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Real advice for Long TERM investment

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I was reading this on news.com.au. This article…is kinda..dodgy to me.

Should I sell or hold?

Generally the experts recommend that it is better to hold and sit it out.

If you sell your shares or investment in most cases you will be triggering a real loss.

Remember, at the moment it is only a paper loss and you have not physically lost anything yet.

If you sell, as well as making a real loss you then have to find somewhere else to put your money.
……
This could mean you not only triggered a loss when you sold but you might also miss out on the share price rebound and have to buy in at higher prices.

Full crap here

Well, what do you think about this piece of ‘advice’? I thought it was “awesome”… :lol:.

The real advice the author is trying to say is…in plain english…. Just keep holding your losses, just keep holding..For long term, share market will be going up. Just keep holding …uhm..yeah, just keep holding…uhm…

How the rich differ from the rest

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Article from News.com.au. Nothing really new, but it might a good reminder.

A common definition (of Rich) is a person with at least $US1 million ($1.2 million) in assets not including the family home.

“The rich are normal human beings, but with bigger wallets, and invest in much the same sectors and asset classes – property and shares – as most investors do, but on a much bigger scale,” said Bourke Shaw Financial Services principal Lawrence Orlando.

“There is no desire to have huge holdings in cash or fixed interest investments that have an earning capacity of 4-5 per cent. These asset classes are generally used as short-term parking bays,” he said.

“Wealthy people want to preserve their assets as well as keep building wealth. They are patient accumulators of assets that generate solid income. Within shares, it’s the blue-chip Australian companies with a good track record of growth and paying dividends that are most favoured.”

common characteristics of wealthy people included:

*LIVING well below their means all their lives.
*ALLOCATING time, energy and money to increasing their wealth.
*BELIEVING that financial independence was more important than displaying a high social status.
*THEIR parents did not provide financial handouts.

“They are extremely focused and passionate about their business or occupation and about earning strong income from that. They are also driven to live within their means, which enables them to invest on a regular basis,” Mr Grey said.

“I think the real answer to the question about how people become rich is – in my experience – because they have a business idea that they then turn into reality.

“They have the courage to start their business when others want the comfort of a pay cheque, they take calculated risks and they work damn hard to achieve their goals.”

…they have been through market cycles more and expect bad times. They don’t do things with their heart – they react with their head.”

Where the world’s wealthy live
High net worth individuals are those with at least $US1 million of financial assets.
North America ……….. 3.3 million
Europe …………………… 3.1 million
Asia-Pacific ……………. 2.8 million
Latin America ………………400,000
Middle East …………………400,000
Africa ………………………….100,000
Total……………………10.1 million

Full article here

Driver losing control..

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RBA bashes the banks

THE Reserve Bank has partly blamed Australia’s private banks for creating conditions that risk pushing the nation into a “deeper and more persistent slowdown”.

The central bank’s board also seriously considered cutting interest rates when it met on August 5, according to minutes of the meeting released yesterday.

At the meeting, board members expressed concern that financial conditions in Australia were “clearly quite tight, and effectively getting tighter”.

The August meeting minutes confirm that board members were worried that conditions had been tightened too far, “given there had been a significant change in borrowing behaviour, confidence was weaker, asset prices had declined and slower overall growth was in prospect”.

The minutes also indicate that there was debate on whether to cut interest rates immediately.

The minutes signal that the Reserve board intends to start cutting rates next month. They say that without less restrictive conditions “the risk of a deeper and more persistent slowing in the economy would increase”.

Full article here

Clear signal of rate cut? RBA had been working on slowing down Aussie economy in which they believed was the way to fight inflation. Now, the driver seems to be losing control of his vehicle…who to blame?

Charities feel the Subprime pain

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MORE than 100 local councils, charities, churches, hospitals and nursing homes across Australia are sitting on a $2 billion black hole after buying subprime investments structured by Wall Street banks during the bull market but which are now potentially worthless.

A document leaked to BusinessDay revealed that Lehman Brothers is managing tens of millions of dollars in funds for Victoria’s community, education and health sectors, much of it invested in high-risk financial instruments now potentially worthless.
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BusinessDay has identified more than 150 government, private and charitable institutions that bought complex financial instruments such as collateralised debt obligations (CDOs). There have been few buyers for CDOs and similar structured finance products since the subprime meltdown this time last year that sent global financial markets into a tailspin.

The $2 billion in investments identified by BusinessDay pertains only to funds under Lehman Brothers management. Lehman acquired boutique local bank Grange Securities two years ago and Grange had been the biggest player in the CDO market, having undertaken a strategy of selling the product to local government, charity and semi-government agencies.

As Lehman was acting as “agent” to most of its council and charitable clients, it not only sold the products, it also managed them for clients, and in some cases “churned” the CDO portfolios by 200%, 300% and 500%.

In other words, the bank bought and sold the products between its clients and earned commissions on the sales, according to sources close to the councils.

Full article/crap here

Interesting game played by Lehman, but that’s not the point. Sorry, but pardon me, communities, charities invested in high-risk financial instruments?  High-risk instrument, pardon me? Charities?

What’s wrong with these people? ‘Westerners’

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I don’t normally post non-trading stuff here. But recent reports , particularly in Australian medias are just so annoying. Full of craps.

More ceremony fakes unearthed

Stephen Hutcheon | August 15, 2008 – 12:08PM

The Olympic opening ceremony featured faked fireworks, a fake singer who lip synced to another girl’s voice and now it appears that the children appearing in costumes representing China’s 55 minority groups were also fakes.

Full bullshit here

The only fact  is, western medias, yes, Australian, you are one of them, trying their extremely best to dig everything, anything bad, negative about China, about Beijing Olympics.

The fact is, China presents one of the greatest opening ceremony ever and great games, great people to the world. That’s the whole point. Look at the opening ceremony, the effort, the hard work, and the performance, it is almost second to nothing. I’ve almost forgotten about other Olympics, Atlanta? Sydney? how about you? Oh Yes, I still love the Barcelona opening, that’s awesome.

Man, you are missing the point, you are blind.

I am sorry, but Trader Gav feels really pissed by these reports.

Link: Brokers monitoring your pattern of trade

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I found this post on Forexfactory today. Pretty useful post to explain how retail forex brokers manage their order flow. Before complaining about retail forex broker or spot forex market etc , read this article and understand how it works.

Pattern of Trade. You create a pattern of trade each day that is easy to follow, and with the help of technology is something that is simple to track and report. If for example you regularly trade the same currency, you use the same Lot size, and you tend to hold the trades for set periods of time, your new Order can be reliably swapped with another that is going the opposite way. Once you have an account balance at a set level, and a set pattern of trade that can be followed, your Orders will not often leave your Broker’s doors if they have an active Desk. Your trading footprint can be easily followed and monitored, and there are positives in what your Broker can do with data for you as well in providing liquidity.

Trading Bio. A trading Bio of your habits, your Trends, your Stop areas, your Take Profits, and even the length of time that you are in a trade is a great tool for a Broker to leverage in being able to set the criteria in deciding whether Orders go to the Market or not. If a Broker needs liquidity in a certain Pair, that may tip their hand in that decision as well. Technology and Automation are revealing more about each trader than most would realize, as the Broker works to get you filled at the prices that you see.

Slippage and Spikes. There is nothing underhand with a ‘Broker Big Brother’ (BBB), and nothing to worry about so long as your Broker does not have ‘unusual’ looking price spikes, holds off order fills , or creates slippage on a regular basis. Spikes, slippage and failed Orders are a reflection of one thing in general; the fact that there are no Interbank Orders on both sides of the quoted prices, there is no conspiracy in the Interbank to manipulate prices, it is just a time and a price point that for whatever reason does not contain Orders. Spikes will occur until a price point is reached that houses Orders, it is the natural flow of the Market.

Full article here.