Read? Coping with Financial Pornography from Millennial Deci-Millionaires.
Hmm ... learnt something from the above link!
This compounding investment return pornography illustration diagram on how to become rich from investment often shown by many investment writers?
No periodic dips in investment portfolio value across market cycles?
Not pornographic? Then what!
Never confuse compounding interests - 8th Wonder of the World with compounding investment return!
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Yeah ... There's this inconvenient thing called sequence of returns risk...
ReplyDeleteAnnualised return over 20 years from point A to point B is 7% p.a.
But inside got -50%, +40%, -20%, +15% etc. Hoho...
Investment Moats has something quite relevant...
Compounding requires absorbing damage so you're never forced to quit
I think too many people don't focus enough on how to "absorb damage" 😉
Spur😃
In addition of absorbing the damage; one should have the mean to recover and rebound strongly too
DeleteKeep a lookout for Temasek FY annual reporting next few days. :)
ReplyDeleteSeems like a +9% performance from 1/4/17 to 31/3/18.
$275B to $300B
But how much from capital gains + dividends .... how much from injections?
Gotta wait for the details LOL.
Monthly capital injection will huat
DeleteCan my HP 73 shares from 198x to now count?
ReplyDeleteThat is from 73 shares spin off to another 6 companies.
There is a story about investing in S & P 500 for 20 years or more who only buys regularly and DRIP.
So when he need to withdraw even in a >30% crashed market say the 25th year, will he still make money?
Off hand, i think he should still O. K.