ARE there ways to profit from bad news and market panic? What sense can be derived from chaos, as there seems to be no shortage of woe from the world, be it civil unrest in Syria, earthquakes from Italy to Indonesia, or Greece’s possible exit from the EU?
On May 24, Angela Merkel left the EU Summit open to the possibility that Germany would consider a compromise on debt sharing, whereby a “redemption fund” would be created with joint liability among its Eurozone neighbours.
“Who’s going to foot the bill for Portugal, Ireland, Greece and Spain?” is the huge question on everyone’s lips. If approved, the European Redemption Fund would be backed by gold reserves, giving it a net worth of 2.3 trillion Euros. It would help governments cut outstanding debt to below 60 per cent of economic output.
The life of the fund would be limited to 25 years and would be accompanied by a pledge by member states to commit to economic reforms. Are economic reforms such a bad thing? What makes austerity drives too hard to bear?
Greece, retaliating against harsh austerity measures imposed on it, will hold elections on June 17. In the May 6 elections, the pro-bailout party, New Democracy, fell short of a majority, causing President Karolos Papoulias to call for fresh elections. Not knowing what might happen next, global financial markets plunged. On May 24 the Euro fell to a 22-month low against the US dollar.
How does instability within the EU affect global financial markets? How has Greece caused so much stress on the EU? Greece is responsible for 0.4 per cent of the world economy. Major players in the global markets think that a Greek exit would inflict collateral damage and spur sovereign defaults as well as bank runs (withdrawals), credit crunches (rising cost of funds), and recessions. They say that Greek incomes, bank deposits and property would lose value.
Food prices would rise by a quarter.
According to the Institute of International Finance (IIF) the Greek exit (Grexit) would cost the EU in excess of US$1 trillion. What then if Spain and Portugal exit too? JP Morgan Chase estimates that a one per cent slump in the euro economy drags down growth elsewhere by 0.7 per cent. Exporting nations, from UK to China would suffer and commodity producers like Russia would face falling (oil) prices.
At first I was gob-smacked by this “gobble-de-gook.” Then it struck me that unless I learn to see opportunity in situations, unless I learn to make “cents” of stuff, how could I profess to be living my best life? Why can’t EU leaders just agree to print money and get on with it like the US?
For a start, the 17-member union isn’t a single republic like America. Why would your neighbour willingly be held accountable for your sins? This is probably what separates France and Italy (those who support the joint fund) from
Germany and The Netherlands — those who don’t. If you study investment trends you’d know that whenever there’s uncertainty, people become risk averse and they do what they perceive is safest. Investments get shifted from equities to bonds and safe haven currencies such as the US dollar or the Japanese Yen.
Tip 1: Be cautious. When times are bad, currencies naturally collapse against the Dollar. Last week the Indonesian Rupiah fell to a two-year low of 9,574 against the US Dollar. Is cash king?
In April, the rate of inflation in Singapore was 5.14 per cent. Singapore’s fixed deposit interest is averaging 0.7 per cent. The market is forecasting that due to its high inflation, the Singapore Monetary Authority will allow the Singapore dollar to appreciate further.
Tip 2: How to enjoy the best yields at uncertain times? I would buy a fixed-income asset that appreciates when bad news hits the markets! I would buy the iShares Barclays 20+ Year Treasury Bond Fund; an exchange — traded fund that measures the performance of US Treasury securities.
Tip 3: I’d buy the Powershares DB US Dollar Index Bullish Fund, an exchange-traded fund that gives investors exposure to the US dollar against the Euro, Jap Yen, British Pound, Canadian dollar, Swedish Kroner and Swiss Franc and efficiently enables long - exposure to the dollar.
Tip 4: Most of all, I would buy Malaysian to keep my country’s balance of payments strong. I would buy Malaysian to increase domestic demand for Malaysian-made goods and services.
Demoralised by reprimand
MY boss reprimanded me in front of the team. He scoffed at my efforts. He said I was out of touch and that my skills had deteriorated. Now I feel demoralised.
When you think about your boss telling you that you messed up, what thoughts and feelings come to mind? (Luckily we don’t see gestures and can’t hear words!) What state does that put you in? What do you believe about what happened?
You feel demoralised. You’ve lost confidence. You’ve made it mean that you can’t lead because your boss doesn’t think well of you. Does your response enhance your learning abilities? Do your meanings serve your creativity?
Let’s take a step back. What if it were true... that most people don’t really know how to give feedback. They give opinions or make judging statements. Because we’re responsible for our mood and to keep our morale high, let’s refuse to allow their sloppiness affect our state. How do we do this? We set an intention to look for the good in everything.
Easy? Not always. But let’s just take whatever happened for what it was worth, the information that it contained. What allows us to be strong about this? Simply because our self-esteem isn’t dependent on other people’s opinions!
We’re made up of good stuff. We seek to improve everyday! So we say, “Thanks, boss! I hear you. Would you spend some time with me later to go through all the ways I can do better?”
Imagine the admiring glances of your co-workers as you take this stand. It may surprise you that you would lead more powerfully after that.
Learn to love yourself
I’VE gained 5kg in the last three months. I was already trying to lose weight before that but nothing succeeded. Now I hate myself. I’m especially unhappy that the man I’m interested in doesn’t seem to notice me.
If you don’t find yourself attractive, isn’t it a bit much to expect others to think you are? If you don’t like your own company, how could you expect others to want to spend time with you? We attract who we are. We get more of what we focus on. Each one of us exudes energy, a particular vibrancy that communicates, “This is who I am”.
Can you see what this means? Examine the way you’ve described yourself. Is this the language of someone used to succeeding? Unless you set yourself up for success, isn’t it rather unrealistic to expect success? I’d rather say, “I’m on my journey to my ideal weight. Whatever I’m doing will support my way to there.”
Instead of saying, “Nothing ever succeeded,” I’d say, “Everything I do will add up to my achieving what I want.” I would count every small sacrifice I make. I would celebrate each small step I take. I’d see my every effort as all the ways to mark and measure how I esteem myself. How I love my body is how I celebrate my best life.
Now my favourite question: What will you do about that?
1. Eat less per meal.
2. Whenever possible, walk instead of drive.
3. Go to the gym even if it means showing up dressed in slacks and sneakers. Choose your favourite music and walk the length of two songs.
Be kind and gentle on yourself. It’s all about taking one step at a time.