Wednesday, 27 February 2008

Are Fixed Deposits risk-free instruments?

I have been busy meeting lawyers, consultants, advisers and investors regarding my Fund for the last one week. I spoke to 2 individuals who always put their money into fixed deposits and the most often reason cited is that fixed deposits are 'risk-free'. Frankly are FDs really risk free? To me, putting money solely in FDs is actually very high-risk. I have not put money in FDs for a long time and in fact, i always offer to pay the FD rate to anyone who wants to 'loan' me their money.

If you are someone who aspires to be financially free, then putting $ into FDs will not lead you to financial freedom. With inflation at 6% last year and FD rate at 2% (figuratively speaking), you are actually losing 4% per annum in terms of your purchasing power. To me, putting money in FD is a high risk strategy if the inflation rate is higher than the FD rate.

In my personal opinion, FDs should only be part of your asset allocation. One should invest a portfolio of different asset classes like properties, commodities, stocks, bonds, cash etc but having said that, one must know the risk-return profile for each asset class and the investor must know his or her own risk appetite and profile so that the most appropriate portfolio can be structured.

Take care and happy investing.

Friday, 22 February 2008

Yongmao Allocation Result

Yongmao closed at 46 cents from its IPO price of 35 cents (+31%). Not a bad debut at all. It goes on to show that if the valuation is reasonable, the IPO debut will still be well supported. Anyway, my application was unsuccessful. :) Good for those who have gotten it. On closer look at the allocation result, it seemed that those who applied for 100 lots will stand a better chance of getting the shares than those who applied for 500 lots. Better luck next time :)

Monday, 18 February 2008

A new office

Today is my first day at my new office. I have started a fund management company with a few "sleeping" partners and i spend the whole day fixing up my laptop, printer and packing my tables. Basically, I am on my own now and it is quite a different "experience" doing everything myself but i somewhat enjoyed it. While i have given up a huge chunk of my "fixed salary", i gained time and freedom as this is my own business now. After all, i used to have an IT department to take care of my computing needs, but now i have to even go down to Funan to buy one printer cable. Apparently, the cable is no longer included with the purchase of the printer! :(

I applied for 501 lots of Yongmao. Lets see if this IPO is worth the effort.

2Y Capital Fund

2Y Capital Fund was officially launched on the auspicious date of 18.02.2008 at 8.18 am (hahaha) and I hope that through the sharing of my views on trading and investing, you will be able to draw your inspiration and seek your own path to financial freedom. There is no short cut to financial freedom but the day will come if you plan for it constantly. I was "lucky" in the sense that my financial freedom came approximately 10 years after i started work but I always believe that luck will favour those who are prepared and those who seek for financial freedom.

2Y Capital Fund is a fund that is managed by me. The Fund invests in pre-ipo companies as well as trade in listed shares, futures and forex. I will share the investments and trades made by 2Y Capital Fund and hopefully through the sharing, it will be able to help you in one way or another.

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