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.

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!

Currently; it about 54% to destination!


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.

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Value Investing
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Sunday, 22 May 2011

Playing The Game of Leverage (6)

Read? Playing The Game of Leverage (5)

Unexpectedly, you may become poorer in the next Bear when you fail to leave the party before Mid-night clock strikes at 12.

You may heard it many times that Leverage is a double-edged sword and it can kill! But, may be it is not leverage that kills. It is Deleveraging that actually kills.

Deleveraging is an attempt to decrease or pay off debts or loans. If people or instituitions are unable to pay off their debts quick enough; they will be at risks of defaulting or become bankrupt.

When the Bear market endures, more and more peoples and instuitions will become unable to loan back and refinance. Soon, they will be forced into more deleveraging at higher losses and coupled with more mass redemptions coming from the retail investors. As a result the market will collapse. When market collapses, it will become the "Mother of All Margin Calls" and Market Crash happens!

When you have not deleverged quick enough when Market Crash, you may become poorer!

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