| Less than 0.8% individual investors have effective | | | | have faith in it. And to me, I consider buying great |
| asset allocation for their investment. And 97.9% | | | | stocks at cheap price as the lowest risk |
| of novice investors don't even know how to | | | | investment ever. This is just like buying Berkshire |
| allocate their cash prior to investing in stock | | | | Hathaway shares at only $10,000. |
| market. In this article, I'm going to share with you | | | | Isn't that a no brainer investment decision? |
| the suggested asset allocation that I used myself | | | | However, the challenges are finding good stocks |
| for your own references. | | | | and have patient not to buy them unless the |
| I bet you must have heard someone saying | | | | share prices are "cheap enough". You can do this |
| "invest only with money that you can afford to | | | | by first identifying potential stocks that worth |
| lose". At least, this is what I'm always saying to | | | | investing. After you have shortlisted them all, try |
| myself and to all my loyal readers. Nevertheless, | | | | to determine how much each stock worth by |
| when I said so, many reply back to "how much | | | | calculating its intrinsic value. Then, buy the stocks |
| exactly?". They are hoping some figure or | | | | once the share prices are within the margin of |
| percentage that they can start applying in their | | | | safety. After all, this is what Warren Buffet did all |
| cash management. So here we go, | | | | this while. |
| Easy Money for Medium to High Risk Investment | | | | 40% Cash Reserve to Further Diversify |
| First of all, high risk investment is highly subjective | | | | If you are thinking of putting all of your hard |
| to individual risk tolerance. Something risky for me | | | | earned money into stock market, think again. The |
| might not be risky to you at all. It's depend on | | | | fact is, limiting your investment in one asset |
| your knowledge, skills and experience when | | | | classes alone; such as stock market only, can |
| dealing with such opportunities. And of course how | | | | bring disaster. No matter how good your investing |
| confident are you dealing with external factors | | | | skills and how much you have diversify your |
| that are beyond your control; such as market | | | | money into different stocks across various |
| volatility and commodity uncertainties. | | | | industries, I found it just not good enough. |
| But for me, medium to short term trading are | | | | Consider diversifying into other asset classes such |
| considered as medium to high risk investment. | | | | as real estate or maybe building your own |
| And therefore, I personally allocate "easy money" | | | | businesses as well. |
| for this activity. Easy money includes but not | | | | I prefer buying high end properties than others |
| limited to bonuses from your employer, gratuity | | | | since that market segment seems to be less |
| after you retire, or dividends from existing | | | | susceptible to economic condition. Real estate |
| investment. With money that I can afford to lose, | | | | investment is a good platform for you to |
| I can trade stocks with emotionally detached. | | | | understand how businesses works, especially your |
| 40% Cash for Low Risk Investment | | | | negotiation skills. Slowly, I venture into some other |
| You might want to apply this suggested asset | | | | businesses to increase my return on investment. |
| allocation since you can comfortably put most of | | | | From such activities, I have better understanding |
| your hard earned money into something that you | | | | on which stocks to invest. |