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Ignore all the negativity


How many of you reading this could have imagined ten years ago that you would be living, for the most part happily, in Thailand to day?

Most of us can never predict change in our lives but the smart ones know the oxymoron

that applies to all our lives being that change is the only constant. Otherwise stagnation and who wants that?

If we can keep an open mind throughout all these changes then our lives will be much more fulfilled and happy.

I think we all know the disgruntled expatriate who made a mistake by moving here. His mind is so closed that nothing is the way he wants it to be. Its’ too hot, it’s too wet, the food’s too hot, everyone is after you for your money, too many foreigners, they don’t know how to drive etc.etc.’

The problem for him is that he doesn’t have enough money to live in, as he sees it, his utopian homeland.

The likelihood is that no place or no person or any amount of money could make this type happy, mainly because of the closed mind.

I have had clients in the times of the dot com era making 100% on their capital in three months; the one thing I never did was guarantee that return.

It is very important for any investor to understand risk. Yes it is easy to be wise in retrospect but the truth is that unless you fully understand all the elements of risk when investing, then you are better to leave your money in the bank and let them use it to their advantage.

For me one of the most important elements of investing is, of course, the return, but the single most important item to know is what would happen to my capital if the company in which I had invested went bankrupt?

However a guarantee given by a friend of a friend that in 12 months he will return your capital with 100% profit as I said may work but which would you feel more comfortable with: Government bonds guaranteed by sovereign governments or that of any individual?

If I know my original capital is secure then I can take risk or be very conservative in my choice of funds I select. The risk should be explained by my broker and I am responsible to make sure it matches my risk tolerance.

I have to remember that low risk carries with it a lower chance of loss with a smaller possible gain whereas high risk can carry a higher return with a higher chance of loss

The last thing I want to do is convey a cynical attitude like the misfit we talked about earlier.

When I read in the press about people being ripped off by some financial scam the first emotion I have is pity and sorrow but when I explore the scheme they were ripped off in I can sometimes sense greed and wonder how stupid people can be.

Can you really feel sorrow for people who have been ripped off by the Nigerian scam?

Remember years ago Bernard Trink in the Bangkok Post used to talk about it every week.

Going back to the guy with the closed mind who had an answer for everything, my friend with me that day happens to be a portfolio manager with a private London bank here on vacation, told me to give him the sealed envelope treatment.

I asked him to explain. He told me in similar situations when confronted with some crazy investment idea that a client has he gives him an envelope and asks him not to open it until he has lost his money. Of course the temptation is too much and when the customer opens it written there is the line “I told you so.”

My intention is not to scare people away from some excellent investment opportunities the world over but just to assist people be more careful where they put their life savings.

After all if you are comfortable with the returns you are getting I think it’s a bigger mistake to move.

I believe most investors can tell a genuine offer from a scam.