I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com

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

Thursday 31 December 2009

Earned income --Most people don't make enough money from their jobs.


Sound like me?
  • Fixed-income job
  • ZERO chances for that coveted promotion (I can't even remember when was my last promotion )
  • No spare room to rent out
  • Knowledge out of date - how to give tuition?
  • No driving license - how to become relief taxi-driver?
So how? No choice. I have to fully focus on Active Investing to earn some extra money to supplement the limited earned income; otherwise money not enough.

2009 Year End Performance Review

"However beautiful the strategy, you should occasionally look at the results." - Winston Churchill

Finding Back The Stolen Wealth By The 2008 Greater Bear

  • Portfolio has recovered 133.2% from its low in 2009 while STI has recovered 98.6%.
  • Portfolio is 14.3% away from its Peak in Oct 07 while STI is 25.3%.
  • Lessons learn from this Greater Bear:
    • Cut losses on s-chips in 2008 to recover investing capital and deploy them in some beaten down true blue chips has shown that it is a right strategy for me. From the past bear market lessons, true blue chips will recover faster while some speculative stocks will be lost and gone.
    • The truth is that you don't need to win back in the same way that you have lost.

Trading Performance

Since 1 Nov 08 that I have given up the faster exciting Contra Trading (or gambling) after three successive months of contra losses for a slower moving Position Trading, how am I doing after that?

1. ROC from 3.1% to 34.3% (I don't use stop loss so no negative ROC)

2. Holding Days from 1 to 329 days (some sins committed in 2008 were cleaned up so longer days)

3. Average ROC: 11.4% per trade

4. Average Holding Days: 54.9 days per trade

2009 Goal

(In 2003, I set some bullish progressive goals from 2003 to 2011. Phew!).

I only managed to achieve 47.8% of 2009 Goal
Bigger Goal For 2010
A seriously challenged Goal for 2010 if I opt not to revise it.

Do you know where are rocks? - Part 2


I still like the moral of the story.

We like to learn from others and try to implement their strategies. They know where are rocks but we may not and then get ourselves drown.

10 lessons to be learnt

05:55 AM Dec 31, 2009

It has been a decade that many investors would rather forget. On Dec 31, 1999 the FTSE100 closed at 6,930 and 10 years on it still has some distance to go before it regains this peak, sitting at around just 5,300 last week. The Daily Telegraph's Emma Simon looks at the lessons to be learned from the decade that shocked the stock market.

1. A guarantee is only as good as the guarantor

Structured products may have been guaranteed by Wall Street investment banks. But once Lehman's went bust, people realised that many of their guaranteed investments were not as guaranteed as they thought.

2. Don't buy something you don't understand

Financial advisers often point out that many people drive a car without fully understanding how the engine works. But those who got lost money in split-capital trusts and precipice bonds will no doubt now think twice before being reassured by such twaddle. If a car breaks down there is always the AA - there isn't any equivalent rescue service when it's your life savings.

3. Higher returns come with higher risks

If you want to better returns than a building society account, you need to take more risk with your money. This almost always means you could also lose capital.

4. Don't pay more than you have to

The advent of the Internet and price comparison sites mean people can now shop around for financial deals and compare prices and products more effectively.

5. Long-term investments do not always mean long-term gains

Just because an investment should be held for a minimum of five years, does not mean you will get a positive return at the end of this period, as the "lost decade" for equities demonstrates.

6. Ask how your adviser earns his money

Commission skews judgments; it pays to inquire why comparable products are not being recommended.

7. Read the small print

What will you be charged if you exceed your overdraft limit? What penalties will be applied if you cash the investment in early? When can the insurer turn down your claim? Such vital information is almost always in the small print.

8. Don't rely on easy credit

Many assumed cheap loans, remortgages and interest-free credit cards would bail them out of any financial difficulty. But these credit lines disappear when times get tough.

9. Don't rely on others to provide a pension

If you want a decent retirement, start saving. Employers have watered down pension schemes while the value of the state pension has declined. Even generous public sector pension look under threat.

10. What goes up also comes down

Shares prices can plummet, house price can fall, and interest rates can tumble as well as rise sharply too. It's best to plan for such eventualities. They almost always happen.

Beware Of Future Bears In Your Investing Journey!

2009 is ending soon and the Great Recession of 2008 may be really over; but we have to beware of more future Bears appearing soon. They may come sooner than expected.

The personal impact of the future bears will be greater in the future and unlikely to be lesser.

When we first began this investing journey, we have less investing capital exposed to the Market, and year- on-year we keep adding more investing capital to our investment account and getting ourselves more exposed to the Market with a larger portfolio.

Just one or two bad years can really offset years of effort in building wealth and trying to restore it can be a painful and heartbreaking experience.

Wednesday 30 December 2009

Passive Income - Renting out a room?

I saw a notice pasted at lift lobby this morning:

Rental Specialist ...

1 common room : $500-$650
1 master room ..

So rental income of $500-$650 is not a bad idea; but not for me as I am still short of 1 room as I have 3 kids and each prefer to have their own room. LOL.

Tuesday 29 December 2009

Is Your Company Hoarding Too Much Cash For You? - Part 3


Cash-22: Is It Bad To Have Too Much Of A Good Thing?

by Ben McClure

Cash is something companies love to have. But can they have too much of the stuff?

Provided things are going well, debt financing helps a company gear up to boost returns, but investors know the dangers of debt. When things don't go as planned, debt can spell trouble.

But what about a company's cash position? If excess debt is a bad thing, does it follow that a lot of cash is a good thing? At first glance, it makes sense for investors to seek out companies with plenty of cash on the balance sheet. After all, cash offers protection against tough times, and it also gives companies more options for future growth.

The Theories

Unfortunately, nothing is quite that simple. For investors digging into company fundamentals, a big pile of cash can signal many things - good and bad. How investors interpret cash reserves depends on how the cash got there, the kind of business the company is and what managers plan to do with the cash.

Corporate finance textbooks say that each firm has its own appropriate cash level, and companies ought to keep just enough cash to cover their interest, expenses and capital expenditures; plus they should hold a little bit more in case of emergencies. The current ratio and the quick ratio help investors determine whether companies have enough coverage to meet near-term cash requirements.

Theory also holds that any extra cash over and above those levels should be redistributed to shareholders either through dividends or share buy backs. If the company then discovers a new investment opportunity, managers should turn to the capital markets to raise the needed funds.

Good Reasons for Extra Cash

That said, there are often good reasons to find more cash on the balance sheet than financial principles suggest prudent. To start, a persistent and growing reserve often times signals strong company performance. Indeed, it shows that cash is accumulating so quickly that management doesn't have time to figure out how to make use of it.

Think of Microsoft. The software giant has done so well for so long that it built up a mountain of more than $40 billion. As revenues continue to grow, that cash pile will swell further. Other highly successful firms in sectors like software and services, entertainment and media don't have the same levels of spending required by capital-intensive companies. So their cash builds up.

By contrast, companies with a lot of capital expenditure, like steel makers, must invest in equipment and inventory that must be regularly replaced. Capital-intensive firms have a much harder time maintaining cash reserves. Investors should recognize, moreover, that companies in cyclical industries, like manufacturing, have to keep cash reserves to ride out cyclical downturns. Boeing or Daimler Chrysler, for instance, face high demand at one point in the business cycle and then face another phase when cash flow dries up. These companies need to stockpile cash well in excess of what they need in the short term.

Bad Reasons for Extra Cash

All the same, textbook guidelines should not be ignored. High levels of cash on the balance sheet can frequently signal danger ahead. If cash is more or less a permanent feature of the company's balance sheet, investors need to ask why the money is not being put to use. Cash could be there because management has run out of investment opportunities or is too short sighted and doesn't know what to do with the cash.

Sitting on cash can be an expensive luxury because it has an opportunity cost - the difference between the interest earned on holding cash and price paid for having the cash as measured by the company's cost of capital, or WACC. If a company, say, can get 20% return on equity investing in a new project or by expanding the business, it is a costly mistake to keep the cash in the bank. If the project's return is less than the company's cost of capital, the cash should be returned to shareholders.

Don't be fooled by the popular explanation that extra cash gives managers more flexibility and speed to make acquisitions when they see fit. Companies that hold excess cash carry agency costs whereby they are tempted to pursue "empire building". Top managers can fritter away cash on wasteful acquisitions and bad projects in a bid to boost their personal power and prestige. With this mind, be wary of balance sheet items like strategic reserves and restructuring reserves. They are often just excuses for hoarding cash.

Even worse, a cash-rich company runs the risk of being careless. The company may fall prey to sloppy habits, including inadequate control of spending and an unwillingness continually to prune growing expenses. Large cash holdings remove from managers much of the pressure to perform.

There is much to be said for companies that raise investment funds in the capital markets. Capital markets bring greater discipline and transparency to investment decisions and so reduce agency costs. Cash piles let companies skirt the open process and avoid the scrutiny that goes with it.


To play it safe, investors should look at cash position through the sieve of financial theory and work out an appropriate cash level. By taking into account the firm's future cash flows, business cycles, its capital expenditure plans, emerging liability payments and other cash needs, investors can calculate how much cash a company really needs

Year End Portfolio Review

Three possible ways to conduct portfolio review:


Some ideas like benchmarking to STI or X times the Inflation rate, FD rate, CPF rate, etc

Risks Tolerance Level

Will the  level of risks tolerance change in the next 1-2 years e.g. kids are going to Uni, getting married, producing babies, getting keys to the new flats i.e. you are expecting big expenses to be coming on the way.


Any further need to diversify into other sectors as some of the sectors have recovered significantly from their lows and further upside may be limited.

Monday 28 December 2009

Does Your Account Size Matter?

The magic number - as larger as possible.

One of the key success factors in your investing journey is how well you manage your portfolio risks. A bigger account size allows you to better manage your portfolio risks.


Sunday 27 December 2009

Two Bank Accounts? No, You may need Four! - Part 2

Read? Christmas Days Reflections

If you truly wish to stay calm and steady in the world of investing through the volatile stock market. You have to learn to mentally, financially, and physically separate your investment needs from other needs. It is best to confine your investing activities to itself and your other needs are adequately taken care of and have the least dependency on the success or failure of your investment activities.

It has taken me many years to realize the power of separate bank accounts; and knowing that I should have enough to overcome the worst market condition and that really helps me to stay calm and steady in the highly volatile market.

Even if I have extra money at hand, I will evaluate it carefully which account should it go to and not necessary it will go to investment account as expected expenses may change from time to time in our life cycle. I will forecast what are the expected expenses in the next 1-2 years so that I will not get caught in a financial situation that I am forced to liquate my investment at losses to fund these expected expenses.

Read? Why you may need four bank accounts?

Er, What is value investing?

Lorna Tan wrote:

So you want to use the term. Just say...

"My resolution for the new year is to go into value investing. Hopefully it'll make me rich in the long run."


Hmm...  Value investing makes one rich in the long run?

Whatever methods or strategies you use in investing, you can only become rich in the long run if you can to do one or both of these:
  • Have a portfolio of multi-bagger stocks and sell them at the next bull market peak and wait for next bear market bottom to load up again.
  • Compounding your portfolio of stocks at the fastest speed - the most money in the least time. Keep repeating it and pause at next bull market peak. Take a super long vacation and wait for the next bear market bottom to try again.
otherwise, it is very hard to become rich in the long run as bear comes after bull - yet another cycle of bull and bear.

Passive Income or Building Wealth From Stock Dividends?

Seriouly, if the source of passive income or building wealth from stocks dividends, then we will need a portfolio of this size ...

Saturday 26 December 2009

Sure Way Of Not Getting Drunk - Returning Your Wine Glass!

After many years of fighting over how not to get drunk in many happy occasions - I have learned an effective way of not getting drunk:

  • When you begin to feel tipsy and still have control, quickly bottom up the glass and return the wine glass to the passing waiter/waitress and ask for a glass of ice water or Chinese tea.
  • If you don't return the wine glass to the house, your wine glass will magically from time to time be filled up again.
  • The moment you are out of control over the glass wine, likely you will become drunk once again.
  • Enjoy your drink and do remember to return your Wine Glass while you still have control.

Are High Ratio Dividend Payout Stocks Make A Low Risk Investment? - Part 4


The idea behind All Dividend Income investing may sound low risks and logical.

But very often, these investors have forgotten about the serious impact of inflation and under-estimate the power of compounding returns to fight inflation.

Every year, inflation will reduce your real returns and erode the purchasing power of your original capital that was invested.

If you plan to derive your passive income in this way, then just how big an dividend income can you expect in going through this route?

It will take a real big account size to produce sufficient sum of dividends to be able to re-invest them for compounding effect. Furthermore, when the market is trending up, a pure dividend yield investors will find it more difficult to re-invest as the dividend yield will be falling as well.

Another serious consideration is the real purchasing power of your original capital after so many years. For example:

If the dividend yield is 10%, it will take 10 years to recover your orginal capital. But, after 10 years, what will happen to the real purchasing power of your original capital?

Worse still, if the dividend yield is only 5%, it will take 20 years to recover your original capital.

There's also no guarantee that the companies will be able to continue year-on-year to pay out good dividends. If companies start to struggle due to change of management or business environment it may cut or eliminate their dividends.  When dividend yielding stocks fail to deliver, you can bet the stock price will plunge faster than expected and can remain at that level for a long time. By then the stock price could be down considerably and the inflationary impact may completely destroy the real purchasing power of your remaining or recovered capital.

The real enemy of any long term investor is inflation.

Do you seriously think that with an all dividend income strategy, you can really fight against your real enemy?

A reasonable strategy to fight against inflation is to include investing in some growth companies and also to periodically recover some invested capital together with their realized profits and to re-invest them to tap into the magical power of compounding effect to fight the real enemy.

Friday 25 December 2009

Sorting Priorities in Life : What are your thoughts in 2010?

By Author Unknown

A Professor stood before his philosophy class and had some items in front of him. When the class began, wordlessly, he picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar was full. They agreed that it was.

So the Professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

The Professor next picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He asked once more if the jar was full. The students responded with an unanimous "yes."

The Professor then produced two cups of coffee from under the table and poured the entire contents into the jar, effectively filling the space between the grains of sand.

"Now," said the professor, as the laughter subsided, "I want you to recognize that this jar represents your life. The golf balls are the important things--your family, your children, your health, your friends, and your favorite passions - things that if everything else was lost and only they remained, your life would still be full.

The pebbles are the other things that matter like your job, your house, and your car. The sand is everything else -the small stuff.

"If you put the sand into the jar first," he continued, "there is no room for the pebbles or the golf balls. The same goes for life. If you spend all your time and energy on the small stuff, you will never have room for the things that are important to you. Pay attention to the things that are critical to your happiness. Play with your children. Take time to get medical checkups. Take your partner out to dinner. Play another 18. (CreateWealth8888: Never play more than 18 holes)

There will always be time to clean the house and fix the disposal. "Take care of the golf balls first, the things that really matter. Set your priorities. The rest is just sand."

One of the students raised her hand and inquired what the coffee represented. The Professor smiled. "I'm glad you asked. It just goes to show you that no matter how full your life may seem, there's always room for a couple of cups of coffee with a friend."

Anyone buying me a cup of coffee?

Home for Living and not for profit taking - Part 2

Read? Home for Living and not for profit taking

I happened to meet this ex-neighbour again. I am not surprise that he was retrenched last year, and now he is a full-time Taxi Driver.

I believe now he will have a harder time keeping up with his housing loan. The lesson learn:  Never under-estimate the risk of losing your job in the future; and it is not wise to use your residential home as a profit taking financial instrument or product.

Fundamental or Technical Analysis?

The Truth about Fundamental or Technical Analysis is that both are Guesswork and Speculative. Their only differences are method used to guess and the period of Validity of Time Frame to guess and to speculate.

Technical Analysis: Much Shorter-Term guesswork and Much Shorter-Term period of Validity of Time Frame to speculate on stock price movement; and can be as short as few minutes.

Fundamental Analysis: Much Longer-Term Guesswork and Much Longer-Term period of Validity of Time Frame to speculate on the ability and capability of the companies to produce consistent earning, dividend payout and perhaps some stock price appreciation.

Fundamental Analysis looks like this:

Counting the eggs, and guessing and speculating the quantity and quality of the chicken to lay future eggs.

Technical Analysis looks like this:

How many more or less eggs are coming?
Where are the Chicken? What is that?

Thursday 24 December 2009

What Money Means?

Money is power: so said one.

Money is a cushion: so said another

Money is the root of evil: so said still another

Money means freedom: so runs an old saying

And money is all of these - and more.

Money pays for whatever you want - if you have money.

Money buys everything except love, personality, freedom, immorality, silence, peace.

- Carl Sandburg

Wednesday 23 December 2009

Ideal Job?

Do you have an ideal job? I believe many don't; but, the job still provide a steady stream of income and help you to make a living. However, if you are not making a living; then probably it is time to look elsewhere.

Your money or your life ...

I have found my ideal part-time job - active investing to complement my not-so-ideal job to pay bills until my two elder kids completed their university study before deciding the next course of life while the part-time job provides me the motivation and momentum to go forward each day and each week.

If you are still holding on to your not-so-ideal job, why not start looking for some part-time activities that help you to complement your full-time not-so-ideal job. It may be easier to find your passion in your near-ideal part-time job. I know someone who is passionate about his part-time "career coaching".

Monday 21 December 2009

Price Increase Due To Inflation Or Perception Of Better Quality and Services


Not all price increases are due to inflation. Some price increases are add-on partly due to better quality and services provided or perception of being better like the story of 3 cans of Coke.

I remembered during my childhood days, chicken or ducks were served at the dinner table only on festive seasons or family celebrations.

Chicken rice? No, not any chicken rice. We may want to try the best chicken rice in Singapore and of course it will definitely cost more. We also want to eat Peking Duck, Suckling piglet, Lobsters, King Crab, and Hairy Crabs, etc.

My friends, life style has changed and we should be forward looking instead looking back.

Be happy! Let me think where to eat the best Turkey? Merry Christmas!

Sunday 20 December 2009

Is Investing In Real-world Business Safer Than Stocks? - Part 3


Not surprising, 40% of the stalls are empty in Hougang Plaza Foodcourt, probably due to its new nasty neighbour - 24x7 air-con Kang Kar Food Court offering a 10% discount with Kopithiam card. How can old foodcourt compete when both food courts are selling almost the same kind of foods.

The only other stall at another coffeshop that biz is still so good is the Western food where new food court doesn't have one. No direct competitor.

From the perspective of pure financial return from investment dollars, I think investing in a real life small retail business can be more risky than investing in stocks.

When the real life retail business tumbles, the biz owner has to pump in more cash into the biz to keep it on going and end up with negative cash-flow; or else have to close shop.

This is somewhat similar to Margin, CFD or any other leverage trading, when the Market tumbles, the traders will be asked to top up the margin or the maintenance; or otherwise will be forced sell by the brokers.

For investing in stocks, when the stock prices tumble, investors don't need to put in more cash other than watching with horrors.

Do you still think that investing in stocks is more risky than investing in real life small retail business?

Analyst's Company Report or DIY analysis?

Unless one have access to insiders' details, and trying to analyze companies based on publicly available details are no more than just guessing the number of eggs, hens or marbles? Any number is just a good guess.

For this type of guessing competition, you will be surprised that some of those in the crowd can intuitively guess the number close enough to be right and won the prize as prize is usually awarded to the one that guess the number that is closest to the actual number.

Is the stock market another form of Guess the Number game?

Inflation-protected Passive Income Stream?

Retirement planning should start with a projection of one's desired income in retirement, and then choosing assets that are likely to deliver and protect that income stream.

Let recall past posts on inflation: http://createwealth8888.blogspot.com/2009/10/personal-inflation-rate-and-market.html

Let assume:

1. Average personal or family inflation is 3%
2. Retirement fund or Capital Account size is 25 x yearly expected expenses or desired income.

Using the multiple of  $10,000 for the Maths:

To have a inflation-protected desired passive income stream, we will need a annualized return of at least 6.1%.

To be realistic, it is really very hard to re-invest year-on-year to get an annualized return of at least 6.1%.

Probably we will need to add new passive income streams every other year; but, is it realistic too?

Or alternatively, we may consider draw-down approach : Inflation-protected Draw-down method

Saturday 19 December 2009

Dollars and sense of investing

Are some long-held principles on the markets merely myths? Genevieve Cua looks into some of them

THE depths of the financial crisis between 2008 and 2009 called into question a number of investment principles that have been accepted almost as truisms - until recently.

Are those principles simply fair weather crutches? That is, they work in a rising market but fail horribly in a bear market. Or worse, are they simply myths?

Here are some of them and what some analysts think.


Not putting all of one's eggs into a single asset is common sense. Portfolio construction typically works on the expectation that correlations among assets are stable based on historical trends. Assets are chosen for their low correlations with one another, so that not all should tank at the same time.

'What may not make sense is suggesting the best asset allocation to meet the investor's objectives is 100per cent equity and leaving this as 'buy and hold'. This will lead to volatile outcomes.'

Between mid-2008 and the first quarter of 2009, however, the worst case scenario happened. The unravelling of the credit crisis triggered massive waves of selling and liquidity dried up. Correlations converged to one for almost all assets.

There were exceptions. US Treasuries proved to be the safest of safe havens, for instance. Gold also rallied, thanks to fears that the financial system was on the brink of collapse.

Diversification is still seen as a form of risk mitigation, and widely recommended by advisers. Perhaps the biggest lesson of the crisis, however, is that liquidity has been under-appreciated. Many portfolios were invested substantially in structured products that proved horribly illiquid, or worse, that actually unwound and caused heavy losses.

Says Christian Nolting, lead strategist (Asia-Pacific) for Deutsche Bank Private Wealth Management: 'We see value in the asset allocation approach and have implemented the same in our private client portfolios. An appropriate distribution of wealth among different asset classes, with an individual strategy geared to the risk-return profile of the client - complemented periodically by dynamic and tactical decisions - is key for a sustainable and satisfying portfolio return.'

'Time' diversification

This principle says that the longer your horizon, the more equity risk you can take. In particular, it is common that presentations by banks and fund houses show long-term returns of an index, usually the S&P500, to justify this thinking.

Boston University professor Zvi Bodie believes that the fallacy of time diversification is perpetuated as part of the fund management industry drive to sell funds.

As he told an audience at the National University of Singapore recently, if stocks became safer in the long run, they would not carry a risk premium. An indication of how risky stocks are can be gleaned from the cost of protection, which rises as the time horizon lengthens. Conventional advice, he says, based on the mistaken principle of time diversification, leads to portfolios that are riskier than most consumers realise.

Buy and hold

This mode of investing in markets may truly be one of the biggest casualties of the bear market.

Almost all strategists now say that shifts in tactical asset allocation - that is, shifts around a long-term strategic mix of assets - have become more frequent since the crisis began. They expect 2010 to be no different, as uncertainties remain on the economic outlook and the manner and timing in which central banks will begin to withdraw the massive stimulus.

Financial advisers such as Providend and New Independent have launched portfolio services that actively allocate to exchange traded funds.

Such portfolio services are typically aimed at generating a positive absolute return. The rub, however, is that retail investors with modest sums may not have access to such advice, where the minimum capital for a portfolio can start from $100,000.

An absolute return objective is also not a panacea as a lot will depend on the fund manager or adviser's skill and ability to time markets.

Schroders' Asia-Pacific head of multi-assets, Al Clarke, says buy-and-hold is still a sensible strategy 'as asset allocation is a difficult endeavour that requires time, technical understanding and discipline'.

'An investor should construct an appropriate asset mix that will deliver the return and risk objectives they need for that investment . . . At Schroders, we believe we can add value through making sensible changes to the asset allocation based on value, cycle and liquidity.

'What may not make sense is suggesting the best asset allocation to meet the investor's objectives is 100 per cent equity and leaving this as 'buy and hold'. This will lead to volatile outcomes and as history has demonstrated, can deliver sub-standard returns for prolonged periods of time.'

Balanced and target date retirement funds

These are marketed as core holdings in a retirement fund that investors can effectively buy and hold. While balanced funds are a staple in the CPF menu, there are not many target date funds here. The latter refer to those designed with a maturity that should coincide with your retirement. Assets are automatically rebalanced such that as the fund nears maturity, it should be invested in more conservative instruments.

In the US, target date funds, in particular, are under tough scrutiny as the market plunge in 2008 caused severe losses among funds that are near maturity. Bloomberg has reported that target date funds labelled 2000-2010 lost an average of 23 per cent last year, with some dropping as much as 41 per cent. The average 2050 fund declined 39 per cent in 2008, while the S&P500 fell 38 per cent.

Prof Bodie heaps particular scorn on target date funds as 'silly, counter productive and disingenuous'. Such funds, he says, do little to provide investors with a secure income in retirement.

The upshot of this is that retirement planning should start with a projection of one's desired income in retirement, and then choosing assets that are likely to deliver and protect that income stream. This is how institutions with a stream of future liabilities invest. This approach would favour direct investments in bonds, in particular inflation indexed bonds. There are no inflation-linked bonds here. Many investors also sniff at Singapore government bonds whose yields are low. Corporate bonds are also not as easily accessible to retail investors, as they require minimum investments of at least $200,000.

Flower Bouquets and Hampers


Code F2

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Code: F6

Code F7

Code: F8

Are High Ratio Dividend Payout Stocks Make A Low Risk Investment? - Part 3


Mark said: "We are finding companies with good dividend yields, companies that are growing."

Mark Mobius is a legend among emerging-market investors. For more than 30 years, the 73-year-old fund manager, who oversees $33 billion spread across 35 Franklin Templeton funds.


Make sure you are looking at companies that have both good dividend yields and growth.

Only Performance Is Reality

"In business, words are words; explanations are explanations, promises are promises, but only performance is reality." - Harold S. Geneen


So get real and start measuring your performance. What's next?

We have to do a little bit of  bench marking against your peers and also take a look at how the world's best investors are doing:  some of the world's best investors performance; otherwise, we are behaving like a frog in the well looking up and thinking that is the sky.

Friday 18 December 2009

Lottery: Buying ToTo? Evil Of Gambling? - Part 2


ToTo is definitely not a Get Rich scam. It is a wonderful Get Rich financial Game where many players lose pennies and pool together all their lost pennies and present it to 1 or few lucky people to become Rich overnight. The organizer provides plenty of job opportunities, help to sponsor sport and charity events and the Govt gets its tax revenues to stimulate the economy.

Is ToTo still Evil of Gambling meh?

Thursday 17 December 2009

Lottery: Buying ToTo? Evil Of Gambling?

The Evils Of Gambling?

Gambling is an important service industry in the economy and generate many job opportunities, and they are also big sponsors in sport and charity events. Indirectly, gamblers are helping out in good causes in a small way through "small sacrifices".
Addictive or compulsive gambling is evil and not gambling itself. Anything that you got yourself  addicted is evil or just bad, e.g. addicted to womanizing, drinking, gaming, etc.

I know one guy got addicted to running marathon, everyday running 2-3 hour on weekdays, and on weekends running 4-6 hours on the road. Even on Chinsese New Year, he also runs. One day, I jokingly told him that even animal like Horses also don't run that many hours.

I only buy ToTo. What so evil about buying ToTo? It is probably burning away less than 20 bucks a month to buy a nice Dream of firing your Boss.

If I can save a total of $240 per year by not buying ToTo, can anyone recommend me which counter to buy? DigiLand?

If you save a few bucks a month by not buying ToTo, I can guarantee you that you will never be a Millionaire overnight. So don't be a Nut, who want to be a Millionaire overnight?

Wednesday 16 December 2009

How to ruin your chances of prosperity?

Sheyna Steiner
On 6:00 am EST, Tuesday December 15, 2009

Prosperity and financial freedom are burdens. Where's the excitement in knowing you'll always have enough money to cover any contingency and pay all your bills? All that free time and security would be enough to bore anyone to tears.

To avoid that fate, most people can ruin their chances of prosperity simply by doing as little as possible: Show up at work, do just enough to stay employed and strive for mediocrity.

But for those who just can't seem to beat prosperity off with a stick, there are overt ways to foil long-term financial success.

4 ways to thwart prosperity
  • Don't set goals. 
  • Dillydally. 
  • Think inside the cubicle. 
  • Invest in the hottest sectors.
Don't set goals

As they say, you can't reach your destination if you don't know where you're going.
The mantra preached by self-help gurus in every field, from weight loss to dog training, is to set clearly defined goals. The same is true for finance.
Whether your money goal is to pay down debts or become a billionaire, write it down and then figure out how to reach that milestone.

"First we need to define what prosperity means to each of us, meaning are we financially free? Or do we have no mortgage? Do we have money in the bank?" says Justin Krane, Certified Financial Planner and president of Krane Financial Solutions in Los Angeles.
"If someone says they want to retire, that is not as clear and vivid as, 'I want to be able to travel and gift money to my kids,'" he says.
Before you make wealth-building a priority in your life, set your goals.

Saving and investing is a mandatory part of building wealth. It may not make you a Maserati-driving, champagne-swilling magnate, but it plays a vital role in fostering good financial habits.
Think of it like establishing good grooming habits. Heidi Klum probably has a great skin care routine, and though you won't become a supermodel by following her example, you may end up with nice skin.
Saving and investing work best in the long run if you start early. To gum up your prosperity plans, take a few years off between 18 and 40.
Blame it on math and compounding interest.
"One of the lessons we try to teach young people is that the savings curve is not linear; it's geometric," says Jack Reutemann, Certified Financial Planner and president of Research Financial Strategies in Rockville, Md.
"To save for retirement, if you wait until 35, you have to double the money you would have had to save if you started at 25," he says.For instance, a 25-year-old would need to save $167 a month for 45 years to amass about $881,000, assuming an annualized 8 percent return.
Sadly, saving the same amount with an identical return for 35 years will get you just about $383,000.
Think inside the cubicle

Keeping your head down and your nose clean is a good way to stay employed, but it's not the best way to get rich.
While company executives rake in the dough, the rank and file often get the short end of the stick -- they're subject to layoffs and pay freezes while CEOs make millions. Even for star employees, there are no guarantees of ongoing employment, hence, very little control and security.
The big money is in entrepreneurship. The big losses are also there. Some people who may be inclined to start their own business may never actually do it because of the perceived risk.
"When you talk to the average person about starting a business, they find the idea very risky. When you talk to people who have started a business, they didn't find it very risky because they had special gifts or talents or skills and never thought that it would fail," says Dan Danford, chief executive officer of the Family Investment Center in St. Joseph, Mo.

"Most people perceive a higher level of risk than is actually there," he says.

Invest in the hottest sectors

Everyone has heard of someone who's made a mint in the market -- the guy who bought Apple when it went public or Caterpillar in the 1990s.
But for just a little more luck and investing savvy, any of us could have a pot of gold in our brokerage account. More likely than not, the average investor is not doubling or tripling her money in a year. Instead, he or she is likely earning less than the market return.
"The average investor return is two-thirds of the S&P," says Reutemann.
Kelly Campbell, a Certified Financial Planner at Campbell Wealth Management in Washington, D.C., has also found that to be true.
"When the S&P lost 38 percent in 2008, most investors lost 30 (percent) to 60 percent of their portfolio. Why someone would lose more than the market did is a mystery to me," he says.

Once a sector or a stock is hot, it's a fool's bet to jump on the bandwagon. But it can be hard to resist the siren song of massive returns in a short period of time.

Investing is difficult -- people devote their lives and careers to studying markets and finance. There's no shame in admitting that despite skimming a book and some online articles about investing, you still don't know everything there is to know.

"People have to educate themselves and find their way to a competent adviser who will help them buy low-cost index funds," Reutemann says.

If you're not up to doing it yourself, an ethical adviser can shape your investing strategy and also help you see the big picture and attain your financial goals.

Noble - Got it @ $3.07

Will I be the Greater Fool as Noble has been under selling pressure?

Tuesday 15 December 2009

Critical illness insurance pays you for living


Let me join in the debate ...

Understand what are Critical illness insurance plans?

Critical illness insurance plans are benefit plans (No reimbursement on medical expenses) that pay the amount equal to sum assured, if the critical illness strikes, irrespective of expenses incurred on treatment.

In typical critical illness insurance plans, a lump sum allowance is paid irrespective of the actual medical expenses. Most critical illness plans cover cancer, heart attack, diabetes, multiple sclerosis, kidney failure, and stroke.

While planning a purchase of critical illness insurance cover, you should try to estimate what your loss of income will be and how much money you may need to compensate for the earning power that the illness deprives you of.

Having covered by CI is only one part of the story, the second part of story, where do you find money for your treatment as CI doesn't reimburse on medical expenses incurred?
I think we must first be covered by Medical Insurance and H&S, and then either by CI or other alternatives to cover part of lost incomes.

Monday 14 December 2009

Insurance and Organic Foods


Insurance can be thought as expenses or premiums spent to hedge against unforeseen incidents. Likewise, it is getting popular for people to consume only organic foods, and basically, they are willing to spend extra money or premiums to hedge their health for better well-being.

If one have plenty of resources to spend by all means spend more on insurance premiums to get the best coverages available and eat only organic foods.

Sunday 13 December 2009

Are High Ratio Dividend Payout Stocks Make A Low Risk Investment? - Part 2


Stocks can have high dividend yield for two reasons:

  1. The company's future earning doesn't seen rosy and investors are valuing it at lower stock price causing the yield to increase temporary and not really attractive to potential investors.
  2. The company is unfamiliar to investors, its price will be a poor reflection of the stock's true value. But, if the company has been around for many years, can the company still unfamiliar to the market?
Dr Michael Leong is a private investor who focuses on investing long term in selected stocks and shares has this advice in one of the chapters in his book: "Your First Million" on buying stocks based solely on "dividend yield" and he doesn't think that is the right way. Capital appreciation is far important than high dividend yield. Go and read this chapter to find out more.

I also love dividend play stocks but I treat the dividend as safety net if the stock price falls temporary but not as a buying decision. Technically on chart-wise, I must see that the stock price has the probability of moving higher before considering it in the watch-list.

Tips On Child Life Insurance - Part 4

Read? Tips On Child Life Insurance - Part 3

small change, invest, Dec 13, 2009, thesundaytimes
by Ignatius Low

Buying policies: Don't go with the flow.

Main points that I strongly agree with:
  • Don't just let the FA assume that you will eventually need to raise a family and you want a hassle-free way to invest your money

  • Must fully understand that traditional Whole Life plans, the relatively high premiums are partially used to provide the cover, but the rest are invested in a fund that pays returns. This is why the policy eventually breaks even and later has a cash value that you can take out.

  • Don't buy simply because you are young under the impression that it was cheaper if they started young. Yes, it is true that you lock in lower premiums when you buy a policy in 20s. But, for many people, a true understanding of their needs in life doesn't come until they are more mature. Is it worth that discount to get locked into a policy that may not suit you? Or is it better to wait a few years until you have a clearer view of yourself, your investment skills and the products on offer before you commit?

  • Insurances are long-term products that need to be serviced for years, and often decades. And it would be tragic to chalk up these costly commitments for the wrong reasons.

  • Don't buy from anyone towards whom you feel an obligation

From my own personal insurance experiences, I didn't manage to escape from  "Don't buy from anyone towards whom you feel an obligation". I think I finally signed on the dotted line more of an obligation as they are my relatives and close friends and helping them to meet their sales target so they could move up in their insurance career.

Singaporeans unclear about retirement income - Part 3


To depend on two common sources of passive income:
  • stock dividends
  • interest from saving
Unless the size of investment portfolio and saving account are significantly large enough to generate passive income in excess of expected expenses; it may not be sustainable due to inflation and partial draw-down to meet any shortfalls.

May be it is wise to include some sort of smaller scale active income to supplement or complement the retirement fund for another few more years after retirement; and thereafter to solely fund the expenses from passive income.

Saturday 12 December 2009

Aim For It And Then Enjoy It!

There are two things to aim for in life;  first, to get what you want; and second, to enjoy it. Many achieve the first, but only the wisest achieve the second - Logan Smith


About Wife:

It is so true and it doesn't only apply to money. It is also true for wife. A man spent lots of energy and time to woo his girlfriend to become his wife; but, some guys end up divorcing his wife.

About Children:

Some husband and wife slog days and nights to bring home more income to provide for their family; but, hardly have more time for their children and leave their children either to the maids or care-takers, and thinking that their children are happy by providing them with more materialistic goods, luxuries and expensive overseas holidays; but, actually when the children are young they just wish that their parents can spend more time together with them.

Why Do We Still Need To Read Charts? - Part 3

Why Do We Still Need To Read Charts? - Part 2

Let us take a look at MTQ for a real life example of "under-valued stock" and does chart reading help in making buying decision for TA cum FA investor?

Mr Bolton is mainly a fundamentalist, but uses technical analysis which helps in timing and size decisions. 'If I'm looking at a stock that has done well for seven years, I look at it differently from one that hasn't done well,' he says. 'A stock that has done well has most of the good news in the price. If things change, there are lots of profits that people can take so investors are likely to suffer on the downside.'


Stock Market - A Greater Fool Theory?

Look at the shaded portion in the chart for price and volume action. It is telling us that many buyers had already bought them very cheap and awaiting to sell to the greater fools. If you look even closely at the price and volume actions after the shaden portion, it has been trading in low volume. It is telling us the earlier buyers have not been able to find greater number of greater fools to sell.

I still like what Anthony said: 'A stock that has done well has most of the good news in the price. If things change, there are lots of profits that people can take so investors are likely to suffer on the downside.'

Look at the chart, does it have evidence of good news in the price?

Friday 11 December 2009

Income from Active Investing

Learn the fine art and science of active investing as soon as possible so that you don't need to worry about finding another job after retiring at 62 or 65.

You should be able to generate income from your investments after you have retired or asked to retire.
I have quite a number of ex-colleagues who were active in the stock market while they were still working and naturally after retirement they continue into "full time" active investing or trading.

I think by the time we have retired at 62 or 65, by then we should have little family financial commitment so it is not too difficult to make enough money for weekly kopi, roti prata and nasi lemak from the market.

Thursday 10 December 2009

Pledging Shares As Collateral for CFD trades or for Loans?

Read this news on:

Signs of irregularities for Sino Environment first appeared in March this year when it was discovered that their CEO, Sun Jiangrong, had defaulted on his personal loan of S$120 million. This would usually not be a direct problem of the company, but the CEO in this case had pledged his own shares in Sino Environment as collateral for the personal loan.

This was actually a smart way of monetizing one’s own shares without actually selling them. Yet, no disclosure of the pledge of shares was needed to be made to SGX at the point when the loan was taken.

Sun’s shares were subsequently seized and sold off to pay for the loan. This triggered a potential early redemption of the company’s own S$149 million convertible bond, which the company might have problems paying. Auditors expressed concerned on the company’s going concern at this point.


Pledging shares as collateral for CFD trades or loans are a highly sharp, double-edged sword. During good time, the borrowers make tons of money laughing on the way to the banks; but, when times are bad, even they drop their pants also not enough.

Especially, those who pledge shares as collateral for CFD trades, have not seen their coffins yet and they think that their CFD brokers are so kind to them let punt the market without having them to put up hard cash.

Didn't they realize how destructive can pledging shares as collateral can be as shares can plunge more than 50-60% in a single trading day.

Wishing them well!

Wednesday 9 December 2009

How Are We Measuring Up?

Here are some top investment guru's annualized returns

  • Peter Lynch, he posted a 29.2% average annual return over 13 years
  • Warren Buffett, from 1965-2005,over 40 years  has produced an annual average return of 21.5%
  • Anthony Bolton,  his Special Situations the fund achieved an average annual return of 19.5% over 28 years
  • Bill Miller, Portfolio Manager of Legg Mason Value Trust (LMVTX). Since inception, his fund has earned 15.25% average annual total returns over 15 years
If considering time and return, I would rank in the order
  • Warren Buffet - 21.5%
  • Anthony Bolton - 19.5%
  • Peter Lych - 29.2%
  • Bill Miller - 15.25%
I think if we can achieve annualized returns over 10-12%, we can congratulate ourselves to be successful in managing our returns on investment.

So what is your annualized return?

Are You CEO or CFO?

When you look at your stock, do you just strongly focus on hard numbers and balance sheet, and ignoring other aspects of it; then you are behaving like a CFO.

A good CFO who have broad understanding of other aspects of businesses may have a chance to be promoted to CEO. In real life, we have seen many CFOs been promoted to CEOs.

A CEO goes beyond looking at just hard numbers, he/she looks at other aspects of the businesses such power of branding, product growth, market demand and supply, pricing, etc. He/she is always thinking of how the company can be taken to greater height; unlike the CFO who is always crunching hard numbers to maintain margins.

If you are too focus on FA, then you are a CFO, and doesn't concern on other aspects of a stock such as market liquidity, demand and supply, industry, sector, and stock trend etc.

If you practice the Five Elements Of Investing:
  1. FA,
  2. TA,
  3. Money Management,
  4. Risks Management,
  5. Emotions Control
then you become a CEO.

Tuesday 8 December 2009

Getting More From Portfolio & Passive Income


Well. My best source of income should be like this from 2012 onwards if I have achieved my investing goals:

  • To replace 70-80% of Earned Income by Portfolio and Passive Income
So that I will have more time and energy to do whatever things that I like to do instead of watching my JOB (Just Obey Boss) at the office. Cheers!

Healthy Body, Healthy Investing

To maintain a good health, we should be eating eat well with a balanced diet, find time to exercise, find time to relax, and must sleep well at night.

To maintain healthy investment return over your investing time frame:

Practise the Five Elements Of Investing:

  1. FA,
  2. TA,
  3. Money Management,
  4. Risks Management,
  5. Emotions Control
At the end of your investing time frame, you are more likely to have healthy investment returns.

Sunday 6 December 2009

Fishermen hate Puffer fish

When fishing, these are the fish that I hate to catch. It is practically useless to me but highly dangerous.

Puffer Fish is the second most poisonous vertebrate in the world, the first being a Golden Poison Frog.

But, wait a minute. I know that Japanese love their Poisonous Fugu and possibility of death due to the allure of eating Puffer Fish.

Look at those S-chips listed in SGX and they are like Puffer Fish. They are highly poisonous and handle them with care or you might get killed by some of them.

Read the news on Sino-Environment : Mystery bankers, dodgy deals, missing millions


May be you are as brave as the Japanese and love their Poisonous Fugu.

TA - Always Two Sides To Every Technical Decision - Part 2

Are you those hardcore retail Value Investors who has always have disdain for TA charting and think that charting are useless?

You have to simply open up your mind a little, things that are useless will soon be discarded through natural evolutionary forces and common senses; and become extinct.

Look back at the natural world, how many creatures have become extinct. Those creatures that are useful to mankind will be around for a long, long time.

If things are still around after many, many years of evolution, then it is somewhat useful.



We are in the market with one objective - to get better returns for risk taking.

Practise the Five Elements Of Investing:
  1. FA,
  2. TA,
  3. Money Management,
  4. Risks Management,
  5. Emotions Control
You are on the way to your investing Goals. Cheers!

Saturday 5 December 2009

Popcorn At Movies Costs Much More

Have you ever wonder how come popcorn at movies costs much more?

It is definitely overvalue and yet no one complains that it is expensive and still happily buy them.

Do you know there are also popcorn-like stocks in the market? I think Noble is one of those popcorn-like stocks.

There are buyers even when the stock is breaking a new all time high and they didn't find it too expensive to buy.
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