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!


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.

Think Investing as Tug of War - Read more? Click and scroll down



Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Sunday 7 April 2019

The Stocks Manage Themselves


Read? The Stocks Manage Themselves

Uncle8888 really likes these ...


It doesn’t matter if you self-identify as an active or passive investor, the stocks don’t care about you either way. It’s a completely one-sided relationship.


When Ibbotson said it’s “much harder to manage people than it is to manage stocks” he was speaking in terms of running a business but the hardest person to manage is yourself when we’re talking about investing.

Research shows investors who are overconfident in their abilities and assume they’re above average investors trade more frequently. There’s an embedded illusion of control in that we assume doing more will lead to a better result. Of course, the research also shows that those investors who trade more end up with below average results.

We’re all taught at an early age that working harder and giving it 110% will lead to better results. This is true in some endeavors but rarely when it comes to the markets. Trying harder typically leads to worse results because when you press you tend to make mistakes.


There are no extra points awarded for effort or degree of difficulty when investing.


CW8888

Know ourselves and manage ourselves according to our historical investment outcome and performance across past market cycles; refine, revise, or adjust investing strategies to move forward to next market cycles to build wealth or generate cash flow from the stock market according to our investing goals.

Back testing his own past 19 years of data points; he is now more blur.

Is holding too much cash as war chest a serious drag on his investment portfolio performance?

Hmm ...























4 comments:

  1. Hi Uncle8888,

    Investing is not easy, but that's what makes it fun! :)

    There's a fine line between doing too much & refining the investment process. Dalbar's annual studies for the past 24 years have consistently shown the average investor to underperform the index, confirming what Ben Carlson is saying above.

    Dalbar 2018 report

    Basically the main problem is the Mind. :)

    When we adopt an investing Method & Money Mgmt, we will need to be aware of shortcomings as well. No method will be right or good all the time. Sometimes our method or money mgmt will make us look foolish. And we need to be OK with it.

    For e.g. in my trend following, I know that during market volatility when there are fake breakouts or breakdowns, I will be whipsawed and will perform worse than just buy-and-hold. This is what happened in Feb/Mar & Jun/Jul of 2018. And then my trend following signals really helped in the Oct to early-Jan steep correction.

    Sometimes, before thinking of tweaking or trying something different, it's best to go back to principles: Do we need it? (whether we've won the game) Are we able to do it? (liquidity, time horizon, portfolio size, sizeable income) Are we willing to do it? (risk appetite, drawdowns, capital loss)

    ReplyDelete
  2. Parrot this : Sometimes, before thinking of tweaking or trying something different, it's best to go back to principles: Do we need it? (whether we've won the game) Are we able to do it? (liquidity, time horizon, portfolio size, sizeable income) Are we willing to do it? (risk appetite, drawdowns, capital loss)


    :-)

    ReplyDelete
    Replies
    1. Is our investing goals based on need or want?

      1) Do weed to build more long-term wealth for future cash future or just want cash flow now?

      2) Do really need more cash flow or just want more?

      Delete
  3. Curious to know what is the rate of return after 30 yrs?

    ReplyDelete

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