So instead of “high risk / high return,” a better description of how investing works – in my view – would be “low risk / high return.” The following’s a real-life example of how this works. Back in 10 October 2007, when the Singapore stock market reached a peak prior to the Great Financial Crisis, Singapore’s largest bank, DBS Group Holdings Ltd (SGX: D05), was priced at 1.72 times its book value. That’s a high valuation – and hence it was a risky time to invest. Today, DBS Group’s stock price is still down by 14% from where it was back then. On the other hand, in early March 2009, when Singapore’s stock market had reached its bottom during the Great Financial Crisis, DBS Group had a price-to-book (PB) ratio of just 0.49. That’s a really low valuation – which meant it was a low-risk time to invest. From then to today, DBS Group’s stock has increased by nearly 200%. On why sound investing principles will always work
CW8888 The above quote is just talk talk on paper. The real thing happening to retail investors on the ground is ...
Real People. Real Story on DBS!
This ex-colleague who was some time also Uncle8888's lunch kaki. During GFC 2008/2009; he was very keen to invest bigger on DBS; but in Mar 2009 he was still waiting for DBS to reach $6 before accumulating slowly! When the market recovered he regretted big time; but; he did learn important lesson on investing! This time in Jan 2016; when DBS went below $15; he started to accumulate slowly using his CPF fund as he has already reached 55 (Feeling rich with his bigger War Chest? How often can we beat CPF OA 2.5% with blue chip yield?) In Investing; Your Account Size Really Matters! - CW8888 When DBS has crossed $19; he began to divest slowly. Uncle8888 last heard that he has fully divested all his DBS.
I am 60+ yrs old uncle living in HDB heartland who has retired @ 60 on 30 Sep 2016.
I have been doing long-term investing and short-term trading in Singapore stock market only since Jan 2000 and now becoming full-time retail investor. So I am that Panda or Koala in the investment world; but I am still surviving well in the wild.
I have two sons and one daughter; two working adult children and the youngest son is currently in his 1st year SUTD.
I am currently executing my Three Taps solution model to maintain sustainable retirement income for life till 2038
Last updated: 16 Oct 2016
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