What do you really know about investing?

[CityFarmer]

I am starting to like ETF very much now as I see a bubble forming on almost every good valuebuddy stock thus-far. Will the bubble really burst so that it lowers the risk of owning our VB - recommended stocks ?

Are there VB - recommended stocks? Are you referring to VB-33?

[Belg]

I am starting to like ETF very much now as I see a bubble forming on almost every good valuebuddy stock thus-far. Will the bubble really burst so that it lowers the risk of owning our VB - recommended stocks ?

Are there VB - recommended stocks? Are you referring to VB-33?

Bro CityFarmer,

VB stocks are those highly followed stocks with a daily followings. Most of them has been highly researched and would have a better chance of beating the index. Hope it clarifies.

[CityFarmer]

I am starting to like ETF very much now as I see a bubble forming on almost every good valuebuddy stock thus-far. Will the bubble really burst so that it lowers the risk of owning our VB - recommended stocks ?

Are there VB - recommended stocks? Are you referring to VB-33?

Bro CityFarmer,

VB stocks are those highly followed stocks with a daily followings. Most of them has been highly researched and would have a better chance of beating the index. Hope it clarifies.

Noted.

[gautam]

what do I really know about investing? I haven't been posting for sometime. Now's my reservist(my 2nd last one) and happen to have more time. Hope you guys don't mind my long post.

well, to me, my initial aim of investing was to put my sums of money idling in the banks to work to beat the effects of tax and inflation which are my greatest enemies over the long term.

tax- the harder I work and the more money I earn, the more tax I am going to pay. I am trading my previous time for money and part of it goes to the taxman whether I like it or not. Over the long run, as owner of businesses, true that I can delegate some work to my staff, but ultimately, unless I sell of the businesses, I still have to spend time and effort to manage it.

inflation - whether as employer or employee, no one can escape this. As everyday examples, a tray of 30 eggs can go under 3 bucks in 2003, but now it costs some 50% more. An bowl of fishball noodles can cost $2 back then, but now, it's going for $3. keeping large sums of money for long periods apart from emergency funds, to me, is the worse thing I can do.

Thus, I began to pick up the ropes of investment nearly a decade ago. Comparing putting a sum of money in the bank for a prolonged period of time and suffer the inevitable effects of inflatory erosion to the risk of losing this sum through careless investment, I began to think long term and give myself a long time frame of investment of 1 ,2 decades or more, with the slow but sure effects of dividend compoundation and predictable company performance from the past decade to carry on to the next. Suffice to say, over a time of near a decade, I have this to say: head I win, tails I still don't lose. But most importantly, I do not need close monitoring and my quality of life is unaffected by market ups or downs. Market up, I use my dividends to buy less shares. Market down, I use it to buy more shares. More importantly, I realise if I could use past 10 years history of raised dividends and predict the next, barring unforeseen circumstances, I am quite certain I will be up by a large margin in the next decade. Risk exists in investment, but this could be mitigated though not eliminated by having the necessary knowledge to hedge against this risk.

And increasing one's net worth is one thing. Having expensive tastes isn't going to help much. It's not useful if one were to look for the latest sports car to upgrade with all that excess cash. Equally important is to have a spouse to understand the situation and not demand on the latest gadgets or handbags regularly. Keep tabs on the expenses and reduce those unnecessary ones.

Live a healthy and happy life and exercise regularly and get adequate sleep. Manage stress levels. Get appropiate insurance cover.

No point using the first 20 years of the working life to exchange for wealth and then do the reverse exchange for the next decades.

[Dividend Warrior]

Live a healthy and happy life and exercise regularly and get adequate sleep. Manage stress levels. Get appropiate insurance cover.

No point using the first 20 years of the working life to exchange for wealth and then do the reverse exchange for the next decades.

Always a pleasure to read your post, bro gautam.

[Temperament]

RETIREMENT GOAL - What is Yours?

Many retirement-advice columns emphasize the importance of “not outliving your money.” But saving up a nest egg and hoping not to outlive it is not a strategy. It’s wishful thinking.

Your goal must be to generate sufficient income with the retirement nest egg so you can cover your expenses, and even save money by spending less than you earn. Invest as if you are going to live forever. Why not? There will probably be at least one other person in your family counting on you not to burn through a lifetime’s hard work. With sufficient income, you will face the wonderful “problem,” when retired, of cash piling up.

NB:-
I think this should be the GAOL for all Retirees and Younger Investors too. (The younger you have managed to have a nest egg for investment the better for you)
Even if you don’t have to leave a legacy for someone.
Why leh?

i am still trying, you know!

[corydorus]

RETIREMENT GOAL - What is Yours?

Many retirement-advice columns emphasize the importance of “not outliving your money.” But saving up a nest egg and hoping not to outlive it is not a strategy. It’s wishful thinking.

Your goal must be to generate sufficient income with the retirement nest egg so you can cover your expenses, and even save money by spending less than you earn. Invest as if you are going to live forever. Why not? There will probably be at least one other person in your family counting on you not to burn through a lifetime’s hard work. With sufficient income, you will face the wonderful “problem,” when retired, of cash piling up.

NB:-
I think this should be the GAOL for all Retirees and Younger Investors too. (The younger you have managed to have a nest egg for investment the better for you)
Even if you don’t have to leave a legacy for someone.
Why leh?

i am still trying, you know!

That's the point where you are truly financially free.

[NTL]

Other than having an "income-generating" nest egg, there are still CPF Life, annuities, and rentals to depend on. Its all up to individual to choose which of these they will like to use to get a perpetual income for life.

[Temperament]

Nest Egg that can generate incomes should be assets that can "grow" by dividend/rental income or capital appreciation, strictly speaking-Stock & property & bond too?

CPF LIFE and annuities should be under income for life but depreciating income due to inflation. i am not sure this income for life should be categorised under "protective income". Maybe if you look at it of as at least you have an income for life though depreciating one, then it's protective to a certain extent. But don't forget who is your insurer. They take your money and do what you do in the investment world of stock, bond, property, etc... The only difference is there are pooling of many individuals' resources(money). But i am not sure this way makes my money safer. If the insurer makes a dumb or unforseened mistake, i might as well make it myself.

[Temperament]

Is your temperament your key?

{But what if the market tanks when you’re newly retired? Won’t retirees whose portfolios are stock-heavy face financial problems as a result? “Only if they sell while prices are low,” said Edelman. “And that’s the important point: If you’re going to be heavily invested in stocks, you must maintain a long-term perspective.”
But if you don’t have the temperament for that and weaken when the market drops, keep your stockholdings down.
“If you know that you get seasick, you shouldn’t go deep sea fishing,” said Edelman. “But if you can tolerate the swells of the currents, you can have a fun time. It’s the same with the stock market. As long as you realize that volatility is an inherent part of investing in stocks and you are prepared to wait it out, the volatility works to your favor.” }

NB:-
Do you think it’s applicable to RETIREES only?
How many of you believe in the above?
Have you gone through at least once?
Or,
How many times have you swim in the tanked markets & managed to survive?
Remember your RISK CAPACITY may be very much different from your Risk Tolerance.
For me I think at anytime, first you must know whether you have adequate RISK CAPACITY before you can think whether your RISK TOLERANCE is still intact.
Without RISK CAPACITY, all bets are off.
And please beware your RISK TOLERANCE may change due to one reason or another.
You will only know when the time has come for you to take the test. Aka your RISK TOLERANCE.
No?