Education -Training - Tutorials
Knowledge Financial Group - Knowledgefinancial.com = Our educational training website, blogs, articles, social media pages are designed to help everyone leverage new stratetegies, techniques and methods to increase engagement in knowledge, and to be more productive in different area in life.. '' CROWDFUNDING FOUNDATION.COM - '' ''
CROWDSOURCING - SOCIAL LENDING CLUB''
''Check Out Crowdfounding Webpage''
'' Like Us, Crowdfounding Is On Facebook.''
'Check Out Crowdfounding Blogs''wp
''Follow Crowdfunding Foundation On Twitter''
''Connect With Crowdfounding On LinkedIn .-
''Check Out Crowdfounding on youtube.'
'' Social Lending Club & Crowdsourcing's Blog.'
---------------------------
The 10 Commandments of Investment Strategy
1st Investment Strategy Commandment: Thou Shalt Not Gamble
“Expectancy” is what separates investors from gamblers. If you follow hunches, guess, take tips, or “play the market,” then you are a gambler — not an investor.. Knowledge Financial Group - Knowledgefinanca.com
Expectancy literally determines the compound growth of your wealth. It’s an inviolable mathematical rule whether you use it to your advantage or not.
=======
2nd Investment Strategy Commandment: Thou Shalt Forsaketh the Advice of False Prophets
Financial forecasts are little more than entertainment, and should never be part of your investment strategy.
=====
3rd Investment Strategy Commandment: Thou Shalt Do Thy Due Diligence
Only invest in what you understand.
If you don’t understand it, then don’t invest. One of the best ways to expand your investment knowledge is through the due diligence process. Knowledge Financial Group - Knowledgefinancial.com
Your first task in due diligence is to determine the mathematical expectation for the investment strategy so that you add only investments that increase the expectation of your portfolio. Understanding expectation includes understanding the source of returns and the assumptions underlying the persistence of returns in the future (see Commandment #1).
Your second task in due diligence is to determine the correlation of the investment strategy so that you can build a portfolio of uncorrelated risk profiles to minimize overall portfolio risk (see Commandment #5).
Your third task in due diligence is to understand what risk management strategies will apply to the investment so that you can accurately assess your risk/reward ratio
=======
4th Investment Strategy Commandment: Thou Shalt Compound Returns
Albert Einstein declared compound growth the eighth wonder of the world … and for good reason. Knowledge Financial Group - Knowledgefinancial.com
Compound growth is how the average person can attain extraordinary wealth.
It’s how lots of little things done right can grow into very big results during your lifetime.
To put compound growth to work for you requires just four actions:
Begin investing now (not next month or next year). Procrastination is the number one wealth killer. Every day wasted is another day that compound returns won’t work for you.
Invest only in known, positive mathematical expectancy investment strategies. Never risk capital on unknown or negative expectancy investments.
Reinvest all profits from your portfolio. Don’t spend the profits from your portfolio until after your passive income exceeds your expenses.
=========
5th Investment Strategy Commandment: Thou Shalt Diversify, But Not Di-Worse-ify:
Never place all thy eggs in one basket. Similarly, never spread thy eggs amongst so many baskets that your investment returns become average. Knowledge Financial Group - Knowledgefinancial.com
Thou shalt place thy eggs in a carefully selected group of baskets, each with positive mathematical expectation and an uncorrelated risk profile.
For example, don’t attempt to diversify by adding a technology mutual fund to a portfolio already concentrated in NASDAQ listed securities. This will only cause your portfolio to more closely replicate the technology averages. The two assets are highly correlated.
Similarly, don’t add another real estate asset from the same general location
The objective of diversification is to lower the risk profile of your portfolio by adding non-correlated or inversely correlated investment strategies. This allows the performance of each asset to smooth the performance of the other.
=======
6th Investment Strategy Commandment: Thou Shalt Invest Defensively
Your first objective with any investment strategy should be “return of” capital, and only after that should you concern yourself with “return on” capital. Knowledge Financial Group - Knowledgefinancial.com
arefully examine every investment strategy to determine its maximum downside risk should Murphy’s Law prevail … because eventually, it will.
Your investment strategy must have built in safe-guards that manage risk exposure and control losses to an acceptable level under both normal conditions and worst case scenarios. The alternative is to accept too much risk into your portfolio (which is a bad thing).
=========
7th Investment Strategy Commandment: Thou Shalt Invest Offensively
At first glance, offensive investing might seem contradictory to Commandment #6 . The truth is they work together synergistically to form a complete and balanced investment strategy. Knowledge Financial Group - Knowledgefinancial.com
Stated another way, you must invest offensively to seek gains while you invest defensively to manage risk and control losses. Either half of this equation without the other is an incomplete investment strategy.
Your objective as an offensive investor is to maintain and improve purchasing power.
======
8th Investment Strategy Commandment: Thou Shalt Avoid Illiquidity
Liquidity refers to the ease with which an investment can be sold and converted into cash.
Certain hedge funds, partnership interests, and real estate are examples of assets that have the potential to become illiquid. Large cap stocks and bonds are examples of highly liquid investments.
The reason liquidity is important is because the risk management tool of last resort (see Commandment #6) is a sell discipline.
If an asset becomes illiquid, then you can’t sell it, which means you can’t control the losses during adverse market conditions. Loss of liquidity equals loss of flexibility.
=========
9th Investment Strategy Commandment: Thou Shalt Respect (But Not Obsess About) Expenses=Knowledge Financial Group - Knowledgefinancial.com
Expenses are a cost of doing business.
The business of investing involves management and transaction expenses such as taxes, brokerage fees, and more.
I’ve seen people lose fortunes because they refused to pay the taxes and transaction costs necessary to exit a formerly good investment.
I have also seen people miss out on great investments because they did not want to pay what appeared to be high management fees.
Neither approach is balanced. The question you must answer is whether the expense adds value in excess of costs.
Does the management company add value (greater return) to your portfolio net of management fees and expenses, or not?
Does selling the stock add value to your portfolio by lowering risk and redeploying assets to higher mathematical expectation investments net of transaction fees and taxes, or not?
=======
10th Investment Strategy Commandment: Thou Shalt Invest in Thyself=Knowledge Financial Group - Knowledgefinancial.com
Nothing is more financially dangerous than a million dollar portfolio managed with a thousand dollars worth of financial intelligence. Your investment skills and knowledge will be reflected in your investment results.
If you want to improve your return on investment, then you must first improve your financial intelligence. That’s where Financial Mentor can help.
The best investment you can make is in yourself because nobody can ever take it away from you, and it will pay you dividends for the rest of your life. The goal of Financial Mentor’s coaching and educational products is to grow your financial intelligence so you can grow your portfolio.
Let Knowledge Financial Group - Knowledgefinancialgroup.com know how we can help you make your financial dreams come true beginning right now.
Learn the Basics of Borrowing and Investing with Peer to Peer LendingSubscribe to our page, sign up and
log in and get access to exclusive information.
'Financial Academy School - Academy Of Finance Is On Facebook''-
'' Insurance Of America Is On Facebook''-
'' Antony Real Estate - For Buyers & Sellers Is On Facebook''-
''Nurses Of America - NursingAlliance Is On Facebook''-
' 'Buyheremarketing - Inspirational Words Of Wisdom Is On Facebook''-
''Money Making Network Organization Is On Facebook''-
' 'Buy Here Market Enterprise LLC is on facebook''-
'' Visionaire Business Center: Visionairebiz is on facebook'
No comments:
Post a Comment