The media around us continues to paint a rather gloom future is upon us. Governments all over the world continue to come to grips with what seems to be the worse economic crisis to hit the modern world. Most would be bombarded daily by the continuous stream of bad news concerning the economy.
However the oracle of Omaha was famous for quoting “We simply attempt to be fearful when others are greedy and to be greedy when others are fearful”. What this means is that one does not have to follow the trend surrounding us just because everyone does. So yes the economy is not at its best but that doesn’t mean there aren’t any opportunities in it.
Such difficult times (recession to some depending on who you read) always presents the “silver lining” and opportunities. There are possibilities aplenty depending on one’s financial position and risk appetite and the following are just a few:
Refinance and/or reschedule loans – Central banks are pressured to maintain the balance between stimulating a slowing economy and inflation. The interest rates in the US are almost at 0% while locally BNM has the leverage to control the OPR which translates to BLR for customers.
It is during these times of low interest rates one should take the opportunity to fine tune one’s loans commitments. While those of variable interest rate loans may see some benefit, those who are on fixed rate loans would have the most to gain from low interest rates.
Considering that big purchase – Low interest rates coupled together with companies lowering prices is a combination that would benefit the consumer indeed. Central banks lower interest rates to ensure that the economy doesn’t grind to a halt while companies continue to drive down margins to meet sales target.
Whether it is a new car or that property that you have been eyeing for so long, chances are the prices of these assets would have been reduced as companies struggle to clear inventories and generate cash flows. Add that to low interest rates and the consumer is definitely in a position to benefit from the increased purchasing power.
Credit card debts – Competition in this market segment is tremendously fierce among the financial institution in Malaysia. Banks continue to provide numerous promotions to get you to sign up with them. Remember the day’s way back when the concept of lifetime validity for rewards points was only offered by very few banks, these days everyone has the same option.
Those with credit card balances should take the opportunity to clear their debt by transferring their debt to a lower charging interest rate card. This provides more flexibility to the consumer to better manage debt payment obligations.
Equities & commodities – Those who invested in the gold or fuel as early as 2005 would have made huge returns during the heights of the end of 2007 and early 2008. While both equities and commodities have significantly come down from their dizzying highs of a year ago, some believe that the floor is still a long way down. In the end, it is the consumer and investor’s risk appetite that would determine one's entry into the market.
Personally I would prefer to purchase during an upside movement of prices rather than trying to time or predict the bottom. The same principle mentioned earlier in the piece becomes a powerful advice during these trying times.
So yes times are difficult but it does not mean that we should think and talk our way into a recession just because that is what everyone says. Fortune only favors the brave so it is really up to us to see if we are brave enough to do so.
Cheers!!! :D
However the oracle of Omaha was famous for quoting “We simply attempt to be fearful when others are greedy and to be greedy when others are fearful”. What this means is that one does not have to follow the trend surrounding us just because everyone does. So yes the economy is not at its best but that doesn’t mean there aren’t any opportunities in it.
Such difficult times (recession to some depending on who you read) always presents the “silver lining” and opportunities. There are possibilities aplenty depending on one’s financial position and risk appetite and the following are just a few:
Refinance and/or reschedule loans – Central banks are pressured to maintain the balance between stimulating a slowing economy and inflation. The interest rates in the US are almost at 0% while locally BNM has the leverage to control the OPR which translates to BLR for customers.
It is during these times of low interest rates one should take the opportunity to fine tune one’s loans commitments. While those of variable interest rate loans may see some benefit, those who are on fixed rate loans would have the most to gain from low interest rates.
Considering that big purchase – Low interest rates coupled together with companies lowering prices is a combination that would benefit the consumer indeed. Central banks lower interest rates to ensure that the economy doesn’t grind to a halt while companies continue to drive down margins to meet sales target.
Whether it is a new car or that property that you have been eyeing for so long, chances are the prices of these assets would have been reduced as companies struggle to clear inventories and generate cash flows. Add that to low interest rates and the consumer is definitely in a position to benefit from the increased purchasing power.
Credit card debts – Competition in this market segment is tremendously fierce among the financial institution in Malaysia. Banks continue to provide numerous promotions to get you to sign up with them. Remember the day’s way back when the concept of lifetime validity for rewards points was only offered by very few banks, these days everyone has the same option.
Those with credit card balances should take the opportunity to clear their debt by transferring their debt to a lower charging interest rate card. This provides more flexibility to the consumer to better manage debt payment obligations.
Equities & commodities – Those who invested in the gold or fuel as early as 2005 would have made huge returns during the heights of the end of 2007 and early 2008. While both equities and commodities have significantly come down from their dizzying highs of a year ago, some believe that the floor is still a long way down. In the end, it is the consumer and investor’s risk appetite that would determine one's entry into the market.
Personally I would prefer to purchase during an upside movement of prices rather than trying to time or predict the bottom. The same principle mentioned earlier in the piece becomes a powerful advice during these trying times.
So yes times are difficult but it does not mean that we should think and talk our way into a recession just because that is what everyone says. Fortune only favors the brave so it is really up to us to see if we are brave enough to do so.
Cheers!!! :D
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1 comments:
Comments from Haloscan:
Impressive!
hazyr | 01.19.09 - 10:48 pm | #
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Not really, I'm not an economist never mind a financial planner :P
Cheers!!! :D
hyelbaine | Homepage | 01.20.09 - 6:27 pm | #
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