Global financial crisis: 'Keep a significant portion of your portfolio in cash'
September 20, 2008 Saturday, 07:52 AM
I AM A financial advisor and money manager, and many of my clients have asked me about the stability of banks in general and some of them have joked about keeping cold, hard cash under their beds.
yeah, look: "To sum it all up, keep a significant portion of your portfolio in cash just in case you need it in situations like these."
it doesn't take a rocket scientist either to know that such generic advice is best not dispensed, but if read, (to be) taken with a lot of salt. it's #1 mahoupao and #2 useless/inapplicable to those who either already keep a significant portion of their portfolios in cash, or have nearly lost even the shirt on their backs and therefore have hardly any cash to begin with.
The Singapore government should seriously review SGX’s policies and also consider banning ‘Naked Short Selling’ immediately without any further delays.
To me you dont seem to be a financial adviser or money manager. You seem to be a layman.If everybody keeps hard cash under the pillow, economies will stagnate. there will be no investment. It is amusing why you didnot pick on subprime system itself per se. Prime lending is when banks give loan to a person who earns decently and is capable of repaying the loan. If a guy earns low salary (say a factory workers) and he cannot afford to repay the loan, still the banks give him loan, but on condition that a higher interest will be charged. See the joke. If a person is financially not qualified for a particular amount of loan because he cannot repay it, how can you expect him to repay with higher interest? This is the stupidest thinking of the policy framers.
adrianlin, seems u more clueless. The idea is to ensure that the borrower can pay interest is enough and cannot ever pay back the principle. If he defaults, then take his home. Win-Win situation. Issue when the asset depreciate, but the risk is compensated with high interest income...and fat bonuses, top hotels, private jets for bankers.
As policy makers close in, bankers are paid to find loopholes. Japan 80's bubble, Korea, Hong Kong, Thailand 90's Asian financial crisis are just some examples.
Very simple. Just buy only what you can afford (meaning with CASH ONLY!)
However, cash loses its purchasing power. Thus, property seems to be the best hedge against inflation especially HDB flats with the government supports.
September 20, 2008 Saturday, 07:52 AM
