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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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

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Friday, 3 August 2018

The Psychology of Investing Biases

Many of us may have already learnt and put into practice a few if not all the known psychology of investing biases. 

How about taking profit is never wrong; but missing those huge capital gains and dividends over the following years?

What kind of investing bias is this?

Anyone knows?


  1. Loss aversion ... cutting winners short.

    Kiasu mah ... Kekeke! Don't let a win turn into a loss haha.

    Taking profit is ok, but ideally should be done when the asset is expensive e.g. within 10% of its highest historical valuation, or current valuation is +2 or +3 standard deviation from its long-term average.

    Rebalancing is 1 method for this ... But not too frequent...

    Or for trend followers ... when a predetermined trailing stop is hit...


  2. For established blue chips for many years may be true.

    Very seldom, can see them suddenly become growth companies again.

    For new IPOs, or new companies how to estimate them.

    Like Keppel D. C. Reits, i sold them much too early though i made quite a small profit.

    At IPO, some established smarter & successful bloggers didn't even want to invest in them and there after.

    Because it was said to be high capex reits.

    1. Just like i never invested in SIA even once IIRC.

      Actually any stock can be invested if U are sure the price is right.

      But then U must also known when the price has become "left".

  3. Now maybe U will understand why i look at the market daily without fail.

    Even then i missed many opportunities due to 101 reasons.


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