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!

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Tuesday, 26 September 2017

Retail Investors : Active (DIY) vs. Passive (STI ETF, XXX Blue chips savers, etc)?


Active vs. Passive Investing and the “Suckers at the Poker Table” Fallacy

 Who are the real suckers?

 Uncle8888's has heard many time when he encountered new faces/starfishes that his slides are so cheem!




































What is the real debate behind Active (DIY) vs. Passive (Index investing)?


One statement to clearly differentiate it: It is about building up one's own investing competency beyond self doubt!

 Self-doubt? No?


Posted by Createwealth8888 at 08:30
Labels:

8 comments:

  1. Spur26 September 2017 at 10:54:00 GMT+8

    Hohoho!! As long make money *consistently* can already ... doesn't matter active or passive. :)

    Actually many people these days adopt both ... Even the simple act of using ETFs & then rebalancing once a year is semi-active --- they're not simply buy & forget...

    These days, most indexes are active or semi-active .... there are already more indexes in US markets than US stocks. If every 1 of the index has 1 corresponding ETF, then there are more ETFs than stocks liao. There are ETFs targeting value investing, growth investing, dividend growth, dual momentum, special situation investing, distressed investing, technical analysis, fundamental analysis, market neutral, long-short, risk parity, derivatives, buywrite options, putwrite options, and a combination of some or all of the above...

    Someone can buy a "passive" ETF but the dynamics of the ETF can be damn active, with supercomputers doing all the analysis, computations & automated buy/sell, overseen by teams of computer programmers & analysts...

    Some ETFs I look at for fun are WSKY (booze ... doing well) and HMMJ (marijuana! ... trended down but appears to be basing). They are new & no track record but fun entertainment!

    Still waiting for bitcoin ETF... A few proposals kena rejected already...

    ReplyDelete
  2. RayNg26 September 2017 at 12:24:00 GMT+8

    Must consider to switch from active to passive as we age ..... some of us may have dementia and incapable to act wisely.

    Passive include annuity (CPFLife, or private), dividend (recession proof companies)...
    Markat ETF (STI, HSI, DOW etc...)

    ReplyDelete
    Replies
    1. Singapore Man of Leisure26 September 2017 at 12:49:00 GMT+8

      Ray,

      ???

      If got dementia, does it make a difference whether passive or active?

      Especially if we can't even recognise our love ones...


      All the money in the world (passive or otherwise) means nothing if we have no love ones to take care of us :(

      Accumulation of wealth is not the same as accumulation of relationships.


      Delete
    2. RayNg26 September 2017 at 13:10:00 GMT+8

      Good question.

      If got dementia, at least the cashflow is still flowing without much worry (anyway, nothing to worry cos everything is forgotten). The cashflow is to sustain one's living (manage by love one).

      Just a thought...

      Delete
    3. Spur26 September 2017 at 17:27:00 GMT+8

      BTW, dividend investing or ETF investing is not that passive ... definitely cannot buy & forget & simply expect to sit back collecting dividends or automated withdrawals month after month...

      Didn't want to bring this up but since hinted at by SMOL.... :)

      I've heard plenty of horror stories from my friends working in IMH & nursing homes. Those with impaired cognition don't even know what money is, or even if they roughly know it's utility, they cannot comprehend value. Patients will simply give all their available money for anything they want now e.g. $10,000 for a packet of kopi-o. Real stories of people giving away hundreds of thousands of dollars, burning their houses for fun, throwing dollar notes out the windows, flush down the toilet, swallow notes & coins, etc etc. Many patients also get "cheated" of their bank accounts & properties.

      Quite a few cases abandoned by family ... immediate family disappeared and the affected people basically abandoned on the streets, nursing homes & IMH. Most of the time govt just step in to pay for their IMH or nursing home ... nobody really bother to track down the family or bring them to court...

      Still haven't reached critical mass yet ... maybe by 2030 or 2040...

      Delete
    4. Createwealth888826 September 2017 at 17:57:00 GMT+8

      Quite easy to cheat rich dementia persons' money in many ways.

      Delete
  3. Createwealth888826 September 2017 at 15:51:00 GMT+8

    Actually income investors are not that active. How often do they need to re balance?

    ReplyDelete
    Replies
    1. Spur26 September 2017 at 17:14:00 GMT+8

      Risk management ... not good to let a single counter occupy too much of our portfolio...

      Retirees who accumulated & allowed stocks like Kep, Semb, Comfort, SPH, SMRT grow into a large portion of their portfolios by 2014-2016 may be regretting....

      Similar with REITs like FCOT facing a whale tenant termination or experiencing REIT / Trust counters all calling for rights exercise at the same time during recession or credit crunch...

      Delete

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