Woodpecker and Snake

Woodpecker builds his nest above pines tree. You may wonder why pines tree but not other type of tree? There is a reason behind it. Snake is a predator of the woodpecker eggs and it seems it is easy for snake to climb the tree to catch the eggs. In order to protect his progeny, wood pecker must select a place where he can safeguard his progeny. Pines tree secret resin, which is an irritant to snake. Whenever snake tries to climb over tree to catch the eggs, he would end the up with a failure. This is because whenever snake climbs the tree, along the way, he would suffered from an irritation from the tree resin. Because of the irritation, the snake will fall down from the tree half way before he manages to catch the eggs. That’s the smart way of woodpecker to protect his progeny.

In the investment world, the naïve investors are similar to the greedy snake. Whenever there appears an “Once in a life time opportunity”, they will flooded to it. The promoters of the “opportunity” definitely will tell the investors how lucrative the investment and best of it, it appears “Zero Risk, Capital Guaranteed”. In order to lure the investors, they will equipped with big titles such as managed by world renowned fund managers, backed with hundred years history banks and so forth. Because the titles are so big and glamour, the investors entrust their money and invest to the so called “Zero Risk, Capital Guaranteed” investment. Keep in mind that the hundred years history bank does not equivalent to hundred years of successful fund management. If you really look deeply, you will find out that the bank nowadays acts more like a financial supermarket: they sell you everything, from A to Z. Housing loan, business loan, credit cards, machinery leasing, mutual funds….etc. When you really examine their performance of the fund they promoted, it seems that majorities of them not only do not preserve the capital of the investors but deteriorate it. While the objective of the investment should always be first preserve the capital and second for capital appreciation, they deliver the opposite result. When asking why they deliver such poor result, they will blame to external factors such as high fuel cost, Tragedy 9-11, financial crisis and so forth. Seem that their poor performance is none of their business. True, those crisis and negative events happens all the times: in the past, present and for sure it will continue in the future though the theme might different, so are these fund managers telling you that the fund performance will continue perform poorly in the future? If so, why selling the funds promising the investors how good the potential return in the first place? Why they still enjoying handsome paid while fund continue perform poorly?

To be a snake or woodpecker is your choice. To be a snake looking for quick and easy profits is dangerous. After all, life is never easy. Life is not a story book, it is a reality.

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