investment wisdom - Aberdeen Asset Management

More documents

Recommendations

Info

The financial world is a confusing place at the best of times. But withthe current uncertainty in markets there may be a particular need forclear thinking. The difficulty with bear markets is that by the time onerealises one is underway, it can be too late to sell.Yet the natural reaction at times like these is to raise cash and putit under the mattress, for fear that the world is about to fall apart.But the world never really falls apart, and the bestcourse of action can be to stand firm andbe brave. To help you in this endeavour,here are some simple thoughts aboutinvesting.Important Information:[Independently operated by Aberdeen International Securities InvestmentConsulting Company Limited]The information of this report is granted byAberdeen International Securities Investment Consulting Company Ltd (97Jin-Guan-Tou-Gu-Zi-Di No.003) for investors’ reference only. The information areprovided “As Available” and subject to change without notice. Investors shouldmake their own assessment of the adequacy, relevance and accuracy of suchinformation, opinion or estimate contained in this article.About Aberdeen TaiwanSince 1997, the Aberdeen Group has been distributingoffshore mutual funds in Taiwan through third parties.From 2008, we are pleased to announce the opening ofAberdeen International Securities Investment ConsultingCompany Limited (‘AISICCL’) in Taipei, and acquireda Master Agent licence from the Taiwan FinancialSupervisory Commission (FSC). Aberdeen will now beable to directly promote and sell its own offshore fundsin Taiwan through third-party distributors after 20th Oct2008. The opening recognises the importance we attachto the expanding mutual fund market in Taiwan, and thebenefits we can bring clients through a local presence.Currently our products include 12 funds within AberdeenGlobal, a Luxembourg-based fund range.AISICCL is part of the Aberdeen Group, a UK-based, LondonStock Exchange-listed asset manager, with over *US$144.8billion under management globally. The Group manages arange of equity, fixed income and property funds for others,chiefly institutions but also individuals via pooled funds. Weare independently run and have no ties to larger financialgroups. Within Asia, we have a long record, having openedour regional headquarters in Singapore in 1992. We alsohave offices in Bangkok, Hong Kong, Kuala Lumpur, Tokyoand Sydney as well as representation in Seoul.*30 January 2009
Volatility isnot somethingto fear, butsomething toembraceThinklong termWhy do we fear stock market volatility somuch? As an airplane’s wings must bend duringturbulence to prevent them from snapping, so toomust shares fluctuate, sometimes gently, othertimes wildly. Of course, severe turbulence duringa flight can be an uncomfortable experience butwe have no choice but to sit tight, knowing deepdown that we’ll reach our destination. But in theworld of investing there is little to stop us bailingout at the slightest wobble as our emotions getthe better of us. Try then to welcome volatility.Shares do not go up without it.All stock price movements are a combinationof unpredictable noise on the one hand and themeaningful pattern of business performance onthe other. Over short periods price movements areas good as random, while over long ones businessperformance dominates. As an investor, youshould align your time horizons accordingly. If afactory, for example, is expected to provideat least ten years of returns, so shouldyour shares.Know thedifferencebetweengambling andinvestingBe contrarianWe all like to have fun once in awhile. A trip to thecasino is an excuse for a good time, but approachthe stock market in the same way and you’llquickly find yourself in trouble. Successful investingis hard and often dull, requiring discipline andlots of study. For that adrenaline rush, few thingsbeat watching the roulette wheel spinning. Whenit comes to making good investment returns,however, owning the casino itself tends to bemore profitable than entering it. Think about it.We have a tendency to do or believe somethingjust because others do. It makes us feel normal,part of the group. Occasionally, however,such behaviour is counterproductive and evendangerous. Rush for the exit in a crowded marketwith everyone else and you risk getting trampled.The same applies to behaviour in the stock market.Selling – or buying – behind everyone else is a sureformula for poor investment performance. WarrenBuffett teaches us to “be fearful when others aregreedy and greedy only when others are fearful.” 1Try to do more thanjust accept volatility, learn to love it.Shares do not go up without it.
Page 1: At Aberdeen we keep things simple,

investment wisdom - Aberdeen Asset Management

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?