Are we really that good (with FA, TA, or combined FA+TA) in generating good return on our financial assets through our investing knowledge and skills?
We just rise and fall with the tide of market cycles of bulls and bears?
You can see that Uncle8888's yearly Return on his human asset is more favorable across economic cycles of booms and dooms.
Living on investment income when we are much younger?
You can make your judgement call after reading this post.
Which is more reliable source of income for MOST of us?
The rise of Big Bull may have made us feel like Gu Shen and thinking that we may have finally got it "Right"! We are ON THE WAY!
But, the follow-up Big Bear will teach us what is truly the "Right" thing to do after sensing the rising power of earning investment Return during a Bull Run.
His Yearly Break Down chart will show the true picture of his last 15 years of investing journey. The Rise and Fall across market cycles. Now, he is planning on how to better ride the tide of future market cycles of Bulls and Bears.
The Road to Financial Independence may actually be shorter and faster via higher return on human asset WITH higher saving rate.
Shouldn't the younger ones be more focus on generating higher return on their human asset with higher saving rate?
You can see Uncle8888's Return on his human asset vs. Return on his financial assets over the last 15 years since Jan 2000 and make your own judgement.
But, we must also be fully aware that our human asset may have limited growth capability. One day we might not even notice that our human asset has started depreciating and will depreciate down to zero value.
In our working life, in the 1st half we should focus more on our human asset and in the 2nd half we can let our financial assets supplement the return on our human asset. Finally, one day our financial assets will be able to take over the role of providing us the cash flow for life.
Federal Reserve Chair Janet Yellen signaled that the U.S. central bank
will likely start raising borrowing costs later this year, even before
inflation and wages have returned to health, but emphasized the return
to normal interest rates will be gradual.
A downturn in core
inflation or wage growth could force the Fed to delay the first increase
to borrowing costs since 2006, the central bank's chief said on Friday,
but policymakers should not wait for inflation to near the Fed's
2-percent goal before tightening monetary policy. The Fed has held
short-term borrowing costs near zero since December 2008.
the first rate increase, Yellen said, a further, gradual tightening in
monetary policy will likely be warranted. If incoming data fails to
support the Fed's economic forecast, the path of policy will be
adjusted, she said.
continued improvement in economic conditions, an increase in the target
range for that rate may well be warranted later this year," Yellen said
at a monetary policy conference at the Federal Reserve Bank of San
that while the Fed is giving "serious consideration" to beginning to
reduce its accommodative monetary policy, the timing and the path of a
Fed hike would depend on the incoming economic data.
actual path of policy will evolve as economic conditions evolve, and
policy tightening could speed up, slow down, pause, or even reverse
course depending on actual and expected developments in real activity
and inflation," Yellen said.
Treasury yields fell and held near session lows on Friday after the
mildly hawkish comments and as investors bought bonds ahead of month-end
Still, traders of U.S. rate futures kept their bets that the Fed will wait until October to raise rates.
By now, you're no doubt familiar with the claim by author Michael
Lewis in his book, "Flash Boys." Lewis believes high-frequency traders
have rigged the stock market, causing harm to Main Street investors.
Many respected financial commentators disagree. They believe
high-frequency trading is only harmful to day traders, and not to the
average investor who is holding stocks for the long term.
Personally, I do not believe high-frequency trading rigs the market
against average investors. However, this debate misses the point. The
securities industry, together with much of the financial media, has
rigged the market, just not in the way claimed by Lewis. They do so by skewing financial news toward negative information. The impact of negative financial news disposes your brain to panic when the market declines.
When investors panic and become anxious, they seek the guidance of
"experts," whose financial interest is often conflicted. If these
experts are not registered investment advisors, or RIAs, they have no
obligation to provide advice that is solely in your best interest.
Instead, they are held to the lower standard of providing advice that is "suitable."
This loophole gives brokers legal cover to generate commissions by
encouraging unnecessary trading at precisely the time when you are
The prevalence of negative news. As I write this blog post , I
am staring at this March 16 headline from CNBC: "Hedge fund manager:
It's a 'truly scary time.'" The article features the warnings of Andy
Redleaf, the CEO of $4.2 billion hedge fund and mutual fund manager
Whitebox Advisors, and his case for why a stock market correction, and
perhaps a global recession, may occur.
He may turn out to be right or wrong. I have no idea. I do know the
financial media's emphasis on negative financial news preconditions our
brains to panic and make short-term investing decisions, which are often
not in our best interest. And negative financial news is everywhere. Here's a small sampling of headlines:
-- Dec. 27, 2014:Predictions for 2015: U.S. Stock Market Crash Debated, But The Rich Will Be Richer In This Economy
-- Jan. 14, 2015: Stocks lower on growth concerns, copper plunges
-- Jan. 19, 2015: China seen posting weakest annual growth in 24 years, will spur more stimulus
-- March 16, 2015: Bull market is 'closer to the end' than investors think
For each of the positions asserted in these articles, there's a flip
side. They could easily have been presented with a positive spin.
The impact of negative financial news on your brain.There is compelling evidence
that exposure to negative information can make you significantly more
anxious and sad. According to a 2012 Psychology Today article, "The
Psychological Effects of TV News," it also causes you to obsess over
your personal concerns, in ways unrelated to the information that
initially created your anxiety.
Investors consistently exposed to negative news may be inclined to
imagine all kinds of doomsday scenarios, including losing all of their
money, a worldwide financial panic and being homeless and destitute.
Clearly, when you are in that state of mind, you are in no position to
make intelligent, rational and objective investment decisions.
Prepare your brain. Fortunately, you can take steps
to avoid succumbing to negative financial news and panicking about your
finances. An article by Gail Schneider, written in October 2008 and
published in Positive Psychology News Daily, "The Economic Sky is
Falling: Can Positive Psychology Help?" suggests you should put the news
in perspective, exercise, meditate and cultivate positive and
Put the news in perspective. Write down your
worst-case and best-case scenarios and estimate the probability each
will occur. Be as objective as possible in estimating the most likely
outcomes. This process will help you put negative news into perspective.
(CW8888: Now, you may know why Uncle8888 likes to stress test his portfolio for the next big Bear or when big negative news hit him hard. When Iceberg hit Noble he wrote down the value of Noble to $0.10 as suggested. Read? Hurray for redundancy. )
The financial media isn't going to do this work for you. Although you
can't control negative financial news, or predict the timing of a market
correction, recognizing your brain is rigged to panic may help you
avoid making poor,short-term financial decisions.
Dan Solinis the director of investor advocacy for the BAM ALLIANCEand
a wealth advisor with Buckingham. He is a New York Times best-selling
author of the Smartest series of books. His latest book is "The Smartest
Sales Book You'll Ever Read."
SINGAPORE: The Government and Monetary Authority of
Singapore (MAS) are planning to introduce a new type of bonds to help
individual investors get a better return on their savings, Senior
Minister of State for Finance Josephine Teo said on Thursday (Mar 26).
at the annual conference of the Investment Management Association of
Singapore (IMAS), Ms Teo said the planned Singapore Savings Bonds will
be safe investments with principal guaranteed by the Government.
bonds will have two features to make them more attractive for
individual investors: The ability to get his or her money back in any
given month with no penalty, and interest rates that are linked to
long-term Singapore Government Securities rates.
Unlike bonds that
pay the same coupon each year, the Singapore Savings Bonds will pay
coupons that “step-up” or increase over time, providing investors with a
higher return the longer they hold the bonds, she added.
short, the Singapore Savings Bonds will offer the higher returns of a
long-term bond and give what investors call a term premium, while
retaining the flexibility of a shorter-term deposit, and the safety of
an instrument guaranteed by the Government," she said.
Ms Teo said the Government and MAS are still working on the details and will release more information later.
Thank you so much for what you have done for Singapore! Father of Singapore as a Nation. Father of PAP as the Ruling Party! Rest In Peace. Amen!
I have been voting for PAP since 21 and will vote for PAP in the next GE in Aljuined GRC!
---------------- This morning, I reached the Parliament House at about 09:15. A large crowd was there much earlier than me so I have to settle for a spot somewhere near the bridge; but close enough to see the entrance to the Parliament House.
Those people at the front were asked to squat or sit so the back row can have their view too. I am sitting behind the man in black shirt.
Old man cannot squat too long so I have to sit down and wait.
First time in my life sitting on a road side. OMG!
I walked to the opposite side via underground tunnel to join the Queue at the Parliament House.
I joined the Queue at 09:58
Under the hot sun for hours, WOW! We appreciate the kindness from Fullerton Hotel for a cup of ice cool water.
Thank you. Fullerton Hotel!
The not so nice one. You see what? Why I said so.
I left the Parliament House at 14:06
So it is slightly more than 4 hours in the Queue under hot Sun. It is hot until I no need to go to Gent for more than 4 hours despite drinking one bottle of water and one cup of ice cold water. LOL!
"It took me 23 years to ACCUMULATE SIZE-ABLE capital to have Real impact on net worth,
Another 16 years of real SOAKING myself in the world of financial news over day and nights."
That means you conceive the plan to get rich at age 20?
But why wait for 16 years later? Aren't there bulls and bears in between?
Excessive fears and greeds that hinder your plan towards earlier success.
Uncle8888's post edited version of this reply:
Our account size? How much is enough?
final objective or goal in long term investing is to have enough cash
flow from our financial assets to replace the loss of earned income from
our human asset when we retire or choose to retire earlier than Singapore official retirement age at 62/65
How much is enough for this cash flow? $3K, $4K or $5K?
more realistic or practical way to know how much is enough is to know our
historical household expenses or 70% - 80% of last earned income as
most financial planners will recommend.
Once we know how
much is enough then we can estimate the our account size to sustain this
level of cash flow across market cycles.
(1) How much portfolio RETURN can we reasonably expect if we are educated and active retail investors?
to 6% is achievable for most of us if we are active in tracking closely
our market and companies that we have invested. We should be able to win more
than our losses. Dividends will be of great help.
When we are still growing our portfolio we should try to focus more on growth dividend stocks.
We must be aware of market cycles of bulls and bears. We want to ride
the market cycles to grow our portfolio so we CANNOT afford stay 90-100%
invested just for dividends or cash flow.
We will need to slowly
liquidate 30% to 40% of our portfolio as war chest and we can be waiting
for years. We will need some growth in our portfolio to offset future
inflationary impact to our cash flow.
Our cash flow must also be able to
grow higher with the injection of war chest during bear market. Our
injection must win more than losses; otherwise we are doom.
After leaving that amount as war chest, is the remaining size of our
portfolio still be able to generate our desired level of cash flow at 5% to
If the answer is no; then we will need to increase
our account size as current account size may not be large enough to be sustainable across
On question for
"It took me 23 years to ACCUMULATE SIZE-ABLE capital to have Real impact on net worth",
I got very serious to invest in the stock market to get out of rat race after reading Rich
Dad. Poor Dad. At that time, I strongly believe it is possible to
achieve as I have already accumulated sizable account size from past 23
years of cash saving and CPF investment account to slowly deploy my investing capital
till when Sep 11 WTC attack happened. I still have nice war chest to deploy in the stock market.
If then my account size was not large enough, I
could have already used up most of my investing capital before WTC event. I would
not have enough investing capital or war chest to buy Keppel corp, SIA, SIA Eng, ST Eng, etc.
May be I was lucky to meet such market opportunity; but most important is that I still have nice war chest to buy
during that crisis.
But, "unfortunately" or most likely it is my stupidity in 2007/early 2008 and caused me me to be too low in my war chest in early 2009. By Mar 2009, my balls has shrunk too much and became too fearful to
take advantage of that market crisis. The fear of STI at 1,200 became too real!
This I shall not repeat it in the next bear.
On question for ..
That means you conceive the plan to get rich at age 20?
But why wait for 16 years later? Aren't there bulls and bears in between?
Excessive fears and greeds that hinder your plan towards earlier success.
I personally witnessed my close relatives almost went bankrupt in the stock
market during 1998 AFC; would anyone think that I would not be affected by
In fact, my wife forbid me in investing stocks. Stock market is highly dangerous place to make money? Right?
I have been probing those colleagues who are in their late 50s and
early 60s why they are not active in the market. You can read those
Did late Uncle Chua, an illiterate taught us something that we don't often read it from books or heard it from our investing seminar Gurus?
In mid-1997, when Asian Financial crisis started sweeping across
regional markets like hurricane destroying every single object in its
path, Uncle Chua started calling his broker more often than usual to
enquire about stocks prices. Contrary to most of my clients, who began
panicking and dumping their shares to preserve what they had left, he
did not sell a single share. Instead, he started buying blue chips only.
He bought bit by bit as the STI broke one low after
another. Uncle Chua's portfolio consisted of
nothing else but blue chips stocks only!I asked him about his philosophy
of selecting good stocks. How did he pick those blue chips? Uncle Chua,
explained: " I bought some of them as early as in the 60s. I was then
in my 50s and retired.I reckoned that I neeeded to have some sort of
passive income and so I made a simple comparison between bank fixed
deposits and stock dividends. I decided that latter offered a better
return, and so based on this very simple reasoning, I looked for
companies which consistently paid good dividends is naturally a
profitable company,management team of the companies that value
shareholder interests and entering market with equanimity and grasping
opportunities to buy good and resilient stocks at " super discounts"
where only , the contrarians, dare to do so. Uncle Chua passed away
at the age of 85 in the year 2000.This is true story, but rare, example
of a successful investor whose winning strategy was simple,
direct, clear-cut,straightforward and hassle free.
Is this the clue behind his success during AFC? He bought bit by bit as the STI broke one low after
another. His large War Chest that enabled him to keep on buying during AFC?
Uncle8888 chooses to stay in Fishing Bay Resort than Mersing Beach Resort so that he can easily walk to the Fishing Jetty in Air Papan to watch fishermen unloading their catch
One 16 Kg giant Sting Ray!
Instead of taking aircon bus MAJU Larkin - Mersing Express back to JB, Uncle8888 did something different by travelling to Kota Tinggi. He wanted to re-call his experience of old days bus travel in 60s/early 70s in Singapore i.e. no air-con bus with driver and bus Conductor. For this experience, he has to pay a bit more. :-(
Mersing - Kota Tinggi RM 9 and Kota Tinggi - Larkin RM 4.80. Total is RM 13.80 Direct MAJU Larkin - Mersing Express back to JB is only RM 12.50
It has been long, long time when wind is blowing directly into his face during a bus ride. LOL!
Many times in the past, when Uncle8888's Bank RM called him, he usually rejected the call for making an appointment to listen to their financial advice. After so many years of rejecting calls from RMs, somehow this time is different. May be he was in good mood to take an appointment on Saturday morning. Anyway, nowadays, he is so Eng! OK! Uncle8888 knows what you are thinking?
You think her voice is so sweat. Right?
She offered 9 am appointment; but Uncle8888 said 10 am.
He went to Hougang Central POSB early at 9+ and observed her at Cubicle 13.
She is busy at works. Wah! Got many lobang.
Time for Uncle8888 to listen to his RM; but told her to cut short all introductory talks and goes straight into the subject matter.
Uncle8888 told her that he is a savvy investor! No bluffing. LOL!
She introduced 5 + 5 Endowment product.
Later back home, Uncle8888 tabulated XIRR for this product to compare it to CPF OA 2.5% rate.
We have to be mindful that Return mentioned for such product is alwaysprojected return so we need to evaluate such product to consdier 5% to 10% off the projected rate of return too. XIRR for 10 years holding period (5+5)
For this product, you "invest" or save for 5 years and hold for another 5 years. Total 10 years of holding period.
It is about 1.3% to 2.67% Suitable for whom? Hmmm ... For those who is thinking of ....
1) Your child University Fund in 10 years? Your child currently in Primary school and you don't want to mess up your child's Uni Fund in the volatile stock market. 2) Your Wedding Fund in 10 years, you got attached during your Uni days and getting married in your early 30s? 3) Building up your own Emergency Fund in 10 years time as you can't keep depending on your Bank of Papa or Bank of Mama for bailout. 4) ??
In the real investing world, some of our money will be rotting. Some will be earning much lower return than expected.
Pareto Principle ~ “20% of the effort generates 80% of the results.” Market Timing vs. Time in Market??? Fundamental vs. Technical Analysis? Short-term Trading vs. Long-term Investing??? For long-term investors, we should be observing Pareto's Principle. 80% patiently waiting for Market Timing and then spend 80% Time in Market with20% of our effort will generate 80% of the results. And then we spend another 80% market timing for next cycle. Read? Laws Applicable To Investing
@Investment this principle applies, but it is an outcome. It cannot be use as a strategy.
every investment before u press the buy button is ur top priority. If u
have 5 stocks, u cannot say my priority is only 1 or 2 out of the rest.
I guess that maybe what B is trying to say is now he is only
focusing on few stocks only with higher amt vested in each stock. And
this is good enough for him getting good rtn.
but if 20/80
strategy applies... then out of ur 10 stocks, only 2 will give u good
money. then how sure are u that it will comes from ur top holdings? -------------------------------------- Uncle8888 fully agreed. It is an outcome and NOT a strategy. BUT, this should be our desired investment outcome after XX years of investing in the stock market. We should be proving this principle RIGHT!
Uncle88888 is quite sure that we are going to prove this principle WRONG by selling our winners sooner; but holding on our losers for the longest possible time before we are forced to sell.
Our investing strategy will likely to determine our investment performance outcome after X decades in the stock market. When our strategies are NOT rightly executed; they will NOT lead us to our desired outcome - The Pareto Principle ~ “20% of the effort generates 80% of the results.”
Singapore-listed Noble Group's
30 percent share-slump over the past month has thrust it onto the radar
screens of Asian companies that want a bigger clout in global
commodities trading, people familiar with the matter said.
Chinese and Japanese companies have held informal
talks with investment banks about potentially making approaches to Hong
Kong-headquartered Noble, a Singapore-based banker aware of the matter
told Reuters, even though founder and top shareholder Richard Elman has
been keen on the group staying independent.
Noble's market value has shrunk by $1.8 billion
since little-known Iceberg Research accused it in mid-February of
inflating asset values by billions of dollars through aggressive
accounting. Noble has rejected the claim and linked Iceberg to an
employee it fired in 2013.
Large companies that control the supply chain in
raw materials such as Noble appeal to Chinese and Japanese firms that
are looking to increase their pricing power and control costs in the
"The stock slump is flushing out buyers," said the banker.
"Noble has been very focused on staying independent but it's hard to
see it staying that way now after the price fall and accounting issues,"
The banker declined to name the potential suitors
as the talks were confidential. Other M&A bankers who have worked
with Chinese state-owned companies mentioned China Minmetals, Brightoil Petroleum and Singapore state investor Temasek Holdings as potentially interested parties in acquiring Noble.
Bankers cautioned though that there were no active
discussions between Noble and potential suitors and it was unclear
whether any interested parties would actually proceed with a proposal.
The sources declined to be identified as the
discussions are confidential. Brightoil declined to comment, while a
Beijing-based spokesman for China Minmetals said he was not aware of any
such plans. Temasek declined to comment on "speculation".
Noble, in response to questions from Reuters,
declined to comment on any likely suitors, adding its focus remained on
"ensuring that we run our day to day business as efficiently as
Elman, 75, who began his career in a scrap yard in
England at the age of 15, has transformed Noble into one of the world's
biggest suppliers of commodities from coal and iron ore to coffee. The
energy business accounts for the bulk of its revenue and profits.
"There is a scarcity value attached to Noble
because there are hardly any listed commodity players," said the
Last year, a Temasek-led consortium made a buyout offer for agricultural commodities trader Olam International , more than a year after short seller Muddy Waters raised questions about Olam's finances, sparking a stock slump.
Elman, who has recently raised his stake to nearly
21 percent in Noble, though is unlikely to be pressured into a sale,
despite the slump in prices of several commodities, people familiar with
his thinking said.
"Elman is known to hold a multi-decade view on
commodity prices. He is not the one to sell at the bottom of the cycle,"
said one person who has previously advised Noble.
It was not immediately clear what Noble's other
significant shareholders think about a sale. China Investment (CIC),
Orbis Investment, Templeton and INVESCO cumulatively own more than 27 percent of the company, Reuters data shows.
Bankers say CIC's 9.4 percent stake in Noble would make it easier for a Chinese state-owned company to propose an offer.
CIC and Templeton didn't respond to a Reuters query, while INVESCO and Orbis declined to comment.
Continue to explore our nearest neighbour, Johore. Going up farther North. Mersing! Uncle8888 has been to Mersing, Kelong Aceh for fishing; but this time he will be staying in Mersing, Fishing Bay Resort; but not fishing for a change.
Soon he will be able to meet his Goal to explore and discover all major towns and attractions in Johore.
Uncle8888 continues to probe for real people, real retail trader/investor around his workplace (a large herd of zebras)
He sees how to get those white hair zebras to open up and talk about their past trading/investing experience.
He is 59+ this year!
He has chopped his fingers few year after AFC as he could no longer take more nagging from his wife for his heavy losses in CPF OA and putting their retirement life at risk (prior to AFC, Govt never control the money in CPF OA for investing/trading/punting) E.g. He lost heavily in heavy-weight stocks like NOL, ST Assembly, UOBKayHian, etc He made some money in SIA, MCL, OCBC, etc
He is still holding on to his old socks; but gave up hope of seeing any recovery.
Deploying your big war chest for the next big Bear?
Let Uncle8888 shares his thought based on real experience on the ground with some real retail investors in those cyber encounters ....
Depending on you how build up your big War Chest?
1. Bulk of it comes from your saving or 2. Bulk of it came from fear of market crashing and liquidating your holding as War Chest. Cash is King! Thinking .. If it is 1, most likely you can deploy your War Chest But if it is 2, not sure how many can actually do it.
With STI still well above 3,000 and currently only O&G and commodity sectors getting badly hit, there will be investment bloggers who felt like Gu Shen with their large following!
Uncle8888 has been there before so he is not surprised at all!
"Some of my favourite bloggers were doing so well and they became my
online superheroes in investing/trading. I visited their blog days and
nights. Sometime, I might join in comments or chats to clarify; but most
of the times, I was lurking behind reading, taking mental notes and
trying to learn from them." Read? Following My Superheroes!
Uncle8888 once also felt like Gu Shen in 2006 - 2007!
No more dealing with life insurance agents for the remaining time of his time on Earth on the value of his human asset. Ants are unlike Grasshoppers. We have Goals! We plan well ahead of our times. With carefully planning, foresight and some emotion check and balance, we can arrive there safety and on time at our own terms.
It is not good idea to go into retirement having persistent cash outflow of $XX,XXX to pay for annual life insurance premiums when our human asset value is much nearer to zero for protection.
I am 58+ yrs old uncle living in HDB heartland doing long-term investing and short-term trading in Singapore stock market only.
I am still making my way to an early retirement by 2016 at 60 yrs old. Official retirement age in Singapore is 62; but can be re-employed up to 65.
I have two sons and one daughter. Two working adult children and the youngest son is in NS.
My wife is a home CEO without income. There are two mouths counting on me for financial support, so I have to do well in this investing journey. There is little room for failure!
Last updated: 22 May 2014
Disclaimer: Stock trading involves significant risks. Create Wealth trader is not a licensed Investment Adviser and will not be responsible for any losses which you incurred. You are advised to always do your own homework before making any trading decision.