Clarification:
I am just trying to flip the coin, to discuss about some investment tools in this article. This article is full with my personal opinion, so feel free to close this article whenever you feel sicked and wanted to vomit, please bear in mind that I am not pointing you with a gun to force you finish reading it.
So what is SMF?
SMF is the short form of Share Margin Financing,
it is actually a loan which you pledged your shares to the bank,
then the bank will lend you a certain amount of money,
you can use that money to buy more shares or for other uses.
For more details of SMF,
please go to Investment Bank and ask.
Also is better to visit a few different bank,
who knows the next bank might provide you a better offer?
So......
if you read most of my articles,
you should know that I did use SMF for my share investment.
WHAT !?
Borrow money and................... invest at shares!?
This is a very sensitive topic.
Non-main stream I would say.
However............
everyone borrowed money to buy house and car,
why can't we borrow money to invest at shares?
Maybe you will say that the housing price keep rising that's why can borrow money,
but shares price do appreciate too.
Maybe you will say that we shouldn't borrow money to buy shares because the shares price might drop and lose money,
but how about car loan?
The value of cars will drop too.
So why is it that borrow money to buy a car which its value 100% confirmed will drops is allowed,
but borrow money to buy shares which might rise in value is not accepted?
Because it is non-mainstream?
Still remember last time.............
After I started to invest for almost a year,
my return was only 28%........
From that time,
I knew that I can't be someone who can earn 30% every month, or every year also earn a few hundred percents.
I knew that I am not investment super genius,
I am just an average, normal person.
So instead of trying to be investment genius,
or trying to find teachers who claimed that they can help me to achieve 1,000,000,000% in investment return.
I decided to stop day dreaming,
be down to earth, no shortcut but one step followed by one step!
So,
the problem that I was trying to solve is:
"As a normal investor, how can I achieve higher investment return?"
Thus, I found SMF.
I realized that by using SMF, I can pull up my investment return to be higher than normal.
For example,
if my investment return per year is 10%,
by using 1.5 ratio of SMF, I can pull it up to 15%.
If 20%, I can pull it up to 30%.
Sounds good right?
But don't be happy so fast............
SMF however, is also a double-edged sword,
since it can magnifies your investment return,
so if you lose money, it will magnifies it too.
During year 2014,
my investment return was -8%, but because of the magnification of SMF,
my return became -12%, so I lost more money.
Imagine if the investment return is -80%,
after magnifying it will becomes -120%,
you will lose everything!!
Even though there are risks by using SMF,
but it will not stops me from using it.
Same like driving on the road,
it is dangerous especially many drivers thought that they are F1 driver at the highway.
However, we can reduce our chances of car accident if we drive carefully.
Same goes to investment,
I believe that if I invest carefully, I am able to reduce the risk of losing money by using SMF.
Some people hate borrowing money,
is because after they owe the bank money,
they will feel that they are not that worthy, they are just trash.
I think this thinking should be modified.
If the bank willing to lend money to you,
that means the bank think that you are worthy and willing to co-operate with you.
The bank need to pay the FD interests to those customers who saved money in FD,
so I am the partner who the bank is looking for.
The bank let me use SMF, so that I can speed up on my financial road.
In turns I helped the bank to earn money, so that the bank is able to pay FD interest to the customers.
This is a WIN-WIN SITUATION.
Last thing I want to emphasize here is that,
I am not asking everyone to follow me to use SMF for investment.
The most important thing is..............
UNDERSTAND YOURSELF,
then you will find a suitable investment method for yourself !
Maybe you don't need SMF,
since you might be the super investment genius??
Who knows?
Investment is about doing own thinking, making own decision.
Thanks for reading.
I don't provide any buying/selling suggestion above,
please make your own investment decision and be responsible with it.
