BOSTON, MA - MARCH 04: Jeremy Lin #17 of the New York Knicks drives around Kevin Garnett #5 of the Boston Celtics on March 4, 2012 at TD Garden in Boston, Massachusetts. The Boston Celtics defeated the New York Knicks 115-111 in overtime. (Image credit: Getty Images via @daylife)Financial IQ Philippines Quick Hit(s):
If you are a New York Knicks fan, an avid NBA follower, or is thinking about investment... you may find this article interesting. It's about investment, discussed in layman's terms.
NATIONAL Basketball Association’s newest sensation Jeremy Lin is gaining a lot of buzz each passing month. He has already been featured on the cover of Time magazine. He is also being eyed as product endorser for several notable multinational companies.
So who is Jeremy Lin? Is he an overnight sensation? No, he is far from it. Lin, a Harvard University graduate in 2010, but was not drafted by any NBA team. He signed as free agent with Golden State Warriors but was cut. He was then picked up by Houston Rockets but was released as well. Little did anyone know, including the NBA analysts and coaches, that his story is about to make a sharp turn for the better.
Upon signing with New York Knicks on 2011, he was still getting very minimal playing time. This same situation happened for the next couple of games. At that time, New York was also struggling to live up to their hype even though they already have two superstars in Carmelo Anthony and Amare Stoudemire. Out of desperation, Mike D’Antoni, who was New York Knicks’ coach at that time, gave Lin an opportunity to showcase his skill. Since then, he has played a pivotal role in turning around Knicks’ fortune. There was a stretch where the Knicks won six consecutive games even though both of their superstars were out for a significant amount of time during that run. To cap it off, he was able to help his team win by scoring 38 points against Kobe Bryant’s Los Angeles Lakers, who scored 32 points.
His NBA journey has not been a rosy one. In pursuing his dreams, Jeremy Lin had to make sacrifices even in his personal life. He had to sleep on his brother’s couch while trying to make ends meet in his NBA career. Even then, Lin has continued putting in the effort in brushing up his skills. The dedication to the game started during his younger years—from varsity days to collegiate years, to the NBA Development League, and eventually now, when he is making a name for himself in the NBA.
Similarly, an educated investor will reap the benefits of his investments by making ”time” and investment returns his ally. Coupled with the right investment mentality, habit, and dedication, the investor will end up with a sizable investment portfolio during the retirement years.
An uneducated investor or non-investor will, however, make “time” his enemy because he will not be able to beat or even equalize “inflation.”
In simplest definition, inflation refers to the price increase of commodities over a period of time. It is important that we can at least keep up with inflation so that purchasing power of money will remain intact. As an example, a hundred pesos that used to buy two pieces of chicken with rice, drink and a side dish meal, can still purchase two pieces of chicken with rice, drink, but no longer with the side dish.
Investing is one way of keeping up with inflation. As an investor, we have two choices on how to invest.
We can treat our investments as short-term holdings.
We can treat ourselves as stakeholders of the companies we invested on.
On No. 1, we are hedging that the prices of the purchased stocks go up so we can take profit once we sell. This method is mostly used by technical traders who analyze technical charts to determine trends, which serves as their buying and selling indicators.
On No. 2, we treat our investments as though we are co-owners of the company. We have long-term outlook and invest on companies with good fundamentals. This type of investor, coupled with regular investments and making time his ally, will enjoy the benefit of good returns because this will neutralize the market volatility and allow investors to enjoy the benefit of long-term growth, which historically beats inflation.
If you are a beginner in the investment world, it would be better to start with Mutual Funds because there are Fund Managers who oversee the financial market and company analysis. In this way, you can enjoy the immediate benefits even though you are still in the process of understanding how stocks work or are busy with your regular activities. For as little as P5,000 to P10,000, you can start dipping into Mutual Funds.
Jeremy Lin received a bit of challenging news. He will be out for the remaining regular season due to an injury. It will be interesting to see how he will fare when he comes back. He may be able to return during the post season....but it’s not yet definite. If it’s next season, it would also be intriguing to follow which team will sign him, if he would still remain with New York Knicks or move to another NBA team.
On the positive side, since gaining prominence, he has gotten a lot of publicity from media outlets, including various publications here in Philippines. He is also a candidate for Time magazine’s 100 Most Influential Persons.
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