International Financial Securities Regulatory Commission: Seven of Warren Buffett’s Best Investing Advices
Everyone listens to Warren Buffett’s investing advice. Who will not want to listen to the world’s greatest investor and learn how he earned $72 billion net worth and enhanced his company, Berkshire Hathaway, into a formidable force valued at more than $212 billion.
One fact that sets Buffett apart from others is his refusal to advice the ordinary investor to follow his example. On the contrary, he tells investors to do the opposite. Nevertheless, Yahoo Finance shares the following Buffett’s well-known insights on investing for a long-term, durable growth:
- Cash is the worst investment over time
Having cash around, whether in the bank or at home, can be a reassuring thing. But over time, cash is an unstable investment. That is a fact; and yet people do keep enough cash with them so that they can have a certain degree of financial freedom.
- Invest in diversified index funds that track the S&P 500
If you already have enough experience as an investor, then you need to focus deeply. For the rest of the people, aim for complete diversification. In the long run, the economy turns out well. As such, do not buy at the wrong price or at the wrong time. In general then, buy index fund at a low rice, and gradually level into a dollar-cost average. Spending merely an hour each week investing will lead you nowhere.
Read the book: “Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor” by Jack Bogle, Vanguard founder. Or if you can, read all Bogle’s books to know all you need to know about funds.
- Invest in yourself
Warren Buffett advices people to invest in their own abilities. “Anything you can do to develop your own abilities or business is likely to be more productive.” Even in life, such advice should not be ignored.
- If you intend to invest in stocks, avoid any business you do not understand
Investors must consider only investments they can understand. Assuming you put all your family’s net worth into a business, would they consider going into that business? Or would they refrain from doing so because they know nothing about it? If that case, they should choose another business. Like Buffet and his long-time partner, Charlie Munger, who avoid businesses they do not understand, individual investors should do the same.
- Focus also on the competition
Investing in a company’s stocks means investing in a part of their business. If you were, for example, to invest in a local gas station or convenience shop, how would they run it? Obviously, they would look at the competition, the competitive posture of both the sector and the immediate environment, the people running the competition and other matters.
- Invest for the long-term
Buffett has this to say: “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for ten minutes.” Investing is like planting a tree for yourself: You begin with a seedling and hope to eat from its fruits later on.
- The most difficult part of investing is learning to trust yourself
Stay away from mob-thinking. That is one sure way of becoming dumb. Buffett thinks investors are not really using their intelligence. One can be smart but also be illogical. To succeed in investing, divorce yourself from the greed and fears of the people you deal with even if you think that is very hard to do.
International Financial Securities Regulatory Commission: Accountability and Governance
The Board of International Financial Securities Regulatory Commission
The International Financial Securities Regulatory Commission is a Statutory Board. The role and responsibilities of a Statutory Board and its members are set out in the Statutory Boards Act 1987 (except where this Act is varied by the Financial Services Act 2008). Appointments to the Board of Commissioners are approved by the Homeland Security and/or Congress.
The Board of the International Financial Securities Regulatory Commission consists of not less than seven qualified people appointed by Treasury and approved by Homeland Security and/or Congress. The Board currently comprises a Non-Executive Chairman and Non-Executive Deputy Chairman, the Chief Executive and a further four Non-Executive.
Commissioners
The quorum of the Board is three Commissioners.
Commissioners normally go out of office five years after appointment and their remuneration is set down by Order.
Routine meetings of the Board are held monthly, generally on the last Thursday of a calendar month and additionally on an ad hoc basis as required. Quorums of the Board also meet as necessary to: hear license applications; review risk and internal control matters (RICC); agree staff remuneration; determine appeals relating to complaints; and hold license holder disciplinary reviews.
The constitution of the International Financial Securities Regulatory Commission and its functions are described in Schedule 1 to the Financial Services Act 2008. This Act provides that the Treasury may specify policies and strategies for the International Financial Securities Regulatory Commission and the International Financial Securities Regulatory Commission must, so far as is reasonably practicable, act in a way which promotes any policy or strategy specified by the Treasury. The International Financial Securities Regulatory Commission Board members are responsible to the Treasury for the proper operation of its regulatory powers and its compliance with the requirements of the Financial Services Act.
Corporate Governance
As a regulator the International Financial Securities Regulatory Commission is subject to challenge in carrying out its functions, and is financed out of public funds. These factors impose a strong responsibility on the International Financial Securities Regulatory Commission to demonstrate that it is acting properly at all times, in the same way that International Financial Securities Regulatory Commission expects a similar behavior from its license holders.
The International Financial Securities Regulatory Commission operates under a Corporate Governance Framework which incorporates the requirements of the International Financial Securities Regulatory Commission Corporate.
Memorandum of Understanding
The International Financial Securities Regulatory Commission Treasury and the Commodity Market Regulatory Commission are parties to a Memorandum of Understanding. It sets out the framework for co-operation between the Treasury and the International Financial Securities Regulatory Commission. In particular, it establishes arrangements to ensure that the International Financial Securities Regulatory Commission is accountable to Treasury for its actions, and clarifies the circumstances in which liaison and dialogue can flow between both parties.
Accountability and scrutiny
The International Financial Securities Regulatory Commission is accountable and subject to scrutiny in the following areas:
- The Homeland Security and/or Congress: appointment of Commissioners, Corporate Plan, new legislation;
- Government and Treasury: strategic objectives, legislative policy and proposals, budgeting and funding, establishment headcount;
- Industry: consultation on regulatory and supervisory proposals;
- Home regulators of licensed institutions.
The International Financial Securities Regulatory Commission regulatory and supervisory approach is also subject to ongoing review by standard-setting organizations including the International Monetary Fund and the FATF.
Transparency
The International Financial Securities Regulatory Commission endorses the principles of openness and transparency contained in the Code of Practice on Access to Government Information and, in fulfilling its functions, the International Financial Securities Regulatory Commission endeavors to be as open and transparent as possible without compromising confidentiality.
Finance
The International Financial Securities Regulatory Commission operates within a budget agreed with Treasury, and within a headcount restriction set down centrally within Government. International Financial Securities Regulatory Commission revenue and expenditure is audited annually by the Government’s external auditors, and the International Financial Securities Regulatory Commission is subject to review by the Government’s internal audit department.
The International Financial Securities Regulatory Commission publishes its financial statements each year as part of its Annual Report.
Delegated Authorities
The Board has put in place a delegation of responsibility framework within the International Financial Securities Regulatory Commission management system. This framework identifies the persons responsible for developing and exercising control procedures and for promoting a compliance culture within the International Financial Securities Regulatory Commission.
The powers delegated to the Chief Executive include:
- Changes in license conditions attached to a license
- Extensions to licenses to include new schemes etc.
- Surrender of lapsed licenses
- Restructure of organizations and sale or merger of license holders
- Approving recognition of collective investment schemes
The Chief Executive in turn delegates certain matters within the Executive.
International Financial Securities Regulatory Commission on Investor Help
A merger occurs when one firm assumes all the assets and all the liabilities of another. The acquiring firm retains its identity, while the acquired firm ceases to exist. A majority vote of shareholders is generally required to approve a merger. A merger is just one type of acquisition. One company can acquire another in several other ways, including purchasing some or all of the company's assets or buying up its outstanding shares of stock.
In general, mergers and other types of acquisitions are performed in the hopes of realizing an economic gain. For such a transaction to be justified, the two firms involved must be worth more together than they were apart. Some of the potential advantages of mergers and acquisitions include achieving economies of scale, combining complementary resources, garnering tax advantages, and eliminating inefficiencies. Other reasons for considering growth through acquisitions include obtaining proprietary rights to products or services, increasing market power by purchasing competitors, shoring up weaknesses in key business areas, new geographic regions, or providing managers with new opportunities for career growth and advancement. Since mergers and acquisitions are so complex, however, it can be very difficult to evaluate the transaction, define the associated costs and benefits, and handle the resulting tax and legal issues.
"In today's global business environment, companies may have to grow to survive, and one of the best ways to grow is by merging with another company or acquiring other companies," which in some cases are multibillion-dollar corporations.
When a small business owner chooses to merge with or sell out to another company, it is sometimes called "harvesting" the small business. In this situation, the transaction is intended to release the value locked up in the small business for the benefit of its owners and investors. The impetus for a small business owner to pursue a sale or merger may involve estate planning, a need to diversify his or her investments, an inability to finance growth independently, or a simple need for change. In addition, some small businesses find that the best way to grow and compete against larger firms is to merge with or acquire other small businesses.
In principle, the decision to merge with or acquire another firm is a capital budgeting decision much like any other. But mergers differ from ordinary investment decisions in at least five ways. First, the value of a merger may depend on such things as strategic fits that are difficult to measure. Second, the accounting, tax, and legal aspects of a merger can be complex. Third, mergers often involve issues of corporate control and are a means of replacing existing management. Fourth, mergers obviously affect the value of the firm, but they also affect the relative value of the stocks and bonds. Finally, mergers are often "unfriendly."
The International Financial Securities Regulatory Commission is established to promote investor confidence in the securities and capital markets by providing more structure and government oversight. The mission of the International Financial Securities Regulatory Commission is to protect investors and maintain integrity of the securities industry, overseeing major participants in the industry, including stock exchanges, broker-dealers, investment advisors, mutual funds, and public utility holding companies. The International Financial Securities Regulatory Commission is concerned primarily with promoting disclosure of important information, enforcing securities laws, and protecting investors who interact with these various organizations and individuals.
