ACG Advisors

the best person to manage your investment funds in these uncertain times?

2012-02-11T07:17:00.001+08:00

why does interest rates varies among issuers?

2012-02-11T06:59:00.000+08:00

Consider both the issuer's credit risk and duration of the note

ACG Advisors now on Twitter

2012-02-05T06:48:00.000+08:00

follow me on twitter

@alijeffty

The cost of government borrowings determines the interest of your time deposits

2012-02-05T06:46:00.000+08:00

a credit upgrade will lower the cost of government borrowings, this would placed a downward pressure on consumer saving/lending rates

why the USD will remain strong

2012-01-29T05:52:00.000+08:00

the USD Index

2012-01-29T05:49:00.000+08:00

should i switch my equity fund to a fixed income fund?

2012-01-29T05:47:00.001+08:00

getting in and out of the market can only make sense if we can time it perfectly, missing just the best 10 days out of 261 will cut earnings by as much as 184%!

Now Showing!

2012-01-29T05:37:00.000+08:00

please get in touch with your

Insular Life Financial Advisor

for schedules and venues

New Learning Series!

2011-10-23T07:09:00.000+08:00

October 28, 2011, 12/F Insular Life Makati

at 1:30 in the afternoon

To lend or To own?

2011-10-15T06:25:00.002+08:00

The Dow at 600,000 level?

2011-10-15T06:19:00.000+08:00

Budgeting Ideas

2011-10-09T07:38:00.000+08:00

New Learning Series!

2011-10-09T07:24:00.000+08:00

October 14, 2011 - 1pm

12/F , Insular Life Makati

Steve Jobs

2011-10-07T07:25:00.000+08:00

Is the "Gold Rush" over?

2011-09-24T08:09:00.000+08:00

September 5, 2011 - $ 1,900.30/ounce

September 20, 2011 - $ 1,803.20/ounce

September 23, 2011 - $ 1,644.00/ounce

Down $159 from 9/20 (8.8%)

Upcoming Talk for PIFAAP - October 7, 2011

2011-09-15T07:18:00.000+08:00

For more information/update :

http://www.pifaap.org/default.aspx

thoughts on inflation 4

2011-09-03T07:02:00.001+08:00

thoughts on inflation 3

2011-09-03T07:01:00.001+08:00

thoughts on inflation 2

2011-09-03T07:00:00.000+08:00

thoughts on inflation 1

2011-09-03T06:59:00.000+08:00

IL SVUL Update

2011-09-03T06:49:00.000+08:00

Protect your hard earned money through Insular Life's IPO

2011-07-31T18:55:00.000+08:00

Talk to your Insular Life's Financial Advisor for more details

How Hyperinflation Will Happen In America

2011-07-19T08:05:00.000+08:00

A slight but sudden rise in the price of a necessary commodity...

One day—when nothing much is going on in the markets, but general nervousness is running like a low-grade fever (as has been the case for a while now)—there will be a commodities burp: A slight but sudden rise in the price of a necessary commodity, such as oil.

Insular Life's IPO - available soon

2011-07-16T09:40:00.002+08:00

Insular Peso Optimizer

A 5-year, single premium, structured variable unit-linked investment product that combines life protection, capital-back guaranteed if held to maturity and unlimited upside potential through exposure to global energy and agribusiness market.

Key Numbers:

Starts at Php 250K
5-year term
Minimum 105% maturity value plus unlimited upside potential
125% Life insurance on GIO (subject to certain limits)

FREE INVESTMENT FORUM

email your contact details to acg@acgadvisors.net

Listed company profits up by 22.2 percent in 2010

2011-06-06T04:38:00.000+08:00

FIRMS listed on the Philippine Stock Exchange (PSE) grew profits by more than a  fifth last year, slower than the 80-percent growth registered in 2009, although that period was boosted by big-ticket asset sales and was compared with a lower base in 2008 which bore the brunt of the global financial crisis.

In a statement released over the weekend, the PSE said combined net incomes of listed firms hit P440.72 billion in 2010, compared with P360.63 billion in 2009.

Earnings of mining and oil firms alongside holding companies led gains last year, reflecting the uptick in economic activity, partly buoyed by election related spending in the first half of the year.  

http://www.businessmirror.com.ph/home/economy/12050-listed-company-profits-up-by-222-percent-in-2010-says-pse

PHILIPPINE ECONOMY POST A MODEST 4.9 PERCENT GDP GROWTH

2011-05-31T05:07:00.000+08:00

Underspending by the government and the slowdown in global trade constricted the economy to a lower growth in the now 2000-based GDP of 4.9 percent in the first quarter from the election stimulated 8.4 percent last year. The industry driven growth benefited from the sustained growth of Manufacturing supported by Other Services, Real Estate, Renting and Business Activities, and the recovery of Agriculture but tempered by the lackluster trading activities and the second consecutive quarter of decline in Public Administration and Defense and Compulsory Social Security which used to be referred to as Government Services.

http://www.nscb.gov.ph/sna/2011/1st2011/2011qpr1.asp

Sales program for financial planners - Available July 2011

2011-05-22T04:59:00.000+08:00

without financial goals..

2011-05-22T04:54:00.000+08:00

IF WE EXPECT THE DOLLAR TO WEAKEN FURTHER, HOW SHOULD WE INVEST IN A DOLLAR DENOMINATED INVESTMENT?

2011-05-22T04:47:00.000+08:00

For investors with existing dollar investments (BSP figures: around $20B in FCDU accounts), a weakening Dollar poses a real risk to their dollar investments, an interest earning of 0.25% to 3.0% today may not be enough to offset the currency loses if for example the peso strengthen further to 40 (+8% from current levels). $10,000 at Php 44 today is equal to Php 440,000, if the $10,000 earns 0.25% it would be $10,025 one year from now, if FX then is 40 it would only be worth Php 401,000. (a peso loss of 8.86%).

The only way is protect dollar investments today is to HEDGE it in a commodity based dollar asset (oil/gold/other precious metals) as its dollar price will go up if the dollar continues to lose value.

For example OIL: The Saudis as one of the major oil producers do not have the dollar as its native currency, if the dollar weakens they would demand more dollars for the same amount of oil and this would cause the price of oil to go up, a Filipino investor invested in oil assets would be in the best position to capture this price increase effectively negating FX losses if the peso appreciates.

WORLD BANK SAYS GLOBAL ECONOMY JUST ONE SHOCK AWAY FROM FOOD CRISIS

2011-05-22T04:41:00.000+08:00

Bloomberg News, AP

WASHINGTON—World Bank president Robert Zoellick said on Saturday the global economy is “one shock away” from a crisis in food supplies and prices.

Zoellick estimated 44 million people have fallen into poverty due to rising food prices in the past year, and a 10 percent increase in the food price index would send 10 million more people into poverty. The United Nations FAO Food Price index jumped 25 percent last year, the second-steepest increase since at least 1991, and surged to a record in February.

Food price inflation is “the biggest threat today to the world’s poor,” Zoellick said at a press conference following meetings of the World Bank and the International Monetary Fund (IMF). “We are one shock away from a full-blown crisis.”

“For most commodities, stocks are relatively low,” he said. “You have one other weather event in some of these areas and you really take a danger zone and start to push people over the edge.”

Zoellick said he opposes export bans that nations use to depress local commodity prices for their citizens, lifting costs for consumers in other countries.

Farmers in Russia, once the second-biggest wheat exporter, are planting the fewest acres in four years, in part because a government export ban kept prices low, a Bloomberg survey of producers, traders and analysts showed last month. India, the largest grower after China, is mulling lifting an export ban in place since 2007 as harvests may reach a record for a fourth straight year, Agriculture Minister Sharad Pawar said this month.

Economic growth “is leveling off after a postcrisis recovery,” Zoellick said. “The question now is whether it’s strong enough to reduce unemployment, particularly in developed countries. Inflation is up in developing countries, and this could lead to overheating or asset price bubbles.”

Meanwhile, global finance ministers and central bankers concluded three days of talks late on Saturday with pledges of greater cooperation to avert another financial crisis, leaving uncertain how far they would go in changing their domestic policies in response to international pressures.

Singapore Finance Minister Tharman Shanmugaratnam, head of the IMF’s steering panel, said at a concluding news conference that all countries realized the importance of policy reform and better coordination as the global economy recovers from the economic downturn.

“Although we are in a better position than a year ago, there are significant vulnerabilities,” he told reporters. “We are still in a fragile situation. We have to be extremely watchful.”

(Bloomberg News, AP)

Enrich by Efren Cruz

2011-05-20T05:50:00.000+08:00

Relaxed, Renewed

2011-05-18T08:18:00.002+08:00

Loving, Living

2011-05-18T08:17:00.000+08:00

Ready, Responsible

2011-05-18T08:16:00.000+08:00

April Inflation at 4.5 Percent

2011-05-09T04:25:00.000+08:00

The year-on-year headline inflation increased to 4.5 percent in April from the March level of 4.3 percent, and was within the BSP’s forecast for the month of 3.7-4.7 percent. The resulting year-to-date average of 4.2 percent remained within the Government’s target range of 3-5 percent for 2011. Core inflation, which excludes certain food and energy items to measure generalized price pressures, was also higher in April at 3.8 percent compared with 3.5 percent (revised) in March. Likewise, month-on-month headline inflation went up to 0.8 percent from 0.3 percent in the previous month.

Higher inflation in April was traced mainly to the increase in inflation for transportation and communication services and fuel as prices of petroleum products continued to increase during the month. Meat inflation also went up in April, possibly reflecting post-Lent demand. Likewise, electricity rates went up due to higher transacted prices at the Wholesale Electricity Spot Market (WESM) in April. Meanwhile, inflation for fruits and vegetables went down and tempered headline inflation in April as supply amply met market requirements.

http://www.bsp.gov.ph/publications/media.asp?id=2580

End-April 2011 GIR Level Climbs to US$67.8 Billion

2011-05-09T04:22:00.000+08:00

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that the country's gross international reserves (GIR) rose to US$67.8 billion as of end-April 2011, higher by US$1.8 billion compared to the end-March 2011 GIR level of US$66.0 billion, BSP Governor Amando M. Tetangco, Jr. announced today.

Foreign exchange inflows that contributed to the significant increase in the end-April 2011 GIR stemmed from the foreign exchange operations and income from investments abroad of the BSP as well as revaluation gains on the BSP's gold holdings on account of rising gold prices. These inflows were counterbalanced by payments by the National Government (NG) of its maturing foreign exchange obligations.

http://www.bsp.gov.ph/publications/media.asp?id=2582

Gus Cosio is back!

2011-03-14T04:36:00.000+08:00

http://guscosio.com/wordpress/

Market comments

Just like most of you who follow this site, I had kept attune of the markets this past week even if I was not sharing my thoughts here. The highlight of these past 6 trading days was the continuous net foreign buying in the local market. The cumulative net foreign buying has exceeded Php 2 billion in my estimation. The question in people’s minds is why has this happened in spite of weakness in the global markets led by the U.S.

Remember that when 2011 started, the fears in our market together with the rest of the emerging markets were inflation, rotation and, later, the Middle East/North Africa tension. Have things changed much since then?

Inflation continues to be a sword hanging over everyone’s head. The Philippines was expecting February inflation to be around 3.7% y-o-y, but it turned out to be much higher at 4.3%. The prospects of further inflation worries remains high as agricultural commodities are trading at prices which are a multiple of where they were 6 months ago. As a result, emerging market countries led by China and India are raising policy rates. With the latest inflation figures, it is inevitable that the Philippine central bank would be raising domestic policy rates. The government securities market is now reflecting such increases.

Enough! by John Bogle

2011-03-07T05:01:00.000+08:00

Ethical Investing

2011-03-07T04:59:00.000+08:00

Philippine GDP highest in 34 years!

2011-02-15T06:38:00.000+08:00

Is the PSEi pricey at current levels? or will the bull market resume?

2011-02-15T06:33:00.000+08:00

If earnings catch up with the current PSEi levels, then the bull market should resume, watch corporate disclosures closely..

Meet the Masters

2011-01-28T20:11:00.000+08:00

Gus Cosio Says So...Sunday 16 January 2011

2011-01-17T16:43:00.000+08:00

After the roller coaster ride in the market in the first two weeks of 2011, it would be good to sit back and framework a market outlook for the rest of the year. The problem, however, with a very look perspective is that it does not become very helpful in our day-to-day trading activities. I will try to share my longer term view and describe how I think share prices in general will work its way out in the coming weeks. Forecasts and outlook are like are like navigation tools and a map though. Things look different when you get to the different points. The map tells you where you’re going, but it is up to you to make adjustments along the way.

Fundamentally, the things that are going for the market are:

1) sustained economic growth which are underpinned by:

recovery in the industrial and export sectors,
job growth in the BPO and services sector, and
growth in consumer spending fueled in large part by OFW remittances.

2) Low interest rates which are likely to be stable early in 2011.

3) A high level of business confidence in anticipation of infrastructure programs to be carried out by government.

4) The business cycle which has bottomed out around 12 months ago.

I think all of these will contribute to some moderate growth in companies earnings among those listed in the PSE. Undoubtedly, some companies will be benefited more strongly by the business environment particularly if real investments are going in their direction. A case in point is infrastructure which will be attracting a big chunk of foreign direct investments as well as moves from local conglomerates.

Now, that’s the long view. The near-term will be strongly affected by portfolio flows borne out of the stock selection that fund managers will be making. Here are some educated guesses.

I suspect the ones that will be in the buy list for the coming weeks would be MPI, AP, AEV, DMC, EDC and SCC. These stocks saw healthy consolidation to a point that it made people nervous. I have a hunch that many that have taken profits will be comfortable reinstating their portfolios in these stocks. I think the banking stocks should be viewed with critical perspective considering that lending spreads may be compromised a bit by low interest rates. I imagine that the banks with either a well diversified business mix or those who have a good record of profitability should be the ones leading the way in the next few weeks. I would say for value the choices will be MBT, SECB and UBP. For property, I imagine that VLL has the most to run, but LND due to the recent AGI announcement on a joint venture into the Boracay property opens up a whole new ball game for LND as they use existing property for leisure and gaming prospects.

For mining, my bets are still on NIKL and ORE. ORE may be a bit of a speculative game, but my sources tell me that at least 86 metric tons has been stockpiled and ready for shipping. If you will dabble with ORE, just do not forget that this company still has to establish a track record. That is the big RISK.

I will probably come up with my list of fundamentally sound stocks which I will choose to follow for the year. In the meantime, I sense that the January effect is now upon us. A lot of the re-balancing by foreign portfolios have been done. If there is going to be any accumulation to be done prior to 4Q 2010 earnings results disclosures, it will be in the coming days. It would be better to be long rather have nothing in your portfolios.

For more of Gus Cosio, Please Visit: http://guscosio.wordpress.com/

Insular Life's Growth Fund Initial Offering

2011-01-09T05:06:00.000+08:00

Investment Prospects in the Year of the Rabbit

2011-01-09T05:03:00.000+08:00

Available Nationwide from January 10 to February 4, 2011

Please Contact Your Insular Life Advisor

Invest your time to learn before you invest your money..

2011-01-06T04:46:00.000+08:00

Insular Life energy-linked product generates P700 million

2010-11-25T03:10:00.000+08:00

MANILA, Philippines – Insular Life energy-linked product generates P700-million Insular Life’s latest investment-linked insurance product offer, the i-Dollar Energy 5 was a best-seller. Launched last Oct. 18 and available only until Nov. 8, Insular’s i-Dollar Energy 5 was a principal-protected, five years to mature, single premium dollar-denominated variable life insurance policy that provided investment opportunities in the international energy sector through key equity indexes.

Aside from the appeal of the underlying investment asset because of growing global demand for traditional and alternative energy, the product also had a novel “look-back” feature wherein the four lowest quarterly observation values would be dropped, thus further raising the upside potential return to the investor.

Insular Life’s latest special product offering was so well-received that it generated almost $16 million, or approximately P700 million in new premium revenues. This was more than five times the target volume initially set. The response was unprecedented and eclipsed all previous sales records for the company’s limited product campaigns.

http://www.philstar.com/Article.aspx?articleId=633117&publicationSubCategoryId=66

FREE INVESTMENT SEMINAR ON NOVEMBER 26, 2010

2010-11-11T18:22:00.000+08:00

Learn the Basics of Personal Finance

2010-10-18T05:54:00.000+08:00

Dealing with cash flows, budgeting, managing one's finances, and adapting to the ever-increasing cost of living are just some of the issues that today's society is facing. That's why one must carefully plan on how to go about these issues. It involves personal financial planning, estate planning, household planning, tax planning, and making the right investments. But why worry much about these things when you can actually attend a program that can help you make the right decisions to lessen risks and minimize costs?

The Registered Financial Planner (RFP) program will provide you with a vital grounding across a broad spectrum of personal financial planning topics, from risk management to investment planning to tax planning to estate planning and many more.It is uniquely designed to provide you with a transformative learning experience.

Start making meaningful decisions now, to be able to adapt more easily to life changes. Minimize your costs and risks to feel more secure. Achieve life goals by making the right investments.

REGISTRATION DETAILS

Registration Details: Registration is a first-come, first-served basis.The minimum number of attendees for the program is 15 pax thus; RFP-Philippines reserves the right to reschedule the program if and when minimum number is unsatisfied.

Date: January 8 - February 26, 2011
Venue: Oakwood Premier Joy-Nostalg, Ortigas, Pasig City
Time: 8:30am- 12:30nn
Contact number: +632 6342204
E-mail: info@rfp-philippines.com

Insular Life launches I-Dollar Energy 5

2010-10-18T04:58:00.000+08:00

MANILA, Philippines - Insular Life has launched I-Dollar Energy 5, the country’s first structured investment-linked insurance product that enables policyholders to invest in global energy companies and take advantage in energy price increases worldwide.

I-Dollar Energy 5 is a US dollar-denominated, single premium, five-year investment linked insurance product that provides policyholders with life insurance protection, principal protection if held to maturity and exposure to strategic allocation of global energy companies.

Strategic asset allocation would be 80 percent in companies involved in non-renewable energy through the Energy Select Sector SPDR and 20 percent in renewable energy companies through the Powershares Wilderhill Clean Energy Index. Both are exchange traded funds listed in the New York Stock Exchange.

A boost to the returns at maturity is the “best of look back” feature which takes away the lowest four returns in computing for the average performance of the basket. I-Dollar Energy 5 also provides insurance coverage equal to 125 percent of the investment or the fund value, whichever is higher.

I-Dollar Energy 5 is available from Oct. 18 to Nov. 8, 2010 only for a minimum of 10 units ($1,000 per unit).

“The surging emerging market economies of China with +9.1 percent GDP growth and India’s +6.0 GDP growth) will lead the increase in the global demand for energy in the next several years. As citizens of both countries enjoy increasing prosperity, this would lead to an increase for both durable and non-durable consumer goods like the latest home appliances (requires electricity to run), new cars (requires gasoline to run) to new homes (requires various forms of energy to construct),” Insular Life senior assistant vice president for Business Development Alijeffty Gonzales said.

http://www.philstar.com/Article.aspx?articleId=621839&publicationSubCategoryId=66

Remember September 2008?

2010-10-09T05:28:00.000+08:00

As The PSEi continuously establishes new highs, i am being ask whether it is now a good time to cash in, my answer to them is the same answer i gave way back in September 2008

http://blogs.inquirer.net/moneysmarts/2008/09/

By Alijeffty Gonzales Managing Partner, ACG Advisors

It was the Black Monday of 2008. Stocks fell by nearly 9.0 percent on Monday — the worst single-day drop in two decades — after the government’s bailout plan, touted by its supporters as a balm for the current market stress, failed to pass the House of Representatives, setting off a fresh wave of anxious selling. In yet another day that has shaken the embattled canyons of Wall Street, the Dow Jones industrials fell 777.68 points after it became clear that the legislation could not muster the support it needed to pass the House. WHAT TO DO IF YOU ARE INVESTED IN THE STOCK MARKET? First, try to recall why you invested in the stock market in the first place. Did you invest in the stock market to build up your retirement fund? If you did, may I ask if you are retiring in the next two weeks? If not then I see no reason why you should even be concerned at this point.

Stock prices are a "perception", while intrinsic value is the "reality", when prices soar way above or drop way below the value, the gap must inevitably be closed in favour of value. --John R. Nofsinger, Washington State University

With regard to value, the question in my mind now is whether “PLDT” lost hoards of subscribers to justify the price drop, or did SM close down a number of malls, or has the size of the Ayala conglomerate suddenly contracted to warrant its current price level?

The Philippine market is not a direct extension of the US market! I’d like to quote one of the persons I respect and whose opinion I trust, Atty. Raul J. Palabrica who says in a recent column, “There is so much to live for in our country...” In this particular instance, US stock prices reflect a pervading sense of "fear" with the US Congress rejecting the $700 Billion bailout plan, equity investors everywhere feared that the current credit crisis would get worse before it gets better, venerable financial institutions would continue to fall by the roadside, and woe to the investor who would be left holding the bag. This basically led to a mad scramble out of the door, causing prices to drop even more.

I remember reading a statement attributed to John Maynard Keynes: he says that investors fool themselves thinking that "liquidity (the ability to sell at will)" is a positive attribute in an investment, what they don't realise is that it is impossible for investors to exit all at the same time, as these selling pressures will cause the price to fall further starting a negative feedback loop.

The question now is "would it give you more comfort to get out NOW even at fire-sale prices or can you just tolerate the "pain" of seeing the value of your stock portfolio drops and hope that it eventually recovers? In my opinion either way is wrong! You should not let the market dictate to you what to do! Prices would always go up and down. What are enduring are your goals. Remember your goals! Are you retiring today? If not, relax, sit on the sidelines and watch one of the best "learning lessons" on the financial market unfolds; hopefully, lessons learned would make us better investors in the future.

Anatomy of a Structured VUL

2010-10-03T06:20:00.001+08:00

I-Dollar Energy 5

2010-09-27T10:29:00.002+08:00

Please see your Insular Life Advisor for more details

PEAK OIL PRIMER

2010-09-22T03:43:00.000+08:00

Oil is the world's premier source of energy and is fundamental to almost every important function of modern life. It fuels 95 percent of land, sea and air transport, so the efficient movement of raw materials and goods, as well as personal mobility, is almost entirely oil-dependent. Food production too relies heavily on oil to run farm machinery and to make fertilisers, herbicides and pesticides. Oil generates 40 percent of the world's commercial energy, provides heating fuel, and drives industry and commerce. No other existing energy source can match the versatility, convenience and low cost of oil. Moreover, it supplies feedstock for many thousands of manufactured products as diverse as plastics, medicines, clothing and building materials.

Global demand for oil has increased seven-fold over the past half-century due to rapid population growth and industrial expansion. The world now consumes about 82 million barrels of oil a day. (A barrel is the equivalent of 42 U.S. gallons or 159 litres.) Demand is generally expected to continue growing at an average annual rate of one to two percent. The International Energy Agency forecasts that worldwide oil demand could exceed 100 million barrels a day by 2020. The greatest rise in demand is expected to come from developing nations. Growing transportation needs throughout the world would account for up to three-quarters of the projected increase.

Oil industry leaders acknowledge that new sources of oil are becoming increasingly difficult to find and more costly to exploit. New oilfield discoveries have been declining steadily for 40 years despite extensive exploration with the most advanced technology, and most importantly, finding giant new fields is becoming ever more rare. Recently, major oil companies have had to cut their production growth targets. In 2002, the world used four times more oil than was found from new sources. Since about 80 percent of the oil that will be necessary to meet projected needs in 10 years time is not currently in production, unprecedented levels of investment and yet-to-be-achieved technological advances will be required to balance supply with future demand.

The industry's ability to locate and recover ever-smaller volumes of oil has improved significantly but the physical limitations of the resource are inescapable. Operating experience from tens of thousands of oilfields shows that the rate of production always rises to a peak and then begins to fall off when about half the recoverable oil has been extracted. Since the world's total endowment of oil is finite and non-renewable, in due course, as new discoveries become insufficient to offset the natural depletion of existing reserves, overall output will reach its maximum limit and begin to decline.

Read more:

http://www.odac-info.org/peak-oil-primer

Annual Oil Market Chronology

2010-09-20T04:42:00.000+08:00

http://www.eia.doe.gov/cabs/AOMC/Overview.html

Association for the Study of Peak Oil and Gas

2010-09-04T06:35:00.000+08:00

The Association for the Study of Peak Oil and Gas, or ASPO, is a network of scientists, affiliated with a wide array of global institutions and universities, whose goal is to attempt to determine the date and impact of the peak and decline of the world’s production of oil and gas, due to resource constraints.

ASPO was founded by Colin Campbell in 2000. It is the most influential organization supporting the "peak oil" theory, meaning that future oil supply will be much less than commonly expected. Their studies use the Hubbert curve, devised by M. King Hubbert, among many other methods to which predict future oil availability. It is a common misunderstanding to believe that ASPO and peak oil only is about the Hubbert curve.

Geologists, energy researchers and many other scientists from the following countries are represented in ASPO: Australia, Austria, Denmark, China, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, South Africa, Spain, Sweden, Switzerland and the United Kingdom.

http://en.wikipedia.org/wiki/Association_for_the_Study_of_Peak_Oil_and_Gas

The Next Bubble? Investors Flee Stocks in Droves In Favor of Bonds

2010-08-24T04:17:00.000+08:00

From Yahoo Finance

Individual investors are fed up with the stock market. Burnt by 10 years of negative returns, two crashes, and a current economy mired with high unemployment and lackluster growth, many are throwing in the towel.

Investors have pulled $33.12 billion from U.S. mutual funds this year through July, according to the Investment Company Institute, the mutual fund industry trade group. With the exception of 2008 (height of the financial crisis), that’s on pace to be the worst year for stock funds since the 1980s, reports The New York Times.

What’s interesting is, this mass exodus comes at a time when stocks are holding up relatively well, as Aaron and Henry point out in this clip. The Dow Jones Industrial average has been volatile but is down less than 2% this year. Not exactly crash territory.

The next bubble?

Investors are fleeing the stock market in favor of bond funds. It’s happening at such a staggering rate, Bloomberg compares the flood of money into bonds to the stock market bubble surrounding the dot.com craze:

“Investors poured $480.2 billion into mutual funds that focus on debt in the two years ending June, compared with the $496.9 billion received by equity funds from 1999 to 2000, according to data compiled by Bloomberg and the Washington-based Investment Company Institute.”

Contrarian investors view this exuberance for fixed-income funds as a potential signal of the beginning of a new bull market in stocks. Plus, there could be another enemy lurking in the wings for bondholders, as Aaron and Henry discuss: If inflation takes hold, as many predict it will, bonds will get “hammered.”

http://finance.yahoo.com/tech-ticker/the-next-bubble-investors-flee-stocks-in-droves-in-favor-of-bonds-535357.html?

China Passes Japan as Second-Largest Economy

2010-08-23T04:18:00.000+08:00

SHANGHAI — After three decades of spectacular growth, China passed Japan in the second quarter to become the world’s second-largest economy behind the United States, according to government figures released early Monday.

The milestone, though anticipated for some time, is the most striking evidence yet that China’s ascendance is for real and that the rest of the world will have to reckon with a new economic superpower.

The recognition came early Monday, when Tokyo said that Japan’s economy was valued at about $1.28 trillion in the second quarter, slightly below China’s $1.33 trillion. Japan’s economy grew 0.4 percent in the quarter, Tokyo said, substantially less than forecast. That weakness suggests that China’s economy will race past Japan’s for the full year.

Experts say unseating Japan — and in recent years passing Germany, France and Great Britain — underscores China’s growing clout and bolsters forecasts that China will pass the United States as the world’s biggest economy as early as 2030. America’s gross domestic product was about $14 trillion in 2009.

Read More:

http://www.nytimes.com/2010/08/16/business/global/16yuan.html?_r=1

Looking for a safe investment? Retail Treasury Bonds Available Till August 17, 2010

2010-08-11T04:53:00.000+08:00

Retail Treasury Bonds are issued by the government and are of the same class as Treasury Bills, these are sovereign issues and are considered to be risk free.

Details:

Maturities Available: 5, 7 and 10 years

Minimum investment: Php 5,000

Coupon Rates : 5 years (5.875%), 7 years (6.625), 10 years (7.25%), paid quarterly; subject to 20% witholding tax

Banks where these are available: BDO, BPI, MBT, LBP, PNB, RCBC

Available till August 17, 2010

Download The Pinoy Financial Planning Guide, Book 1 - FREE

2010-08-03T04:44:00.000+08:00

The Pinoy Financial Planning Guide, Book 2 -

Coming out soon (still free)

Presidential Economics: What Leaders Can and Cannot Do about the State of the Economy by Russell Roberts

2010-07-31T06:15:00.000+08:00

"A President can no more stimulate the economy in the short run than you can make a child grow a foot in a week."

The Presidential campaign season is about to go into full swing. The conventions are coming, to be followed by a barrage of advertising and then almost certainly, we will have debates. Much of the focus will be on Iraq and American foreign policy, but inevitably, the economy and its performance over the last four years will play a crucial role in the campaign.

John Kerry will focus on the mediocre performance of the economy, particularly the job market, in the first part of the Bush Administration. Bush will tout the performance of the economy over the last year or so as long as the job numbers continue to be rosy through the fall. Implicit in this discussion are two strange assumptions. The first is that the President “runs” the economy. The President hardly even runs the government. He certainly cannot direct the fortunes and failures of millions of workers, managers, investors and entrepreneurs. The second implicit assumption is that the success or failure of the President depends on his ability to “stimulate” the economy, as if the economy were an engine that simply needed a different setting for its carburetor or as if it were a lazy steer that needs prodding to speed its way on a cattle drive.

Read More:

http://www.econlib.org/library/Columns/y2004/Robertsleaders.html

Is Society a Great Big Insurance Company? by Anthony de Jasay

2010-07-31T06:07:00.000+08:00

Every epoch and every culture tends to have a magic form of words, an argument-stopper that trumps contrary thoughts, contrary wishes. Throughout the Christian era, "it is God's will" sufficed to settle an issue, and in the Moslem world, much the same words still suffice to do so. During the Enlightenment, the voice of an idealised Reason took over. "Progress" had its day, as did "The National Interest". "Democracy", "Equality" and "Social Justice" are currently running neck and neck. "It is Not Healthy" is a strong contender for filtering out what must not be done, but probably nothing is now more powerful than the kneejerk rejection of anything that "Is Not Safe".

A great variety of reasons conspire to create a "safety first" culture. Many originate in one of the perverse features of modern society: that the risks, costs and benefits of a given course of action accrue to different persons. Since September 11, 2001, hundreds of millions of airline passengers have suffered delay and inconvenience and the airlines and airports were made to incur billions of dollars of extra expense to maintain pre-boarding "security". The security checks may cause an infinitesimal reduction in the risk of a terrorist boarding the plane with explosives round his waist, and possibly an infinitesimal increase of the risk that he will place the bomb in the suitcase he consigns to the luggage compartment.

Patting down millions of respectable matrons before letting them board their plane costs a great deal, causes irritation and no perceptible improvement in security. They cause neither irritation nor cost to the regulators who impose these checks at the airports. However, if they relaxed the controls, all the benefits would go to the airline industry and its hundreds of millions of nameless passengers, and none to the regulators. The passengers would not think of thanking them, nor would they have a face-to-face chance of doing so. Should, however, a suicide bomber blow up a plane after controls have been relaxed, the regulators would be lucky to escape being crucified by the media.

Read More:

http://www.econlib.org/library/Columns/y2010/Jasayinsurance.html

is Hyper-Inflation Real?

2010-07-31T06:01:00.000+08:00

Obscure book by British adviser becomes cult hit after Warren Buffett tip

An obscure book about the collapse of the German economy in the 1920s has become cult reading among leading financiers, after a tip from billionaire investor Warren Buffett.

Mr Buffett, known as the Sage of Omaha because of his shrewd investments, apparently told friends that When Money Dies illustrated what could happen today if European governments attempt to spend their way out of the downturn.

Written in 1975 by Adam Fergusson, a one-time adviser to Tory minister Lord Howe, the book charts how the German economy was ruined by hyperinflation after the Weimar government allowed public spending to run out of control.

read more:

http://www.telegraph.co.uk/finance/financetopics/recession/7883931/Obscure-book-by-British-adviser-becomes-cult-hit-after-Warren-Buffett-tip.html

Seth Godin's Blog

2010-07-31T05:49:00.000+08:00

Suggested Reading:

http://sethgodin.typepad.com/seths_blog/

Every monster has a big shadow

That's what makes it a monster.

In fact, when you look the monster in the eye, when you calmly and carefully inspect the actual monster, you discover that he's not so bad after all. It's just the shadow that's scary.

When in doubt, ignore the shadow.

The path to energy futures: the long march with pitfalls by Shellie Karabell, Brussels

2010-07-28T04:46:00.000+08:00

There is an obvious connection between energy and economic growth: cheap fuel means lower production costs. As energy consumption is on an upward trajectory -with growth in the Far East and Latin America outpacing the industrialised countries in the near term - the key to prosperity is to develop cheaper and sustainable sources of fuel to replace fossil fuels and curtail the environmentally-unfriendly carbon footprint.

..........

Even using all available sources of today’s energy, there are bound to be shortages, according to Gazprom’s Deputy Chairman, Alexander Medvedev. “Production demand in Europe, in a conservative forecast, will be half a trillion cubic metres by 2030; that’s 500-billion cubic metres a year. If you add together all the capacities of NorthStream, SouthStream, Nabuka, etc...there will still be a gap (between output and demand). So it’s necessary to invest now so nobody will fall into that gap.”

Read More:

http://knowledge.insead.edu/EBS-energy-strategy-100726.cfm?vid=454

Price Earnings Ratio of PSEi at 10.62 - BUY?

2010-07-27T05:05:00.000+08:00

God Hinting At Retirement

2010-07-24T05:19:00.000+08:00

THE HEAVENS—At a press conference Tuesday, God Almighty, our Lord and Heavenly Father, gave his strongest indication yet that he might soon step down from his post as the supreme ruler of all things.

Following a routine address during which God confirmed the recent extinction of several thousand species, the Divine Creator fielded questions regarding rumors of his possible retirement.

"I've been at this a long time," said God, ∞, the all-knowing, all-powerful being who has presided over the cosmos since forming it from sheer nothingness nearly 14 billion years ago. "And the truth is, this was never something I planned on doing forever. Lately, in fact, I've begun to wonder if I should move on sooner rather than later."

Over the past few centuries, God has on numerous occasions deflected speculation that his reign might be winding down, but his remarks Tuesday appeared to signal a shift in celestial policy.

While touting his accomplishments as the prime mover of all space and time, the Lord spoke with surprising candor about the recent struggles of his absolute dominion over heaven and earth, acknowledging that it hasn't always been easy for him to keep up with the rapid pace of modern existence.

read more:

http://www.theonion.com/articles/god-hinting-at-retirement,17747/

Getting the Most Out of Life: "The Concept of Opportunity Cost" By Russell Roberts

2010-07-24T05:08:00.000+08:00

One of the challenges of being an economist is explaining what you do for a living. People understand that one of the things a professor of economics does is teach economics. But what is that, exactly? Most presume it has something to do with investing and financial management. When I once told my seatmate on an airline flight that I was an economist, she said, what a shame, my husband loves the stock market. Hmm. I didn't tell her that other than the advantages of investing in indexed mutual funds, I know next to nothing about the stock market.

My seatmate might have profited from reading Alfred Marshall who called economics "the study of mankind in the ordinary business of life." This was the enterprise of Marshall and Adam Smith and Friedrich Hayek and Milton Friedman: they tried to understand what people do and the implications of their behavior for the society at large.

But my favorite definition of economics is a variant of Marshall's. It comes from a student who heard it from another teacher of hers: economics is the study of how to get the most out of life. I like this because it strikes at the true heart of economics—the choices we make, given that we can't have everything we want.

Economics is the study of infinite wants and finite means, the study of constrained choices. This is true for individuals and governments, families and nations. Thomas Sowell said it best: no solutions, only tradeoffs. To get the most out of life, to think like an economist, you have to be know what you're giving up in order to get something else. That's all opportunity cost is:

Opportunity cost is what you have to give up to get something.

read more:

http://www.econlib.org/library/Columns/y2007/Robertsopportunitycost.html

The Financial Planning Process

2010-07-24T05:00:00.000+08:00

If knowledge is power, then perhaps the most powerful knowledge you could have would be self-knowledge. Let's approach financial planning as nothing more than a lifelong process of updating certain aspects of your self-knowledge. While planning for and reacting to life events is often more art than science, through financial planning we can at least try to deal with the quantitative aspects of some possible scenarios and their consequences.

Navigating competently through the life stages of employment, marriage, home ownership, parenting, eldercare, divorce, retirement and ultimately death -- and all the stops in between -- requires knowledge acquired through continual self-education. The conscious management of your financial circumstances, however modest they may be from time to time, will enable you to anticipate opportunities and prepare for contingencies. This approach should give you better choices when life's inevitable events, adverse or otherwise, occur.

Let's begin by helping you determine where you are now -- your starting point in your quest for self-knowledge! Then we'll encourage you to decide where you want to be, helping you to define goals and objectives for the future. The next step will be developing a road map for getting from Point A to Point B. Then it's on to the nuts and bolts of the planning process: investing, managing risk and insurance, handling debt and credit, understanding the all-important concept of the time value of money, and planning for your retirement and your estate.

http://finance.toolkit.com/planning_guide/display.aspx?nid=c10s00d010

PSE Update on Earnings of Listed Companies - 1Q2010

2010-07-23T04:59:00.000+08:00

Opportunity Cost by David R. Henderson

2010-07-23T04:30:00.000+08:00

When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you cannot spend the money on something else. If your next-best alternative to seeing the movie is reading the book, then the opportunity cost of seeing the movie is the money spent plus the pleasure you forgo by not reading the book.

The word “opportunity” in “opportunity cost” is actually redundant. The cost of using something is already the value of the highest-valued alternative use. But as contract lawyers and airplane pilots know, redundancy can be a virtue. In this case, its virtue is to remind us that the cost of using a resource arises from the value of what it could be used for instead.

more on:

http://www.econlib.org/library/Enc/OpportunityCost.html

What is the True Measure of Wealth?

2010-07-22T21:18:00.000+08:00

My Bucket List, What's Yours?

2010-07-22T20:50:00.000+08:00

Why the Rich Gets Richer?

2010-07-22T20:36:00.000+08:00

Please take note of their portfolio allocation, data from an OECD study released 2008

5 Strategic Options in Managing Investment Risk

2010-07-22T20:20:00.003+08:00

Why stocks moves with an upward bias?

2010-07-22T04:50:00.000+08:00

Assuming that the price of one share of SM is Php 100 when it first opened in 1972
Since then SM had expanded its business nationwide (30+ malls nationwide and some overseas)
What is the possibility that the price of SM today will go back to Php 100?

Is there any reason for the PSEi to go up further from these levels?

2010-07-21T09:59:00.001+08:00

Global Ranking of Gross International Reserves - Top 10, Philippines, P.I.G.S. and Haiti

2010-07-20T04:53:00.001+08:00

Retrospective or Prospective?

2010-07-18T08:10:00.000+08:00

Insular Life's Wealth Builder Equity Fund as of June 28, 2010, its net asset value per unit (navpu) has more than doubled since inception in 2005, for existing policyholders, is it time to take profits?

a retrospective view (based on the past) will lead to a "logical" conclusion that it made sense to take profits now and wait for it to correct before going back again, but is this the right decision? When i am investing money to fund future goals, should my action be retrospective or prospective, if i assume a growth rate of 8.0% per year (prospectively) over the next several years, i am seeing the navpu to rise to the Php 3.00 level, is the current level of Php 2.06 too high already?

Will my equity fund go up further?

2010-07-18T07:54:00.000+08:00

IS IT TIME TO SELL? As the net asset value per share/unit of my equity fund reached its highest level since inception, is it now time to cash in and wait for it to “correct” downwards before going back again?

To answer this question, let us go back to the lessons of history, please observe below the chart of a major world index, much like our PSEi index it established an “all time high” towards the end of 1991, (we normally use a stock index as reference point because an equity fund invests in the basket of stocks that comprises the composition of an index), the question in the mind of most investor then is similar to what we have today, is it time to sell?

Behavioral psychologist have a term for a normal human reaction of using past experience as a basis for estimating future performance, they called it "anchoring" - in relation to the past, current levels seem high already, so it would be "logical" to take profits now and just re-enter the market when the net asset value per share/unit corrects downward.

if investors then have succumbed to this tendency, they would have lost out on the greatest bull run of the US stock market. Because as history would have shown, from a level of 3,500, it marched on to 14,000 in the next few years. (the portion enclosed in the red box is the chart shown above)

is it now time to sell?

A CALL FOR SOLIDARITY AND ETHICS IN THE WORLD FINANCIAL SYSTEMS

2010-06-03T04:55:00.001+08:00

EDITORIAL - MANILA BULLETIN , JUNE 2, 2010
(http://mb.com.ph/articles/260281/a-call-solidarity-and-ethics-world-financial-systems)

Ethics are derived from personal values and around the world, there are different cultures with different values.

Cultural values have a strong influence on the way business is conducted and as the economy expands to become truly global, it is inevitable that contradictory ethical stances will come into conflict.

In a speech before the Vatican Foundation Centisimus Annus, an organization which seeks to promote the social doctrine of the Church, Pope Benedict XVI called for ethics and solidarity in the world’s financial systems, reprimanding governments which failed to act properly in the face of speculation that hurt poor nations. Pope Benedict XVI said that the “crisis and the difficulties that international relations, states, society, and the world economies are experiencing are largely due to a lack of trust and adequate aspiration toward solidarity.”

There are many examples of what we would consider unethical business and financial practices in the world today. Paying officials for access to decision makers is a shady practice but in countries where this operates, it is a part of normal business.

The global economy has shifted the power to impact the world in a lasting way. Developing countries are eager to form partnerships with these global giants and are willing to conform to the requirements in order to do so. Making money is not wrong in itself, it is the manner in which businesses conduct themselves that brings up the question of ethical behavior. By refusing to deal with nations or businesses who engage in unethical practices, business and world financial systems can contribute to establishing higher standards.

Calling for solidarity and ethics in the world financial systems, Pope Benedict XVI is hopeful that as every cloud has a silver lining, the upside of the economic downturn is that it offers world financial systems an opportunity to lead by example and make the necessary reforms. It is a good time to dust off past financial conduct and talk about the importance of ethics.

Don't Quit

2010-03-01T18:51:00.000+08:00

"When things go wrong as they sometimes will
When the road you're trudging seems all up hill.
When funds are low and the debts are high.
And you want to smile, but you have to sigh.
When care is pressing you down a bit.
Rest, if you must, but don't you quit.
Life is queer with its twists and turns.
As everyone of us sometimes learns.
And many a failure turns about
When he might have won had he stuck it out:

Don't give up though the pace seems slow -
You may succeed with another blow.
Success is failure turned inside out -
The silver tint of the clouds of doubt.
And you never can tell how close you are.
It may be near when it seems so far:
So stick to the fight when you're hardest hit
It's when things seem worst that you must not QUIT.

7 Must Read Success Lessons from Donald Trump

2010-02-27T05:14:00.000+08:00

7 Success Lessons from Donald Trump

Focus on the Present
“I try to learn from the past, but I plan for the future by focusing exclusively on the present. That's were the fun is.”

Yesterday is buried, and tomorrow is not yet born; the only progress that can be made toward success has to be done in the present moment, so I recommend that you focus all of your energies into making the present moment as productive as possible. If you don’t, your past will duplicate itself into your future.
Fail Forward

“Sometimes by losing a battle you find a new way to win the war.”

Never fear failure, failure is the path to success. If at first you don’t succeed, then … that makes sense. Success takes time and it requires failure, through the process of failing you will discover how to succeed. Don’t fear failing, fear not giving your all.
Think Big

“As long as you’re going to be thinking anyway, think big.”

It takes no more time to think big as it does to think small. Plan for big things in your life, there’s always room at the top for the person who’s willing to think bigger. Leave "little thinking" for people who want to accomplish little things, but not you. Success begins with thinking big.

READ MORE:
http://www.dumblittleman.com/2010/02/7-must-read-success-lessons-from-donald.html

Greek Crisis Fallout: Could the Euro's Days Be Numbered?

2010-02-22T04:31:00.000+08:00

The frenzied betting by financial markets against the stability of Greek government bonds is a clear indication that many investors don't believe Athens will find a way to deal with its massive debt — at least not without an equally huge European bailout. But beyond the market speculation lies a longer-term question that is tormenting the 16 euro-zone nations: Could the Greek crisis be the beginning of the end for the common currency, just eight years after its first notes and coins were issued? Might the doubts and pressures that are driving the euro's value downward lead to the eventual implosion of Europe's most concrete achievement thus far?

The responses, of course, depend on who you ask. However, it's clear that if levelheaded economic experts are even pondering the viability of Europe's monetary union, the situation is grave indeed. "This is a very deep crisis for the euro and all of Europe because what we have is a terrible debt and deficit problem that virtually all European nations share and no collective structures to deal with any of it," says Philippe Moreau Defarge, a European affairs expert at the French Institute on International Relations. "Europe is being forced to recognize it isn't as rich or as well-organized as it thought, and faces several long, hard years of finding its way back to solid ground." (See "Greek Tragedy: Athens' Financial Woes.")

And what about the future of the euro? "I think it's quite possible we could see the euro gone in several years — or at least reduced to a currency only used by France, Germany and a few small nations keeping it alive," says Bob Hancké, an expert on European political economics at the London School of Economics. "The problem is that monetary union was never followed up by political union to coordinate budget and taxation practices and create euro-zone institutions and capacities to help member economies adapt to changes and turmoil. The result is member governments are left very few ways to deal with the current attack on Greek debt and the severe pressure that it's putting on the euro."

Investment Hurdle for Long-term Filipino Investors

2009-11-18T04:52:00.001+08:00

INFLATION!

the spirit of a true champion..

2009-11-17T05:58:00.001+08:00

Pacquiao wins big in battle of concealment

By Recah Trinidad
Philippine Daily Inquirer

excerpt..

"Now, this is not to say that a third Pacquiao was also there inside the ring versus Cotto.Far from that.

But what clearly won for Pacquiao this ultimate test of character was the hungry, unsinkable, fatherless poor boy who smiled through tears and pain while wrestling with an unwilling world for a living.

That boy showed up, a mature and unshakeable warrior, for the big fight against Cotto."

http://sports.inquirer.net/columns/columns/view/20091116-236668/Pacquiao-wins-big-in-battle-of-concealment

Incentives Matter by Russell Roberts

2009-10-24T05:30:00.001+08:00

Towards the end of the 18th century, England began sending convicts to Australia. The transportation was privately provided but publicly funded. A lot of convicts died along the way, from disease due to overcrowding, poor nutrition and little or no medical treatment. Between 1790 and 1792, 12% of the convicts died, to the dismay of many good-hearted English men and women who thought that banishment to Australia shouldn't be a death sentence. On one ship 37% perished.

How might captains be convinced to take better care of their human cargo?

You might lecture the captains on the cruelty of death, and the clergy from their pulpits did just that. You might increase the funds allotted by the state provided to the captains based on the number of passengers they carried. You might urge the captains to spend more of those funds for the care of their passengers. (Some entrepreneurial captains hoarded food and medicine meant for the convicts and sold them upon arrival in Australia.) You might urge the captains to spend the money more carefully. Shame them into better behavior.

But a different approach was tried. The government decided to pay the captains a bonus for each convict that walked off the boat in Australia alive.

This simple change worked like a charm. Mortality fell to virtually zero. In 1793, on the first three boats making the trip to Australia under the new set of incentives, a single convict died out of 322 transported, an amazing improvement.

I don't think the captains got any more compassionate. They were just as greedy and mean-spirited as before. But under the new regulations, they had an incentive to act as if they were compassionate. The change in incentives aligned the self-interest of the captains with the self-interest of the convicts. Convicts were suddenly more valuable alive than dead. The captains responded to the incentives.

Incentives matter. The most famous example in economics is the idea of the demand curve—when something gets more expensive, people buy less of it. When it gets less expensive, people buy more of it.

http://www.econlib.org/library/Columns/y2006/Robertsincentives.html

Budgeting for Lazy People

2009-10-22T05:10:00.001+08:00

By Dayana Yochim

In matters of budgeting, there are two clear camps of consumers: them, and the rest of us.

They are the people you ask to calculate what everyone owes when there are more than two of you dining out. They know exactly how much they spent on ATM fees last week, last month, and last quarter. They balance their checking accounts down to the penny. Daily.

The rest of us? Well, we swear that tomorrow, we really are going to sit down and make a budget. It's not that we don't mean it -- it's just that we have issues with following through.

The secret to setting up a budget you'll actually follow

If nothing else, remember this one simple budgeting rule: Spend less money than you make.

Now that you've memorized that line, let's fine-tune that advice. Procrastinators, you can rejoice: There is such a thing as a budget that you can stick to. What's the secret? Take every shortcut possible.

Since money advice is our full-time jobs, we've been through the budgeting process enough to spot the corners that can be cut and the steps that can be skipped. The Fool's Lazy Budget still requires some prep work (hey, we aren't miracle workers), but we've streamlined the process so that you can start seeing results right away. After all, we don't want you to set up a budget, only to abandon it a few weeks later.

The purpose of this budget is to come up with a system to govern everyday spending. We're leaving out housing, insurance, and the all-important savings categories for now.

So let's start corralling your cash flow, Fools:

Step 1: Take a snapshot of your spending

Every budget starts with sniffing out your spending habits and determining exactly where your money goes on a day-to-day basis. Don't skip this step: After all, if you don't know how much you're spending and on what right now, you can't decide where you want to spend and on what from now on.

You can do this the hard way -- tracking your spending for three months, inputting every expenditure in a 218-category spreadsheet, then spending nights poring over the data -- or you can do it the one-step way.

The one-step way it is! For those who do most of your spending on one credit card (paid off in full each month, right?) or with a debit card, review the raw data your bank provides on your monthly statement, and come up with general categories for spending areas in which the amounts you shell out make you shudder. It's even better if your financial institution provides a year-end spending summary, with your weak spots fully graphed in four-color bar charts.

If most of your spending is done with old-fashioned cash, go about your business as usual for one week -- just write down all of your expenditures. Then project the results over four weeks. Now you have a rough idea of where your dough goes. As stated above, pinpoint the big categories where your overspending occurs.

http://www.fool.com/personal-finance/saving/budgeting-for-lazy-people.aspx

questions you need to ask yourself

2009-10-21T04:41:00.001+08:00

Must Read : Predictably Irrational

2009-10-21T04:36:00.002+08:00

When we make decisions we think we're in control, making rational choices. But are we? Entertaining and surprising, Ariely unmasks the subtle but powerful tricks that our minds play on us.

for more info: http://www.predictablyirrational.com/

Philippine Presidential Elections and the Stock Market

2009-09-26T06:46:00.002+08:00

Markets can be wrong and the price is not always right

2009-08-05T17:37:00.001+08:00

By Richard Thaler

I recently had the pleasure of reading Justin Fox’s new book The Myth of the Rational Market . It offers an engaging history of the research that has come to be called the “efficient market hypothesis”. It is similar in style to the classic by the late Peter Bernstein, Against the Gods. All the quotes in this column are taken from it. The book was mostly written before the financial crisis . However, it is natural to ask if the experiences over the last year should change our view of the EMH.

It helps to start with a quick review of rational finance. Modern finance began in the 1950s when many of the great economists of the second half of the 20th century began their careers. The previous generation of economists, such as John Maynard Keynes, were less formal in their writing and less tied to rationality as their underlying tool. This is no accident. As economics began to stress mathematical models, economists found that the simplest models to solve were those that assumed everyone in the economy was rational. This is similar to doing physics without bothering with the messy bits caused by friction. Modern finance followed this trend.

From the starting point of rational investors came the idea of the efficient market hypothesis, a theory first elucidated by my colleague and golfing buddy Gene Fama. The EMH has two components that I call “The Price is Right” and “No Free Lunch”. The price is right principle says asset prices will, to use Mr Fama’s words “fully reflect” available information, and thus “provide accurate signals for resource allocation”. The no free lunch principle is that market prices are impossible to predict and so it is hard for any investor to beat the market after taking risk into account.

http://www.ft.com/cms/s/0/efc0e92e-8121-11de-92e7-00144feabdc0.html

The Investing Emotions by Kendrick Chua

2009-07-07T21:43:00.002+08:00

We all witnessed what happened last year and it was nothing we would like once again. The saying, “once is enough, twice is too much” holds very true to the stock market crash in the US as well as the Philippines.

The cycle of investing emotions is a very interesting diagram. It presents a roller-coaster scenario of our emotions and this held true. Imagine if I had sold at the Point of Maximum Risk and bought a the Point of Maximum Opportunity, I’d be retiring in Bahamas by now.

But unfortunately, I didn’t know and neither could have anybody. Even if there were some gurus that proclaimed what catastrophe we would all be facing, I doubt they were heed upon. The human emotions on this matter are just too overwhelming even for our own sake.

In investing, managing the risk utmost priority. Yes, rising stock prices (or NAVPS) elicit elation and excitement. Who wouldn’t? I still clearly remember 2007 when my mom and I greet each other by asking how the stock market performed that day. Those were the days…

But then suddenly, everything just went on a falling spree and the point at which everyone should have sold, suddenly found themselves buying more, myself included. And now the tides have turned and investors were left gasping. It’s true, at the beginning it is just anxiety, denial, then the fear turns to panic, depression and despondency. Eventually, when everything seemed to be going nowhere, stock prices suddenly goes jumping and again similar to this year.

The rally is quite impressive-33% in less than 6 months. The question in everyone’s mind if this is just a dead cat bouncing, bear market rally or a serious bull contender (we use lots of animal metaphors).

Your guess is as good as mine but rather than speculating whether the rally has enough gas or not, it is better to muster our own emotions (read The 7 Deadly Sins of Financial Planning). The worst investors always buy at the peak and sell at the trough and that’s why they are called the worst.

The best heed the wise advice of the Oracle of Omaha, Be greedy when the others are fearful and be fearful when others are greedy. Question is, did we or are we regretting at this point why we did not do some shopping last month or we did not listen to the advice of our financial advisors?

But before you jump in once again, remember to control your emotions. Use your logic instead for this one and you just might come out on top.

http://thewealthwarrior.net

THANKS TO KENDRICK CHUA

The Teacup Story

2009-06-29T17:39:00.001+08:00

There was a couple who used to go to shop in the beautiful stores. They both liked antiques and pottery and especially teacups. One day in this beautiful shop they saw a beautiful teacup. They said, "May we see that? We've never seen one quite so beautiful." As the lady handed it to them, suddenly the teacup spoke.

"You don't understand," it said. "I haven't always been a teacup. There was a time when I was red and I was clay." My master took me and rolled me and patted me over and over and I yelled out, "let me alone", but he only smiled, "Not yet."

"Then I was placed on a spinning wheel," the teacup said, "and suddenly I was spun around and around and around. Stop it! I'm getting dizzy!" I screamed. But the master only nodded and said, 'Not yet."

Then he put me in the oven. I never felt such heat. I wondered why he wanted to burn me, and I yelled and knocked at the door. I could see him through the opening and I could read his lips as He shook his head, "Not yet."

Finally the door opened, he put me on the shelf, and I began to cool. "There, that's better," I said. And he brushed and painted me all over. The fumes were horrible. I thought I would gag. "Stop it, stop it!" I cried. He only nodded, "Not yet."

Then suddenly he put me back into the oven, not like the first one. This was twice as hot and I knew I would suffocate. I begged. I pleaded. I screamed. I cried. All the time I could see him through the opening nodding his head saying, "Not yet."

Then I knew there wasn't any hope. I would never make it. I was ready to give up. But the door opened and he took me out and placed me on the shelf. One hour later he handed me a mirror and said, "Look at yourself." And I did. I said, "That's not me; that couldn't be me. It's beautiful. I'm beautiful."

"I want you to remember," then, he said, "I know it hurts to be rolled and patted, but if I had left you alone, you'd have dried up. I know it made you dizzy to spin around on the wheel, but if I had stopped, you would have crumbled.
I knew it hurt and was hot and disagreeable in the oven, but if I hadn't put you there, you would have cracked. I know the fumes were bad when I brushed and painted you all over, but if I hadn't done that, you never would have hardened; you would not have had any color in your life.

And if I hadn't put you back in that second oven, you wouldn't survive for very long because the hardness would not have held. Now you are a finished product. You are what I had in mind when I first began with you."

********
God knows what He's doing (for all of us).He is the Potter, and we are His clay.

He will mold us and make us, So that we may be made into a flawless piece of work To fulfill His good, pleasing, and perfect will.

Thanks to Paul Chia for sharing

What Your Spouse Must Know about Investing By Christine Benz

2009-06-20T05:14:00.001+08:00

Within every household, most couples divide and conquer.Maybe you do the laundry and your spouse always handles the trash. Or perhaps he's in control of all things yard-related, but you always do the grocery shopping.

Handling a household's financial affairs is another one of those tasks that usually falls to one spouse or the other. Of course, there are some couples who are equally engaged in the process of budgeting, bill-paying, saving, and investing. But in most families, those jobs are the exclusive domain of just one partner.

If you're trolling around Morningstar.com for information, there's a good chance that you're that person in your household. Perhaps you had hands-on work or educational experience with financial matters, or maybe you simply have a greater aptitude and interest in financial affairs than does your spouse.

The key risk you run in single-handedly managing your family's financial affairs, however, is that you could leave your spouse out of the loop. If something were to happen to you, would he or she know how to manage the family nest egg? And even if you expect that your spouse will have to turn to a financial advisor for help when you're gone, would he or she even know where to look for advice?

Even if you're fit as a fiddle, make sure that your spouse would know how to handle the following issues if something were to happen to you.

1. Whom to Contact

Your first step in leaving your spouse well prepared is to draw up a list of your important financial contacts: financial planners, insurance agents, accountants, and attorneys. Include their names, phone numbers, and e-mail addresses, and also provide a brief overview of what they've helped you with.

2. Where to Find Everything

After that, your next step is to delineate what assets you have and where to find them. Even if you're not an investment junkie, you're no doubt holding a number of different accounts scattered across several different financial-service providers. You may have it all straight in your head, but it could seem like a confusing mess to your spouse. Try to streamline your investment accounts as much as you possibly can. Your partner will have a far easier time managing the family nest egg if something should happen to you. Maintaining a relatively short list of investments has another positive side effect: You'll have fewer moving parts to monitor. It also lessens the chance that you'll wind up with a portfolio that behaves a lot like an index fund but costs a good deal more.

In addition to streamlining your portfolio, it also makes sense to develop a filing system that makes sense to both of you. Start by creating a folder--either paper or electronic--for each separate account, and be judicious about what papers you store in each. (Stash: Brokerage and mutual fund statements, along with trade confirmations. Trash: Annual reports, prospectuses, and marketing literature.) Once you've done that, create a master directory, listing all of your accounts and account numbers (don't forget life-insurance policies), the names and phone numbers of any individuals you deal with at various financial institutions, and any URLs and passwords you need to gain access to your accounts. Store this information in an ultrasafe place, such as a safety-deposit box or in a password-protected file on your computer, and let your spouse know that it's there.

For other ideas on handling your financial records, read this article about how to organize your financial life, and check out this column on what paperwork you can safely throw out and what you should keep. Also bookmark or print out this checklist for surviving spouses; consider using it as a guide as you prepare your master directory.

3. How You're Doing

Even if you don't inform your spouse of every investment decision you make, you should take time periodically to give him or her the big-picture view of where your finances stand. How much do you have overall, and how much of that is liquid (that is, in cash or in securities that you could easily convert to cash)? Are you on track to meet your shared goals or do you need to increase your savings rate? Deciding how much to spend each month and how much to save and invest is a basic decision for every household, and both partners should be involved.

4. Which Assets to Tap First

Some of your assets can be tapped at any time, while others may carry penalties and tax costs if your spouse withdraws the money prematurely. To prevent your spouse from making a serious and costly mistake, it pays to clearly delineate which of your assets are liquid and which are not. As a general rule of thumb, you'll want to keep at least six months' worth of living expenses in highly liquid securities, such as money market funds, CDs, or money market alternatives. If you're retired and drawing upon your portfolio for living expenses, aim for three years' worth of living expenses in highly liquid accounts.

5. Where to Go for Help

If you've been an investment do-it-yourselfer but expect that your spouse will have to seek outside help in managing your financial affairs after you've gone, it can't hurt to lay the groundwork for that possibility. Scout around for financial planners who share your investing philosophy and have served clients with needs similar to yours. For details on how to find a financial advisor who suits your needs, check out this article.

6. How to Learn More

Even if you expect that your spouse will use the services of a financial planner or advisor after you're gone, he or she will still need a basic grounding in money and investing. No, a financial book isn't beach reading, but a handful of commonsense investment books impart a lot of information in an easy-to-digest format. Here are a handful of Morningstar analysts' favorite books for those who are relatively new to investing.

http://finance.yahoo.com/news/What-Your-Spouse-Must-Know-ms-537084665.html?x=0

The Cost of a Savings Account

2009-06-15T17:23:00.001+08:00

Do you know that your savings account is losing 2.5% of its REAL VALUE EVERY YEAR?

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2009-06-14T04:34:00.001+08:00

The Joy of Less By Pico Iyer

2009-06-11T04:04:00.001+08:00

“The beat of my heart has grown deeper, more active, and yet more peaceful, and it is as if I were all the time storing up inner riches…My [life] is one long sequence of inner miracles.”

The young Dutchwoman Etty Hillesum wrote that in a Nazi transit camp in 1943, on her way to her death at Auschwitz two months later.

Towards the end of his life, Ralph Waldo Emerson wrote, “All I have seen teaches me to trust the creator for all I have not seen,” though by then he had already lost his father when he was 7, his first wife when she was 20 and his first son, aged 5. In Japan, the late 18th-century poet Issa is celebrated for his delighted, almost child-like celebrations of the natural world. Issa saw four children die in infancy, his wife die in childbirth, and his own body partially paralyzed.

In the corporate world, I always knew there was some higher position I could attain, which meant that, like Zeno’s arrow, I was guaranteed never to arrive and always to remain dissatisfied.

I’m not sure I knew the details of all these lives when I was 29, but I did begin to guess that happiness lies less in our circumstances than in what we make of them, in every sense. “There is nothing either good or bad,” I had heard in high school, from Hamlet, “but thinking makes it so.” I had been lucky enough at that point to stumble into the life I might have dreamed of as a boy: a great job writing on world affairs for Time magazine, an apartment (officially at least) on Park Avenue, enough time and money to take vacations in Burma, Morocco, El Salvador. But every time I went to one of those places, I noticed that the people I met there, mired in difficulty and often warfare, seemed to have more energy and even optimism than the friends I’d grown up with in privileged, peaceful Santa Barbara, Calif., many of whom were on their fourth marriages and seeing a therapist every day. Though I knew that poverty certainly didn’t buy happiness, I wasn’t convinced that money did either.

So — as post-1960s cliché decreed — I left my comfortable job and life to live for a year in a temple on the backstreets of Kyoto. My high-minded year lasted all of a week, by which time I’d noticed that the depthless contemplation of the moon and composition of haiku I’d imagined from afar was really more a matter of cleaning, sweeping and then cleaning some more. But today, more than 21 years later, I still live in the vicinity of Kyoto, in a two-room apartment that makes my old monastic cell look almost luxurious by comparison. I have no bicycle, no car, no television I can understand, no media — and the days seem to stretch into eternities, and I can’t think of a single thing I lack.

I’m no Buddhist monk, and I can’t say I’m in love with renunciation in itself, or traveling an hour or more to print out an article I’ve written, or missing out on the N.B.A. Finals. But at some point, I decided that, for me at least, happiness arose out of all I didn’t want or need, not all I did. And it seemed quite useful to take a clear, hard look at what really led to peace of mind or absorption (the closest I’ve come to understanding happiness). Not having a car gives me volumes not to think or worry about, and makes walks around the neighborhood a daily adventure. Lacking a cell phone and high-speed Internet, I have time to play ping-pong every evening, to write long letters to old friends and to go shopping for my sweetheart (or to track down old baubles for two kids who are now out in the world).

When the phone does ring — once a week — I’m thrilled, as I never was when the phone rang in my overcrowded office in Rockefeller Center. And when I return to the United States every three months or so and pick up a newspaper, I find I haven’t missed much at all. While I’ve been rereading P.G. Wodehouse, or “Walden,” the crazily accelerating roller-coaster of the 24/7 news cycle has propelled people up and down and down and up and then left them pretty much where they started. “I call that man rich,” Henry James’s Ralph Touchett observes in “Portrait of a Lady,” “who can satisfy the requirements of his imagination.” Living in the future tense never did that for me.

Perhaps happiness, like peace or passion, comes most when it isn’t pursued.

I certainly wouldn’t recommend my life to most people — and my heart goes out to those who have recently been condemned to a simplicity they never needed or wanted. But I’m not sure how much outward details or accomplishments ever really make us happy deep down. The millionaires I know seem desperate to become multimillionaires, and spend more time with their lawyers and their bankers than with their friends (whose motivations they are no longer sure of). And I remember how, in the corporate world, I always knew there was some higher position I could attain, which meant that, like Zeno’s arrow, I was guaranteed never to arrive and always to remain dissatisfied.

Being self-employed will always make for a precarious life; these days, it is more uncertain than ever, especially since my tools of choice, written words, are coming to seem like accessories to images. Like almost everyone I know, I’ve lost much of my savings in the past few months. I even went through a dress-rehearsal for our enforced austerity when my family home in Santa Barbara burned to the ground some years ago, leaving me with nothing but the toothbrush I bought from an all-night supermarket that night. And yet my two-room apartment in nowhere Japan seems more abundant than the big house that burned down. I have time to read the new John le Carre, while nibbling at sweet tangerines in the sun. When a Sigur Ros album comes out, it fills my days and nights, resplendent. And then it seems that happiness, like peace or passion, comes most freely when it isn’t pursued.

If you’re the kind of person who prefers freedom to security, who feels more comfortable in a small room than a large one and who finds that happiness comes from matching your wants to your needs, then running to stand still isn’t where your joy lies. In New York, a part of me was always somewhere else, thinking of what a simple life in Japan might be like. Now I’m there, I find that I almost never think of Rockefeller Center or Park Avenue at all.

Pico Iyer’s most recent book, “The Open Road: The Global Journey of the Fourteenth Dalai Lama,”is just out in paperback.

The Master Says...

2009-06-07T09:00:00.001+08:00

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