CNN 2010-06-23

So managing your hard-earned money wisely, how do you that? It's critical, especially in these economically uncertain times. So here with some important dos and don'ts, financial adviser¹, Ron Hart. So get your notepad out because you are about to get some free financial advice.

 

Good to see you, Ron.

 

Good to see you.

 

So let's begin with what we always hear, diversify², diversify, you know, why you shouldn't put all your eggs in one basket, what do you mean?

 

You can get wealthy with one stock, one a Home Depot³, for example and write it all the way up. You stay wealthy by diversifying⁴. You must diversify no more than 5 percent in one position. Do asset allocation. Most studies say, the (inaudible) studies, the main one that 90 percent of your return is derived⁵ from the fact you do asset allocation well. So it's very important.

 

And so -- are we talking about hundreds? If you've got some disposable income or at least you got some income that you want to grow, we're talking about hundreds of dollars, we're talking thousands of dollars, what?

 

The less money you have, the more you need to diversify because you can't afford to lose it. The wealthy can take a better chance with the big positions. They can take more risks with hedge funds and be more aggressive, but the average investor⁶ needs to be careful and watch pieces well.

 

All right, you need to be thinking long term, you say. Big picture?

 

HART: Be long-term greedy, we say. Take the long term view, that's the best way to do it. People -- you have to research your stocks. You have to pay attention to what you're doing. A lot of people would spend more time researching their refrigerator or computer than they will a stock purchase. So it's a very important thing to look at, know and pay attention.

 

So kind of become intimately involved in that company, in that stock, you want to know and perhaps if it's something that a real tangible⁷ product or service, something you're actually going to use. You like it for some reason, maybe others do, too.

 

I tell people look at your American Express bill, your Visa bill, and if you are buying products from that company, you're buying them for a reason and they're probably doing pretty well.

 

OK, but then that means you're also saying don't get emotionally attached to your investment. Sometimes you want to go with something you really, really like, but cannot part because of your personal loyalty⁸.

 

Exactly - human nature is you have to fight your own natural inclinations⁹ to invest well. There's a tendency that you have a herd¹⁰ mentality¹¹ to buy what someone told you at the cocktail¹² party.

 

Everybody else is doing it.

 

Exactly. When everyone is buying, I'm always wondering who is selling. So that it happened in '99 with hot tech stocks, internet stocks. You could go public back then with a web site, you could public. So real estate 2007, everybody's in, very pedestrian investment, people start to do it and that's when you get out.

 

All right then you say, you know, review your investment strategy fairly regularly. How regularly? Because you would drive yourself nuts if you're doing this every day, when is regularly?

 

It depends on your tolerance¹³ and your risk parameters¹⁴. Most people feel like twice a year would be enough to do it. Sit down with a professional and go over it. You should definitely take a stock in your change of circumstances. Your kids going to college, you're getting ready to retire, things like that that are very important to let you financial adviser know.

 

Some folks are still thinking about what took place about a month ago, the Greek debt crisis. Could it happen here? What do we need to learn from that that people are experiencing in Europe? Might it impact us, too?

 

It might. We are spending money at a rate that's parallel to Europe. It's unsustainable over a long period of time. I had a friend of mine who said we are spending money like a drunken sailor.

 

He went on to say, I was a sailor once and at some point the bartender cuts you off. So he says with America we keep spending money and we keep put our country in debt. It's going to be our kids' problems. It's a very selfish endeavor and I hope hopefully Greece will be a warning for everybody.
 

1 adviser   

n.劝告者，顾问

参考例句：

• They employed me as an adviser.他们聘请我当顾问。
• Our department has engaged a foreign teacher as phonetic adviser.我们系已经聘请了一位外籍老师作为语音顾问。

2 diversify   

v.（使）不同，（使）变得多样化

参考例句：

• Our company is trying to diversify.我们公司正力图往多样化方面发展。
• Hills and woods diversify the landscape.山陵和树木点缀景色。

3 depot   

n.仓库，储藏处；公共汽车站；火车站

参考例句：

• The depot is only a few blocks from here.公共汽车站离这儿只有几个街区。
• They leased the building as a depot.他们租用这栋大楼作仓库。

4 diversifying   

v.使多样化，多样化( diversify的现在分词 )；进入新的商业领域

参考例句：

• Some publishers are now diversifying into software. 有些出版社目前正兼营软件。 来自辞典例句
• Silverlit is diversifying into new markets, such as Russia and Eastern Europe. Silverlit正在使他们的市场变得多样化，开发新的市场如俄罗斯和东欧国家。 来自互联网

5 derived   

vi.起源；由来；衍生；导出v.得到( derive的过去式和过去分词 )；（从…中）得到获得；源于；（从…中）提取

参考例句：

• Many English words are derived from Latin and Greek. 英语很多词源出于拉丁文和希腊文。 来自《简明英汉词典》
• He derived his enthusiasm for literature from his father. 他对文学的爱好是受他父亲的影响。 来自《简明英汉词典》

6 investor   

n.投资者，投资人

参考例句：

• My nephew is a cautious investor.我侄子是个小心谨慎的投资者。
• The investor believes that his investment will pay off handsomely soon.这个投资者相信他的投资不久会有相当大的收益。

7 tangible   

adj.有形的，可触摸的，确凿的，实际的

参考例句：

• The policy has not yet brought any tangible benefits.这项政策还没有带来任何实质性的好处。
• There is no tangible proof.没有确凿的证据。

8 loyalty   

n.忠诚，忠心

参考例句：

• She told him the truth from a sense of loyalty.她告诉他真相是出于忠诚。
• His loyalty to his friends was never in doubt.他对朋友的一片忠心从来没受到怀疑。

9 inclinations   

倾向( inclination的名词复数 )； 倾斜； 爱好； 斜坡

参考例句：

• She has artistic inclinations. 她有艺术爱好。
• I've no inclinations towards life as a doctor. 我的志趣不是行医。

10 herd   

n.兽群，牧群；vt.使集中，把…赶在一起

参考例句：

• She drove the herd of cattle through the wilderness.她赶着牛群穿过荒野。
• He had no opinions of his own but simply follow the herd.他从无主见，只是人云亦云。

11 mentality   

n.心理，思想，脑力

参考例句：

• He has many years'experience of the criminal mentality.他研究犯罪心理有多年经验。
• Running a business requires a very different mentality from being a salaried employee.经营企业所要求具备的心态和上班族的心态截然不同。

12 cocktail   

n.鸡尾酒；餐前开胃小吃；混合物

参考例句：

• We invited some foreign friends for a cocktail party.我们邀请了一些外国朋友参加鸡尾酒会。
• At a cocktail party in Hollywood,I was introduced to Charlie Chaplin.在好莱坞的一次鸡尾酒会上，人家把我介绍给查理·卓别林。

13 tolerance   

n.宽容；容忍，忍受；耐药力；公差

参考例句：

• Tolerance is one of his strengths.宽容是他的一个优点。
• Human beings have limited tolerance of noise.人类对噪音的忍耐力有限。

14 parameters   

因素，特征； 界限； （限定性的）因素( parameter的名词复数 )； 参量； 参项； 决定因素

参考例句：

• We have to work within the parameters of time. 我们的工作受时间所限。
• See parameters.cpp for a compilable example. This is part of the Spirit distribution. 可编译例子见parameters.cpp.这是Spirit分发包的组成部分。