Indonesian Stock Market » financial education

Financial literacy vital to invest in complex environment

bullbear — Wed, 30 Mar 2011 23:31:00 +0000

Wednesday March 30, 2011

KUALA LUMPUR: Financial literacy is important to enable people to protect themselves in an environment that offers increasingly complex and sophisticated investment products.

Securities Industry Development Corp (SIDC) chief executive officer John Zinkin said some people needed to be guided on how to manage their money for savings and investments.

“They need to understand not just income and expenditure but also save, budget and invest. They have to understand the whole concept,” he told a media briefing yesterday.

Zinkin said different stages of life required different financial needs and SIDC’s financial literacy programme, Bijak Mengurus Wang (BMW), would cater to differ levels of learning.

He said the programme, aimed at creating knowledge and vigilant investors, had benefited 21,133 participants.

The programme teaches participants about smart money management, wise investing and how to spot scams.

To gauge the programme’s effectiveness, SIDC has recently engaged a third party to conduct an impact survey among 800 random participants.

The survey shows that 87.3% of the participants are now more vigilant when considering an investment, 85.8% have started implementing personal budget and 84.4% have started setting financial goals.

Zinkin said 88% of the participants had also set aside some money as force saving before spending their income every month.

More than half of the respondents have opted for automatic salary deduction facility to practice “pay yourself first”. Additionally, 46% of the participants had become investors for the first time after attending the programme.

This year, SIDC hopes to educate 5,500 people. The programme, which is free for all, is part and parcel of the overall effort by the Securities Commission (SC) to promote investor education.

For more information, visit www.sidc.com.my or www.min.com.my.

http://biz.thestar.com.my/news/story.asp?file=/2011/3/30/business/8375425&sec=business

Savers’ Impatience Hinders Retirement Goals

bullbear — Fri, 11 Feb 2011 00:10:00 +0000

Too many savers choose immediate gratification instead of taking advantage of larger long-term payoffs.

Few would argue that we have a retirement crisis in America. What people might debate is how we solve the problem.

Slowly but surely, however, researchers are producing work that offers much-needed insight into how we can reduce the severity of the problem. Case in point: A working paper just published by the National Bureau of Economic Research, on two explanations for why consumers have trouble with financial decisions.

“One is that people are financially illiterate since they lack understanding of simple economic concepts and cannot carry out computations, such as computing compound interest, which could cause them to make suboptimal financial decisions,” wrote Olivia Mitchell, the director of the Pension Research Council, and Justine Hastings, an economics professor at Yale University, in their paper, “How Financial Literacy and Impatience Shape Retirement Wealth and Investment Behaviors.”

“A second is that impatience or present-bias might explain suboptimal financial decisions. That is, some people persistently choose immediate gratification instead of taking advantage of larger long-term payoffs.”

In other words, people generally don’t much know, if anything, about money. And two, consumers — even when they are financially literate — sometimes can’t help themselves from making bad decisions. It’s the way we are wired. The lizard part of our brain overrules the more rational part when it comes to things financial. The lizard part of the brain says that the joy of spending (or not saving) today is greater than the pleasure of having a nest egg later on.

“Impatience or present bias seems to be an inability to plan for long-term consequences,” said Stephen P. Utkus, a principal with the Vanguard Center for Retirement Research. “It may be a learned trait from family and peers, or it may be inherited. There is some evidence from neuroeconomics that impatience may be related to certain brain structures.

Savers’ Impatience Hinders Retirement Goals

bullbear — Fri, 11 Feb 2011 00:10:00 +0000

Too many savers choose immediate gratification instead of taking advantage of larger long-term payoffs.

Few would argue that we have a retirement crisis in America. What people might debate is how we solve the problem.

Help Teach These Kids How to Fish

bullbear — Fri, 31 Dec 2010 23:54:00 +0000

By Chuck Saletta | More Articles

December 31, 2010 | Comments (0)

There’s an old saying: If you give a man a fish, you’ll feed him for a day, but if you teach that man to fish, you’ll feed him for a lifetime. When it comes to extending that parable to handling money, truer words have never been spoken.

Money, if not handled well, can be very fleeting. Multimillionaire athletes, celebrities, and lottery winners have all wound up broke. On the flip side, there are stories of people like Grace Groner, who managed to turn a modest income into amazing wealth through prudent long-term money management.

Good habits start earlyThere’s an enormous difference between income and wealth, and it’s surprisingly easy to have a very large income, but not be able to save or invest a bit of it. Without an investing mentality, income alone will never turn into wealth. On the other hand, as Grace Groner’s story showed, you don’t need to earn a fortune to wind up with one, if you manage what you’ve got well.

That’s an amazingly powerful message that, if it can be driven home to at-risk youth, can help them escape the cycle of abject poverty that may have plagued their families for generations. And it’s a message that needs to get through to people early, for two critical reasons:

The earlier that people understand how to manage money, the longer time they have for their little bit of cash to compound in their favor.
It’s far too easy to get trapped into financial pain in things like payday loan traps from short=term decisions made without a full understanding of the long-term consequences.

With that reality in mind, The Motley Fool has chosen Thurgood Marshall Academy as this year’s Foolanthropy recipient. The academy is a Washington, D.C., charter school whose students are drawn from an area with an average per-capita income around $14,000 per year, just about one-third of the national average. For people in that situation, every penny counts, and there’s not much keeping them from getting trapped in a state of perpetual indebtedness.

With Foolish financial training to go along with Thurgood Marshall’s mission to provide a first-class education, these students can break free from the bonds of generational poverty. In essence, the Fool and Thurgood Marshall Academy are teaming up to teach these students how to financially fish — so that they may eat for a lifetime.

Break the bonds that tieOne of the most powerful Foolish lessons for these students explains credit card debt, and how a $20 pizza can wind up costing $100, if financed over time on a credit card. But what happens if you take that lesson to the next level, and show what can happen to that $20 if it gets invested, rather than spent on pizza in the first place?

With a long-term perspective, the same compounding that would cause a $20 pizza to really cost $100 can turn that $20 into something far more useful — if it’s invested well. And while you may think that $20 may be too little to invest, there is one type of investment that often accepts even small-scale contributions at or around that level. They’re called Dividend Reinvestment Plans (DRIPs), and they can be a great opportunity for people without much cash to join the investor class.

Companies that kids may be familiar with that offer DRIPs include:

Company	Initial DRIP Enrollment	Minimum Optional Contribution	$20 Invested for 20 Years Turned Into	More Information
Hershey(NYSE: HSY)	$250 or 1 Share of Stock	$25	$156.89	Click Here
McDonald’s(NYSE: MCD)	$500 or 10 Shares of Stock	$50	$287.28	Click Here
Nike (NYSE:NKE)	$500 or 1 Share of Stock	$50	$491.47	Click Here
PepsiCo(NYSE: PEP)	$250 or 1 Share of Stock	$50	$157.04	Click Here
Verizon(NYSE: VZ)	$250 or 1 Share of Stock	$50	$65.46	Click Here
Walt Disney(NYSE: DIS)	$250 or 5 Shares of Stock	$50	$105.47	Click Here

While they all offer DRIPs, most are not exactly the friendliest for small investors, thanks to high enrollment minimums, high optional purchase minimums, and/or investment fees.

On the flip side, 3M (NYSE: MMM) has an extremely friendly DRIP for small investors. Once you have the single share you need to join the plan, you can invest as little as $10 at a time, and the company covers all purchase and dividend reinvestment fees in the plan. Of course, kids may not know 3M products as well as they do the Disney princesses, but they have at least likely used 3M’s Scotch Tape and Post-It Notes.

Simple lessons — powerful resultsWhether it’s “invest even small amounts early” or “avoid paying stupid fees,” if the lessons really sink in, then they’re laying the foundation for true long-term financial success. Of course, past performance is no guarantee of future results, but any possible investing result is better than paying $80 in interest charges on a long-ago forgotten $20 pizza.

You don’t need an MBA in finance — or even a college degree, for that matter — to benefit from understanding the basics of personal finance. And if this year’s Foolanthropy campaign is successful, the students at Thurgood Marshall Academy will benefit enough to become successful financial fishermen. When all is said and done, isn’t that all that really matters?

http://www.fool.com/foolanthropy/2010/12/31/help-teach-these-kids-how-to-fish.aspx

How do I make or lose money on stocks?

bullbear — Fri, 24 Dec 2010 23:03:00 +0000

How do I make money from stocks?

You make money in two ways:

You sell when the price is higher than you paid.

Example: Let’s say you buy a stock when the price is $10 a share. A year later the price goes up to $11 and you sell. You will make $1 on each share you own, minus fees or taxes.
You get dividends.

Example:

Let’s say you bought 100 common shares of a company at the start of the year. At the end of the year, you get a dividend of 25 cents a share. That means you made $25 in dividends that year (100 shares x 25 cents = $25). Some years, you may get a higher dividend. Some years, you may get a lower dividend, or no dividend at all.

Tip: Before you buy a stock, ask these questions: Is this stock’s price likely to rise over time? Does the company pay dividends often?

How do I lose money from stocks?

You sell when the price is lower than you paid.

Example: Let’s say you buy a stock when the price is $10 a share. A year later, the price has dropped to $9. If you choose to sell then, you will lose $1 on each share you own. You’ll also have to pay fees for selling the stock.

Tip: You don’t really lose money on your stock investment until you sell. You may decide to hold on to the stock and hope that its price will rise. There’s no way to tell for sure if the price will rise again or how soon. It could even fall lower. As an investor, you have to decide when you should sell. Or, get help from a registered adviser.
The company whose stock you own goes out of business.

This doesn’t happen often. But a company can go bankrupt if it can’t afford to pay its bills. Its stock will drop a lot in value and may even become worthless.

Remember: There is no sure thing in the stock market

For better results, learn as much as you can before you invest your hard-earned cash. You may also want to get professional advice.

M’sian capital market need more informed investors

bullbear — Thu, 04 Nov 2010 02:53:00 +0000

by Chin Kee Leong. Posted on November 1, 2010, Monday

MIRI: The Malaysian capital market need more informed investors who are encouraged to trade online.

Q&A SESSION: (From left) Shin, Mo and Tan on stage fielding questions from the floor during the roadshow.

OSK Investment Bank Bhd (OSK) organised Market Chat 2010 roadshow in Grand Palace Hotel here recently that provided insights on stock market investment to educate and create awareness on the securities market as well as to encourage online trading amongst retail investors.

“A good investor is an informed investor – creating more informed investors is one of the goals of our Market Chat roadshows,” said Bursa Malaysia Bhd (Bursa Malaysia) head of surveillance research and development (R&D) and market surveillance, Arshad Azizi Kamaruddin in his opening speech.

Arshad welcomed some 150 participants who turned up at the fourth season of Market Chat roadshow.

“Retail investors have always been a crucial investor segment of our Malaysian capital market.

“We have been steadfast in working hand-in-hand with our stakeholders and broker partners to stimulate interest amongst Malaysians to invest in our stock market,” said Arshad who explained the main aim in boosting the retail stock market with Market Chat started in 2006.

According to him, Bursa partnered with nine selected brokers which included OSK, and has since conducted 117 roadshows and reaching nearly 18,000 investors in the past three years.

“We were able to generate nearly 3,600 new CDS accounts over the period.Naturally, we intend to make Market Chat bigger and better each year,” he said.

He hoped to see expansion to more cities and non-urban areas, and eventually reach out to all segments of society.

“Our government is committed to make Malaysia more business-friendly to investors.

“The call for the divestment of government stakes in public listed companies are examples of measures to promote vibrancy, free float and liquidity in our market to enhance the attractiveness of the Malaysian capital market.

“These developments hold opportunities for all investors like you,” he said.

In order to achieve greater efficiency and offering convenience to the public, Bursa has introduced the eDividend to enhance payment efficiency.

“We would like to see the younger generations take keener interest in the stock market. It is very important for stakeholders to collaborate in enhancing the pool of retail investors,” he said.

He urged participants to spread the word and encourage others to participate in future roadshows.

“I believe that there are always opportunities if we know what we’re looking for. And yes, there are hidden gems in our capital market,” he added.

During the Q&A session, he replied to a participant that he will bring up the matter with Bursa of introducing similar e-payment systems for the Warrants and Futures trade, which involve larger sums of money.

The main speakers were Shin Kao Jack of OSK Research Sdn Bhd, Kuala Lumpur (KL) who presented ‘Market sOutlook’, Eric Tan of OSK Investment Bank (Derivatives and Structured Products), KL with ‘Understand Call Warrants and ETF’, and Grace Mo of OSK Investment Bank, Sibu with ‘How to trade KLCI Futures and CPO Futures’.

The guest speakers were Sarawak Plantation Bhd (SPB) corporate finance manager Koay Bee Eng, and Naim Cendera Holdings Bhd senior director Ricky Kho who enlightened participants with the portfolios of their respective companies listed on the stock exchange.

http://www.theborneopost.com/?p=72153

Know the best Stock Market Investment Strategy of all times

bullbear — Sun, 17 Oct 2010 13:37:00 +0000

The best stock market investment strategy is to give your self time to learn the process of investment. To learn the details of the stock market investment strategy one needs to be patient. Successful investors are like scholars and it takes time to become a scholar. this article aims at providing stock market investment strategy tips to its readers by listing below top three (3) steps of investment.

Stock Market Investment Strategy one (1) – start Investing form today

Best investment tip that can be given to a budding investor is that the stock investment is learnt best while implementing. Encountering mistakes and learning form ones bad decisions is the best stock market investment strategy. Staring the journey of investment with a plan is ideal. Setting up goals, organizing resources for investing and setting up time bound targets are basics of stock market investment strategy. the most common form of investment plan is linked to retirement form job. Suppose a man is 35 years of age and he wants to retire in next 20 years, then he must know how much ($) he shall have before retirement.

Stock Market Investment Strategy two (2) – know the business before buying its stock and keep your self informed about other investment options available.

Taking a course on financial investment is not such a bad idea. But of course not many will agree with me and rather my advice will go to deaf ears. So better I will share something which is more practical and usable. Before one starts investing in stocks it is important to know about what alternative investment options are available in the market. in order to set up a fool-proof stock market investment strategy it is most important to know what other options. until an investors know about other options he can never appreciate the magnitude and dignity of stock market investment. I can tell you there are majority of people who are in this business of stock market investment without even knowing the basics of investment. These are the people who have made this stock market investment strategy look more like a gambling than a profession. I will still repeat, investment are a profession of scholars and this is the reason why so many mediocre claim to know stock market investment. in reality, to invest like a champion investor, stock market investment strategy shall be developed only after one knows the key concept of business. and the best way to learn business is to read the financial statements of companies. Tell me how many so called investors have ever read a balance sheet and income statements of a company before buying its stocks. if one asks them about the importance of cash flow in evaluating the value of stocks they will give a blank mysterious look. But this is the difference between a champion investors and part time stock traders. Investors read financial reports for investing and traders reads morning dailies for some quick tips. Knowing a business before buying its stocks is the best stock market investment strategy.

Stock Market Investment Strategy Three (3) – Be a disciplined investor.

A disciplined, focused and a long term investor has been observed to outperform the market better than even the qualified investors. a disciplined investor can also be the one who has continuously invested in the diversified mutual fund. his value addition to investment in only limited to starting a systematic invent plan (SIP) and rest in done by the fund manager. a disciplined investor is also the one who keeps an eye on each and every market dips more than 15% and is prompt enough to pump his money in.

Conclusion

The best stock market investment strategy is to keep the process of investment as simple as possible. Invest with a strategy that complements your personality. if you are one who does not believing in taking lot of risks in life, then you are one to invest in blue chip companies. if you are more dynamic and has some spare money, then you can invest in mid cap stocks and funds. these stocks are very volatile, but if invested for long term then it may give above average returns.

http://forex-trading-store.com/investments/know-the-best-stock-market-investment-strategy-of-all-times.html

Making investors more savvy

bullbear — Thu, 14 Oct 2010 22:59:00 +0000

Making investors more savvy
Anneli Knight
October 13, 2010

The Australian Securities Exchange is expanding its range of free online courses, giving investors and financial advisers the tools to extend their knowledge base on a range of technical products.

The head of ASX investor education, Tony Hunter, says the recent launch of the online course on interest rate securities and the impending launch of the exchange traded funds course, provide investors with information about how to diversify their portfolios.

While the ASX shares course has remained the most popular, Hunter says investors have been seeking information on a broader range of investment products since the global financial crisis.
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”Because of what’s happened over the last couple of years, people are less confident about the markets,” he says. ”They’re going back and learning more. It’s better to learn before you’ve invested rather than after you’ve invested. Unless you understand your products you’re not going to get a proper sense of its risks and its benefits.”

It is important to build your knowledge base, Hunter says. ”You need to understand [how the financial products work] before you talk to an adviser so you can ask your adviser proper questions. And if you don’t have an adviser, it’s even more important because you’re your own adviser, so you need to be briefed.”

The ASX has been building its stable of online courses, which now includes shares, options, warrants, ASX-listed CFDs, instalments and futures and, most recently, interest rate securities.

Each course is broken down into a series of 20-minute modules, which can be taken anonymously with no registration required.

The modules have been designed with maximum flexibility so they will suit people of all ages and different levels of comfort within the online environment, Hunter says.

”It is common knowledge that especially younger people tend to surf around – they’ll try to work it out themselves before they go back to instructions. A lot of people don’t like to be told: ‘You start here and finish here.”’

The more technical courses – such as interest rate securities and instalment warrants – have also been useful for financial advisers, Hunter says.

The ASX is encouraging advisers to take these courses and link their clients to them, so they can see what the end user is learning.

The free courses are funded by the ASX development fund for education and Hunter says the organisation made the decision to invest heavily in its online education resources rather than on face-to-face courses so the information is more accessible nationally, including to those in remote and regional areas, and people can take the courses at any time that is convenient to them.

They have had particularly high access levels late at night and during the Christmas holiday period, Hunter says.

The courses are created in-house by the ASX education team and are reviewed by legal and product experts before their launch.

Each module is broken down to include essential pieces of information, with interactive learning exercises and quizzes to reinforce key points.

”The web is a really different way of learning to reading a book,” Hunter says. ”You really need to have far less content and make it clean, uncluttered and pithy. Once the slides were done, I spent most of my time working out what we can take out rather than what we can leave in.”

In addition to these online courses, the ASX investor education area provides downloadable podcasts of the free education seminars it holds in Melbourne and Sydney each month.

The ASX courses and details of the monthly investor hour seminars are at:
asx.com.au/resources/education.
http://www.asx.com.au/resources/personal_investors/index.htm
http://www.asx.com.au/resources/education/classes/shares/course_09/index.html

http://www.smh.com.au/money/investing/making-investors-more-savvy-20101012-16gon.html

Financial Education: Play and learn about finance

bullbear — Sun, 10 Oct 2010 00:04:00 +0000

Star Education Fair
Sunday October 10, 2010

Play and learn about finance

BY ALYCIA LIM
educate@thestar.com.my

TO INSTIL the habit of savings and prudent financial management among the nation’s youth, Perbadanan Insurans Deposit Malaysia (PIDM or the Malaysia Deposit Insurance Corporation) recently launched an online competition.

Called “MoneySmart Online Game”, it is part of the corporation’s educational programme for secondary and tertiary education students.

Running for the first time this year with the support of the Education Ministry, the programme aims to reach out to students through road shows and talks in secondary schools, colleges and universities.

PIDM chief operating officer Md Khairuddin Arshad said that the competition was an initiative from PIDM to enhance public awareness on the role of PIDM through interactive activities.

He added that since the soft launch in July, roadshows have been held at over 100 secondary schools and about 25 higher education institutions. They are targeting a total of 200 schools by the end of November.

“The schools have been identified according to the ratio of urban and non-urban schools, and we make sure that this covers every state in the country.”

Education Ministry deputy director-general (general policy and educational development) Dr Khair Mohamad Yusof applauded PIDM’s efforts, saying that the ministry had always welcomed initiatives from organisations to support the education development of the young generation in this country.

He added that the teaching and learning process today required the involvement of society, and should not only be the role of an educator. Through a creative and interactive way, the project helps to enhance the knowledge and skills of all aspects of financial management to local students.

The entire programme, including the production of board games and comic books to be distributed to the schools, amounted to approximately RM1mil.

Md Khairuddin said: “I believe this investment will give good returns, and it is a part of our contribution to the country’s financial literacy growth.”

The online game competition, which depicts real-life stages beginning from the decision to pursue an education to the retirement stage will end on Nov 30.

The results will be announced early next year.

http://thestar.com.my/education/story.asp?file=/2010/10/10/education/7145680&sec=education

Do you want to take your knowledge of investing to the next level?

bullbear — Mon, 21 Jun 2010 10:01:00 +0000

Learning to invest can be an enjoyable pastime for those inclined toward it. It is not a mystery that has to be left to the professionals. Do you want to take your knowledge of investing to the next level?

You can do it as successful investing relies primarily on the proper understanding of basic mathematics and basic principles of business.

You want to learn about business.

You want to learn how to value individual stocks.

You want to determine whether or not to buy more of the stock of your employer.

You want to own the greatest companies on the planet, hold them for decades, and turn a couple of thousand dollars into a couple of million dollars by the time you retire, or your kids retire, or their kids.

To get there, you need only add 6 + 17 successfully (23). You need only multiply 12 X 2.6 (31.2). You need only divide 178 by 14 (12.7).

Mostly, you’ll just need to keep your eyes and mind open.

The future of your financial situation rests more on these abilities than on working triple overtime next month or inheriting a whole mess of money from your great-uncle.

So, let’s ask again: is it time for you to step beyond the index fund and start investing in individual stocks?

Why invest in individual stocks?

Because if you’re methodical, you may beat the index funds that beat the majority of managed funds.

Chances are you won’t make much money at all in your first year of investing.

You’ll still be learning and you’ll probably make plenty of mistakes.

And there certainly are other alternatives to common stock. Index funds are a great way to begin investing.

With method and resolve, private investors can manage to outperform the market over the long term.