Investing

            Recently, I am reading a book about investment. There is a lot of knowledge about investment that I can gain by reading this book. 

            To be a good investor firstly you have to differentiate between an inventor and a speculator. An investor often takes a long term view that sees the market price of a company that grows and matches the true worth of the company. In addition, value investors have the self-discipline and patience to see to the whole investment process to achieve their financial goals.

            However, a speculator takes short term view because it does not really consider the fundamentals of financial instrument. The change in market price is not sustained if it is not supported by its fundamentals in the long run.

            A true investors need to understand that stocks are also called “securities” for a reason. As Mr. Benjamin Graham said, each security represented a real company and that company had a value, just like a house would have an appropriate value. This factor can differentiate between a value investor and a speculator. A value investor looks at a company’s value whereas a speculator looks at the market price.

            Moreover, value investor uses the fundamental analysis which involves qualitative and quantitative studies when do the valuation of a company. Other than that, a value investor is making fact based and informed decision on an investment he knows well. Thus, he can minimize his risk by getting a better picture of the company.

            In conclusion, to be a good investor one should avoid the thing that a speculator have done and start follow the good attitude of the investor.

The factors of ups and downs in currency

As we know, nowadays our country Malaysia is having a tough time due to currency reduction. Ok. Firstly, I like to share something about currency where basically the values of currency are being measured by comparing it with foreign currency. Yeah…usually currency in this world will compared the value of currency with United State dollars. This is because; United State dollars are being used widely in this entire world for international trading.

Every currency have it value beside it also have other function such as medium of   converter and saving value. However, it functions as saving value causes it be an assets. The value of currency had been decided by the demand and supply of the currency itself in the market. If occur any demand in export transaction from Malaysia to other countries so the importer will definitely need our money to make the payment and it will lead increase in demand for the currency if there are fixed in supply for the currency and vice versa.

Other than that, the demand of the currency can occurred because of its function as assets. It will be used in investment where investment can be divided into two which are long term and short term investment. The example of long term investment is when the foreign investors want to do the investment in Malaysia. Contrarily with short term investment where it get the profit from the changes in the rate of interest and changes in share market.

In addition, Bank Negara also play it role due to balance the currency. How Bank Negara play it role??? Bank Negara will used international reserve by decreasing it and the amount of currency in market will decrease. Bank Negara buys “Ringgit Malaysia” with international reserve. Thus, the value of “Ringgit Malaysia” will increase compared to United State Dollars because the supply of “Ringgit Malaysia” decrease in the market and vice versa.

So, that all from me and I hope you all can gain knowledge from this sharing.