SN Finance Blog

Disclaimer: Please note that all content and information in this blog are for educational and informational purposes only and should not be taken as professional investment advice. ────────────────── Money is not made in certainty but during uncertainty  To invest in uncertainty is to invest when few are. This inevitably means you'll get a better deal. And better deals translate into better returns. People enjoy certainty, and as such are willing to pay a premium for it. Nothing comes free.  If you like certainty and stability, you have to pay for it. Therefore during times of economic stability and certainty, equities demand a higher premium. Conversely, if you're fine with accepting uncertainty, you'll get a much better price.  The market discounts uncertainty because it dislikes uncertainty. Now the question is whether you value certainty or your money more. If you're fine with uncertainty, you're rewarded with lower prices.  If you're uncomfortab...

Disclaimer: Please note that all content and information in this blog are for educational and informational purposes only and should not be taken as professional investment advice. ────────────────── Some people make it seem that high returns are attainable as long as you put in the time and effort to managing your portfolio.  But that's just one side of the picture. The other side of the picture that is less often discussed is the high risk which high returns portfolios bring.  It is impossible to achieve high returns with low risk. Regardless of how skilled an investor is, it is not possible that achieve maximum return with minimal risk. You can maximise your risk and return trade-off but if you want high returns, you cannot say that you want low risk. High returns come with high risk.  There is no free lunch in this world. People who say it's possible to achieve high returns with low risk do not realise that portfolios which deliver high returns often go th...

Disclaimer: Please note that all content and information in this blog are for educational and informational purposes only and should not be taken as professional investment advice. ────────────────── Buying on bad news either because: 1. You believe the market has overreacted 2. You believe the market will recover One focuses on the present, one on the future. Both are equally difficult to assess with reasonable certainty.  You will never know whether the market has truly overreacted to the bad news, or even underreacted.  Likewise, you will never know whether the market will recover. Even though there are no guarantees, we can make our decision based on what has happened before — history. Historically, markets tend to overreact to bad news. Investors tend to over-penalise bad news because investors are risk-averse. A minor bad news is able to cause a major market sell-off.  Markets have historically shown resilience. Not just the US market, but most markets globally. Rec...