As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Saturday, 18 February 2012

Investing Made Simple by Uncle8888 (32)

Read? Investing Made Simple by Uncle8888 (31)

So what is investing?

It can be as simple as two sets of A.B.C.

  1. Always Be Constructing
  2. Always Be Controlling
Investing Process model









Always Be Constructing


In investing, your Capital is your Input into your Investing Process. Your output from this Process is your Return. Your Returns will create wealth for you. In this Investing Process, you will be always constructing your portfolio according to market conditions and your investing goals. Your portfolio should be under construction until you reach your investing goals. You must be fully aware that a portfolio constructed for wealth building will be much different from portfolio constructed for preserving wealth.
 
Always Be Controlling
 
In investing, you undertake risk for return. Risk and return are inseparable. You can only control risks to the level that you are comfortable with for that expected return. You can never directly control your returns; but can only expect them.
 
In investing, you always need to control your anxiety of fear and greed to take the necessary risks to generate that kind of returns in your portfolio to build up your wealth.
 
Why are you not building up your wealth?
 
You may want to think over these?
 
  1. Is your portfolio well constructed to meet your investing goals? Preserving wealth or building wealth?
  2. Have you control your anxiety to undertake risks for returns? Returns create wealth. No return means no wealth creation.
In investing, every other day, we are simply making a series of risk-and-return decision in our portfolio, should we buy, hold or sell?

If you have not been making enough of such decisions; how can you expect to be building up your wealth?
 
 
 
 
 
 
 
 

2 comments:

  1. Wah Uncle, You talk like RObert Kiyosaki leh.
    Yes, control is important. If we can control the amount of risks, then we will seek to minimise the risks while ensuring maximum profits. Easier said than done for stocks for me. So I am more a fan of RObert who goes for property investment. If one can read in detail what he is trying to say, there is no need to attend property seminars. Don't make other rich while making oneself poor even before starting to invest. If still do not get it, going for the seminar will not help.

    ReplyDelete
  2. Hello CW8888,

    I like this "Preserving wealth or building wealth?" question.

    I see some "young" investor seeking passive income or wealth, but their style of investing or portfolio show a wealth preservation bias...

    Their day job (or savings) is the one doing the wealth creation part; I hope they are not neglecting it.

    It's good to ask ourselves questions constantly. If nothing else, to ensure what we say and what we do tally ;)

    ReplyDelete

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