Advice

The World of Investment Banking: Trading, Investing or Managing?

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For new and experienced investors alike, the best place to start with managing your money and investing it wisely is by asking investment bankers, who are specifically trained and experienced in the investment world. The insight, experience and technical knowledge they can provide will help turn your investment into a profitable one.

What is Investment Banking?

Experience investment bankers will have expertise in a broad range of areas, including investments, stocks, mutual funds, money bonds, hedge funds. They will also be informed about recent macro-trends, changes in the economy and industry developments. You can also expect many investment bankers to be specialized in one area.

Leading financial experts like John Studzinski Weforum will tell you that one of the biggest determinants in how well your stocks will perform is knowing as much about them as possible. This means researching potential start-up companies and corporations before investing, and keeping a close eye on them to monitor growth patterns and change. By keeping up with what’s happening with investments, you will be able to react sooner if you need to sell a stock, or purchase more of it.

Different types of Investment Banking

Investment banking is usually made up of three components: sales and trading, asset management, and the obvious one, investment banking. The services these three components provide as follows:

Investment Banking: this usually refers to corporate and commercial finance, and offers advice and assistance with investment transactions, including using capital to acquire or merge a business, or to sell or divest part or all of a business.

Sales and Trading: if you want to sell a stock, buy a stock, or trade a stock? This area of expertise at your investment bank is where you’ll go for any type of stock management, or simply to check on the happenings in the stock market.

Asset Management: manage existing assets, such as private or commercial property, here. Seek capital for your assets or acquire additional assets here as well.

Tips & Advice on Dealings

When doing business with investment banks, there are some things to keep in mind.

First, know that there are large and small investment banks, with many smaller investment banks making actual investments themselves. But regardless of their size or whether or not they manage stocks, all types of investment banks can assist you with managing your stocks and shares.

Depending on your investment needs, you’ll either work with an analyst or an associate. An analyst will take care of helping you determine what to invest and where, and for businesses, analysts can assist with putting together pitches and models. An associate is a level higher than an analyst, and will help you out with more complex financial transactions, such as business mergers or acquisitions.

All investment banks have vice presidents, a senior vice president, and a managing director, but unless you are an extremely valuable client, you will rarely have interaction with these "higher ups".

Lastly, make sure that you understand the terms & conditions BEFORE you sign a deal. And if they are too complex, too wrapped up in legalese, you will need help to determine the veracity of the contracts. Don’t be afraid of doing this, after all you should…

Trust But Verify

After the financial crisis of 2007-8, you may have read that investment banks may have engaged in trading against their clients, that investment banks sold inappropriate products, or otherwise acted against their clients’ best interests.

The only suggestion that I can make is that you should keep up to date with your investments and not be afraid of querying, checking, double-checking and otherwise managing the investment managers to make sure they are doing their job. While it might be difficult to avoid second guessing the professionals, and you don’t want to micromanage them (that’s not what you’re paying for), you must still be in charge of your money. After all, whose money is it? It’s not theirs.

Investment banking is something you’ll want to look into if you’re concerned about being able to support yourself after retirement, about managing your estate & wealth, or developing your business investing.

Shopping: Are retailers driving you ‘Potty’?

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Retailer’s margins are under pressure these days as prices rise, but incomes stagnate. I know that from my own wallet. Competition is intense and sometimes even the biggest retailers will resort to less than kosher methods to shift their products.

You’ve got “One Chance”

For those of you who like Paul Potts CD, I just bought the CD at a local retailer in Tamsui, one of the biggest in Taiwan. While this retailer is known for its aggressive pricing strategies, its behind the scenes pricing looks (to be polite) disorganized at best.

Beware the sale price gotcha’s

A few months ago, I noted one sign advertising filing boxes for NT$279. I bought one, but didn’t note the actual price until I got home on the receipt. It was over $300. This isn’t a big amount of money. I naturally assumed that I had made the mistake and brought the wrong model.

The next time I went to the store I bought several more of these items for colleagues in our office who thought they would be useful. This time I checked carefully the model number ‘DD105’ and I took them to the counter. I thought I had bought three of them with larger drawers, but turns out that the DD113 models were also on display (undiscounted) right next to them. I had bought the wrong models, and again paid through the nose.

What a potty pricing scheme?

So this time I was shopping in the store, and bought a CD of Paul Potts for my wife who liked the video she saw on YouTube! As you can see from the picture, it was priced NT$348 on the shelf. I tried to scan it myself in the store, but couldn’t because the in-store scanner wouldn’t read the barcode on the item properly. I bought it anyway because it didn’t matter that much, I wasn’t price sensitive on that item.

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On checkout, I found that I had been charged NT$378 for the CD, despite it being priced on the shelf at NT$348. I also found another display showing NT$358 for the same item. Of course, this time I did complain. You can see the receipt pictured here with the price. I can’t ascertain if that is the result of product substitution or not, because the product numbering schemes were somewhat different.

InvestorBlogger sez…

It doesn’t matter the reason: the store should price each and every accurately to the best of its ability and remove old pricing. Nowadays, most products are not priced at all in Taiwan. The price label is only on the shelf. By the time you get to the checkout with thirty or forty items in your trolley, who will remember what each item cost? Who will take the time to check their receipt? And if you’re dragging children, husbands or wives, and your phone is ringing, who will be able to remember?

Fortunately, the store seems to have a no-quibble refund policy in such cases, and indeed refunded me the NT$30 on the spot. But I’m wondering if the policy of insufficient and/or misleading pricing is somehow discretely approved of, quietly practiced but publicly disavowed by the management of this hypermarket.

Advice to Shoppers

The only thing I can urge: if you are facing a budgetary pressure, scrutinize your checkout receipts for both prices and quantities to make sure that you are being overcharged, wrongly charged or leaving items sitting on the supermarket checkout.

Still I learned how to magnify pictures on my camera from the clerk! He was pretty nice about it all! I’m still not sure what the real price should have been because inside the box were two cds, not one. But there was no other pricing on the CD stand or the CD itself to indicate what the correct price was.

Monday News: A Carnival, Tidying Up, Chinese New Year and our 1st Martian Reader

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What you’ve missed here…

  1. Saturday Bytes: WMV to FLV and FireFox’s Causing Me Frustration
  2. Technorati: Why you should bother, how you do it, and the ‘dark side’
  3. NetWork Solutions: How YOU can gouge your customers in 10 steps or less – a case study
  4. and our new Advice Column: Your House Is Not YOUR ATM Machine

For the advice column, simply drop your email to us (anonymously, if you wish) and I’ll write InvestorBlogger’s response with some suggestions.

And now the news…

Monday is here, the first day of our holiday at Chinese New Year! Yesterday, we spent the whole of yesterday reorganising the school offices. I had to finish rewiring the computers, too. But it’s done, and the new network will work nicely, I think. One PC will be devoted to running the printers, another to running the network, another to running the photocopier, and another to running our IntraNet Blog, I hope.

So, though we use a local network at school, we’ve distributed services across every PC except the notebook to maintain as much of a system as possible should one PC die. I had intended to network everything to just one PC, but then thought perhaps that wasn’t a good idea if there should be a hardware problem. So our services are distributed to minimize impact of broken systems. BUT we don’t have any extra capacity at the moment which is a pity.

The New Carnival 10th Edition and the new host

New Carnival 10th Edition

Yep, it’s out on the new blog, and posted with 21 good stories, and most of the junk removed. I took a huge paring knife to cut out duplicates, irrelevant stories, popup articles, etc., But I’m glad, the edition is good. Next time, we’ll feature a new section: Chinese New Year is approaching, posts that make special reference to that will be given their own featured section!

Chinese New Year: A time to tidy up

Chinese take a lot of time to clean up before the New Year (February 6th this year!) and I’ve really gone to town to clean up my own clothes closet! But I’m so untidy and disorganised that it took me more than 12 hours to put everthing here…

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into here…

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and it’s done now… But it was a challenge! And it’s not particularly neat and tidy, but it is sorted out now! What is the secret to being organized, please tell me!?

Amazon’s Big News: Downloads go International!

You’ve got to read this story about Amazon’s announcement:

Amazon MP3 is the only retailer to offer customers DRM-free MP3s from all four major music labels as well as over 33,000 independent labels. “We have received thousands of e-mails from Amazon customers around the world asking us when we will make Amazon MP3 available outside of the U.S. They can’t wait to choose from the biggest selection of high-quality, low-priced DRM-free MP3 music downloads which play on virtually any music device they own today or will own in the future,” said Bill Carr, Amazon.com Vice President of Digital Music. “We are excited to tell those customers today that Amazon MP3 is going international this year.”

I’m skeptical, because their definition of the term ‘international’ may only include Canada, the UK, Japan, France and wherever else there is a localized Amazon site. But here’s hoping.

What’s that guy on Mars doing?

CNET is carrying this picture recently taken from Mars courtesy of NASA/JPL-Caltech/Cornell University of a 2″ man.

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Nasa has finally taken a picture of a Martian: he (or she) is obviously squinting at the ASUS Eee PC with the 7″ screen while browsing InvestorBlogger dot com. What else could the Martian be doing? Suggestions in the comments please!

Upcoming Stories

These are some of the stories I’ll be posting several stories in the next few days:

  1. What I did with my money
  2. Security and WordPress: Beefing Up Security for your Blog
  3. WPBanners: A Fuller Review – Good Value or not?
  4. Blogging: Usability Improvements

Do check back this week to see which is posted.