Great Investing Rules To Become RICH

Hope this information is useful to you......

I find that achieving investment success is the confluence of a number of factors. Try to keep in mind these  ideas as you're crafting your own investing strategy.

Think Globally:

The days of just allocating 10% of your portfolio to an international mutual fund without thinking are over. The steady decline in the U.S. dollar is only one reason to have more global diversification. The world is filling in fast and you need a global perspective in seeking growth and value opportunities.

In particular, emerging markets with 85% of the world’s population, 25% of world gross domestic product and generating more than 50% of world economic growth still only represent 11% of the world’s total market value. This is a great opportunity since many of these countries have higher foreign exchange reserves, lower foreign debt, lower inflation and higher credit ratings, and have enjoyed average annual economic growth of 7.7% during the last four years.


Get Organized:

Most portfolios I review are a hodgepodge and rarely reflect a well-thought-out strategy. Investors would be better served by separating their portfolios by goals and risk. Why not a core and explore strategy with a core portfolio for the capital you primarily want to protect and a few growth portfolios with capital appreciation as the overriding objective?

This keeps India, Treasury bonds, gold, foreign currencies, China and biotech in their proper places.


Use ETFs As Core Investment Tools:

Although ETFs are popular because of their low cost, transparency and tax efficiency, they can also help you get organized and go global.

ETFs offer investors risk management techniques such as using trailing stop losses and there is no better way to diversify your portfolio into areas such as precious metals like silver and gold, foreign currencies like the Swiss franc or euro, countries like Singapore or Brazil, timber and technologies like clean energy or biotech.


Look Under The Hood:

Before investing in an ETF, make sure you take the time to look to see what companies are in its basket and how they are weighted. Traditional market cap weighted ETFs in particular can have a high concentration in its top names.


A Rifle Is More Deadly Than A Shotgun: Keep in mind that broad-based ETFs are a very different animal than narrow ETFs that focus on a particular sector or sub-sector.


To Beat Benchmarks, Look Forward:

The traditional market cap weighted indexes such as the MSCI World index that most institutional money managers use as their benchmarks look backward. For example, in the MSCI world index, America accounts for 48%, Japan 11%, Australia 2.3%, Germany 3.1%, Singapore 0.37%, Brazil 0.7% and Canada 0.1%. Japan is still 40% of the Asian MSCI index. To beat these benchmarks, use common sense and weight countries based on prospects going forward rather than the value of their market due to past performance.


Politics Matter:

Take off your green eyes-hades, get your head out of the numbers and start paying attention to politics. Great bull markets start with significant political reforms and end in their reversals.  What are the prospects and likely impact regarding upcoming elections in Australia, Russia and Taiwan?

You need to know.

Lead With Momentum, Check On Valuation:

It is difficult to fight the momentum of surging markets. Chartwell ETF watches 30-, 50- and 200-day moving averages closely in making its ETF selections but also checks them against overall valuations. When you see an emerging market like India or Indonesia trading at 25 times earnings, it is time to apply the breaks and take some money off the table. An 8% to 20% trailing stop-loss strategy is also wise and takes emotions out of the equation. Only a fool holds out for top dollar.


Follow The Big Boys:

Chartwell ETF also looks carefully at where the big global money managers are placing their bets.

Being a bit ahead of these massive investment flows is the goal. You don’t want to be left behind holding the bag as behemoths like Templeton sharply reduce weightings to countries like Mexico or Malaysia.


Date Before You Marry:

It is surprising how many investors change advisers or money managers without getting to know how they think. Take your time and have a few dates before tying the knot.