As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons 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

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Monday, 21 September 2009

Investing in Stock Market As Your Business Or Your Pension Fund

Do you invest in stock market as your "Business" or "Pension Fund"?

Most Value Investors are likely to treat investing in stock market as "Pension Fund". The objective of a Pension Fund is long term investment, and hopefully with regular dividend income , re-investing dividend income, and capital appreciation for future draw down.

But, if you treat investing in stock market as "Business" as I do. The approach to investing is completely different. As a "Business" owner, you have to actively manage Revenue, Stock Inventories and Cash flow.

You have to set average monthly Revenue target to ensure that you can meet the Yearly Revenue target.

Sometime to meet the average monthly Revenue target, you have to trim the inventory level by doing a clearance sale on stocks for lesser realized profit than expected.

You may have to maintain sufficient inventories to meet your short, mid and long term business goals or even change the mix of inventories by disposing slow moving stocks that are not going anywhere or stock up with more exciting stocks.

You are very active on cash flow management to ensure that you have sufficient purchasing power to pick up your inventories when discounted assets are available for sales in the market.

As a "Business" owner, your main objective is to keep expanding the business further and to achieve higher and higher revenues as possible and to ensure future business growth is achieved within your risks management to meet your final investment goals.

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