Daily Investment Tips

I was over at Amazon online market and browsed some of the books on market Psychology. I read the reviews and the following chart sums up the psychology of the market.

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Some of the books review on Market Psychology I read were

1. Art of Contrary thinking by Humprey Bancroft Neil

2. The Crowd : A study of popular minds by Gustva Le Bon

3. Speculation as a fine art of life by Dickson G Watts

4. Why You Win or Lose : The Psychology of speculation by Fred C. Kelly

5. The Nature of Risk by Justin Marris

written by Constantine Njeru \\ tags: Amazon, Art Of Contrary Thinking, Art Of Life, Bancroft, Books Review, Books Reviews, Crowd, Dickson G Watts, Fine Art, Fred C Kelly, Humprey, Market Psychology, Marris, Psychology Books, Risk, Speculation, Stock Market, Sums

Warren Buffet is arguably the best investor in the world. Over the years Buffet has shared his ideas on investing. Most of this ideas are found in his annual letter to Berkshire Hathaway shareholders.

In this article I share some of the investment gems by Warren Buffet.These ideas can used as an investment guide to investing in stocks.

1. Buy and Hold.

This idea of buy and hold is synonymous with Warren Buffet. He buys into company’s and seems to hold the stocks forever.

2. Buy Stocks That You Understand.

Buy into companies which you understand their products and services. Warren Buffet is quoted saying “Stick to what you know. Bill Gates is a good friend, and I think he may be the smartest guy I have ever met. But I don’t know what this little things do. So I didn’t invest in Microsoft.

3. Always Have Spare cash

The reason why Buffet seems to do better then the rest is because he always has spare cash. During periods of crisis, he uses the extra liquidity to take advantage of opportunities.

4. Buy When Everyone is selling and Sell when everyone is buying.

He was quoted in 2009 saying “When it’s raining gold, reach for a bucket, not a thimble.”

5. Don’t Be Fooled By the Media Buzz / Euphoria

Charlie Munger his trusted lieutenant was quoted “avoid businesses whose futures we can’t evaluate, no matter how exciting their products may be.”

6. List down your reasons for buying a stock.

When your force yourself to write down your reasons for buying a stocks it prevents you from making dumb decisions.

7. Understand The Behaviour of the Crowd

A simple rule dictates my buying: Be fearful when others are greed and greedy when others are fearful.

8. Understand The Value in the Business

As he said in 2009 letter to investors, “In the end, what counts in investing is what you pay for a business — through the purchase of a small piece of it in the stock market — and what that business earns in the succeeding decade or two.”

written by Constantine Njeru \\ tags: Berkshire Hathaway, Berkshire Hathaway Shareholders, Bill Gates, Buy And Hold, Buy Stocks, Charlie Munger, Crowd, Dumb Decisions, Euphoria, Futures, Good Friend, Greed, Investing In Stocks, Investment Gems, Investment Guide, Lieutenant, Liquidity, Media Buzz, Stock Market, Warren Buffet

Burton Malkiel is the author of the classic investing book, A Random walk down wallstreet, his latest book is Elements of investing.

The following is an index of some of Burton Malkiel Investing ideas and investing tips.

1. Burton Malkiel Number one Investing Idea is simple – It all starts with saving. The earlier you do it the better.”
2. Burton Malkiel Advise on Buying a Bigger Home – It is not worth it. Buying a bigger homes means spending more money to service the mortgage and less money left for saving and investing.
3. Burton Malkiel Advise on managing risk – To make money you need to take some degree of risk and the way to reduce risk is by being very well diversified.The best way to go about this is to buy index funds.
4. Buy and Hold – just like many other investment advisors who started their careers in 1970s, Burton swears by the mantra of buy and hold – over the long haul the stock market will do what it’s always done: namely be in a long-term up trend.
5. Take advantage of tax efficient retirement funds.

written by Constantine Njeru \\ tags: 1970s, Burton Malkiel, Careers, Degree Of Risk, Elements, Index Funds, Investing Ideas, Investing Tips, Investment Advisors, Long Haul, Managing Risk, Mantra, Money, Mortgage, Random Walk, Retirement Funds, Stock Market

Gold is hot at the moment. Gold is up a whooping 84% in the last 3 years. The gold investors who so it coming have made some serious money.

There are many reasons as to why gold has risen this high, one is the idea that gold is a safe haven. There is belief that the bailouts of the last 2 years will lead to inflation which causes devaluation of currencies and the only protection against all this is gold.

The idea gold is a safe investment goes back to medieval times. A safe investment means you cant lose your money. But the truth is you can lose your money in gold. What is needed is a change in sentiment and people who bought gold start taking their profit. The gold price trend will be in a reverse gear.

Risks of Investing in Gold

In a Business week interview Susan C. Elser, of Elser Financial Planning Indianapolis gave a good detailed analysis on the risk of gold investment,

Unlike other commodities, gold has few industrial uses. Unlike businesses owned through the stock market, gold earns no profits and doesn’t pay out dividends. Unlike bonds, no one pays interest to holders of gold. And, unlike insured bank deposits, there is no guarantee of your principal investment.

“There is no downside protection on investing in gold,” Elser says.

written by Constantine Njeru \\ tags: Bank Deposits, Business Week, Devaluation, Dividends, Downside Protection, Financial Planners, Gold Commodities, Gold Investment, Gold Investors, Gold Price, Inflation, Investing In Gold, Medieval Times, Price Trend, Principal Investment, Safe Haven, Sentiment, Serious Money, Stock Market, Susan C

If your strategy for making money from greece financial turmoil was shorting Greece bank shares, you are to late.

The latest news from Greece is, Greek regulators have announced a ban on short-selling on Greece stock market, following steep falls in bank shares.

The reason why the banks are targeted is because they are the biggest buyers on greece debt. If Greece defaults, the banks will be hit with huge losses.

Since Greece has banned any short selling on Greece stockmarket, investors should look at international banks that might be carrying Greece debt.

written by Constantine Njeru \\ tags: Financial Turmoil, Greece, International Banks, Investors, Latest News From Greece, Losses, Making Money, Reason, Regulators, Selling Shares, Selling Stock, Steep Falls, Stock Market, Stockmarket

2009 has to be the year of commodities. If you are a follower of trend following you must have made lots of cash by trend of gold, Silver & Platinum.

Look at this 2009 Price trends of this metals

2009 Gold Price Trend – up 34%

2009 Silver price trend – up 63%

2009 Platinum price trend – up 56%

2009 Palladium price trend – up an impressive 98%

If your mind was focused on the falling prices of real estate & non-starter stock market recoveries, you might have missed this commodities bull.

Should investors jump in? No! I don’t think just because this metal commodities have done well in the past they will continue doing well.

Strategy for making money in Metal commodities.

Whatever goes up, eventually comes down, one strategy is to focus on shorting the metals or sell the futures contract.

Strategy two, only for the seasoned pro, if you know how to play the speculation game keep buying the futures contract.

written by Constantine Njeru \\ tags: Amp, Contract Strategy, Follower, Futures Contract, Game, Gold Price, Gold Silver, Investors, Making Money, Metal Commodities, Metals, Palladium Price, Platinum Price, Price Trend, Price Trends, Real Estate, Silver Platinum, Silver Price, Speculation, Stock Market