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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"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, 4 October 2009

Portfolio Management - Price Volatilty

Knowledge born from actual experience is the answer to why one profits; lack of it is the reason one loses - Gerald M. Loeb

George Soros earned his reputation and a lot of financial rewards by understanding risk and return has his views on volatility, risks, and returns. He said that asset classes and stocks that have the lowest short-term volatility also generate lowest long-term returns.

Short-term Price Volatility May Not Be Risk To Some.

If you are investing with high leverages, then short-term price volatility that goes against you will pose significant risks.

If you are trading with time decay, also short-term price volatility that goes against you will pose significant risks.

If you have strong holding power, why do you see short-term price volatility as a risk?

Learn to love short-term price volatility.

Volatility is your friend and it provides you opportunities to compound your gains in the market.

To obtain truly significant returns you must allow for volatility in short-term pricing of your portfolio and allows you to actively manage your Portfolio mix - continuous reallocation of different stocks and cash level.

Did you smile or frown last Friday when STI was down -1.99%?

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