Investment Risk Pyramid

After deciding on how much risk is acceptable in your portfolio by acknowledging your time horizon and bankroll, you can use the risk pyramid approach for balancing your assets.

• An investment pyramid actually represents three levels of investment. At the bottom of the investment pyramid, low risk investment options are placed. 

• In the middle portion of the pyramid, the investment options have a greater risk associated with them. However, these investment options can give you better financial returns than the extremely low risk ones. 

• The third and the topmost portion consists of extremely high risk investment options. Though the profit from such investments can be unbelievable, you also stand at a high risk of losing your money due to volatile market conditions and overall nature of the economy. 

Personalizing your Pyramid 

Define the overall parameters of the portfolio. Each investor is different and one investor may not tolerate the same risk as another investor. Those who want more risk in their portfolios can increase the size of the summit by decreasing the other two sections, and those wanting less risk can increase the size of the base.

You must understand your goals, priorities and financial aim in your life and then decide which investment would suit you. The pyramid representing your portfolio should be customized to your risk preference.

Article sharing: Determining Risk

You might be familiar with the risk-reward concept, which states that the higher the risk of a particular investment, the higher the possible return. But, many investors do not understand how to determine the level of risk their individual portfolios should bear. This article provides a general framework that any investor can use to assess his or her personal level of risk and how this level relates to different investments.

Risk-Reward Concept
Anytime you invest money into something there is a risk, whether large or small, that you might not get your money back. In turn, you expect a return, which compensates you for bearing this risk. In theory the higher the risk, the more you should receive for holding the investment, and the lower the risk, the less you should receive.

Located on the upper portion of this chart are investments that offer investors a higher potential for above-average returns, but this potential comes with a higher risk of below-average returns. On the lower portion are much safer investments, but these investments have a lower potential for high returns.

Determining Your Risk Preference
With so many different types of investments to choose from, how does an investor determine how much risk he or she can handle? Every individual is different, and it's hard to create a steadfast model applicable to everyone, but here are two important things you should consider when deciding how much risk to take:

• Time Horizon Before you make any investment, you should always determine the amount of time you have to keep your money invested. If you have $20,000 to invest today but need it in one year for a down payment on a new house, investing the money in higher-risk stocks is not the best strategy. The riskier an investment is, the greater its volatility or price fluctuations, so if your time horizon is relatively short, you may be forced to sell your securities at a significant a loss.
  
  With a longer time horizon, investors have more time to recoup any possible losses and are therefore theoretically be more tolerant of higher risks. For example, if that $20,000 is meant for a lakeside cottage that you are planning to buy in ten years, you can invest the money into higher-risk stocks because there is be more time available to recover any losses and less likelihood of being forced to sell out of the position too early.
  
  
• Bankroll
  Determining the amount of money you can stand to lose is another important factor of figuring out your risk tolerance. This might not be the most optimistic method of investing; however, it is the most realistic. By investing only money that you can afford to lose or afford to have tied up for some period of time, you won't be pressured to sell off any investments because of panic or liquidity issues.
  
  The more money you have, the more risk you are able to take and vice versa. Compare, for instance, a person who has a net worth of $50,000 to another person who has a net worth of $5,000,000. If both invest $25,000 of their net worth into securities, the person with the lower net worth will be more affected by a decline than the person with the higher net worth. Furthermore, if the investors face a liquidity issue and require cash immediately, the first investor will have to sell off the investment while the second investor can use his or her other funds.

Sources of article: Investopedia

教育投资：孩子的未来扛在父母肩上

天下父母心，没有父母不会为孩子未来的教育操心。
孩子一出世 ，就有不少保险员来推销教育保单，到底哪一种教育保单最好呢？
孩子的教育投资，应该考虑些什么因素呢？

教育保单
保险公司推出的教育保单大同小异，最重要衡量自己当前的经济状况，决定保额的多少。预先购买总比事后追悔好，至少以后经济宽裕时还可以加保。

只要持续交保，孩子长大后，有一笔钱作为最基本的教育基金，至于他选择的深造途径，花费多少，得视家长的经济能力和他本身的欲望及学业成绩。优秀生奖学金固然能解决学杂费、生活费，同时对学生是一种推动力；不过优秀生都是万中选一的，所以父母为孩子准备的教育投资，这时就发挥了效应。

无形投资
另一种教育投资，除了金钱之外，就是行为榜样。父母以身作则，从小培养孩子良好品德和学习精神，阅读的习惯以及对知识的渴望，人际关系的建立和良好的沟通技巧，除了在学校接受正规的教育之外，在家中父母的熏陶和教化是非常重要的。

这种无形的投资，其成效比之金钱上的投资是有过之而无不及的。用几十万可以培养出一个医生，可是一个医生的医德和良心，未必是堆积起一两百万就可以塑造出来。

教育的投资，从父母开始，以身作则，精打细算；在国家格局里，栽培经济人才，也要塑造人文社会，重视精神价值。

因为，教育就是一种投资。　

Investment Risk Tolerance

An important part of investing is understanding your risk tolerance. Risk tolerance is an investor's ability to handle declines in the value of his/her portfolio. An investor's risk tolerance varies according to age, income requirements, financial goals, etc.

There is possibilities that investors might lose some money during investment.

If you can afford to lose more money, you can take bigger risks and aggressive stocks and funds, and in the currency market. However, if you cannot afford to lose a great deal of money, it is vital that you do not invest as much of it, and that you stick to more conservative stocks and funds. You may not make as impressive returns, but you will at least be less likely to run into a situation where you are financially ruined by your losses.

In order to understand your own risk tolerance, you should:

1. Look at how much money you have, and how much money you can afford to lose.

2. Can you stand to lose the money? Will you be constantly stressed about the performance of your investment?

3. Starting with a more conservative investment as they get used to the idea, and then moving to riskier investments as they earn money and become more comfortable with the investment process.

废除大专法令：叫政府太沉重？

首相署部长纳兹里最近频频扮演政府的测温器，发表一些与政府政策的主流思想相异的言论。这一次他向法新社建议政府应该废除1972年大专法令中，禁止大学生参政的条文，只能说是这一系列高姿态的又一个示范。

姑不论政治角力或政治唱戏，1972年大专法令有关条文已经是臭名昭著。如果研究它的影响，可能得出马来西亚政治生态因此而产生巨大改变的结论。从马来亚立国开始，政府就十分重视教育，以及教育的最终目的。过分重视的结果，却是以国家团结和社会和谐为由，钳制了教育的正常发展。

可以这样说，政府重视的不是通过教育塑造完整的人格，而是通过教育政策打造忠心爱国的好公民，最好当然是服从政府政策的顺民。我们有堂而皇之的“国家教育哲学”，有每年数亿拨款的教育开销，可是仍然栽培不了杰出的大学生、建设不了排名百大的国际一流大学学府、一改再改的小学课程纲要、犹豫不决的考试教改方案、反复逆转的教学媒介语闹剧。

教育是教会学习、培育德行。学习的成效彰显在个人的独立思考能力。德行的培养可从个人的气质和行为看出来。参与政治是公民的权利，政治参与需要的成熟度和丰富知识，难道不正是大学生所具有的吗？剥夺大学生在校的参政权利，就如把未经受训的羊只放入狼群，是两种情况，一样结果：你压制，他们私下进行，非正式的政治教育不完整，以致导致错误的理念和手法；毕业后，大学生投入社会，要不对政治冷感，要不过于热衷，热血澎湃，结果方法错误无辜牺牲。

我们要问自己：我从小是如何被教导的？我要如何教育我的下一代？
记住：重蹈覆辙是可悲的，趁一切来得及时力挽狂澜。


相关报道：
MSN法新社新闻

历史科与性教育：叫小学生太沉重？

 

历史将列入小学的教学科目，而根据最新的消息，副教育部长拿督魏家祥告诉法新社时这么说，从2011年起，性教育也是小学课程之一。




社会与生育健康课程：明年列入小学纲要

这门课称为“社会与生育健康教育social and reproductive-health education”，为了克服社会上日益严重的弃婴问题。

随着现代儿童越来越早熟，媒体的发达使到他们过早地接触到许多与性有关的讯息，因此正确的知识和适当的引导对于建立孩子的性价值观是必须的。

大马青少年未婚先孕和弃婴问题趋向严重，当局不得不正视这项社会课题，尤其在回教社会和传统的华人社会中，婚外性行为违反了道德或宗教价值观，更何况其导致的恶果——流产、弃婴和未足龄强奸等等，更是对身心尚未发展健全的青少年一大伤害。

 

弃婴：青少年性教育不足？

从小学生开始的相关性教育，必须是全面的、包容性的，需能建立孩子完整的性别认知和健全的性价值观，或至少打好基础；不只是在于预防某个社会课题而已。

否则，就沦为为了解决问题而将方法观念设定为课程内容，灌输给下一代；教育不是灌输，而是启蒙。

在性教育被正式宣布列为明年小学课程纲要，以及历史科也将成为小学生的必修课后，看来小学生将来的书包会更沉重，教育工作者有必要在日益增加的教学科目中，与教育的目的找到一个平衡点。

别迷失在由数字和绩效构成的教学目标中。

相关新闻：

Malaysia's first school for pregnant teenagers, an initiative directly aimed at curbing the rising numbers of abandoned babies, opened in September in central Malacca state.



相关评论：

焦点论衡：掀开我国教改面纱●林清隆

SPM历史科及格：我们要怎样的历史教育？

SPM历史科考试须及格

“教育部副部长拿督魏家祥认为，在落实2013年大马教育文凭（SPM）考生历史科必须及格，才可获得SPM文凭的同时，须检讨历史科的内容。
他说，修读历史科的目的主要是让国民瞭解先辈建国的艰辛历程，推动各族关係，使国家更为团结。
他指出，目前的中学生对历史科都不感兴趣，依及格率来看，马来文在过去可达至70%-80%，而历史科却只有40-50%的及格率，因此教育部将会进一步探讨这个问题，确保中学生能适应这项新制度。”————风云时报2010-10-24 18:51:58

学历史是为了鉴古知今，就是知道以前发生什么事，汲取教训，了解现在的时局，不再犯相同的错误。历史教育和公民教育不同，所谓的“让国民瞭解先辈建国的艰辛历程，推动各族关係，使国家更为团结。”也不完全是公民教育，充其量姑且称之为“国民团结教育”。

如果读历史读出这么一些高材生，将来也只有像副部长那样讲这样的话了。

历史教育应该教会学生正确的看待历史，教会学生什么是历史，教会学生以历史的眼光看待事物。

“一切历史都是思想史”“一切历史都是当代史”的著名论断早就告诫世人，有生命力从而有魅力的历史教育，“思想”和“现在”是万万不能缺席的。中国《中学历史教学参考》杂志主编任鹏杰在07年的一篇报告中说：克罗齐直言“历史就是思想”，李大钊则把历史思想、历史观与人生观等同，说“历史观者，实为人生的准据”，夸美纽斯亦谓熟悉历史是人生“终身的眼目”，尼采把历史分为纪念的、好古的、批判的三种，认为只有批判的历史对人生有益。无不表明，历史教育以思想见境界。

雕塑：历史书——历史教育可塑造人格

当各方人马为私利而竞逐政治资源和文化话语权时，下一代的历史认知和国家民族史观，就显得举足轻重了。

也难怪，历史科要及格一公布，就摩拳擦掌、气势逼人地要检讨、修订历史科内容了。

历史真相虽不能改，但是教育实践却能够改变思想和塑造品格，历史教育和国家的未来，必须慎重看待。

Investment Risks You Must Know (2)

6. Non Diversification Risk
Diversify your fields of investment. DO NOT put all eggs in one basket. Asset allocation and diversification can protect against non diversification risk because different portions of the market tend to under perform at different times.

7. Liquidity Risk
Liquidity Risk arises from difficulty of selling as asset. An insufficient of secondary market causes investment cannot be bought or sold quickly enough to prevent or minimize a loss when credit rating falls.
Some assets are highly liquid and have low liquidity risk (such as stock of a publicly traded company), while other assets are highly illiquid and have high liquidity risk (such as a house).

8. Gearing Risk
Gearing is borrowing to invest, or investing in leveraged assets such as installment warrants or options. Most businesses require long term debt in order to finance growth, however, the introduction of debt and gearing increases financial risk. the higher the level of gearing, the higher the level of financial risk due to the increased volatility of profits.

9. Legislative Risk
The risk that a new law or a change in an existing law by government could have a significant impact on an investment. It could significantly alter the business prospects and adversely affecting investment.
You should be aware when investing in foreign countries because countries that may often change policies and undergo political transformation are prone to legislative risk.

"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1" Warren Buffett

Investment Risks You Must Know (1)

In the investment world, risk is inseparable from performance and, rather than being desirable or undesirable, is simply necessary.

1. Mismatch risk
Trade the wrong investment products which doesn't suit with investment budget. Or investing in something that is inappropriate for your investment needs

2. Inflation risk
The risk that the rate of inflation will exceeds the rate of return on an investment. For example, if the rate of inflation is 5% over a year and the rate of return is 3%, then the investor has effectively taken a loss even though investor has made a profit in absolute terms.

3. Interest rate risk
The change of interest rate may decrease the return of investment. This may happened when current interest rate is lower than the interest rate when you invest.

4. Market risk
The value of investments may increase or decrease over a given time period simply because of economic changes or other events that impact large portions of the market. It means that your return of investment can increase or decrease at such a time.

5. Market timing risk
Market timing risk is different from market risk. Market risk affected all investor however, market timing risk is the risk that an investor takes when trying to buy or sell a stock based on future price predictions.

"Risk comes from not knowing what you're doing." - Warren Buffett

Palm Oil Advances to 27-Month High, Extending Longest Rally Since 2007

Palm oil climbed to the highest level in more than two years, extending a 10-week rally, the longest since June 2007, on concerns that supplies are not rising fast enough to meet demand.

The January-delivery contract on the Malaysia Derivatives Exchange gained as much as 4.9 percent to 3,348 ringgit ($1,084) a metric ton, the highest price since July 18, 2008, and traded at 3,302 ringgit at 4:14 p.m. Prices had advanced 26 percent in the past 10 weeks.

Edible-oil prices may increase as growth in global supply fails to keep pace with the rise in demand for a third year, with weather patterns hurting crops, according to Godrej International Ltd. Director Dorab Mistry.

Palm oil may gain to 3,300 ringgit in the next few weeks and extend gains in 2011, according to remarks Mistry prepared for delivery at the DCE oilseed conference in Guangzhou, China yesterday. Soybean oil in Argentina, the largest exporter, may climb to $1,250 a ton by December, raising his forecast from $1,050, he added in a separate email.

“We have looming supply problems in wheat, in rice, in corn, in canola, in sun seed and, above all, in soybeans,” Mistry said in his speech. “We must therefore begin to give up too many thoughts of any meaningful decline in vegetable-oil prices during 2011.”

Rainfall in Malaysia, the world’s second-largest palm-oil producer, may be as 40 percent above normal in November and December as a La Nina weather event strengthens, according to the state forecaster.

Discount Narrows

Palm and soybean oils are the most consumed edible oils and are substitutes. Soybean oil in Chicago added as much as 1.2 percent to 52.85 cents a pound, extending the 1.9 percent rally on Nov. 5 to the highest intraday level since Sept. 3, 2008.

Palm oil traded in Malaysia, closed for trading on Nov. 5 for a religious holiday, tracked the rival oil higher today as soybean oil’s gains left palm oil trading at the smallest discount in four weeks, according to Bloomberg data.

Mistry, who has been in the industry for more than 30 years, correctly forcast in March that palm oil would top 3,000 ringgit after June on lower oil palm yields, and then test 3,200 ringgit. He will make his next prediction at a conference in Bali in December, he said.


Godrej is one of India’s biggest buyers of cooking oils.

“Dorab does have some effect,” said Arhnue Tan, a senior analyst at ECM Libra Capital Sdn. said of Mistry’s forecasts.

Tightening supplies and “inelastic demand” from countries including China will extend the “crazy” price rallies this year, Tao Chen, chairman of Louis Dreyfus Commodities (Beijing) Trading Co., said at the same conference yesterday.

Chinese Imports

China’s soybean imports in the 2010-2011 marketing year may be as much as 60 million tons, according to unidentified global grain trading companies cited by the China National Grain & Oils Information Center on Oct. 25. The center’s own forecast is for purchases of 54 million tons in the year that started Oct. 1, compared with 50.3 million tons a year earlier, it said.

Supplies of soybean, palm, coconut, groundnut, cotton, rapeseed and sunflower oils will rise 3.5 million tons in the year to September 2011, according to Mistry. That’s less than the 3.8 million-ton gain he forecast on Sept. 26. Demand in the same period would rise as much as 5 million tons, he said.

An El Nino-induced drought hurt oil-palm yields in Indonesia and Malaysia, the largest producers, this year, while a La Nina-induced drought delayed planting of the South American soybean crop and hurt yields.

“Weather disturbances in the form of drought, wet springs, flooding and frosts have been more evident this year than any other year I can recall,” Mistry’s text said.

In China, palm oil for September delivery in Dalian surged as much as 4.4 percent, and closed 2 percent higher at 9,466 yuan ($1,419) a ton. September-delivery soybean oil rose as much as 3.1 percent, before closing 0.3 percent higher at 10,192 yuan.

CME Group Inc.’s January palm oil contract, pegged to the Malaysian benchmark price, advanced as much as 2.9 percent to $1,081.75 a ton, the highest level since the contract began trading in May.

Link: Bloomberg

Types of Investments: Where you can Invest your money in (2)

4. Mutual fund
Mutual funds have become extremely popular over the last 20 years. It is likely a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund. The primary advantage of funds is the professional management of your money. It is a relatively inexpensive way for a small investor to get a full-time manager to make and monitor investments. At the same time, risk is spread out by owning shares in a mutual fund instead of owning individual stocks or bonds.

5. Commodities
Commodities are raw materials used to create the products consumers buy. It include agricultural products such as wheat and cattle, energy products such as oil and gasoline, and metals such as gold, silver and aluminum. Commodities investment is a investment related to "future market" through a future contract, which is an agreement to buy or sell in the future a specific quantity of a commodity at a specific price.

Examples:
A farmer can sell a crop before it’s planted, even though he might get a better price in the future (which is where the name comes from.) If a boom in demand drives up prices by harvest time, the buyer of the futures contract wins. But if a bumper crop floods the market and prices plunge, our speculator could lose everything.

Commodity contracts typically let you control large amounts of gold, oil or soybeans with relatively little money, small price moves have a much bigger impact on your holdings. Those price moves can be extremely rapid and unpredictable, so Commodity investment come with very high risk.

6. Real Estate
Real estate investment involves the commitment of funds to property with an aim to generate income through rental or lease and to achieve capital appreciation. Real estate investments need a larger capital and longer period to generate returns.Investors also need a good knowledge of the real estate market. Common examples of investment properties are apartment buildings and rental houses, in which the owners do not live in the residential units, but use them to generate ongoing rental income from tenants.

The owner (landlord) earns a continuous stream of rent from the tenant, but is responsible for paying the mortgage, taxes and any costs associated with maintaining the property. The owner also benefits from capital appreciation (a rise in the value of the property over time). The landlord runs the risk of not finding a tenant and could suffer negative monthly cash flows, with mortgage payments and maintenance expenses still to be borne.

Types of Investments: Where you can Invest your money in

Previously we had discussed briefly the concept of investment. Now let us have a look at option of investment where we can roll our money in. Your choice of investment greatly depends on the amount of cash on hand.

1. Cash Investements
Cash Investment includes saving bank accounts, certificates of deposits and life insurance policies. Investors can benefit from the lower risk and high liquidity of cash flow in such investments. It generally regarded as one of the safer ways you can invest your cash. However,cash investments provide low interest rate and a risky option during inflation.

2. Bonds
A bond is a formal contract to repay borrowed money with interest at fixed intervals. It is like a loan: the issuer is the borrower (debtor), the holder is the lender (creditor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure. Investing in bonds consider safer than stocks, but still it has some level of risks due to fluctuation of interest rate, inflation risks, rating downgrades, and Liquidity risks.

3. Stocks

Put your money in stock market is considered as a risky move. However, the higher the risks the larger the profits. Unless you have blue chips shares on your hand, enjoy the interests every financial season, you won't be able to avoid any of the ups and downs in share market. Smart people do analysis before invest their money on certain companies, and ordinary people just follow what they heard from "intellectual" "professional" or read from the paper.

Ignorance is the taboo of investment.