The core discipline of the investment value is simply not buy cheap, but safety margin. Margin of safety means you won't lose too much if you're wrong, and to meet, make mistakes. I do, you can do. Standardised at the following two rules: 1 don't lose money). 2) To don't forget rule # 1.
My latest piece for men, I have come Con. And even in my most recent piece, to avoid investment scams and bad advice, Web Edition, I come. I mean come from those who do not come through a regular channel for investment. These are people who are trying to attract those who want something off the beaten path, for high performance or high level of safety.
But not all men con come. Some are regulars, with all the trappings of success — working for a company known. They dress well, speaks well, and they are aware of the most important trends and concerns of investors. Have seemingly well-designed financial plans of the firm production models. The smart ways of helping you meet your income goals. Everything about what it says, "we can assure the financial security for you."
Have interaction with some of these researchers (not yet ladies) in the Councils I have. (Curiously, when I was a corporate and mortgage bonds manager, the people I interacted with were much less slick. I think the bond market which tolerates people is more realistic than the purchase of shares.) Usually must bite my tongue because they are front men. Be aware of their limited bit fed by sales manager, but I really don't know much beyond that.
With the rare opportunity to speak and brinkmanship policy in the seller. I try not to. The only do if they are (as I see it). Usually, only trying to earn their bread, and there is nothing to learn from fools. However, occasionally trying to lure users into investments that are not in their interest.
I have often said that the lure of free money that brings out the worst. I believe that a key area that is the finding of the performance. I say this clearly: Wall Street can provide you with any version you like, if you don't care about the preservation of principal. Performance is the oldest scam in books.
Wall Street has a wide variety of products, performance and stress that now, because we are in an environment of low yield, and will bring more often as a result of these products. One example that I spoke of before is structured notes. I would like to talk about tonight is reverse convertibles.
An easy way to improve performance is to sell an option on your posts. The problem with this is that the choice could come into money, and you suffer capital loss as a result, often exceed the extra income "Earned."
With CBS, you have the best of all worlds. He has long been an option. If things go well, it is convertible into stock. If things go badly, you protect the downside of a bond (which can still be default, but hey, you are higher in the order of bankruptcy pecking. Perhaps you have something?). The cost of the best of all worlds is reduced performance than a nonconvertible will get to straight debt.
Reverse convertibles are the worst. The holder is short an option. When things go well, remains a bond. If things go badly, converts in stock, usually priced delivering capital loss. However, the graphic equalizer here is that if it continues to be a bond, you can get a high yield.
This is a big "If." Almost all my advice is to avoid complex products. If you can't get the performance you need through standard vanilla products that are transparent, then either your or reduce costs consume a small capital. Wall Street and insurance companies thrive on complexity, because you cannot price or to make comparisons. Play their rigged game. can you try to your skin, but simply to swim. Nicking your means win, but you still play the game, so that they can swim your again. It is like playing in a casino. the edge of the body is stable and will wipe that does not have an advantage (card counting in blackjack), but not so slowly and volatility, that players do not realize this.
Composite products are not created to do a favor, but you can cheat on average. Think about it: If you are invited to participate in a game for money, as an amateur, you want to play against professionals? I thought not. But if you feel that way, because you have purchased products from Wall Street that they know much better than you?
This goes back to my rule: don't buy what others want to sell you. Buy what you personally have been investigated and want to buy. But what if I do not understand enough to do anything with investment? Then what?
Find your friend who knows the most about investing. Ask him for his friend who knows more about investments. Repeat a third time, if necessary, but it appears to someone who can give you intelligent impartial advice. If all else fails, go to the front and take their advice. They will not harm you, although it may not help a lot.
But be wary of those who offer easy solutions. What is free is rarely cheap, as the Ferengi. Get reliable intelligent third parties in order to see your investment and avoid slick salesmen with smart products that are difficult to understand.
Bonds, personal finance, portfolio management, stocks, derivatives and structured products || Trackback |
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