Why Invest in Stock Market When There are Other Investments

So, as a smart investor what would you choose???
- Put in your money into bank for one year to get 2.5% interest
- Or buy dividend based stock on 14/04/2009 and only one day you will get 1.42% dividend yield
- Or hold Government T-bills at lease 6 months in order to get 1.89%

FOR ME, i will choose " B " lo............................he he..
I need to be a shareholder before Ex-dividend date to be entitled to the dividend.

Let's Prove it --------- Counter Name: Bursa ( 1818 )

Before Ex-dividend 14/04/2009	Ex-dividend 15/04/2009	After Ex-dividend 16/04/2009
Open : 5.760	Open : 5.90	Open : 6.150
High : 6.00	High : 6.050	High : 6.30
Low :5.750	Low : 5.750	Low :6.050
Close: 6.00	Close: 6.00	Close: 6.10
Vol : 1905000	Vol : 2815600	Vol : 3351300

Before ex-dividend date, stock price closed at Rm6.00. Stock price opend at Rm5.90 at ex-dividend date ( 15/04/2009 )
and the price closed at Rm6.00. Share price usually goes down right after a dividend because of the new valuation based on less cash that the firm just distributed.
Anyway, this dip usually doesn't last long for STRONG COMPANIES....................

Another question now arise, I’m sure many people will ask, why does a particular share price dips right after the ex-dividend ?????



EXPLANATION

It’s very rational to worry about how our funds in our saving accounts and fixed deposits are protected.

Every person should have well planned financial planning. Our monies should have two purposes. There are liquidity purposes and investment purposes.



First thing we should do in financial planning is to ensure we have sufficient monies to meet our daily liquidity ( money that we need for daily needs ) and short-term needs.



We should set aside more money in our saving account



1) If we have dependents such as parent, wife or children who depend on our income.

2) Or we have immediate goals. We should keep extra funds if we need them for something just a few months.



Once the liquidity needs have been take care of, any extra funds must be put to good use.

It’s less rational to put extra monies in our savings account or fixed deposits. For instance, put extra funds in fixed deposits for one year and just earn 2.2% interest. This return is measly and inflation easily trumps them.



We should take our extra funds in some investment. There are several investment options that we can choose such as, invest in share market, forex, derivative, government bond, corporate bond and etc.















For me, I prefer invest in share market. You know why ?



My personal opinion is that , during this bear run, I believe many investors are prefer stay on sideline and waiting for the market recovers in future or some of them are still waiting for the market hit the bottom line then they start to invest.

Actually, this is a good time for us to pick up some stocks that have a sound business model and good economic fundamentals.

There are many companies that they intrinsic value is underweight by market because of worldwide economic tumbled. I will start to pick some stocks when they down and once rationality returns, I will see my investment’s inherent value.

Do remember all the times ‘Buy Low and Sell high’ if you want to make money.

Some of the investors they still waiting for the market hit the bottom than they start to invest.

ha ha… I just want to say….hello, we’re not a god, how can we estimate when the market will hit the bottom. For me, of course I would not invest all my money in one buy, I prefer slowly pick up some valuable stocks and average down the buy price.

“20%, 20%, 20 %and 40%” is my investment strategy at this bear market.

Investment is always trade at you own risk no matter what kind of investment you are chosen ( except risk free risk investment such as, invest in government investment ).

Always remember do your own homework’s before start invest because we got to ensure our “margin is safety”. However, safety doesn’t mean a guarantee that our investment will not fall. It simply means that our investment can be considered safe because we believe it has good fundamentals and it has fallen to a level which gives much room for improvement. Its downside, if any, is likely limited.