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

Wednesday 2 December 2020

Is Bull Market Always Creating An Illusion Of Wealth In The Stock Market???

 Uncle8888 has learnt his Lesson 1 in the stock market i.e. illusion of wealth in 2007 Bull Market and then after 2009 GFC his Investing Mind has been fully mindful of this illusion of wealth and he knows clearly the difference between Real and Imaginary Parts of his Wealth in the stock market and develop practical Money Management to safeguard and ring fencing from losing a large part of this illusionary wealth back to the next incoming Big Bear! When will it happen again? or never?








11 comments:

  1. Hi Uncle8888,

    All the "motherhood" statements over the decades have been in response to "illusion of wealth" in risky markets. ;)

    Things like emergency funds, diversification, position sizing, asset allocation, risk appetite, loss tolerance, knowing yourself, objectives, controlling greed, what is "enough", getting wealthy versus staying wealthy etc.

    What's that saying about old bold traders? LOL!

    ReplyDelete
  2. CW,

    We've learnt from "crash got sound" what's the difference between:

    1) Theory and Practice.

    2) Knowledge and Wisdom.


    The trick with investing/trading/doing our own business is to SURVIVE long enough so we can start to PROFIT from our MISTAKES ;)

    LOL!

    ReplyDelete
  3. Invested wealth is an illusion indeed.

    As I get nearer to retirement, I try to minimise this "illusionary" portion of my assets and channel more and more money into "more dependable" assets including our dear CPF accounts.

    The CPF despite its relatively low and boring returns, is one asset class where one can project the savings trajectory into the future with high certainty unlike the illusionary assets where one cannot even tell if it will increase or decrease from one day to the next.

    One can set realizable targets for CPF savings to be attained at different ages with confidence (like what some young followers of the 1M65 movement did) but setting targets for equities is more crystal-balling than anything.

    ReplyDelete
  4. cant help to ask question abt this topic on illusionary wealth or 'paper gain' so how? do we stay invested ? or move our fund to safe heaven like cpf? but cpf had got limits or move into bonds? i thk bonds are risker than shares haha

    ReplyDelete
    Replies
    1. do we stay invested?

      Yes but we have to be mindful that we don't know when Mr Market will change his mood.

      Are we able to know that his mood has already changed and seek to protect paper gains from losing back?

      This skill or wisdom we have to build up on own across market cycles and the other skill is our money and portfolio management to relation to our view of Mr Market's mood.

      It is up to us to feel our own emotions. Which is less scarier or painful?

      To REGRET NOT making more from Mr Market or to FEEL sorry or frustrated for losing back BULK of illusionary wealth to Mr Market.

      3Ms - Method, Mind and Money Management. Mind and Money management will take more time and effort to build up across market cycles. Going through one full market cycle will help to understand more.

      Delete
  5. recently with the CRCT rights issue i started to get de-illusionised by the promise of high dividend from reits. looks like bo hua leh, we get the so call high dividend but then when we play the chasing games of getting of rights issue. it looks like we are paying back our hard earned dividends and there are very limited capital gain and worst some reits price keep dropping. so i searched cw8888 blog and found that he is not a reits investor! i have 40% reits and are going to reduce them. that leaves us to only a few options to buy in the blue chips with high dividend. like that how to receive enough passive income to retire early har :(

    ReplyDelete
  6. also i am curious cw8888 do short term trading eg recently sold dbs at $24+ then how do u decide how many lots to keep for long term investing to collect dividend and how many lots for short term trading. i had dbs at $14 i thk i bought in 2016 and $19 bought in oct 2020 too.

    ReplyDelete
    Replies
    1. Buy slowly in Batch/Round and Sell in Batch/Round. When I decide to Sell to lock in gains i.e. fulfilling 1st component of the Secret Formula = N x (Buy Low. Sell High) + N x Panadols + N x Golden Eggs + n x (Buy - Hold), Where n << N and Hold = current stock price. I also already decided on Buying back price. Sell and Buy Back as a pair.

      You have decide for yourself "dbs at $14 i thk i bought in 2016 and $19 bought in oct 2020" are your Touchstone for keeping or Sardine. $14 is likely a Touchstone. How about $19? You have to feel it yourself!

      Still not sure. No harm selling partially in 1/3, 2/3 and 3/3 as it goes higher and buy back in the Reverse 3/3, 2/3 and 1/3. If we are right, hosey liao! N is getting bigger!

      Read? Touchstone or Sardine?

      Delete
    2. complicated formula haha but looks like no straightforward answer haha if the dbs i bought at $14 i treat as sardines i wld had alrdy sold it. there will be no touchstone in my portfolio. sounds like to treat my panadol as touchstone until the bull comes then i treat it as sardines and sold it for a profit

      i still must thank u for the generous knowledge shared and the time taken to explain and show us your way :)

      Delete

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