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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"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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Sunday, 5 February 2017

Can You Beat STI ETF DCA Passive Investing???


This young ex-colleague with small capital has taken the common investing advice to start investing early via STI ETF monthly DCA through our local bank Invest-Saver account. 

A few bloggers even suggested for those who have smaller capital they can start investing early through this way.

He started on 23 Mar 2015 when the stock price STI ETF closed at $3.42.

CW8888: Who says market timing is not important! You listen to whom?


This young investor has been happily doing this monthly DCA passive investing until he has met Uncle8888 for a few investing lessons and began to open his eyes and get his hand dirty doing his own mini version of STI stocks.

Passive or active? There is No free lunch! Why do you want to pay for someone's lunch? Not one; it could be a dozen of lunches. Total expense ratio for this STI ETF fund is 0.42%! 

Finally; after close to two years of passive investing; he sold all his Nikko STI ETF stocks on 31 Jan 2017 and he will now fully focus on his own mini STI portfolio.

After many months has passed; finally; he has validated Uncle8888's investing lessons that he can make more managing the fund himself and decided to give Uncle8888 lunch treat.

LOL!


9 comments:

  1. CW,

    Your young colleague "investor" has a "soft" ear... Who is to say in another 1-2 years, he meets another person more charismatic or persuasive he wouldn't switch strategy again?

    Although I'm not a big fan of passive indexing, to properly evaluate it, we need at least 1 bull/bear cycle, preferably 2 - which means 10 years' time frame?

    Its clear he started near the top of the STI cycle hence the mediocre performance. But its less than 2 years of track record... If he had started in 2009, he would be singing praises to passive indexing!

    It took 20 years to validate your style of DIY Panadol investing with extra rounds of 1,2,3 trading for extra kick. It just took a few months for your young colleague to "validate" it?

    Was it the Trump rally or was it strategy? Causation or correlation?

    What happens if we have a plain vanilla bear market of minus 20%? Throw away the strategy?

    LOL!



    ReplyDelete
    Replies
    1. Shhh ... Like that how to have free lunch or dinner.

      Delete
  2. Very interesting.

    You remind me of everyone of us is subjected this "lottery of investing"

    That is:-

    How to avoid sequence-of-return risk.

    http://www.marketwatch.com/story/how-to-avoid-sequence-of-return-risk-2013-09-28

    It’s important in comedy. It’s equally if not more important in retirement. In essence, we’re talking about the timing of your retirement and how much you plan to withdraw from your retirement accounts.

    "Get the timing right and your money is likely to last over the course of your household’s entire retirement. Get the timing wrong and your money, sorry to be the bearer of bad news again, isn’t going to last over the course of your lifetime.
    /////////////////////////////////
    //////////////////////////////////

    ReplyDelete
    Replies
    1. Temperament,

      Wow! You good! Its a 2013 article!!!???

      Either you have the memory of an elephant, or you are super organised with your bookmarks ;)


      Yup, if after 30 years of investing (passive or active) you call it quits in 2007, you are smiling all the way.

      Call it quits in 2008 your portfolio would have been 50% smaller :(

      It's like a coin flip no?

      Delete
  3. What i am saying is actually when a person started and ended in his investing journey will tied to his sequence-of-return risk for the whole journey.

    ReplyDelete
  4. May be some of you miss his point that monthly DCA doesn't work well like the Preacher's saying that passive investing doesn't care about market timing.

    Investing is about market timing!

    ReplyDelete
    Replies
    1. CW,

      Now I'm with you ;)

      DCA and passive indexing is like faith. You'll only know for sure 20-30 years later when you plan to call it quits and retire.

      STI near all time high - heaven! Its better to be lucky than smart ;)

      STI near all time low - well... try going back for your money back guarantee... What guarantee? Its based on faith. Look ma! No brains needed remember?



      Passive indexing is driving using the rear view mirror. You are betting what works for the past 30 years will work for the next 30 years. Its just simple straight line extrapolation.

      Delete
  5. He can consider using 'Chan Channel" to invest STI ETF.
    Invest and accumulate when the index is below mean.

    http://www.ycchan.net/LRTheory.aspx

    ReplyDelete

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