While most people have been busy watching the FIFA World Cup, I’ve spent some time scanning the world of investments. And I came across a couple of interesting findings!
Firstly, I found an amusing and intriguingly titled index fund, called the Nifty 50. Yes, that is it’s real name. The Nifty 50 is an Indian index fund carrying the top 50 stocks from India; an exciting and emerging economy. Sounds appealing, right? But there is a catch. The Nifty 50 is also traded in Singapore, so that investors can avoid Indian bureaucracy. In Singapore, the Nifty 50 is just a derivative which tracks data from index funds; the Nifty 50 is essentially a shadow of a shadow. It has no underlying value. Try telling that to its investors.
Secondly, next month will bring the IPO of a company considered the Chinese Apple; Xiaomi, the Chinese smartphone maker. Investors are lining up. However, last year, Xiaomi made nearly a $1billion AUD loss.
People get very excited about stocks and options; what sounds cool, what is in vogue? But sometimes, things need to be stripped back to the basics.
All this can lead you to ask, where is the value?
The value is first and foremost found in the decisions you make. Creating a plan with realistic timeframe and monetary lifestyle goals. Secondly, value is then enhanced through intelligent investments to give you the greatest chance of achieving your lifestyle goals.
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Mark O’Toole CFP™