As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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Welcome to Ministry of Wealth!

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

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Saturday, 24 November 2012

An Ideal Permanent Portfolio???

What is an ideal Permanent Portfolio???

  1. Provide cash flow yield of at least 5%
  2. Net positive portfolio i.e. not sitting on any paper losses on your invested capital
  3. Keep significant level of cash flow away from stock market actions

Question

Does it really matter when your marked to market net positive portfolio value riding up and down across market cycles when you are not liquidating your portfolio for cash flow yet?



When to build your ideal Permanent Portfolio?



  • Practise market timing - STI down at least 20% from its recent peak i.e. technically defined as entering into a bear market.
  • Buy few beaten down blue chips
  • Keep 1 or 2 best winners when the Bull charges back


Wait for the next Bear market.











Repeat the same steps again but pick different set of beaten down blue chips.




Simple. Right?











Disclaimer: Simple is not necessary easy to do!



7 comments:

  1. and you expect the same blue chips to last forever? the permanent portfolio is for people that don't have your god given analytical skills that will be able to choose 2 stocks that will do well for the next 40 years.

    ReplyDelete
  2. Temperament tries but always sell when the profits are too tempting in Markets heading north. I had own Keppel Corp, Semb Corp, F&N, etc, more than 2 or 3 market's cycles at least. So if i really follow "UNCLE CHUA" i think i will be a multi-millionaire too. i believe it can be done if you don't need your capital in the markets for your daily living expenses from the beginning of your investment journey.

    By the way, now i have sold more than half of my portfolio. So Uncle Chua is Uncle CHUA. Temperament is Temperament. For that matter can i say WB IS WB? So be happy as long as you survive in the Market & make some money more then your vocation can give you. Best wishes to all of you.
    Amen.

    ReplyDelete
  3. Interesting...

    Let's imagine we bought a passive index fund or ETF of STI at 800 in 1997.

    And let's assume STI is 3,200 now in 2012.

    So after 15 years, we got a 4 bagger.

    Looking at your other post on what's the best inflation hedge, after discounting for an inflation of 5% for 15 years, dang! Our 4 bagger is now "only" 2 bagger :(

    #$%(*%@&!!%*)^ - I don't play liao!

    I think I better go buy property and gold. It's a lot easier than hitting 10 baggers in equities!!!

    LOL!

    ReplyDelete
    Replies
    1. You learn for Lau Lee?

      Property can go up, 10, 20, and 30 times. LOL

      Delete
    2. It's true leh!

      Dad bought our Queenstown HDB 3 room for $7,000 from HDB. Now the valuation is $375,000!!??

      No financial literacy needed. Just have to get married :)

      Dad lost more than win in the stock market. And have since swore off it. He wasn't exactly jumping with joy when he found out I "retired" and now managing my own funds. LOL!


      You must give hope to your younger readers mah! Give a link to your previous post on HOW to find 10 baggers. By discovering 99 other counters that are not!!! The Thomas Edison way!

      Many forget that Keppel and Sembawang were both sunset shipyard industries in the 80s. It took brave contrarian an patient investors to believe Keppel and Sembawang can transform themselves into property, infrastructure, and offshore marine plays today.


      The trouble with blogging is that not everyone got patient to reflect what's written between the lines.

      If I had not read all the way to the end "Disclaimer: Simple is not necessary easy to do!", I would have thought you are saying "fong liang hua" to those who do not have 10 bagggers yet.

      It also helps I've read your archive posts so I got the big picture perspective - you not laughing at me; just giving me gentle reminders ;)

      Delete
  4. Agree with SMOL. Reading this post ALONE and reading all the other post leading to this post presents two different intention, perceived or not.

    ReplyDelete

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