Yes, with my Opportunity Fund, now or LATER I can choose to buy stocks at 30% to 70% lower prices than 1 month ago.
If a person's portfolio market value is 50% below his/her purchase price, prices have to move up by 100% before he/she breaks even.
Whereas, if I buy NOW, if prices moves by 100%, I would have made 100% gain.
Staying 100% invested has its advantages (which many have already expounded).
What's the problem with staying 100% invested?
The Opportunity Cost of staying 100% invested is one can only "stare at Opportunities" in a market crash, as one has NO additional Cash to invest at all.
I observe that Rich people typically have Opportunity Fund. I personally think there is not much harm learning from the Rich. I'm glad I did.
It is NOT possible to time the market. However, I personally think it is possible to ROUGHLY know at which phrase of the bull market at a particular point in time. This is one of the longest Bull market which started from Mar 2003......all bull markets come to an end eventually and we can roughly estimate the "Current Phrase" of the cycle by looking at "historical records".
In my opinion, roughly correct is better than precisely wrong. Investment is both an Art and a Science. Anyway, I've always prepared for the Possibility that I'm wrong.
I'm still learning. Still have much to learn.
What is the PROBLEM of staying 100% Invested?
Moderators: alvin, learner, Dennis Ng
What is the PROBLEM of staying 100% Invested?
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
FACT: I'm ahead of most people who bargained hunted in the last 2 months only to see their stock portfolio dropping by 30% to 70%.
FACT: even if I missed the bottom, I'll still be ahead of these people who bargained hunt in last 2 months.
Observation: All the Rich people I know, (including Warren Buffett and George Soros, Li Ka Shing, etc, etc), HAVE Opportunity Fund. In other words, they typically do NOT invest 100% in the market 100% of the time.
1.5 years ago, I was almost fully invested. 80% in stocks and only about 10% Opportunity Fund.
Today, I'm only 20% in stocks and holding 30% Opportunity Fund. My Opportunity Fund will jump up to over 60% after I sell my investment property.
I know "market timing" over short periods of say 1 month and 1 year is almost impossible (well, why almost, becos some traders tell you they can do it, not me though).
However, it is possible to look at the BIG picture and roughly know "at which stage" of the "economic cycle" and "stock bull market cycle" by just being OBSERVANT and KEEPING UP-TO-DATE on World's events.
In my opinion, it does NOT take Rocket Science to do that (roughly estimate at which part of economic and stock market cycle we are in). It does NOT require HIGH IQ (my IQ is average, don't think can qualify for MENSA)).
Well, it might be possible that I'm JUST LUCKY. And I have to say that everyday I express gratitude for being blessed.
I used to think Buy and Hold is the way. However, after the run-up in stock prices from 1998 to year 2000, the Tech bubble burst thereafter (and down market from Mar 2000 to year Mar 2003), after I reviewed my position I realised that I'll be MILES ahead had I sold most of my stocks in 1999, rather than holding on to them "through thick and thin" through the entire Bear Market (year 2000 to year 2003).
I exhausted all my Opportunity fund in year 2002 (after Sep 11, I thought what else can drive the markets lower?) Well, I didn't manage to pick the market bottom then (I don't think I can do this in future as well).
However, the FACT is it does NOT make a BIG difference. The stocks I bought in year 2002 still went up 100% to 300% in the Bull market that followed (year 2003 to year 2007) and by taking profits (last year), I've protected my Gains (paper gains converted into Realised Gains).
Of the stocks I still hold today (20% of my investible funds), most of the GAINS have evaporated in the last few months. If I had done NO selling and still hold 80% in stocks today, I would have just taken a "roller-coaster ride" (down, up, back to down again) with NOTHING much to show and my Networth would not have increased much.
On the other hand, my current position is that I've managed to triple my Networth in the last few years.
At the end of the day, each of us must know our own strengths and weaknesses. We should be investing so that we have an edge, and not investing at our own disadvantage.
Know yourself, know the enemy (Market) and you can win more battles than you lose. (slightly changed from Sun Tzu's actual words).
Remember, our OBJECTIVE. Our Objective is to Win the War (NETT-NETT better financially) and not trying to win the next battle and definitely not trying to win "every battle". (As Peter Lynch reminded, we can be wrong 4 out of 10 times and still become Rich).
I'm just an Average Singaporean on my own investment learning journey. Just sharing my thoughts with the general public. I'm not here to advise anyone to buy/sell/hold any stocks.
Remember, it is perfectly OK for you to have a different opinion. The PURPOSE of a Discussion Forum is to draw out different views and opinions. We don't need this forum if everyone agrees with us, right?
FACT: even if I missed the bottom, I'll still be ahead of these people who bargained hunt in last 2 months.
Observation: All the Rich people I know, (including Warren Buffett and George Soros, Li Ka Shing, etc, etc), HAVE Opportunity Fund. In other words, they typically do NOT invest 100% in the market 100% of the time.
1.5 years ago, I was almost fully invested. 80% in stocks and only about 10% Opportunity Fund.
Today, I'm only 20% in stocks and holding 30% Opportunity Fund. My Opportunity Fund will jump up to over 60% after I sell my investment property.
I know "market timing" over short periods of say 1 month and 1 year is almost impossible (well, why almost, becos some traders tell you they can do it, not me though).
However, it is possible to look at the BIG picture and roughly know "at which stage" of the "economic cycle" and "stock bull market cycle" by just being OBSERVANT and KEEPING UP-TO-DATE on World's events.
In my opinion, it does NOT take Rocket Science to do that (roughly estimate at which part of economic and stock market cycle we are in). It does NOT require HIGH IQ (my IQ is average, don't think can qualify for MENSA)).
Well, it might be possible that I'm JUST LUCKY. And I have to say that everyday I express gratitude for being blessed.
I used to think Buy and Hold is the way. However, after the run-up in stock prices from 1998 to year 2000, the Tech bubble burst thereafter (and down market from Mar 2000 to year Mar 2003), after I reviewed my position I realised that I'll be MILES ahead had I sold most of my stocks in 1999, rather than holding on to them "through thick and thin" through the entire Bear Market (year 2000 to year 2003).
I exhausted all my Opportunity fund in year 2002 (after Sep 11, I thought what else can drive the markets lower?) Well, I didn't manage to pick the market bottom then (I don't think I can do this in future as well).
However, the FACT is it does NOT make a BIG difference. The stocks I bought in year 2002 still went up 100% to 300% in the Bull market that followed (year 2003 to year 2007) and by taking profits (last year), I've protected my Gains (paper gains converted into Realised Gains).
Of the stocks I still hold today (20% of my investible funds), most of the GAINS have evaporated in the last few months. If I had done NO selling and still hold 80% in stocks today, I would have just taken a "roller-coaster ride" (down, up, back to down again) with NOTHING much to show and my Networth would not have increased much.
On the other hand, my current position is that I've managed to triple my Networth in the last few years.
At the end of the day, each of us must know our own strengths and weaknesses. We should be investing so that we have an edge, and not investing at our own disadvantage.
Know yourself, know the enemy (Market) and you can win more battles than you lose. (slightly changed from Sun Tzu's actual words).
Remember, our OBJECTIVE. Our Objective is to Win the War (NETT-NETT better financially) and not trying to win the next battle and definitely not trying to win "every battle". (As Peter Lynch reminded, we can be wrong 4 out of 10 times and still become Rich).
I'm just an Average Singaporean on my own investment learning journey. Just sharing my thoughts with the general public. I'm not here to advise anyone to buy/sell/hold any stocks.
Remember, it is perfectly OK for you to have a different opinion. The PURPOSE of a Discussion Forum is to draw out different views and opinions. We don't need this forum if everyone agrees with us, right?
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
MM Lee "Endorses" the Wisdom of Cycle Timing...
On the front page of Straits Times 12 Feb 2008, MM Lee was quoted saying:
Boom and bust is in the nature of business cycles. You must be able to ride through a recession and emerge the better for it.
This is HOW the Government of Singapore Investment Corporation and Temasek have been able to increase the value of its assets, he said, focusing on opportunities present in dark times.
In a recession we hang on. As the boom gets too intoxicating, we sell part of our shares and other assets and keep Cash.
In another posting I made sometime ago, I also touch on the possibility of estimating which part of the business/market cycle we are currently in and then take appropriate action.
My posting is pasted here for everyone's easy reference:
Cheers!
Dennis Ng, http://www.HousingLoanSG.com
with my Opportunity Fund, now or LATER I can choose to buy stocks at 30% to 70% lower prices than 1 month ago.
If a person's portfolio market value is 50% below his/her purchase price, prices have to move up by 100% before he/she breaks even.
Whereas, if I buy NOW, if prices moves by 100%, I would have made 100% gain.
Staying 100% invested has its advantages (which many have already expounded).
What's the problem with staying 100% invested?
The Opportunity Cost of staying 100% invested is one can only "stare at Opportunities" in a market crash, as one has NO additional Cash to invest at all.
I observe that Rich people typically have Opportunity Fund. I personally think there is not much harm learning from the Rich. I'm glad I did.
It is NOT possible to time the market. However, I personally think it is possible to ROUGHLY know at which phrase of the bull market at a particular point in time. This is one of the longest Bull market which started from Mar 2003......all bull markets come to an end eventually and we can roughly estimate the "Current Phrase" of the cycle by looking at "historical records".
In my opinion, roughly correct is better than precisely wrong. Investment is both an Art and a Science. Anyway, I've always prepared for the Possibility that I'm wrong.
I'm still learning. Still have much to learn.
Boom and bust is in the nature of business cycles. You must be able to ride through a recession and emerge the better for it.
This is HOW the Government of Singapore Investment Corporation and Temasek have been able to increase the value of its assets, he said, focusing on opportunities present in dark times.
In a recession we hang on. As the boom gets too intoxicating, we sell part of our shares and other assets and keep Cash.
In another posting I made sometime ago, I also touch on the possibility of estimating which part of the business/market cycle we are currently in and then take appropriate action.
My posting is pasted here for everyone's easy reference:
Cheers!
Dennis Ng, http://www.HousingLoanSG.com
with my Opportunity Fund, now or LATER I can choose to buy stocks at 30% to 70% lower prices than 1 month ago.
If a person's portfolio market value is 50% below his/her purchase price, prices have to move up by 100% before he/she breaks even.
Whereas, if I buy NOW, if prices moves by 100%, I would have made 100% gain.
Staying 100% invested has its advantages (which many have already expounded).
What's the problem with staying 100% invested?
The Opportunity Cost of staying 100% invested is one can only "stare at Opportunities" in a market crash, as one has NO additional Cash to invest at all.
I observe that Rich people typically have Opportunity Fund. I personally think there is not much harm learning from the Rich. I'm glad I did.
It is NOT possible to time the market. However, I personally think it is possible to ROUGHLY know at which phrase of the bull market at a particular point in time. This is one of the longest Bull market which started from Mar 2003......all bull markets come to an end eventually and we can roughly estimate the "Current Phrase" of the cycle by looking at "historical records".
In my opinion, roughly correct is better than precisely wrong. Investment is both an Art and a Science. Anyway, I've always prepared for the Possibility that I'm wrong.
I'm still learning. Still have much to learn.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
U.S. Stock Market is still in Denial Stage...
my conclusion? U.S. Market is still in denial. It is ironical that U.S. being the source of the problems, its stock market is outperforming global stock markets, especially Asia stock market.
Even MM Lee thinks that U.S. slowdown is ok, since Asia is growing. There are still people who hold the "Asia de-coupling" thinking.
It will take a few more months before U.S. govt officials would acknowledge that U.S. is entering a Recession.
Jim Rogers when interviewed in Nov 2007, said U.S. just started recession then as he said, Umemployment rate is up, Housing is down, Car sales is down, even retail (Walmart and Macy's sales) are down, if this is NOT recession, what is?
Of course the Official recession is to have consecutive 6 months of economic contraction, which typically is a time-lag statistic. Thus, one only knows a country is in recession, after the country already in recession for more than 6 months.
Typically, in a few months after official acknowledgement (which might be close to 1 year after economy is in recession), the stock market would start recovering
Let's look out to see if this time, this holds true as well.
Even MM Lee thinks that U.S. slowdown is ok, since Asia is growing. There are still people who hold the "Asia de-coupling" thinking.
It will take a few more months before U.S. govt officials would acknowledge that U.S. is entering a Recession.
Jim Rogers when interviewed in Nov 2007, said U.S. just started recession then as he said, Umemployment rate is up, Housing is down, Car sales is down, even retail (Walmart and Macy's sales) are down, if this is NOT recession, what is?
Of course the Official recession is to have consecutive 6 months of economic contraction, which typically is a time-lag statistic. Thus, one only knows a country is in recession, after the country already in recession for more than 6 months.
Typically, in a few months after official acknowledgement (which might be close to 1 year after economy is in recession), the stock market would start recovering
Let's look out to see if this time, this holds true as well.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
yes, I agree the Opportunity of a Lifetime is coming.
That is provided that one heeds my advice NOT to be fully invested before this Crash. If one is fully invested, a Crisis is just a crisis to one, NOTHING else.
A Crisis is ONLY an Opportunity for those who have Cash. And if one is 100% invested, where does one find the Cash to grab the Opportunity of a Lifetime?
And forumers would have noticed I mentioned that I'm interested to buy CITIGROUP several times already so far, becos I think the Crisis will present a Rare Opportunity to buy into CITI's Global Brand and Franchise at a very low price. (so, I didn't echo Ken Fisher).
That is provided that one heeds my advice NOT to be fully invested before this Crash. If one is fully invested, a Crisis is just a crisis to one, NOTHING else.
A Crisis is ONLY an Opportunity for those who have Cash. And if one is 100% invested, where does one find the Cash to grab the Opportunity of a Lifetime?
And forumers would have noticed I mentioned that I'm interested to buy CITIGROUP several times already so far, becos I think the Crisis will present a Rare Opportunity to buy into CITI's Global Brand and Franchise at a very low price. (so, I didn't echo Ken Fisher).
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Re: What is the PROBLEM of staying 100% Invested?
Today 30 Jan 2010, a Financial Planner, Christopher Tan, CEO of Providend shares the virtues of staying invested.
Actually, 99% of all Financial Planners will sing the same tune, asking clients to stay invested. However, if I had stay 100% invested through 2007 to year 2008, I would have seen most of my earlier Gains wiped out in the Stock Market Crash.
So my personal Real Life experience of selling most of my stocks in year 2007 helped me "lock in" 200% Gains from year 2002 to year 2007. Later, after the stock market crash, I started buying in Oct 2008 again and becos I have Opportunity Fund, that is why I have money to buy when prices are low.
Again, this strategy of buying during a Crisis (something I share in all my seminars) helped me see my stock portfolio gaining 40% by end 2009.
If you still want to listen and follow the "it is wise to stay invested" advice given by most Financial Planners, then go ahead, what I know is that you won't get much Richer following such a strategy.
On the other hand, by applying Market Cycle Investing strategy, selling out when Market is high and buying big when market is low, I'm quite confident that this strategy would still work going ahead and would help me get Richer and Richer.
Think about it.
Actually, 99% of all Financial Planners will sing the same tune, asking clients to stay invested. However, if I had stay 100% invested through 2007 to year 2008, I would have seen most of my earlier Gains wiped out in the Stock Market Crash.
So my personal Real Life experience of selling most of my stocks in year 2007 helped me "lock in" 200% Gains from year 2002 to year 2007. Later, after the stock market crash, I started buying in Oct 2008 again and becos I have Opportunity Fund, that is why I have money to buy when prices are low.
Again, this strategy of buying during a Crisis (something I share in all my seminars) helped me see my stock portfolio gaining 40% by end 2009.
If you still want to listen and follow the "it is wise to stay invested" advice given by most Financial Planners, then go ahead, what I know is that you won't get much Richer following such a strategy.
On the other hand, by applying Market Cycle Investing strategy, selling out when Market is high and buying big when market is low, I'm quite confident that this strategy would still work going ahead and would help me get Richer and Richer.
Think about it.
Dennis Ng wrote:Yes, with my Opportunity Fund, now or LATER I can choose to buy stocks at 30% to 70% lower prices than 1 month ago.
If a person's portfolio market value is 50% below his/her purchase price, prices have to move up by 100% before he/she breaks even.
Whereas, if I buy NOW, if prices moves by 100%, I would have made 100% gain.
Staying 100% invested has its advantages (which many have already expounded).
What's the problem with staying 100% invested?
The Opportunity Cost of staying 100% invested is one can only "stare at Opportunities" in a market crash, as one has NO additional Cash to invest at all.
I observe that Rich people typically have Opportunity Fund. I personally think there is not much harm learning from the Rich. I'm glad I did.
It is NOT possible to time the market. However, I personally think it is possible to ROUGHLY know at which phrase of the bull market at a particular point in time. This is one of the longest Bull market which started from Mar 2003......all bull markets come to an end eventually and we can roughly estimate the "Current Phrase" of the cycle by looking at "historical records".
In my opinion, roughly correct is better than precisely wrong. Investment is both an Art and a Science. Anyway, I've always prepared for the Possibility that I'm wrong.
I'm still learning. Still have much to learn.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.