“Risk is not volatility. Risk is the permanent loss of capital.” This simple yet profound distinction by Howard Marks reshapes how we think about risk management. Many people conflate risk with short-term price swings—volatility—but true risk is far more consequential. The Misconception of Risk as Volatility The stock market goes up and down daily. Headlines …
In a personal net worth statement, we normally classify car as an asset (click here to learn more about net worth statement). Owning a car is often seen as a rite of passage and a symbol of independence. However, is it really an asset that is able to generate cash or a liability that drains …
In the world of personal finance and investment, the classification of real estate as either an asset or a liability has been a subject of much debate. While some argue that real estate is a solid asset that appreciates over time, others contend that it can become a liability, draining resources and tying down capital. …
In personal finance, the term “liability” often conjures up images of debt—credit card balances, mortgages, car loans, and student loans. While these are indeed common forms of liabilities, the concept of what constitutes a liability is broader than just financial obligations. To truly understand and manage your financial health, it is essential to rethink and …
In personal finance, assets usually mean things you own that has monetary value. They are further divided into cash and cash equivalents, investment assets and personal use assets (click here to learn more). However, if we really think about it, an asset should be a thing that can generate income. A car that requires monthly …
Defining financial planning Financial planning can be defined as the process of taking a comprehensive look at your financial situation and building a specific financial plan to reach your goals. In financial planning, the end result is an actionable financial plan which will help to achieve your financial goals. This plan is a comprehensive evaluation …
I guess no one will say NO to dividend from stocks. Nonetheless, there are four dates related to dividend. These are announcement date, ex-date, entitlement date and payment date. So which dates are important? First, let’s define them. Four dividend dates Announcement date This date is also referred to as declaration date. The definition …
Have you heard of the term feeder fund? If yes, do you really know what it is? Basically, it is a kind of mutual fund. According to Investopedia, “A feeder fund is one of a number of funds that all put investment capital into an overarching umbrella fund that is called the master fund, for which one …
Since I have quoted so many times from Investopedia, I would be remiss not to write an article about it in this blog. It is like taking people’s ideas without giving credit (although I did give credit to them). What does it do? And why do I use it so often? Taken directly from its …
Before I start with my definition, let’s google it first. According to Investopedia, “An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the …
