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

Sunday 16 January 2011

Have you spend enough time thinking on your money management stratgeies? (3)

Read? Have you spend enough time thinking on your money management stratgeies? (2)

From Daryl Guppy's Money Management Rule

Zero Cost Averaging

This is how it works?

Sell 50% of the position once the unrealized profit reaches 100% of the initial invested capital.

For example:
  1. Bought 10 lots of Stock A at $1
  2. When Stock A reaches $2, then sell 5 lots (50%) and hold the other 50% to run with the Bulls. The remaining 50% is now at zero cost i.e. all invested capital has been taken back
Zero Cost Averaging is the money management used to protect capital.
From Createwealth8888
Standing on the shoulders on these Gurus's money management rules, I have formulated my own money management rule.
Pillow Stocks - The money management used by Old Uncle from Hougang HDB Heartland to protect his capital. Money in the pocket is always safer than capital in the stock market.

Any kind of investments by nature are risky as you may lose some or all your invested capital if you get it wrong. Even if you initially get it right, and somehow by over-staying in the stock market; it may turn wrong.

The only safe and risk-free investment in the market is Zero Cost investment aka Pillow Stocks Strategy, where I can sleep peacefully at night regardless of the market conditions as my capital is not at risk.

The Pillow Stocks Strategy

With active investing through re-cycling of investing capital, I ride on number of profitable trades on the SAME stock over and over again, and then slowly accumulate enough realized profits to eventually own a certain number of shares of that stock at zero cost in terms of cash flow, and then let it runs in the stock market to collect dividends as passive income or when necessary for future draw-downs by selling some of it slowly. Absolutely, NO CAPITAL AT RISK and yet passive income.

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