The Most Important 4 Tips to Avoid Investment Risks in 2020

As we all know, the world has been undergoing tremendous changes. It seems that just after one night, this world is full of innovative technologies, products, and services. Furthermore, clashes and conflicts in international trade and business are seen everywhere. In 2019, a lot of people have experienced huge losses just because the world is changing so fast that they can not figure out how the brand new business model works.

Now, we are offering 4 tips that can help you avoid investment risks in 2020. With this guideline in mind, you can have a good start at the beginning of this new year.

Tip 1: Keep an eye on the macro environment.

A lot of investment risks are closely related to the macroeconomy and state policy. Therefore, keep yourself informed, pay attention to the economic news and reports on the regulations and policies. All kinds of information can help you evaluate the probability of systematic risk and make preparations for them.

In particular, we should focus on some important indexes such as the GDP, the total scale of the M1, M2, M3, as well as the price index. These indexes can help you determine if the national economy works well.

Tip 2: Evaluate risks scientifically, do not go after the hot concepts mindlessly. 

You must realize that every investment has risks. Putting risks under control means you must figure out how much losses you can accept at most.

Before making any investment decisions, you must ask yourself: behind this investment, do I know the risks? That may be caused by policy, the outside macro economy environment, or just some stake holder’s will.

Now, it’s time to review one sentence, as I quote from Warren Buffett, the first rule for investment is do not lose, the second rule is to remember the first rule…….’

Tip 3: Use the strategy of ‘scattered investment’.

Risk can be diluted if your investment is scattered. Ray Dalio, the founder of the ‘Bridge Water Fund’ once said:

A portfolio of highly correlated diversified investment targets does not reduce the risk, only an investment combination with zero or preferably negative correlation can effectively reduce risk.

Researches show that if you create a portfolio of 5 investment targets with low correlation can reduce the risk by more than 50%! Besides the low correlation, these 5 targets must be excellent in terms of business performance.

Tip4: Choose excellent ‘investment institutions’.

We must be realistic and accept that we are just normal people. Maybe it’s time to choose one professional institution to help you manage wealth. There are 3 reasons why we recommend them.

The first reason: Institutional investors are well informed and strong in evaluating risks.

They have various connections with government agencies, colleges, and other business partners.

It’s relatively easy for them to find the real investment opportunities.

The second reason: they have good behavior in investment.

An institutional investor is an economic entity with an independent legal person status, and its investment behavior is regulated in many ways. On the other hand, the institutional investors are self-disciplined, committed to protecting the interests of clients and their reputation.

The third reason: they evaluate and manage risk comprehensively.

They raise money through different channels from society. The first thing they should consider is safety. They are risk-averse. To put investment risk under control, institutional investors choose investment targets carefully. For them, predictability is sometimes more important than high returns.

With these 4 tips in your mind, you will have a good start at the beginning of this new year!

How Do You Manage Your Money While Living in America

For most American people, money management is a compulsory course. People may lose their ability to make money due to age, illness, mental problems or family reasons. A good money management plan will save people from a desperate situation. There is no perfect family financial plan, but a good plan will protect people from the regret of “living too long” or “dying too soon”.

As retired Americans, personal income consists of three major parts: social security, legal allocation to a personal account, a pension from governments, schools, or other institutes.

401K is a salary-based saving plan. If you work for a company, the employer usually pays a certain percentage of your salary to match your contribution to your 401K account. Let’s say, if you allocate 2% of your salary into a 401K account, your company will also compensate another 2% to that account. There is no law to force the company to pay for an employee’s 401k contribution. However, it is required that annual nondiscrimination testing plans are fair to all employees. Therefore, if your company has matched the 401k for other colleagues, that means you will get the “bonus” too. So, 401k is the most common saving plan for Americans. In case that you are working for a small company that does not provide 401K benefit, the employee can choose to open an “IRA” (Individual Retirement Account), which works similarly as 401K.

401k is not enough for the middle class. Different types of insurances will provide other channels for family financial arrangements, and some time can be the last line of defense for your family’s wealth. For the middle class whose annual income is between 50k dollars and 100k dollars, a proper insurance plan can be the basic risk control method and a perfect channel for stable wealth growth. Among all kinds of insurance products, car insurance, house insurance are necessary for most people because these types of insurance will cover your losses due to car accident, flood, hurricane or other force majeure unexpected, so after a disaster, you don’t need to start from scratch. In the USA, car insurance is compulsory by law, real estate insurance is quite reasonable and most companies provide very good medical insurance.

However, for people who earn 50k-100k each year, they have to think about an alternative hedge against inflation. First, they should consider catch-all medical insurance which can fully cover dental care and visual health. After that, one can look into permanent life insurance. For permanent life insurance, the pools of capital are usually several millions of billions of dollars large, which guarantees the security of your investment and at the same time, it helps to waive the capital gains tax and inherit tax while providing enough flexibility. Theoretically, permanent life insurance is a good money management solution for most high-income classes in America. However, there is still a risk because the quality of company and personnel managing the insurance, are quite different.

While talking about investment and money management, the stock is an inevitable topic. If you are a rational investor, and you believe in math and statistics, you will not step into the stock market. If you believe you are Warren Buffet, then you can make a try, but never throw all the money you have into the stock market because even Buffet himself, not only purchase stocks but also buy some blue-chip companies as a whole, to mitigate risk.

Do Precious Metals Have Huge Potential in The Future? Really?

When people talk about precious metals, do you always think of gold or silver? Does it make you excited? These precious metals are both important for our material and spiritual life, they are very attractive to us. Gold, silver, platinum and palladium constitute the majority of trading in precious metals. Today we’re going to talk about the advantages of precious metals investing.

  • Precious metals bullion is highly liquid; it trades twenty-four hours a day, seven days a week. Bullion held in certificates or in ETFs, where liquidity is dependent on the market rather than the bullion itself, should be avoided.
  • Deep liquidity and high volatility mean positions may be easily opened and plenty of opportunities abound whether gold’s price is rising or falling.
  • Investing in precious metals represents an opportunity for investors and traders to diversify their financial holdings to ensure they are at least partially represented on the haven. In an era of uncertainty, safe-haven tends to work opposite equities, and hence can be viewed as a hedging opportunity not just against inflationary tendencies, but also against riskier assets.
  • As an investment product, the value of gold is relatively stable, so it is often used as a hedging tool. According to the record, the performance of the gold price is always opposite to the stock market. When faced with huge economic fluctuations, the stock market and other investments are more fierce in a short time. Only small waves are magnified infinitely. When the market is in a landslide, people tend to buy gold to avoid financial risks, so the price of gold rises.
  • Unlike luxury goods, houses and lands, whose value declines due to the influence of time, politics, local economy and other elements, precious metals cannot be shaken by the abrupt change of place at any time.
  • When trading precious metals, the profit and loss of each transaction are equal to the trade margin in two opposite directions in the contract. The gold contract transaction only takes 1% of the transaction amount as the investment cost of the deposit, that is to say, only little investment expense has greater leverage, and a small amount of funds promotes the bulk transaction.
  • The precious metals market belongs to the global market, and no individual or consortium has enough capital to manipulate the market. The price of precious metals is globally uniform, and no dealer’s quotation dare deviate from the actual range because once the deviated price is reported, there will be a large number of investors in the world to carry out risk-free arbitrage.
  • Precious metals are non-renewable rare metals, the total amount has been mined more than half of the earth reserves, the future supply of precious metals will be less and less so that the price of precious metals always keep rising, even if there were fluctuations during past time, in the long period, the price of precious metals is still overall positive.

Global Advertising Market Is Booming

It is predicted by the authority, the advertising market is booming, and will increase by 5% in 2020.

Ten Highlights

  1. In June2019, the MAGNA forecasted that the global market of advertising will grow by 5% by the end of the year. Now, they adjust that number up to 5.2%.
  2. In 2019, digital advertisements covered 51.5% of global advertising business sales, which is over half of the global total for the first time.Comparing 18-20% growing speed in the last four years, a 15% growth of 2019 seemed relatively weak.
  3. Among all types of digital advertisements, social media continued to be the fastest-growing one, followed by digital videos and search engine service.
  4. Search engine service is still dominating the digital advertising business. More and more retailers are moving their stores online. No wonder, the online advertisement will be extremely important, the search engine will be second to none.
  5. Traditional linear advertainments lose their advantages gradually, Ads through media channels like TVs,Radios, outdoor billboards sum up to less than half of the market share, for the first time this year.
  6. Theprice for the TV ads is rising, but the audience of TVs is declining due to competition from online media, such as YouTube, Instagram, and Facebook, which are more eye-catching because they can reflect daily life and mass interest faster and more flexible. Mobil media are increasingly pulling the audience from traditional flat media such as television and newspapers. Reading habits and entertaining habits are quite different for the young generations.
  7. Evenwith the downturn of the world economy because of the trade friction between the largest two economy body, the USA and China, global advertising business income still increased in most countries such as the USA, China, Russia, and India. These countries still have stable economic growth, even though the growth speed is lower than before. Other countries, like Peru, Chile, Malaysia, Vietnam, and Lebanon, have not made great gains from the advertising business. Some of them have suffered from internal political or economic affairs, some are influenced by the trade conflict between America and China, just because they are parts of the supply chains connecting the two superpower
  8. Advertisementis like a mirror of the economy it serves for. A good economic environment will nourish the advertisement industry. Like in China and most other Asian Pacific countries, the Ads business increased by about 6.3% in 2019, leading the rest of the world. Because of the economic crisis, together with shifting governance and reduction of governmental budget, advertisements growth in Latin America ended up with 4.3%, far from expected.
  9. We are quite optimistic about the outlook for this industry as a whole, which has grown steadily for the last decades. The most inspiring sectionis digital advertising, the most expected territory will be North America, followed by Asia and Latin America.
  10. Big events will help to slow down the economic recession. 2020 is an election year for the USA, andmany other global events will take place, such as the summer Olympic Games and the European football championship. All these world-renowned events will encourage advertisement investment from candidate campaigns, local governments, organizations hosting the events and merchandises including products or services.

Generally, 2020 will be a bumper year for the advertising business.

Major advantages and disadvantages of ETS investing in ETF funds

We have learned that for investing in overseas markets on this stage – ETF funds are our main choice. In this article, let’s learn about the advantages and disadvantages of ETF funds.

Advantages of ETF

The very first advantage of the ETF fund in overseas markets is that it is relatively flexible. For US stocks, it supports t+0 on the day of the transaction. It means you can sell it on the same day you bought. Your stocks can be traded multiple times during the day.

The second benefit is transparency. On the one hand, some funds are mostly index funds. The rules for stock selection are more open and transparent. On the other hand, ETF funds are purchased according to stock value. Therefore, it is common to announce the number and proportion of stocks held. For ordinary investors, ETF funds are completely transparent. As a result, customers avoid risks of rat trading, shady transactions and so on.

The third benefit is that ETF has a lower rate. Either the management fee or the transaction fee, ETF rates are much lower than ordinary stock funds.

Disadvantages of ETF

However, the weaknesses of ETF’s are also obvious. The first drawback is that it is too convenient to trade, so it is difficult to hold for a long time. It is easy to induce investors to trade frequently because the transactions are very easy to operate. In particular, OTC funds do not display stock’s rise and fall during the day, therefore, to a certain extent, it also eases the fear of investors, and the ETF in the market is different. The ETF market is different. It is traded in real-time with very low. It is very easy to operate, and it is can be done with the touch of a finger, so it is really difficult to achieve long-term holding.

The second disadvantage is that in fact, the total transaction costs for ETF investors will be higher, so if you analyze the turnover rate of ETF, you can find that some people have it much higher. Because transaction frequency is high, the total transaction costs are high as well. That is to say because the rate is very low, it cannot hold investors from buying and selling stocks as frequently as they want.

The third disadvantage is that the liquidity is relatively poor, because the sizes of funds are way too small, and it, eventually, will cause poor liquidity. For example, the dividend ETF of our A shares: dividend index is very good, but its daily turnover is tens of thousands. In other words, there are only tens of thousands of transactions. Once the amount of funds is slightly larger, they cannot be bought or sold.


Points above are the advantages and disadvantages of ETF funds in terms of investing, they are not perfect whether on or off the market. We can see some of the major drawbacks of the ETF. Mastering relevant knowledge will help you to avoid troubles. It’s not about how good is your weapon, it’s all about how to use it.

6 Taboos of Investment

There is no golden rule in investment. But there are some basic principles and guidelines which can prevent you from going too far.

Here we will discuss 6 taboos for investment, for your reference.

1.No Investment System

Many investors do not have a mature investment system or do not have an investment system at all. Some investors have an investment system, but they never perform investment operations in accordance with the system requirements.

A mature investment system includes investment philosophy, investment methodology, investment tools suitable for you, portfolio management, transaction implementation, investment psychological control, and other components. This investment system mainly solves three major problems: positions, industries, and individual stocks, that is, how to allocate assets, how many shares are possessed, when to buy/sell, which industries and individual stocks to choose.

In investing, you may wish to write out your own system and constantly review it and make it a “muscle memory”.

2 A Sense of Superiority

Everyone has a preference, and the same goes for investment. Different professional background, experience, personality and investment experience will affect your investment method and preference. Long-term investors usually have a sense of superiority. There is no good or bad method, whether it is a long-term value investment or an opportunistic short-term investment. A long-term investor can be successful as Warren Buffett. Michael Steinhardt is a good example of the short-term investor. The investment suitable for you is the best one, so just follow your heart and get away from your sense of superiority.

3 Prejudice

People have prejudice to many things, but nobody is biased against money. However, when it comes to investment, a lot of people make the wrong decisions simply because of their inherent prejudices. Such as Lehman Brothers, they were so confident about what they believed, because they were familiar with investment, being successful in the past with good experience. The prejudice against risk factors leads to their investment kingdom’s collapse. Sometimes investors are easy to feel too confident in their familiar areas, overly trust their judgments, overestimate their strength, and thus ignore other objective factors and risks.

Taking the pig farming cycle as an example, most people “look down” the pig farming industry, so they missed the “big market” this year.

Therefore, follow market rules, instead of your preconception.Successful investors need independent thinkings. If you just follow the herd without your own judgment, then you can only get an average return of investment. Some famous bloggers, post-investment suggestions daily ,followed by hundreds of thousands of fans. But no one can guarantee their investment, even themselves.

4 Without Independent Thinking

Give up herd mentality, find the most suitable investment method for yourself, through your study and research based on your own financial situation and then improve your method accordingly.

5 Greed

Never try to sell your stocks at the highest point. Do not be greed for the last coin.

Many failed investors set a precise selling price for their stock. However, the price factors of stock are quite complicated, including the whole market,overall evaluation, political-economic environment changes, etc.

Don’t be too greedy since it’s hard to predict the stock market precisely with any theory.

6 Sensitive

This is a little bit controversial. The stock market needs a prompt reaction, but if you are too sensitive and too picky with all the stocks, you might not be able to find a perfect stock to buy-in. No company or stock is absolutely ideal, so keep patient in the fluctuating market, otherwise, you will be too nervous about any hint of price change.

6 Financial Secrets Truly Rich Have

6 Financial Secrets Truly Rich Have

Spending money is always easier than saving money, even for the riches. The inflation rate seems higher than saving interest while watching your friend who earns less driving a new Benz. Are you wondering how he made it in your old Chevy? I will share the top 6 secrets which help you to spend freely with extra saving in your account.

1.Take a Note

Know where your money goes. It’s very important to know where your money goes. Take a detailed note of each spend you make for daily consumption, no matter it’s for foods or for stationery. Control your daily consumption, be aware of what are necessary, try to make savings each month after all the required expenditure.

2.Make a Plan

A monthly budget helps to save. Like a company’s chief financial officer, you need to make a monthly budget for your fixed cost. There are some fixed expenses like employees’ salary and office rent the company has to cover every month, so does a family. You have to list the fixed expenditure like mortgage, phone bills, electricity bills and insurance. Spare the money that you have to spend and make a wishing list based on priority, then you will have a perfect budget to prevent you from blind consumption.

3.Set a Target 

Setting a saving target is the key. The material world is like a magic forest, absorbing the gold coins from your small purse silently. You will be lost if you don’t have a clear target like the stars above the forest. Set a clear and firm target that you will save a certain percentage of your monthly income. Experts usually suggest 10% of monthly income as regular saving to your bank account. You can also set your own saving target depending on your needs, such as for urgent cash, illness, unemployment, or any other unexpected emergency.

4.Cutting Debt Cost

Your debt is stealing your money. No bank will lend you money for free. They will make money from your debts you are owing to them with different interest rate. Therefore, a cost-effective repayment plan can also help you to save money. The credit card interest is usually much higher than your mortgage rate, so the best way is to repay the debt with highest interest first, more likely, the credit card. The better your repayment plan is, the sooner you will get out of the bud of debt.

5.Increase Your Income

Only saving is not enough. If you only make 2,000 dollars a month, you will never afford a million-dollar house no matter how you are strictly executing your saving plan. So, the top secret is, apparently, to make more money. If you can not earn much money from your current job or business, try to find another way to make more money with your specialties, not necessarily quitting the present one.

6.Make an Investment

Money is the easiest way to make money. As we all know, Easy and quick money comes from capital investment. But there are lots of tricks and risks for capital investment. Bank saving account are pretty safe, but it will not reward you much. So, a rational investment will help you to increase your fortune rapidly.

Maybe it’s hard to become a billionaire but you can live like billionaire with the top 6 financial secrets.


Do You Believe in Banks? Do You Know Every Bank Could be Crushed Down?

What happened to the failed banks? Are they all deserved the bad results?

As we all know, banks take deposits from depositors and then look for opportunities to lend loans. It’s impossible for them to just keep all the money at home. Theoretically, any bank can be crushed at any time.

Imagine that somebody says that a bank is going to run down. What will happen? Obviously, this bank must be overrun. Because all the depositors will rush to take out their money. People always think if I don’t go to the bank, others will take out all the money, then I’ve got nothing. The economics believes that others will betray, it would be better to be betrayal first.

  • Can you live through the bank run?

Have you heard about the largest bankruptcy case in the United States. The Bank of United States was founded in 1913 by Joseph Marcus, a garment factory owner, while failed in 1930 by his son Bernard Marcus.

In 1928, Bernard raised the bank’s capital to $ 25 million, with 61 branches and 400,000 customers. They set up subsidiaries to issue and trade securities. In April 1929, with the crashing of the U.S. stock market, the bank’s stock price begun to fall. Bernard Marcus and his executive vice president, Saul Singer, bought their own stock through other affiliates and raised the stock price. This approach caught the attention of the Federal Reserve and state bank inspectors, who criticized Marcus and Singh for “running banks rashly.” The only way is to find a buyer for the Bank of United States.

After a long forward, On December 8, 1930, the merger plan failed. Over the next two days, 2,500 panic savers withdrew more than $ 2 million in deposits from the Bank of the United States. The New York Bank Clearing Association refused to provide guarantees for the Bank of the United States. Eventually, the Bank of the United States was forced to close.

  • What is the right Coping Strategy?

The famous economist Milton Friedman specifically talked about the bankruptcy of the Bank of the United States in Free Choice. He said that after the bankruptcy liquidation, the Bank of the United States paid 82.5 cents for every dollar of depositors. In other words, the bank’s family base is quite solid. If there is no run, the depositor’s money would not have been lost.

When people heard that the Bank of the United States was bankrupt, many people mistakenly assumed that the US central bank was bankrupt. Panic quickly spread, and other New York banks were also at stake. Fortunately, the Federal Reserve Bank of New York soon woke up and immediately took steps to provide cash and liquid assets to other banks in New York City. Eventually, they successfully prevented the bankruptcy of a major bank from causing panic runs and liquidity crises.

  • How to deal with bank runs?

From the bankruptcy case of the United States Bank, we can learn that most banking crises are liquidity crises, not insolvency crises. So the government should take a decisive shot. The Economist Bai Zhi hao wrote the famous “Lombard Street”, in which he proposed the basic principles for dealing with the bank run crisis:

First, the government should lend in a timely and generous manner, hold its ground in the first place, and curb panic;

Second, government loans should only be provided to financial institutions that operate soundly and have high-quality collateral, that is, to ensure that they have a liquidity crisis, not an insolvency crisis;

Third, the government’s emergency loan should use a sufficiently high interest rate, otherwise everyone will depend on the government’s support. Only with a sufficiently high interest rate can we scare away those who are not in a hurry to spend money.


Invest in stocks when stock market is down

As a superstar in the investment world, Peter Lynch has also experienced many stock market crashes. The U.S. stock market plummeted in 1987 when he was managing more than $ 10 billion in the Magellan Fund. Within a day, the fund’s net asset value lost 18% and the loss was as high as $ 2 billion. He had to choose to sell stocks like everyone else. Since then, Peter Lynch has experienced many stock market crashes but still achieved very successful performance. In the face of the plunge, some of Peter Lynch’s practices are worth learning from.

1. Stay calm during the plunge

First, strengthen confidence and maintain a rational and positive attitude. For Peter Lynch, whenever the Big Picture is worrying and hopeless, he pays attention to the “The Even Bigger Picture” because the latter keep investors awake. “Despite all kinds of disasters that have happened since the 20th century, there have been tens of thousands of reasons to predict the end of the world, but investment stocks still yield more than double the yield on investment bonds. Looking at the stock market, we will strengthen our confidence and invest in stocks for a long time, and the yield will definitely be much higher.

2. Hold firm stocks of good companies

Second, don’t throw out all the stocks at low prices due to panic, and have firm courage for the good company stocks you hold. Peter Lynch said, “If you desperately sell stocks during a stock market crash, the selling price tends to be very low.” Buffett has also warned investors that those who can’t stand a 50% loss in their stock market Investors who still insist on not moving stocks should not invest in stocks.

3. Fully pay attention to the fundamentals of the company

Third, give the company full attention to its fundamentals, adhere to the concept of value investment, and find treasure in a bearish environment. Peter Lynch’s investment in Bandag is the best example. Bandage Corporation is engaged in the business of retreading used tires. Since 1975, dividends have continued to increase, and profits have increased by 17% annually. Despite the continued increase in revenue, Bandage Corporation’s stock price has also been twice during the 1987 stock market crash and the Gulf War. The plunge and this overreaction on Wall Street created a good opportunity for Peter Lynch to buy on dips. After the two big falls, not only did the stock all recover its lost, but it also rose dramatically. Due to the cyclical economic fluctuations, most of the stocks in the stock market will rise or fall with it. In addition to keeping calm and not eager to lighten up, investors must also realize low-risk profits through value analysis.

Should you invest on crypto currency?

The market of cryptocurrency is not stable, many people have heard the stories of getting rich by one night, or broke in a short time. But Are cryptocurrencies valuable? Can cryptocurrencies be invested? What are the advantages of cryptocurrency investment?

Why cryptocurrency is valuable?

The value of cryptocurrency comes from the nature of cryptocurrency and the nature of currency is interlinked. The nature of money is only a medium for transactions. It can exist in any form and does not need to be valuable in itself, but it must have some kind of rarity and liquidity. cryptocurrency can act as a medium for people to trade, so cryptocurrency has value.

Cryptocurrency is different from fiat currency supported by national credit. Compared with gold and silver, which can be used as a currency without any credit guarantee, it is not credited by any institution or country. The cryptocurrency user group distributed around the world is its credit. The system, the larger the user base, the more valuable cryptocurrency is. Take Bitcoin as an example. Bitcoin currently has hundreds of thousands of active addresses and is still growing rapidly. Moreover, the rules of Bitcoin use limit the number of Bitcoins that can be issued to 21 million. At the same time, it is a hard currency that can be used globally. This is why digital currencies can be valuable and can continue to appreciate.

Can cryptocurrency be invested?

Cryptocurrencies are investable because of price fluctuations. But whether cryptocurrency can be invested and what investment strategy to take depends on everyone’s risk tolerance. Friends who have experience in investment and financial management know that whether they go to a bank to buy wealth management products or to open a stock account with a securities company, most financial institutions need customers to fill out a risk survey questionnaire before they provide product services. The same is true for cryptocurrency investments.

What are the advantages of cryptocurrency investment?

The main advantages of cryptocurrency investment can be summarized as follows:

(1) Convenient operation. Register and open an account on the trading platform to start trading

(2) The threshold is low, and only a few hundred yuan can be used to participate in investment speculation

(3) 365 days a year * 24 hours, unlimited transactions, can participate in transactions at any time.

(4) Wide coverage and no national or regional restrictions.

(5) Appreciation prospects are good. Currently, the cryptocurrency and blockchain industry is still growing rapidly. The invest of outstanding currencies in advance will surely yield amazing returns in the future.

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