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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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.

Think Investing as Tug of War - Read more? Click and scroll down



Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

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

Sunday, 7 April 2019

The Stocks Manage Themselves


Read? The Stocks Manage Themselves

Uncle8888 really likes these ...


It doesn’t matter if you self-identify as an active or passive investor, the stocks don’t care about you either way. It’s a completely one-sided relationship.


When Ibbotson said it’s “much harder to manage people than it is to manage stocks” he was speaking in terms of running a business but the hardest person to manage is yourself when we’re talking about investing.

Research shows investors who are overconfident in their abilities and assume they’re above average investors trade more frequently. There’s an embedded illusion of control in that we assume doing more will lead to a better result. Of course, the research also shows that those investors who trade more end up with below average results.

We’re all taught at an early age that working harder and giving it 110% will lead to better results. This is true in some endeavors but rarely when it comes to the markets. Trying harder typically leads to worse results because when you press you tend to make mistakes.


There are no extra points awarded for effort or degree of difficulty when investing.


CW8888

Know ourselves and manage ourselves according to our historical investment outcome and performance across past market cycles; refine, revise, or adjust investing strategies to move forward to next market cycles to build wealth or generate cash flow from the stock market according to our investing goals.

Back testing his own past 19 years of data points; he is now more blur.

Is holding too much cash as war chest a serious drag on his investment portfolio performance?

Hmm ...























10 comments:

  1. Hi Uncle8888,

    Investing is not easy, but that's what makes it fun! :)

    There's a fine line between doing too much & refining the investment process. Dalbar's annual studies for the past 24 years have consistently shown the average investor to underperform the index, confirming what Ben Carlson is saying above.

    Dalbar 2018 report

    Basically the main problem is the Mind. :)

    When we adopt an investing Method & Money Mgmt, we will need to be aware of shortcomings as well. No method will be right or good all the time. Sometimes our method or money mgmt will make us look foolish. And we need to be OK with it.

    For e.g. in my trend following, I know that during market volatility when there are fake breakouts or breakdowns, I will be whipsawed and will perform worse than just buy-and-hold. This is what happened in Feb/Mar & Jun/Jul of 2018. And then my trend following signals really helped in the Oct to early-Jan steep correction.

    Sometimes, before thinking of tweaking or trying something different, it's best to go back to principles: Do we need it? (whether we've won the game) Are we able to do it? (liquidity, time horizon, portfolio size, sizeable income) Are we willing to do it? (risk appetite, drawdowns, capital loss)

    ReplyDelete
  2. Parrot this : Sometimes, before thinking of tweaking or trying something different, it's best to go back to principles: Do we need it? (whether we've won the game) Are we able to do it? (liquidity, time horizon, portfolio size, sizeable income) Are we willing to do it? (risk appetite, drawdowns, capital loss)


    :-)

    ReplyDelete
    Replies
    1. Is our investing goals based on need or want?

      1) Do weed to build more long-term wealth for future cash future or just want cash flow now?

      2) Do really need more cash flow or just want more?

      Delete
  3. In short, at de-accumulation phase, able to preserving nest eggs is more important than trying to hatch them into chickens.

    i still have a few life insurances which i consider as century eggs.

    One that has no run out of date, i am going to sell it in the market in 2021 to get a bit more money.

    It is 2021 because this is the time it has paid premium for 30 years.

    ReplyDelete
    Replies
    1. Curious to know what is the rate of return after 30 yrs?

      Delete
  4. From 29 to 30 years there is a jump in Non Guarantee Surrender value of $10,875 to $19,125 based on BI.
    After there is no more jump until 99 or death.

    Rate of Return not sure how to calculate leh.

    i give you the data U see can calculate or not?

    Based on BI on the 30th year:-

    Premium Paid: Est.SV. ESt.Cash Bonus
    $26,055 $31,575 $23,515

    That is the data i have.
    (Boh Tak Chet)

    Anyway, life insurance is not an investment.

    RR usually sucks.
    So is annuity.

    ReplyDelete
  5. Actually to me "Heng Ah" still get back double or almost double my premium paid though for 30 years.

    Don't need this "shi_" anymore.

    If i invested the money(premium paid annually for 30 years) in an index or unit trust, will i get back double or more or less ?

    Now i know i will get back double if not more.

    ReplyDelete
  6. So 30 years almost FOC Insurance since i get back my money and some more?

    No?

    Ha! Ha!

    "A man is as rich as how much assets he can leave it alone", someone said.

    Then, what about my century eggs (life Insurances in the money)?

    Surrender or let it matured at 85 years?

    Can they be my part of my Emergency funds?

    Any opinions or facts are welcome.

    i am here to learn from others who have a better idea or experiences.

    Shalom.

    ReplyDelete
  7. The rule of 72 is not applicable to calculate the rate of return for life insurance. Only Excel can do it quite accurately.

    But just let me assume that I have this amount of money of $26055 invested 30 years.

    So in 30 years at what % of interest will double my money based on the simple Rule of 72.
    It is about 2.4%.

    But this $26055 is premium paid annually for 30 years.

    So my wild guess is Xirr based on Excel will be more than 2.4%.

    Anyone?



    ReplyDelete
  8. Because the balance of UTD premiums is always working somewhere.

    O.K. some of it maybe in my stomach Liu.

    This is how Bot Tat Chet logic some times.

    It maybe wrong or roughly make sense.

    LOL!

    Just too hard or too lazy for me to want to learn to use Excel unless forced to do so.

    Ha!Ha!

    ReplyDelete

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