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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"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

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Sunday, 24 June 2018

Low Return Is NOT Zero Return and Far Better Than Negative Return!


In our life-cycle of investing; we should be investing largely based on our needs and wants in respect of tight and discipline money management and estimated future cash flow to avoid liquidating any part of our investment portfolio to fund shortfall to meet future years of household expenses.

Low return is not ZERO return and it is far better than negative return when we are NOT in the position to inject monthly capital to our investment portfolio anymore.

We often hear bloggers in the investment blogosphere warning us about impact of future inflation eroding our cash. So what?

Uncle8888 has been living through years of inflation and same as generations before him. The generations before him have survived and so we will survive inflation too. But, we will NOT survive years of negative investment return and followed by years of partial cash draw-down to fund household expenses under negative investment return! 

Inflation may be painful; but negative return will kill us faster when we are not capable of any capital injection any more! Get it?









6 comments:

  1. Able to take risks? Willing to take risks? Need to take risks?

    If answer is "no" to any of the above then probably not good idea. :)

    Inflation & disinflation keeps occurring in cycles. The last time with elevated inflation was in 2011/2012 ... gold at US$1900, Brent crude at US$120, unaffordable BTOs, inflation at 6%, PAP kena whacked at the polls ... think people all forget liao LOL! Now inflation is at miserable 0.1% yoy as of Apr 2018.

    Periods of high inflation will be followed by periods of disinflation (or touch wood, deflation) & vice versa. Nowadays with ultra flexible monetary & fiscal policies, usually don't stay in extremes for too long (unless govt really incompetent or corrupt).

    In fact for those with plenty of cash & not afraid to invest in risk assets should be praying that central banks all around the world quickly jack up interest rates much higher & faster! This will accelerate bear markets (stocks & property) & recession. No pain no gain Hohoho!

    ReplyDelete
  2. Uncle 8888

    Waiting for posb savings acc int to 8% lIke in the 1970s

    ReplyDelete
  3. Like i have posted earlier about my late Mom had taught me a pratical lesson about high single digit to doubble digits inflation, CW8888 U said it very well for all those who believe Life is not a 100 yards sprint but a marathon journey with all the ups and downs.

    So patience is a virtue but also never be afraid to strike while the iron is hot.

    Able to take risk? Willing to take risk? Need to take risk?

    Any no means no go?

    But many people who need to take risk, what will they do?

    If U need to eat/drink or die of hunger, what will U do?

    Life is indeed sometimes between the devil & the hard rock.

    ReplyDelete
  4. i think inflation to me is how much i paid for a ordinary plate of "chai pun" or a "bowl of mee pok" now compare to 2 or 3 years ago.

    Do U ever wonder the PAPYs talked a lot of GST inevitable increase recently, but decided to postpone to 20xx?

    How magnannimous are the Papys?

    i have my doubts?

    ReplyDelete
  5. Actually, it is basically even if we have more than enough, we still want more.

    It is very hard to escape how we splash when we have more than enough.

    Even if U don't, your kins & immediate family do.

    So do U need more even if U have more than enough?

    Just look at the MillionStars Papys U will know U will need more even if U have more than enough.

    Sorry, i think i have to include myself.

    If not why still investing in the stock market?

    Ha! Ha!

    ReplyDelete
    Replies
    1. May be we can slow down our investing goal to get more yield since we have enough and days ahead are getting shorter.

      Delete

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