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Strategies & Market Trends : Analysis Class for Beginners -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (1156)	7/16/2000 9:38:29 AM
From: Arthur Tang	Respond to of 1471

Back to fundamentals of investment or financial planning? Planning takes place first, which is how much money you have and will earn in the future. How much money you will need to spend in the future. This puts you into the concept of strong hand or weak hand in investment. If you don't need money unexpectedly then you are a strong hand. Whether you do long term investment or a mixture of both short term and long term is planned first. Once the planning is done. You have the task of investing in a theme. There are many instruments to invest in; you could be too diversified, or you could put all you eggs in one basket. Hedge fund is to control risks, but it can be more risky because of too diversified investment. Value investment is safe but return maybe small, due to obsoleting assets. Index fund is an investment on the economy, some hopes that economy is based on supply side monetary control. Supply side old economy can best perform about 3% compounded based on population growth. If you use index fund for demand side new economy growth, then you have to invest in technology stock index where obsolescence, replacement and recycling rule. So, a theme will be developed as you choose your field of investments. I hope that before we foolishly invest based on momentum in the market; that we develop concepts of planning and themes of where the money should be put. Daytraders of today, watch out only for technical imbalance and depend entirely on rumor mills; watch out. Too much diversification is risky indeed. With the info on the web, themes can be searched and researched to your heart's desire. But valuation of management and performance depends on your own skills of analyzing how a company makes money and how much will the future earnings be? Long term investment can be destroyed by one large investor buying from one greedy market maker shorting a large volume of one stock. Daytrader investment can be destroyed by a slight overbought or oversold. Short term investment can be destroyed by the wrong kind of news in the economy or government monetary policy. What planning and what theme of investing do you have now. I am investing in companies that I can turn around, by working with the management through message boards at arms length.