What Sounds Most Right about Stocks, Bonds and Mutual Funds May Not Be So Right - 4
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
This is why the new sub headlines reads: Does hard work pay off. The answer is yes, it does pay off. In my life it has always paid off. I have not seen when people did what they were supposed to do, spent their time checking, researching, trying to analyze companies, in great depth- what the company was doing last year, how they have changed according to the competition, even more important is how fast they are able to meet the consumer demands. The companies who keep the consumer’s demands in mind are the one who will continue to flourish year after year. Do your proper research, analyze the companies, ask yourself why you want to invest, what you expect in return out of it, and once you have done all that in shaa Allah you will come out to be the winner.
Fact # 7
LOOK TO THE PASTS TO SEE FUTURE.
Funds and investments pools are consistently launched with “proof” that they have worked in the past and will work in the future too. What’s the proof? It’s often an illustration showing that if this brand-new fund had been existing 10 years ago, people who owned it would be fabulously wealthy by now. This “if only I had a time machine” technique is known in the trade as “back testing”. Unfortunately, it rarely works in going forward.
INSTEAD Don’t invest based on past performance.
As the fine print in virtually any legitimate investment offering will tell you, past performance is no guarantee of future success. Rather than looking at the past, stick with what has the best chance of success in the future: an ultra-low cost, diversified investment portfolio.
To conclude, for any investor it is important to look at the past performance while at the same time you must pay attention to what the company is doing at present. More important than both of the above mentioned is what the companies are forecasting or planning. Try to do what a great hard time investor, most successful investor in the world, Warren Buffet does, does. For example, I read once he wanted to invest in certain companies; he went to the store where the company’s merchandise was available, he not only visited but discussed with the customers the pros and cons about the company. He looked at the stores foot traffic, demanded from the people what was the reaction and what the people were buying. The second step to that is to meet the management. Make an appointment with the company, go meet them. Find out what their plans are, not only for this year but also for moving forward. What do they think their greatest competition is, and what plans do they have to outperform the competitors. Your meeting with the management of the company will open up new horizons for you.
These different facts and different realities I have tried to share with you are seven great ideas for your investment. If you work and put all of these seven ideas together, try to study them, understand and implement them in your investment, be very careful to understand and take each article from # 1 to #7 and go through it thoroughly, understand it, implement it, before you start investing in any company.
Once you have done all of this: spent your time, done your research, based your time on analyzing the facts about your future investment, you will come up with conclusion whether or not they match with what you want. Remember, if you do not follow any of these rules from the seven facts I have shared with you, you may be surprised with not such great results. My suggestion is take your time, understand these seven facts, and try to learn the basics of investing from these facts. Insha Allah once you do all this carefully, properly you will see great results. Do not forget to follow the other basic rules that I have been sharing with you, year after year. Investing can be and will be fun, and will bring good results as long as you do not get greedy, and do not simply follow your emotions to buy certain companies. Buy company stocks strictly based on facts and performance, not your emotions. Emotions do not count, and do not bring good results. On the other hand, your hard work, research, meeting with the company directors and managers, looking into the company history, checking out what the company is presently doing, even more importantly, trying to understand what the company's plans are for the future matter. That inshaa Allah will bring you great results.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale)
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