Investing in the Stock Market

I am reading up on finance books and also on investing in the Malaysian stock market. Though I have already opened an online trading account with Public bank last year, I still dare not trade yet for lack of knowledge. Now, as I read more books on investing and financial ratios like ROE or Return on Equity which measures profitability or PE ratio for Price Earnings Ratio and Debt Equity Ratio, etc. You also need to know how to calculate intrinsic value or book value of the share in a company so that you don't over pay and buy at a discount, preferably below 2/3 its actual price.

Buy Property to Beat Inflation

If you have disposable income and savings in the bank, it is better to invest in properties than to park your money in Fixed Deposits or put in the savings account. Using the rule of 72, if the inflation rate is 4% per year, then it takes 72/4 equals 18 years for your money to become half its value. Prices keep increasing and the cost of living keeps rising due to inflation. Hence, it is better to invest in properties to get rental income and to get capital appreciation as time goes on.

For instance, if you buy a property for $160,000.00 and rent it out for $800 a month, your returns would be 6% compared to putting it in the Fixed Deposit for only 2.75%. Just my 2 cents.

Gold represents the ultimate payment worldwide

Gold is accepted worldwide and represents the ultimate payment system anywhere in the world. It is a much sought after precious metal that is used for jewellery, space technology and as numismatist gold bullion coins. Banks prefer to deal with gold than paper money of which the value can be eroded due to rising future inflation. So, if you have extra cash to invest, it is better to buy gold coins and keep them in a safe place. In times of war, paper money can become useless overnight just like the Japanese banana money that was printed in abundance during the Japanese occupation in Malaya. However, when the British return, the banana paper money became worthless overnight. It is named so because of the picture of the banana tree on the paper notes.

Got more than RM1k from interests of my Government Bonds

Government bonds are also known as Treasury bills. The interests that you earn from government bonds are known as coupons. Yesterday, I received more than RM1k that was banked into my Public Bank account for the coupons that I received from my 3 government bonds, namely Sukuk, 1 Malaysia and another government bond of which I have forgotten the name. The coupon rate is 5% and paid either monthly or quarterly. Treasury bills pay more than the standard Fixed Deposits in banks. Hence, it is a wise move to buy some government bonds to get better returns for your income. Make your money work for you and not the other way around.

A Brilliant Company

I have been reading books on the stocks and to learn how to interpret financial reports in the newspapers. Also, I have recently open an online share trading account with Public Bank but am not in a hurry to trade yet until I know all the facts and figures and how to make money from the stock market. It is important to know how to read the charts and predict bull runs to make a gain. I plan to be a fundamental analysis investor or long term investor and not short term investor or also known as technical analysis investor.

There are ways to create alternative energy from waste. This is a brilliant idea that not many people are aware of. You might like to know that a company by the name of N-Viro International Corporation develops and licenses its technology to municipalities and private companies. Their patented processes use lime and/or mineral-rich, combustion byproducts to treat, pasteurize, immobilize and convert wastewater sludge and other bio-organic wastes into biomineral agricultural and soil-enrichment products with real market value. The company has generated sales in excess of $40 million dollars, since its initial public offering in October of 1993. With this huge share market capitalization, no wonder investors are ever ready to put in their money and faith in this brilliant idea and trust this company to deliver more profits. Their web site is at http://www.nviro.com where you can browse for more details.