What is a realistic return on value investing?

Hi experienced forumers,

I was referred to here by one of my colleagues who also does share investment.

Having read up some articles on value investment strategy online and also some helpful books recommended by him, I have started investing in Singapore stocks early this year as part of my early retirement planning (35 year old salaryman marketing manager currently)

So far the results have not been very good, lost nearly 2k due to poor markets. Understand that investment need to wait long term, but quite frustrating to see them going nowhere.

Anyway just wanted to ask experts here what is a realistic long term average return taking into account share price increase and dividends to set as a long term goal? I am thinking of around 15% annual return, hopefully can reach & have enough to retire early.

What are some of your average annual returns so far and any goal you set for yourself?

Thanks in advance.

(13-06-2012, 08:27 PM)mobo Wrote: Anyway just wanted to ask experts here what is a realistic long term average return taking into account share price increase and dividends to set as a long term goal? I am thinking of around 15% annual return, hopefully can reach & have enough to retire early.

Thanks in advance.

Hi there.

15% is really pretty spectacular and kinda unachievable unless you are very experienced and still its pretty hard to beat.

Many of those who were achieving spectacular returns for over a decade were at the right place, investing the right country at the right time.
I do not think that is so easily achievable nowadays.

I think above all, you need to find the right fit of investment strategy to your personality. And to do that, you do need to spend money and time to explore and test them out.

For example: value investing in fundamental strong stocks? Or momentum trading in monentum strong counters? Time scale?
What indicators you use? What fundamental datas for companies you use? How you churn out your analysis?

There are much much more I can share but basically I would say this, if you are a "blow hot and cold" kinda investor, its better to just set up a trading acct, invest in a globally diversified stock portfolio, and invest a fixed amt every monthly or quaterly.

Most of all, you need to know your winning edge beyond others. And it takes alot of hard work and perseverance to achieve so. Going for some trading courses that ask you to pay $4,888 doesn't help much unless you use the knowledge and find the right fit path for yourself. And worse of all, many courses out there are dubious in quality.

Ppl tend to share their glories with others but hide their sorrows. Same for investing. I tend to hear the good stuffs only.. just like Gold 90.5 FM

Cheers.

wow 15% per annum over long term is considered a guru. So far my return since 2006 to now is a low 3.8% due to growing cash reserves from salary savings. Excluding cash reserves its 10.8% per annum. Actually you should welcome poor markets and recessions. Yahoo got one article on "How to buy stocks during a crisis".

In the writeup it mention: "Recessions create new millionaires. During the last financial crisis in 2008-2009, Straits Times reported that the number of millionaires in Singapore increased by 32.7%."

(13-06-2012, 08:27 PM)mobo Wrote: Hi experienced forumers,

I was referred to here by one of my colleagues who also does share investment.

Having read up some articles on value investment strategy online and also some helpful books recommended by him, I have started investing in Singapore stocks early this year as part of my early retirement planning (35 year old salaryman marketing manager currently)

So far the results have not been very good, lost nearly 2k due to poor markets. Understand that investment need to wait long term, but quite frustrating to see them going nowhere.

Anyway just wanted to ask experts here what is a realistic long term average return taking into account share price increase and dividends to set as a long term goal? I am thinking of around 15% annual return, hopefully can reach & have enough to retire early.

What are some of your average annual returns so far and any goal you set for yourself?

Thanks in advance.

In the first place, do you understand what is value investing? How about telling us your value investing strategy in selecting stock and see if anyone can correct your mistakes or teaches you something different? Are you talking about 15% Compound Annual Growth Rate (CAGR)? Warren Buffett achieves a 20% CAGR over many years but for a retail investor, it might be a little difficult.

Do not just stick to value investing. Buy some dividend stocks and some growth stock and diversify. It would not be easy but if done correctly, you may be able to achieve 10% CAGR over 10 to 20 years.

It depends largely on your capital size.

For someone who has a very small capital base of less than $100,000. Having a concentrated and successful portfolio, it is possible to yield 20-30% CAGR.

Of course, that growth grows smaller as your capital grows bigger

Hi all,

Thanks for your input. Just to clarify I'm not into trading as my current job is very taxing and I really don't have time to keep monitoring the market and executing orders.

As for my strategy, to put it shortly is to analyze the financial statements and calculate some ratios that estimate the health of the company and also looking at profit trends and NAV / earnings ratio. I tried to run a discounted cash flow calculation like what they teach in the books, but the whole thing is very confusing and seems to require making all sorts of assumptions, so it's not very useful for me.

Is 15% very high? I mean it doesn't sound impossible to me. A few of my colleagues told me they already made more than that in just this year till now. They might be exaggerating, but so far they sound quite down to earth and not the flashy hao lian type, so I am inclined to give them the benefit of doubt.

If 15% is too high, what is the realistic return an average value investor can expect?

(13-06-2012, 10:07 PM)mobo Wrote: Is 15% very high? I mean it doesn't sound impossible to me. A few of my colleagues told me they already made more than that in just this year till now. They might be exaggerating, but so far they sound quite down to earth and not the flashy hao lian type, so I am inclined to give them the benefit of doubt.

If 15% is too high, what is the realistic return an average value investor can expect?

Why dont you ask your colleagues again how much $ they made in year 2008 when STI plunge to 1500 points? I am very interested to know. If you are talking about long term of 10 years, 15% per annum is high. Short term of 1 year, it is possible to get 100 to 200% when stocks recover from recession.
5 to 10% returns over long term for a average value investor is considered not bad.

(13-06-2012, 10:07 PM)mobo Wrote: Hi all,

Thanks for your input. Just to clarify I'm not into trading as my current job is very taxing and I really don't have time to keep monitoring the market and executing orders.

As for my strategy, to put it shortly is to analyze the financial statements and calculate some ratios that estimate the health of the company and also looking at profit trends and NAV / earnings ratio. I tried to run a discounted cash flow calculation like what they teach in the books, but the whole thing is very confusing and seems to require making all sorts of assumptions, so it's not very useful for me.

Is 15% very high? I mean it doesn't sound impossible to me. A few of my colleagues told me they already made more than that in just this year till now. They might be exaggerating, but so far they sound quite down to earth and not the flashy hao lian type, so I am inclined to give them the benefit of doubt.

If 15% is too high, what is the realistic return an average value investor can expect?

It is important to understand financial parameters and valuation methods used in investment. It is equally important to re-use the biz sense acquired from your formal occupation. (you are marketing manager, right?). I always suggest to start simpler, by using PE, and adjust it base on your biz sense.

The answer is already highlighted by other buddies, i believe 10% long term is a norm.

though i am still very inexperienced, 10% long term is quite a realistic target to aim for. If you break it down into 5% dividend + 5% capital gain or 4-6, it looks so much easier at least in theory.

your colleagues could have bought the right stocks during nov 2011 to jan 2012 which will have given them some good return.

(13-06-2012, 10:28 PM)CityFarmer Wrote:

(13-06-2012, 10:07 PM)mobo Wrote: Hi all,

Thanks for your input. Just to clarify I'm not into trading as my current job is very taxing and I really don't have time to keep monitoring the market and executing orders.

As for my strategy, to put it shortly is to analyze the financial statements and calculate some ratios that estimate the health of the company and also looking at profit trends and NAV / earnings ratio. I tried to run a discounted cash flow calculation like what they teach in the books, but the whole thing is very confusing and seems to require making all sorts of assumptions, so it's not very useful for me.

Is 15% very high? I mean it doesn't sound impossible to me. A few of my colleagues told me they already made more than that in just this year till now. They might be exaggerating, but so far they sound quite down to earth and not the flashy hao lian type, so I am inclined to give them the benefit of doubt.

If 15% is too high, what is the realistic return an average value investor can expect?

It is important to understand financial parameters and valuation methods used in investment. It is equally important to re-use the biz sense acquired from your formal occupation. (you are marketing manager, right?). I always suggest to start simpler, by using PE, and adjust it base on your biz sense.

Hi guys, just to share with u. I use market cap, nav, dividend yield as my key parameters n use these over a span if 5-10yrs. Consistent and constant growth is what i look out for. I use dividends to compound more shares for snowballing effect. If sti crashes, it'd not be a bad thing since 1) i can use my own money to buy more or 2) i can switch frpm defensive to growth stocks.
Last but not least, timing is impt. So far i managed to achieve ard 15%pa. If sti, i might

The answer is already highlighted by other buddies, i believe 10% long term is a norm.