Tuesday, February 26, 2008

Stock and Options Investing

I have been exploring other alternatives of earning money. After reading books that advise on earning separate streams of income, I have chosen on investing in the market as another way to earn money. With the recent re-structuring at the office, I think this is a good move. I guess this is the predicament faced by everyone all over the world with the trend on outsourcing and globalization. So I have invested in the local stock market: modestly buying unit trusts, REITs (or Real Estate Investment Trusts), ETFs (or Exchange Traded Funds) and directly buying specific stocks following fundamental and technical analysis but following the principles of value investing. I followed the view expressed by people like Benjamin Graham and Warren Buffet. I have also practiced diversification and possess a modest portfolio with investments in country funds (Malaysia, Japan, Singapore and Philippines) as well as stocks in China (corn) and shipping companies, as well as infrastructure investment trusts and food companies.

The recent volatility in the stock market have affected me but overall I am not in bad shape. I think the key is to have a long term view. Recently, I have begun to explore and study other instruments of investments such as currency and options although I have not taken the plunge. I hope to increase my financial literacy by exploring other alternatives although I have to be careful having lost some money many years back in currency trading. So I have begun to read books by people like George Soros and Nicolas Taleb who are both engaged in financial trading and investments. I also read books about well-known traders (as against investors) who have made money speculating in the stock market. The better books are of course by Soros and Taleb who provide a philosophical framework with regards to investing to prevent risky decisions. A good start before undertaking riskier ventures which may cause you to lose money.

So I am now studying other profitable but riskier ventures after attending an introductory seminar on options last Saturday. The speaker was very good with a PhD in Finance and writes good articles. He runs a well-regarded seminar locally and seems to know his stuff. He paints a picture that investing in options is not difficult and people can earn money very easily. I resisted to attend his rather expensive course and prefer to educate myself on my free time by reading books, researching the Internet and practicing in websites that offer free tools to invest. So I would rather embark on a self learning phase to be a knowledgeable investor and read books by Soros, Taleb and others are a welcome companion in this journey.

Life in the office has proceeded but with a sword over our head as we await the Best and Final Offer (BAFO) from the outsource. The recent rumor is that we will be paid our package, plus a job offer from the outsource agent to work with them with a joining bonus. This sound too good to be true. After serving more than decade with the company, this is a good offer for me. Although I also like the prospect of being transferred to another country hopefully, China but the recent news is that the option to transfer no longer exists and only alternative left is to work for the outsource or get the money and look for another job in another company. So the coming change is imminent and one should be prepared for it. So I am widening my knowledge base by increasing my financial literacy in case a job opens in the financial sector - actually one of the growth areas around here.

Preparing for change is really something difficult but I have accepted the challenge by enrolling myself in all sorts of lessons. I have joined a gym club last month and have been exercising to keep my self strong and fit for the coming changes. I have joined a yoga class yesterday and engaged a personal trainer for 10 lessons. Working out in the hi-tech and popular gym is a new experience for me. Likewise I have also started guitar lessons every Sunday morning and a good way to keep me mentally fit. So at 44 year of age, I am re-inventing myself to adjust to the changes brought about by so-called forces unleashed by globalization, outsourcing and what have you..

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