COMMENT POSTED IN MY BLOG
Here's some advice from Guide to Investment Strategy (Peter Stanyer, The Economist, 2006) page 129-130.
Who should invest in CDOs?
No one needs to invest in CDOs, and no one should invest in any instrument unless they are sure that they, or a trusted adviser, understand and can monitor the risk and potential rewards involved. This means that they need to understand the complex issues involved in pricing CDOs and, in particular, different tranches of a CDO.
... Investors who have used CDO tranches as a means of getting around a prohibition on investing in sub-investment grade assets need to assess the likelihood of such a downgrade, and all investors need to be satisfied that these disappointment risks are sufficiently reflected in the investment return that the CDO tranche offers.
Message: Make sure you or your trusted adviser know the risk, the return, and if the complicated product is priced fairly.
Saturday, July 21, 2007
Logic9 puzzles
Dear Mr Tan,
I like the Sudoku puzzles in your website. My children also enjoyed doing the puzzles with the flowers and animals.
However, I find that there are only a few puzzles at each level. Do you intend to add more puzzles?
REPLY
There are already quite a number of variations, ie 5 puzzles X 6 levels X 4 sets of symbols. The total is 120 different variations.
I will consider your request. Meanwhile, you can try the 120 variations. Click here to access the puzzles or on the Logic9 at the right panel.
I like the Sudoku puzzles in your website. My children also enjoyed doing the puzzles with the flowers and animals.
However, I find that there are only a few puzzles at each level. Do you intend to add more puzzles?
REPLY
There are already quite a number of variations, ie 5 puzzles X 6 levels X 4 sets of symbols. The total is 120 different variations.
I will consider your request. Meanwhile, you can try the 120 variations. Click here to access the puzzles or on the Logic9 at the right panel.
Diversify your investment
Dear Mr Tan
Recently I invested part of my CPF fund with AVIVA. It pays 3.5% interest.
I am now thinking of investing all of my CPF funds with it. Is it all right to invest my major savings with a single financial institution? Is there a guideline?
REPLY:
It is generally a good idea to diversify your investments. You should spread you investments, so that the chance of any one failure will not cause you any serious financial distress.
The chance of failure of a highly rated insurance company or bank is very small. It is still a good idea to spread your total savings in two or three of these institutions.
Recently I invested part of my CPF fund with AVIVA. It pays 3.5% interest.
I am now thinking of investing all of my CPF funds with it. Is it all right to invest my major savings with a single financial institution? Is there a guideline?
REPLY:
It is generally a good idea to diversify your investments. You should spread you investments, so that the chance of any one failure will not cause you any serious financial distress.
The chance of failure of a highly rated insurance company or bank is very small. It is still a good idea to spread your total savings in two or three of these institutions.
Dependent Protection Scheme
Dear Mr Tan
I am a single, middle age, and live with my parents. Our HDB flat is fully paid and belongs to my parents. I have no plan to buy a flat myself. Do I need to continue the DPS insurance? Is it relevant to me?
REPLY:
The cost of the Dependent Protection Scheme is quite low. It is a term insurance plan. It is useful to provide some cash to your parents, or as a fund for final expenses, in the event of premature death. It also pays on permanent disability. I suggest that you keep this insurance.
I am a single, middle age, and live with my parents. Our HDB flat is fully paid and belongs to my parents. I have no plan to buy a flat myself. Do I need to continue the DPS insurance? Is it relevant to me?
REPLY:
The cost of the Dependent Protection Scheme is quite low. It is a term insurance plan. It is useful to provide some cash to your parents, or as a fund for final expenses, in the event of premature death. It also pays on permanent disability. I suggest that you keep this insurance.
Cars under warranty
When you buy a new car, the distributor provides a 3-year warranty against manufacturing defects. To protect this warranty, you are required to have the car serviced and repaired at the distributor'z workshop.
The distributor charges a high price (compared to independent workshops) for work not covered by the warranty. You have to pay this price, in order to protect the warranty.
In several countries, this is considered to be unfair practice, and against free competition. Consumers are given a free choice of their workshops.
I hope that the consumers in Singapore will take a stand against this practice, which increases the cost of motoring.
The distributor charges a high price (compared to independent workshops) for work not covered by the warranty. You have to pay this price, in order to protect the warranty.
In several countries, this is considered to be unfair practice, and against free competition. Consumers are given a free choice of their workshops.
I hope that the consumers in Singapore will take a stand against this practice, which increases the cost of motoring.
Subscribe to:
Posts (Atom)