brian wang
 |
I had not seen any further actual pointer to sources from the original message.
But VC's and the last three months of deals are at
www.vcbuzz.com (best free source that I have found)
www.thedeal.com (registration required)
I have just started putting together a site discussing startup funding.
startupfunding.icommunity.com
It has more info on angel investor groups right now.
Top funders of deals in the last 90 days.
Dubai Airport Free Zone Authority ($325M)
Intel Corp ($325M)
Investment Bank of the State of Brandenburg ($325M)
Venrock Associates ($281.7M)
Intel Capital ($250.1M)
St. Paul Venture Capital ($225.7M)
J.P. Morgan Partners ($225.24M)
Menlo Ventures ($223.8M)
New Enterprise Associates ($219.34M)
Benchmark Capital ($186M)
BrianPost Reply Reply by Private Message (new win) |
| 06/20/02 | MBA, CFA looking for a new challenge # |
James Grebenc
 |
Hi there, I just noticed this tribe on the Ryze website and thought I'd send a brief e-mail to introduce myself. Currently, I work in the Private Wealth Management/Middle Markets group at Robertson Stephens in San Francisco but find myself exploring other opportunities given the uncertainty surrounding the firm and its pending sale. As such, if anyone knows of any potential opportunities I'd love to send them a copy of my resumé and speak to them. I'm an MBA, CFA with experience in High Net Worth sales & marketing, Institutional Equity Research Sales, Pension Plan Consulting (Investment Manager Search & Selection), Venture Capital advisory (business plan and funding marketing documents, VC networking)...
Sincerely,
James Grebenc CFA
jamesgrebenc_cfa@yahoo.com
Post Reply Reply by Private Message (new win) |
| 06/17/02 | BIOTECH's # |
Keith Butler
|
As the last truly growth area of the market.... does anyone have any ideas regarding promising biotech companies??Post Reply Reply by Private Message (new win) |
| 06/14/02 | SIA Technology Management Conference & Exhibition, June 19-21, NYC # |
Guan Seng Khoo
|
FYI,
http://www.sia.com/tmc2002/index.htmlPost Reply Reply by Private Message (new win) |
| 06/12/02 | re: re: Advisors vs. individuals # |
Steve Johnston
 |
Hello Sean!
A number of people have shared similar thoughts with me! The key is that the majority of people simply don't have the time to invest in doing it right!
In addition, people such as yourself who do this for a living often hire someone else to handle their finances just so they don't have to deal with it. Kind of like an accountant not wanting to do their own taxes! ;)
Steve
> Sean Phelan wrote:
> Hello Steve
>I'm on a desk for a trading firm and when friends have asked questions similar to yours (e.g. 'Should I take a broker's/advisor's advice, should I do my own trading or investing, should I just use mutual funds, etc.) I generally tell them it depends on the time/commitment you are willing to make to the effort.
>
>I'm of the opinion that successful investing/trading is not beyond anyone, however, it's hard & you have to pay the price in time, effort, education, stress, frustration, ego and the rest.
>
>Most people think doing it themselves sounds pretty good - but when it comes right down to it they're unwilling to commit the time & effort over the ensuing years to do it right. A relatively few, on the other hand, seem to be able to commit to what it takes.
>
>It's a very challenging endeavor with a lot at stake - but I think it can be done. I'll also throw in that it doesn't necessarily have to be one or the other. You could use professional services for a portion of your assets & personally run the rest; adjusting the amount of personal allocation as you decide it is or it isn't your thing.
>
>That's my two cents.
>Sean
>
>
>
>> Steve Johnston wrote:
>> I have spoken with a number of people who had gone out on their own and tried serving as their own advisor, only to find that they needed a professional to help them catch their balance. What has been everyone else's experiences? Why have you or have you not chosen to work with a financial advisor. Keep in mind that most advisor are not fee-based planners.
>>
>>Steve
>
>
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| 06/07/02 | Today's Financial Educational Catch of the Day - TALK # |
Guan Seng Khoo
|
Dear Ladies/Gentlemen,
Another Tutorial for the Day – see below generated at 11.45 a.m., EST. Thank you.
Best,
Khoo
DISCLAIMER:
This TradEdge trading tutorial column is an educational guide to using TradEdge only. The information provided herein is not to be construed as an offer to buy or sell
securities of any kind. It must be noted that the findings of this TradEdge tool do not guarantee future price performances. Other events, like negative news or a broker downgrade may affect some of these assumptions and criteria used in this analysis.
Revisiting Consistent Performers Scanner (CPS)- a TradEdge tool:
One of the gainers this morning is TALK, Talk America Holdings Inc. At 5 pm yesterday, it was the top-ranked stock on the CPS list. TALK has also been on the CPS list for several weeks. Today at 11.45 am, it is almost up by 25%. So, while the market crashed just after the opening bell on negative news, it exhibited a contrarian behavior. Of course, it may retrace downwards after these early gains in the morning. Using the MA indicator, profit taking levels are suggested at 2.68 and 2.70 – see below.
Taking and Stop Loss Levels using MFE/MAE Levels commentary.
Cutting losses with MAE :
From an analysis of historical data from 05/15/2002 to 06/07/2002 , this choice of indicator average on SHORT positions produces a profit approximately 10.87% of the time.
Historical analysis indicates that 25% of the time, a profitable trade will not encounter a temporary loss of more than USD 1.00 per 100 shares of TALK traded before it recovers above the entry price; 50% of the time, the temporary loss will not be more than USD 1.00; while 75% of the time, this temporary loss will be limited to USD 3.00. This information should be useful in providing inputs on any decisions to cut loss on the position.
Holding period
In addition, 75% of the time, your choice of indicator will stay SHORT for a minimum of 1 bar(s) on this security; 50% of the time, it will stay SHORT for a minimum of 2 bar(s) and 25% of the time, it will remain SHORT for a minimum of 5 bar(s).
Note: This simulation is based on a standard procedure of using 300 bars of historical data, unless the database contains less than 300 bars. In those cases, the actual number of bars used is stated in the middle of this Report. For more robust simulations with more data, a longer simulation period can be selected by clicking on the "Eval" button.
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| 06/06/02 | re: "It was just stupid" - Jim Cramer # |
Keith Butler
|
Also, the booke that was mentioned "confessions of a street addict" is a great read.
> Adrian Scott wrote:
> http://www.salon.com/tech/feature/2002/06/04/cramer/index.html??x
>
>interesting. a lot of discussion of the emotional side of trading and losing balance in one's personal life.
>
>whenever i read something like this, i think someone's really missed out on some opportunities.
>
>it seems he has not fully internalized the implications of being an emotional person. the emotion stuff plays well on tv, but isn't great for sleeping at night.
>
>my guess is he'll be back in a few years, but next time around will design his trading strategies around his life priorities, instead of the other way around... or else he'll just be a talking head...
>
>Post Reply Reply by Private Message (new win) |
| 06/05/02 | "It was just stupid" - Jim Cramer # |
Adrian Scott
|
http://www.salon.com/tech/feature/2002/06/04/cramer/index.html??x
interesting. a lot of discussion of the emotional side of trading and losing balance in one's personal life.
whenever i read something like this, i think someone's really missed out on some opportunities.
it seems he has not fully internalized the implications of being an emotional person. the emotion stuff plays well on tv, but isn't great for sleeping at night.
my guess is he'll be back in a few years, but next time around will design his trading strategies around his life priorities, instead of the other way around... or else he'll just be a talking head...
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| 06/04/02 | Pension Reform Act - Roth IRA or pre-tax 457/401(k) ? # |
Adam Thaler
|
On May 8 of last month, the governor signed legislation to conform California law with the federal pension reform (effective 1/1/02).
Among other things, this legislation allows employees who have both 401(k) and 457 plan options to take advantage of higher contribution limits.
For the 2002 tax year, I can now contribute up to $11,000 into BOTH a 401(k) AND a 457 Plan, for a total annual contribution maximum of $22,000.
I find this very interesting and as there are no limits as there have been in the past. Also, in the past, one could not maximize both plans. I'm in the unique situation where my employer has both the 401(k) and 457. I'm currently maximizing my 401(k) with the full $11,000 - pre-taxed.
Now, I find out that I can also contribute up to $11,000 - pre-taxed - into the 457.
Here's my question:
Since 1998, I've also been maximizing contributions to my ROTH IRA. The IRA contribution limit for 2002 is $3,000.
Now that my 401(k) is maxed out for the year, where should the additional money go? Let's say I have $3,000 to invest.
Scenerio A:
If I invest the $3,000 into the ROTH IRA, this will be in "after-tax" dollars. However, when the funds are withdrawn during retirement, the income is tax-free.
Scenerio B:
If I invest the $3,000 into the 457 Plan, this will be in "pre-tax" dollars (the out-of-pocket cost will be about $1,890 since this is exempt from state and federal taxes). However, the funds are withdrawn during retirement, it's considered taxable income.
So, to invest the extra money into a ROTH IRA or the 457 Plan?
In summary, one who has both a 401(k) and 457 Plan can invest up to $25,000 in 2002.
(401(k) - $11,000, 457 Plan - $11,000, and Traditional or Roth IRA - $3,000)Post Reply Reply by Private Message (new win) |
| 06/03/02 | re: Advisors vs. individuals # |
Sean Phelan
 |
Hello Steve
I'm on a desk for a trading firm and when friends have asked questions similar to yours (e.g. 'Should I take a broker's/advisor's advice, should I do my own trading or investing, should I just use mutual funds, etc.) I generally tell them it depends on the time/commitment you are willing to make to the effort.
I'm of the opinion that successful investing/trading is not beyond anyone, however, it's hard & you have to pay the price in time, effort, education, stress, frustration, ego and the rest.
Most people think doing it themselves sounds pretty good - but when it comes right down to it they're unwilling to commit the time & effort over the ensuing years to do it right. A relatively few, on the other hand, seem to be able to commit to what it takes.
It's a very challenging endeavor with a lot at stake - but I think it can be done. I'll also throw in that it doesn't necessarily have to be one or the other. You could use professional services for a portion of your assets & personally run the rest; adjusting the amount of personal allocation as you decide it is or it isn't your thing.
That's my two cents.
Sean
> Steve Johnston wrote:
> I have spoken with a number of people who had gone out on their own and tried serving as their own advisor, only to find that they needed a professional to help them catch their balance. What has been everyone else's experiences? Why have you or have you not chosen to work with a financial advisor. Keep in mind that most advisor are not fee-based planners.
>
>Steve
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| 06/02/02 | re: re: The 7 Disciplines of StockBottom.com - The Bottom Line # |
Guan Seng Khoo
|
Thanks Keith. Totally agree with your defense play - with so much uncertainty for the moment. Have a good weekend. World Cup/NBA/Stanley Cup are all more engrossing for the moment! Best,
> Keith Butler wrote:
> Great Post Guan, This has been one of the most frustrating markets I can ever recall: As a rule you never want to short a dull market, and it's tough to go long when you dont know what the next terrorist rumor will be.
>
>Does this scenario sound familiar: You see a breakout, it sets off a buy signal, and you jump in. But the stock just sits there and goes nowhere while its newfound strength slowly ebbs away. After a while, it rolls over from its own weight and triggers your stop loss. To add insult to injury, the stock then magically recovers without you and moves higher. But the most important thing is to stay disciplined, and quantify your risk on every trade.
>
>One thing that has been working somewhat for me lately are the liquid defense plays: ie; RTN,ATK, and my favorite LLL. The biggest threat to the market these days is terririst attacks, war threats etc and these plays should keep you insulated from those threats, in fact they should rise. On top of that, unlike technology/telecom, the new U.S.Defense budget is the largest pile of money on earth and it's going to get spent. If you listen to the talking heads on CNBC they'll tell ya that the defense plays are overvalued at 25 and 30 times earnings, and to an extent they're right. BUT remember who's buying these names.... The Momentum investors.... and as thair name implies they don't care about valuations, they care about momentum. If you'll recall the last group that the momentum hawks bought was dot.bombs and telecom who had absurd valuations of say 500 times earnings. So comparitavely, buying a stock with a multiple of 30 seems like a bargain to them. Besides, they just rent the stock for a short while anyway.
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| 06/02/02 | re: The 7 Disciplines of StockBottom.com - The Bottom Line # |
Keith Butler
|
Great Post Guan, This has been one of the most frustrating markets I can ever recall: As a rule you never want to short a dull market, and it's tough to go long when you dont know what the next terrorist rumor will be.
Does this scenario sound familiar: You see a breakout, it sets off a buy signal, and you jump in. But the stock just sits there and goes nowhere while its newfound strength slowly ebbs away. After a while, it rolls over from its own weight and triggers your stop loss. To add insult to injury, the stock then magically recovers without you and moves higher. But the most important thing is to stay disciplined, and quantify your risk on every trade.
One thing that has been working somewhat for me lately are the liquid defense plays: ie; RTN,ATK, and my favorite LLL. The biggest threat to the market these days is terririst attacks, war threats etc and these plays should keep you insulated from those threats, in fact they should rise. On top of that, unlike technology/telecom, the new U.S.Defense budget is the largest pile of money on earth and it's going to get spent. If you listen to the talking heads on CNBC they'll tell ya that the defense plays are overvalued at 25 and 30 times earnings, and to an extent they're right. BUT remember who's buying these names.... The Momentum investors.... and as thair name implies they don't care about valuations, they care about momentum. If you'll recall the last group that the momentum hawks bought was dot.bombs and telecom who had absurd valuations of say 500 times earnings. So comparitavely, buying a stock with a multiple of 30 seems like a bargain to them. Besides, they just rent the stock for a short while anyway.Post Reply Reply by Private Message (new win) |
| 06/01/02 | The 7 Disciplines of StockBottom.com - The Bottom Line # |
Guan Seng Khoo
|
The Bottom Line: The Top 7 Trading Principles from StockBottom.com
We have done our best to whittle down all of our knowledge and trading experience into seven golden nuggets of wisdom. These are not the end all and be all of investing know-how but applying these seven principles can do nothing but help your trading results. There is a difference between trading and investing. One is passive and the other is aggressive. These are guidelines to help you in your trading endeavors. We have tailored these to help you benefit from your StockBottom.com subscription.
Our picks are based on technical analysis while being observant of overall market/sector conditions and company events. The individual investor is encouraged to complete the research needed on a company before making a trade. Investment strategies are very personal and can not be dictated through a website. The final decision is always left to the reader to make based on his or her own risk profile. These seven principles are here to tilt the odds in your favor as you journey to your own financial independence. Good luck!
Principle 1) PRESERVE YOUR CAPITAL.
You make money in the stock market by cutting losses rather than spending your time searching for the next Dell or Microsoft.
Principle 2) MONEY MANAGEMENT.
part A.
As the saying goes, "don't put all of your eggs into one basket". The same is true in successful trading. Don't put all of your money into one trade. If you do, there is a greater chance that you will fall victim to Murphy's Law and end up broke. For example, if you have a $2,000 trading account, put $1,000 into two plays, $5,000 into three, etc... One thing that we strongly recommend is never playing more than three to five positions at one time. Any more than that and they can be difficult to keep track of, particularly when the situation demands prompt action.
part B.
When you are entering a new play, do so by using a limit order. The limit order should be at or slightly above the current ask price. This will ensure a fill at your price, not the market makers price. If your order is not filled, do not worry, there will be other opportunities out there. DO NOT chase the price up! This can be a big mistake. If the price is more than 5% above our pick price you might want to just paper trade it for practice.
part C.
If you are relatively new to trading, we recommend paper trading to get into the swing of things. Paper Trading is simulated trading where actual money is not used. Prices of securities are tracked on a daily basis and fictional trades are made. There are even computer programs available for this. Paper trade until you are comfortable and successful making decisions. Just remember, reality is never as good as fantasy. The moment you put real money on the line, the game changes. Thus our liberal use of stop losses (more on this one later).
Principle 3) STOP LOSSES.
Once your buy order has been filled, immediately turn around and place your stop loss (a.k.a. Stop Loss Order). If the stock takes a dive, this stop loss will bail you out at a relatively smaller loss. This saves the trader a lot of agonizing over whether to exit a position that has turned seriously against him or her. Considering the unprecedented volatility we are experiencing in the market today, it would be foolish for traders not to use a protective stop loss. Remember that Capital Preservation is principle #1. One way to use stop losses is if once the stock advances a percent or two (or three), we recommend moving your stop loss order up to a BREAK-EVEN point. Thus, the trader inputs their stop loss at the same price they entered the play, which reduces their risk to almost zero. As the stock continues to go up, Protect your profits by raising your SELL STOP LOSS ORDER accordingly. This is called a TRAILING STOP order. This way, as long as the stock goes up, your order is ignored. As soon as the stock starts to back off, or on one of those days when the market goes wacky, your safety net triggers and you sell at a PROFIT which is what the business of trading is all about. Unfortunately, stop losses are not perfect. Sometimes stocks do gap up or down and your stop loss could immediately become a market order and fill you at a loss for more than you bargained for.
NOTE: The Placement of STOPS is a personal thing and should be set in accordance with a traders risk and comfort levels while trying to allow some room for normal price fluctuations. Our recommendations may be to tight for some and to loose for others. We like 9% to 11%. The secret to make money in the stock market is to limit your losses. Place your stop losses carefully.
! Never ever move a stop loss down once it is set (see rule # 1). THIS IS AN UNBREAKABLE RULE! You can always re-enter a trade again at a later date after the stock has bounced back.
Principle 4) DON'T FIGHT THE TREND.
You've heard it before. Just like every other trading maxim that has been around forever. If the semiconductor index just rolled over and broke through long term support, we don't recommend going long any semiconductor stocks. Same thing works on a bigger scale. If the overall market is heading South, going long may not be your best bet. Remember that the "trend is your friend". Don't worry about the "why" a market or sector is sinking, just get out of the way and look for any stockbottom's that might result of the downturn.
Principle 5) YOU DON'T TRADE IN A VACUUM.
A trader can get slaughtered by not paying attention to what's going on in the market or what's happening to his/her stock. Major economic reports, FOMC meetings, economic conditions overseas, even military actions can affect how our markets move and react. More specifically, traders need to know what important dates are upcoming for the company they are invested in. We do not recommend holding over an earnings report. Historically, the majority of stocks fall after an earnings report. There are always the rare few that really explode upward that everyone wants to be a part of. The sad truth is this market is priced for perfection and anything less than perfect could be disastrous to investor expectations. When that happens, investors leave and take their money with them. Even if earnings were inline with estimates, the momentum players are leaving to move on to the next stock that has earnings coming. The same effect occurs with stock splits. A lot of stocks go down after the split occurs. Thus, we don't recommend holding over the payable date of a split either since momentum players usually leave looking for the next event to play.
Principle 6) NEVER EVER TRADE ON EMOTION.
Easy to say hard to do. Emotion is your enemy, logic is your friend. Never trade on emotion. There is no such thing as "it has to go up", "it can't go down". The market does not care what you think or hope. It is ruthless and makes its own rules. You should say this 50 times a day, "past performance is not a guarantee of future results". Never buy on impulse. If you just heard the news, it is already to late. Plan your buys during non-market hours. Once the bell rings your mind is clouded, emotion takes over. Plan your strategy. Execute your plan. When in doubt, stay out.
Principle 7) DISCIPLINE.
We'd like to call this lucky number seven, but luck has nothing to do with it. Sure, sometimes you might get lucky, but more often than not, the market can turn and eat you alive. Why are we preaching discipline? Because FEAR and GREED can CANCEL principle #1. Either you have not cut your losses and now you are afraid to exit the play because you can't afford to lose the money you were trading with -or- you were merely being greedy and arrogance can be deadly when you're playing in the market
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