Resolve to Make 2012 A Great Year

Happy New Year! How did you enjoy ringing in the new year? Did you wake up feeling great or with a literal or proverbial hangover? Now that the celebrating has subsided, are you ready for 2012?

This year may be a momentous one with some major milestones on the calendar, from the Chinese Year of the Dragon to the end of the Mayan calendar. Some dates are already set, such as the Expo in Yeosu, South Korea (May 12-August 12), the Summer Olympics in London (July 27-August 12), not to mention the landing of the Curiosity rover on Mars in August, and, barring a new framework agreement, the end of the Kyoto Protocol on December 31. Some major events this year are already known, while others are not. No one really knows what will happen in places such as North Korea, where newly-installed “supreme commander” Kim Jong Un takes over as leader; possible sanctions and threats to blockade the Strait of Hormuz; unrest in Syria and other protests sparked by the Arab Spring; the European financial crisis; protests in Russia; potential economic slowdown in China; general elections in the United States and in dozens of other countries worldwide. No one knows what will happen. On December 21, 2012, when the Mayans purportedly predicted the end of the world will occur, we’ll look back at the year 2012, analyze the fall out, and, hopefully, be around to tell about it on December 22. Until then, we can only speculate about the future.

There’s no reason to worry about 2012. We can only control what falls in our own sphere of influence, which for most people amounts to whatever affects us directly. What do you have planned for yourself this year? Have you considered making some life changes? I believe in making and achieving goals, and I consider New Year’s resolutions worthwhile. Realistic resolutions can help frame a goal and give you a specific objective to achieve. You may not achieve everything you set out to do in a given year, but if you achieve at least one resolution or make progress toward one, you’re better off than you were. I met half the resolutions I set for myself in 2011 and set some new targets to achieve in 2012. The ones I did not achieve will be carried over to this year. They range from publishing a new book to losing weight to strengthening my faith to learning the guitar. Some will be easier than others, but I resolve to tackle them all in the next 12 months.

Even if you’re not the type of person to make New Year’s resolutions, there’s one goal you can resolve to achieve this year. Make this year a better year than 2011. Make it the best it can be. It doesn’t matter if you had a good or bad year last year. Life can always be better. Resolve to make 2012 a great year.

Vote Now! MarketWatch’s "Next Great Investing Columnist" Contest

VOTE NOW!  I entered an article in MarketWatch’s "Next Great Investing Columnist" contest.  Vote for it by clicking on the Facebook "Like" button.  There are many great entries, and the top vote getters will head to a second round with a third and final round in November. The winner gets a six month contract to write as a columnist for MarketWatch, an affiliate of the Wall Street Journal.

Here’s the full link:

The article draws heavily from my experiences in Thailand in the midst of flooding. The floods are a good analogy for the recent swings in the world’s financial markets, with both flood victims and investors looking for shelter. The article offers some concrete suggestions to investors on how they can stay afloat during financial turbulence.

Thanks for reading my article and for your support!

Sound Investment Principles

Some people have asked me about my investment strategy.  Here are some investment principles that have paid dividends.

  1. Buy what you know.  What companies or sectors do you know?  What products do you use?  Are they good companies with promising futures and good growth prospects?  If so, buy some of their shares.  But do your homework first.  Buyer beware.
  2. Don’t try to time the market, but know the season.  It’s folly to jump in and out of the market when you think it’s going up and down because sometimes you win, sometimes you lose.  It’s better to look at the long term and invest accordingly.  What’s in store for this year or the next few years?  Do you believe the market do well this year?  What do the experts say?  If you have a broker, what does he or she say?  Going with your gut instinct is often the best check and balance to investing.  If it sounds too good to be true, it probably is.  Likewise, the situation never seems to be as dire as some predict.
  3. Don’t spread yourself too thin…concentrate.   Don’t try to track too many stocks or funds.  Pick a few (up to 10-12) that you like and focus on them.  Study them and look at their fundamentals such as P/E ratio and EPS.  Professionals don’t try to track too many stocks, and you shouldn’t either.  Add or remove companies as they under- or outperform.
  4. Don’t sell too high or too low.  Since you can’t time the market, set upper and lower price limits to trigger buys and sells.  Don’t ride a stock to delisting; get out while you can still recover some cash.  Don’t wait for an investment to reach an unlikely price target.  Better to get out while you’re ahead.
  5. Watch those fees.  If you don’t feel like a savvy investor, read the fine print before hiring a broker or buying a fund.  Sometimes the fees can be in excess of 2% of the total principal, meaning that your broker would have to outperform you by at least that much to justify the fee.  Sometimes doing it yourself – and employing available investing tools such as stock and fund screeners – yields better returns (or fewer losses) than hiring someone to do it for you.  If you feel more comfortable using a broker, ask them for their fee structure up front.  Some will charge a fee to open and close account as well as monthly wrap fees.  These can be palatable if your broker offers a low fee structure (1% or less) or handles your account carefully. 
  6. Move past the basics of investing.  The smartest investors don’t put all their eggs in one basket.  Consider real estate, a small business, options/margin trading, micro-loans, IPOs and private equity investments to diversify your portfolio. lets you offer higher interest loans to Americans, and does the same for international micro-loans.  Try the IPO market.  W.R. Hambrecht offers periodic open IPOs.  Try angel investing or secondary shares of privately held companies on a site such as or offers real estate and businesses for sale around the world.  Try investing in foreign markets or currency trading. facilitates trades in foreign exchanges and currencies.  (Disclaimer:  I have investments through some of these sites but have no personal financial stake in them.)
  7. Make investing a habit.  These are several basic investment strategies you can use to improve your financial situation by investing just $50 per month (every little bit helps):
  • Open a Roth IRA and invest in it as an after-tax retirement benefit;
  • Increase your 401(k) withholding until it hits the annual ceiling;
  • Open 529 accounts for your children and set the money aside for future college expenses;
  • Set the money aside in a Health Savings Account (HAS) or Flexible Spending Account (FSA) to pay for anticipated expenses tax free; and/or
  • Pay an additional $50/month on any credit card debt and/or mortgage.

What you should NOT do:

  • Spend the money on depreciable fixed assets (aka “stuff”).
  • Spend it on dining out, entertainment, or any expense that offers a one-time benefit.