Many taxpayers are still unclear as to what constitutes taxable income.
With the April 30 deadline only eight days away, many taxpayers seem to be still unsure as to what they can be taxed on. The Inland Revenue Board team, coordinated by the board’s public relations officer Masrun Maslim, takes on some of the queries.
One of the critical investment lesson investors should always keep in mind is to offload any stocks and shares whenever it turned as a bad investment. Such errors commonly occurs to beginners as they would buy stocks of the companies without any proper study or research. Other mind of people found holding such bad investments or stock and shares with a hope of its price would rise again in the future. Both would give negative impact to the portfolio by erasing capital as long as it holds.
Is there any proven strategy to deal with bad investments or stock and shares in hand? Yes. This article give you an idea to deal with such investment and bring your capital back with counter actions.
One of the key steps to investing is deciding on your asset allocation. What is an asset allocation you ask? It’s the relative amounts of different asset classes in your portfolio which will determine how much risk your portfolio has.
Asset Classes
An asset class is a grouping of similar investments whose prices tend to move together – in other words their price movements are at least partially correlated. Asset classes can be defined on a very general level, such as stocks or on a more specific level, such as oil companies. Since most oil companies make money based on similar variables such as the price of oil, it stands to reason that most oil company stock prices will frequently either go up together or go down together.
Intrinsic value makes investment easy and steady
Why do you go for buying spree on winter’s sales or closedown sales? Is it a lot easier to make buying decision when you know the goods you needed is offered at deep discount or at bargain price?
Conversely you will not buy a goods that is priced more than its true value, for example paying a single tulip bulb for ten times of your annual income. I am not kidding, at the peak of the tulip mania in Feb 1937, many people did exactly that, unbelievable!
Similar to purchase your grocery and goods, investors should abide to this principle and habit while making investment. “Buy low and sell high” is the investor’s mantra, the gist of it is to purchase a stock at a price when it is selling low or at deep discount, and liquidate it when its price reaches or exceeds a fair price. In this way the investor is ensured of profit and most importantly provides a margin of safety for his/her stake. If the margin of safety is large, the profit is high and protection the investor’s money is high too.
Inflation is a major factor in the realm of personal finance; it’s a risk that affects investment positively or negatively. In broad terms, inflation is the general increase in prices because of a change in the money supply or the availability of goods. It is not merely a macro-economic concept, since it is relevant to the finances of individuals in four primary ways:
- Determining the real return of an investment
- Evaluating the purchasing power risk
- Interest rates for savings
- Effect on financial instruments
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