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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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



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Value Investing
Dividend/Income Investing
Technical Analysis and Charting
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Thursday, 22 July 2010

Help me! I am still losing money in my Investment Quadrant - Part 4

Read? Help me! I am still losing money in my Investment Quadrant - Part 3


Is stock investing also like gambling?

When some retail investors keep losing more and more of their hard earned in the stock investing, and soon they will feel like they are gambling and tell everybody else that SGX is the biggest Casino in Singapore.

So what is Gambling?

Read this Gambling - investment - speculation

When you come to the stock market, you have three options to play the game and you don't necessary have to gamble. It is unlike going to casino in Sentosa or Marina Bay where the only option is to play the game is to gamble.

But, in the stock market, you can choose to gamble, speculate (professional and specialized gambling) or invest.

You can avoid gambling or speculating by having an edge over others in order to survive in the stock market jungle that is full of predators and stop becoming their short-term preys.

When you gamble, you bet your capital and you either you lose your all or part of your capital or take back your capital plus gains.

But, you are not gambling when you put in your capital and not expecting to lose your capital during your expected investing time frame and also have more options to play the game. You can either do one or more of these options:

  1. Leave your capital invested and focus on collecting stock dividends and likely over a long period you will finally recover all your capital plus more.
  2. Periodically recover your capital plus some capital gains and re-invest when stock market presents another opportunity.
  3. Periodically collect both stock dividends and some capital gains and re-invest when stock market presents another opportunity.
Edge

What is your edge? Are you doing these?
  1. Investing in the stock market with the money that you are 99.9% sure that you don't need it for the next 5-7 years.
  2. Mentally and physically separate this stock investing account from your other saving accounts to mitigate the emotional baggage drag-down during bear markets.  Read more? Two Bank Accounts? No, You may need Four! - Part 2
  3. Choose only top tier blue chips that pay regular dividend yield of at least 4-5% and exclude any special dividend payment. These are companies that most likely to be able to borrow more money from the banks or raise more equities in the capital market to refinance their short-term maturing debts or to build up more working capital to survive in bad economy.
  4. You don't worry over falling stock prices and still sleep peacefully at nights.
Stop Gambling but Invest!

1 comment:

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