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

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

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Monday, 25 July 2016

Cut Losses And Hide Into Cash? Think It Is Difficult To Recover Our Realized Losses With Cash! (3)


Read? Cut Losses And Hide Into Cash? Think It Is Difficult To Recover Our Realized Losses With Cash! (2)


Many retail investors are trapped by their by own emotions so doing the Maths matters!

The Real case for the Maths!
 
 
 
 
 
Assuming 50% dividends cut from FY 15 H2, FY 16 full year dividend payout for Kep Corp = $0.08 + $0.11 = $0.19.
 
 
HOLDING: Yield on investment cost for position held @ $9.67 is about 2% yield.
 
CUT LOSS INTO CASH WHILE WAITING: Less than 1% yield.
 
 
The Maths showed that cut losses into cash does little to help the investor's wallet; but it may heal frustrated or broken heart.
 
Cut loss to immediately switch to another Horse is a different matter!
 
 
See the difference!
 
Overheard someone after learning this strategy from Uncle8888; she has significantly recovered her losses after the recent sales of some switched Horses.
 
 
 
 
 
 
 
 
 
 
 
 
 






6 comments:

  1. The Remedy is never put ourselves into such weak position that force us into cut losses to raise fund. It is bad money management like what I did in 2008 GFC.

    ReplyDelete
  2. Cut gain (earn lesser) and switch horse with higher upside potential, can? lol...


    ReplyDelete
  3. This comment has been removed by the author.

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  4. Better way recommended by brokers is called "Rotational Play".
    Rotate till you don't see any RED MARKs in your portfolio lol.
    Maybe same as "changing horses"
    i have not tried leh.

    ReplyDelete

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