As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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Monday, 16 April 2018

Counting The Opportunity Cost Of Rotting Cash (2)


Read? Counting The Opportunity Cost Of Rotting Cash

Assuming 5% dividend yield per year on yearly accumulated war chest not invested since 2012; the opportunity cost to break even to cover those missing dividends from 2012 to 2022 is about 50% ROC on current war chest.

50% is not that scary!




















9 comments:

  1. 50% for 10 years?
    Duh!
    Compare to portfolio loss of 50% in a Bear market in a few months, which is scarier?

    i prefer the former.

    ReplyDelete
  2. Hmm i suspect the next couple bear mkts may be normal -25% to -35% types.😉

    Those millennial investors may be very happy with overall returns over the next 10-15 years. 😏

    ReplyDelete
  3. Actually i think i missed investing at least 2 times recently when there were dips more than 10 % of the peaks.

    And i also missed the oil & marine industry fiasco.

    And i missed a few promising specific stocks i looked at too.

    Why?

    SMOL said, "Going downhill investing is definitely different from going up hill investing lol."

    Imagine at age of 40 (DINK & NDebt), i invested "Lock ,Stock & Barrel"- seriously no joke or calling the bluff.
    It was do or die or "GU Kia Ng Pak Hor",U decide.

    Times are indeed different going up hill and than now downhill.

    In short very 4Ks liu.
    Can't afford to make any mistakes liu.

    SMOL, where are U? help!

    ReplyDelete
    Replies
    1. temperament,

      Then don't play big! Not as if you need the money to "escape" or be financially free ;)

      Take 10% of your networth to tikam tikam, past time, ease finger itch, etc.


      When young, we can "invest" everything we have; no need emergency fund!

      Lose eveerything we can easily recover in a few years.

      How much can we lose at that age?


      Now? Don't lose money is already for the win liao!


      Delete
    2. Wait a minute!

      10% of Net Worth now may be > when i invested "Lock, Stock & Barrel" at the age of 40 when i first plunged into the market.

      But i totally agree with U "Don't lose money is already for the win liao!

      Better still annual expenses can be covered by assets generating cash is the best for anyone i think.

      If have to be a bit frugal at times, so be it.

      Going uphill is definitely different from going downhill.

      Delete
  4. Correction?

    At 40 still ""GU Kia Ng Pak Hor"?

    Should be a YES because age is one thing real experience in the stock market is another.

    1st time and i plunged "everything' into the market.

    Was it a "gamble to U most people?

    i bet U people will say it a foolish thing to do.

    And i can tell u now the market then was much easier to invest than now because golbalisation and tech disruption of industries still in it's infancy.

    i made quite a lot of money on NOL alone.

    Where is NOL now?

    i lost back just a little which means i still made quite a lot of money from NOl alone.

    Amen.

    ReplyDelete
  5. Depends on ur needs & timeframe. If already enough or need to use the money within 3-5 yrs then is there a need or ability to remain heavily invested in risk assets? 😉

    Otoh for those 30-something or those looking to grow a large amount 15 yrs down the road ... a -30% decline in 6 mths followed by an 18-mth recovery is just a bump in the road.

    Even for retirees ... if already set aside enough cash to cover 5-8yrs of expenses ... rest of assets can be in strong dividend paying stocks or sound rental properties.

    ReplyDelete
  6. Stocks in general have spent 16 yrs (2000 to 2015) in a long basing pattern. Slightly longer for Asian stocks due to AFC payback for the Asian Tiger go-go years.

    Similar to 14-yr basing pattern for many global stocks from 1969 to 1982. Long term secular bull followed even though scary corrections / recessions along the way.

    Not predicting it will repeat but i won't be surprised if it rhymes going forward.

    ReplyDelete

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