Money Masters Of Our Time

some thinking about reading the book:

1. 70% core holding (growth at reasonable price): buy & hold for well-managed growth companies until they slow down, avoid market timing. growth stock can be characterized by higher peaks & troughs across business cycles.
2. try not to touch cyclical stocks or sector funds, if really want, buy low & sell high within the business cycles, but avoid trying to catch the peaks & troughs
3. always keep certain amount of cash for emergency use
4. use funds for unfamiliar areas (emerging markets, small cap, etc)

北京奥運

北京奥運閉幕了。

真的未曾如此投入觀看奥運。除了因為這是自己國家大事，更是被一個個精彩的故事所吸引。

由開幕式到閉幕禮，十六天的盛事，也是一幕幕人生的縮本。

男飛人保特、新水怪菲比斯、羽毛球老將張寧、超級丹林丹、跳水公主郭晶晶、中國男女子體操團體等，一個個都是歷盡艱苦鍛鍊後獲取佳績、振人心的故事。

同時劉翔、程菲、埃蒙斯也提醒我們幸福並非必然，有付出、有實力，並不等於有收穫。

在競賽場上，高禮澤、中國女排雖未能取得上屆般的成績，但他們最後的表現也贏盡觀眾的掌聲與歡呼。

在人生中，我們或許不能保証自己是下一個馬琳、張怡寧，但也得學習高禮澤、中國男籃的精神，努力做好本份，方能今生無悔。

在此向一衆奥運英雄致警。

Morningstar Guide to Mutual Funds- Five-Star Strategies for Success

I. how to pick mutual funds:

1) know the fund portfolio

• equity: value/blend/growth vs large-cap/mid-cap/small-cap
• bond: long/intermediate/short duration vs high/medium/low credit quality

2) performance

• performance against index or peer group
• performance over long period (5 to 10 years)
• performance consistency year over year
• make sure the fund manager responsible for the performance still there to manager the fund

3)risk

• performance volatility
• concentration of stock/bond holdings

4)understand the fund manager

• rule of thumb: >10 years of experience
• strong support team for research & trading
• fund house with wide range of successful funds , quality board, maintain fund cost & no trendy fund launches.

5)cost

• lower turnover, lower trading costs
• bond less than 0.75% ; equity less than 1%
• check expense ratio

II. Core & non-Core Stock & Bond Funds
Core Stock funds

• value funds (relative value (compare with index), absolute value* (look for best deal), income oriented value(dividend focus))
• growth funds (earnings-driven, revenue-driven)
• blend funds (growth at reasonable price)
• flexible funds
• indexing (ETF or index funds)

non-Core Stock funds

• foreign funds (consistently hedge foreign exchange risk or no hedging at all, fair value pricing to minimize the impact of short term traders)
• small-cap funds (diversify)
• no sector funds except real-estate & commodities (use dollar-cost averaging strategy for sector funds)

Core Bond funds

• focus on intermediate-term funds investing in government & corporate bonds
• look for low-expense funds
• focus on total return (income + capital gain)

non-Core Bond funds

• stay away from junkiest bonds
• ultra-short term bond funds as alternative for money-market funds
• inflation-indexed bond funds can be useful
• keep small portion of world bonds funds & emerging market bonds funds only, due to their volatility

III. Portfolio Building

• asset allocation plan to meet financial goals (input: amount of money, time, rate of return, savings rate; output: stock/bond mix)
• avoid market-timing
• core funds accounts for 70-80% of portfolio
• caution with stock funds to meet short-term goals (within 5 years)
• consolidate the funds into single fund house or distributor.
• re balance regularly for asset class, country & style exposure.

IV. When to sell

• portfolio rebalancing
• changes of fund fundamentals (e.g. fund style)
• mis-understand the fund fundamentals
• changed investment goals
• too volatile funds