My fear in investment

[jamestai]

Hi,

It just come to my mind that we should have a light hearted discussion here about our fear when investing with our own money. I think it is something that everybody can relate to and experience in the recent weeks with the roller coaster ride of the stock market. You don't need to have any financial knowledge to participate. As long as you willing to share with all of us here.

There is one thing I would request all of you not to do. Please do not judge or have nasty comment on what people share here. The whole purpose is try to listen and understand the emotion of fear that affect all of us when we invest we our own money and how we deal with it. Hopefully all of us can learn something out of the story we share here

I will start. My greatest fear is when investing with my own money is seeing all my hard earn money disappear when I wake up in the next morning. If that happen I am not sure how I would deal with it. I think the first thing that would come to my mind is how am I going to get my money back. And maybe start calling people asking for help like a mad person. After that I will start worry about how am I going to pay my home loan, phone bill, meals etc. Then maybe I will start counting how much money I have left. I will feel so embarrassed to tell my family member and friend about what happen and wonder if they would believe me or help me even if I ask.

I fear that I may make a bad choice in investing in bad stock seeing my money slowly disappear away. I fear that trusting the wrong person when he/she recommend me to invest in some kind of financial products and I start losing my money with it. I would feel so betray and will put all the blame on that person and at the same time blame myself of being so stupid in believing him/her.

I fear that I see the profit from my share investment slowly disappear. Then I would start worry to sell or to hold. What if I sell and the share price bounce back, but what if I hold and it keep dropping further. What if there is a market crash tomorrow and all my money are gone ?! I fear that what if I keep considering to buy the stock when the price is low and by the time I realize it the price already shoot up and I miss the opportunity ? I fear that the market would crash tomorrow and I make a lost in my stock investment.

I consider myself lucky that I only start investing after the market crash in 2007. Before that I just put my money in the bank, fixed deposit or buy some kind of insurance product. When I start investing in stock, I have no ideas what stock to buy. I fear that I will choose the wrong stock so I the safest bet is to buy only 1 or 2 lots of well known blue chip stock like Singtel, SIA etc. But I know many people has gone through bankrupt, lost all their hard earn money when the money crash and that kind of trauma make them very frighten in investing with anything again. I fear I will also be one of them.

James Tai

[roncha]

Everybody makes mistake, including me myself.

"The greatest fool is not the one who does not know, but the one who does not know what he does not know".

I do fear whenever I made mistakes. However, if I realise the mistakes that I have made, and yearn to look for the root cause to correct the mistakes, then the solution will finally come to me. That's the way I overcome my fear or negative vibes by constantly searching for a better strategy & solution. As long as it is not a life & death situation, learn from your mistakes, but not relearn from your mistakes !

[JIMMYKKL]

Hi James,

I will just "Long story short say" here.

It is perfectly normal that you felt so as this is Psychology at work. Relax, cos if your expectation is high, disappointment is high too (cos u still young and energetic and capable and very eager to achieve so many in so short a time). Just adopt "Normal Heart".

Dr Chan over the years always says, Market driven up by Greed and driven down by Fear. He also always tell people to practise psychology approach towards investment. of course money management and prudent also required.

Dennis also told all to use idle money and be prepared and always ask yourself "what if i am wrong" as one's safety net in case.......

in fact many successful gurus like buffet etc almost all said the same. the onus is to be right more than wrong and u end up positive.

if u are in your late 20s, u easily has another 4 cycles before u becomes grandfather so dun worry about losing out, juz take it easy and live life. there are so many things out there to do and enjoy besides making money (like Denny want to help others, etc....)

Man propose, God dispose. Life can be very simple and easy. it is all wants that complicate matters. Denny for one is clear cut example though he already 2 million millionaire but he always see it as 2 millionhairs (joking, ha ha)

there can only be one king, one buffet, one rogers and everyone is not the same. u gain some, u lose some.

finally as parent myself, i think u are a "dutiful son and a responsible person" but i will not want my son to suffer like that to make me proud (but it is also unavoidable as i guess most young people need to walk through as that's life and it takes time, so life is so funny and ironical, juz too bad)

it is human psychology to pain to part with your money. it is how much attachment u attach to it. so u need to be its master to enjoy parting with it. very confusing hor, u will understand one day when u grow old after "knock walls" many times.

Life...... sigh......... ces't la vie. 1970s OCBC crash after old man statement. 1980s Pan Electric crash and MCA Tan jailed. 1990s Financial Cisis and so many negative equity families.....

stop here or else become long story long talk.

[alvin]

For me, I only invest with money that I can afford to lose. Hence, even in the worst case scenario that I lose everything, I am not worried, just sad and disappointed. It will not affect my livelihood or jeopardize my financial well being. I believe this mentality would remove most of your emotional fears.

[danielcheng]

My immediate concern is always the well being of my immediate family members.

Having invested in businesses, properies, equities etc... My immediate concern is still my family as i feel happy to see them happy & healthy. That is my motivation and hopefully good investments translates to some of these happiness.

So do i fear losing all of my hard earned wealth & investments? Of'cos i do as i started with nothing. So to negate such concerns, i only invest within my means and lead a simple life. So if the worst do happen and if i am so stupid not to notice it coming, then i loose my investments.

Infact, due to the recent pullback, i managed to pick up some good stocks. I may be wrong as Sifus alway say buy on the raise & not fall. Why? Maybe i am just playing within my means to loose.

[walkinepark]

Hi James,

this is a good attempt at self-reflection as an investor.

Here are a few quotes from wise men:

Franklin D Roosevelt: "The only thing we have to fear is FEAR itself."

John Maynard Keynes: “Successful investing is anticipating the anticipations of others.”


History shows that the market can't run away from FEAR and GREED, and People forgets painful lessons.

I guess the art here is to invest within our threshold and steer clear of over-extending our personal Greed/Fear.
Wait for the Greed/Fear of Others to overshoot for a reasonable exit/entry using opportunity fund.

At the moment, the Big Fishes can't shake me off because i'm steady with my personal money handling and i'm running at my own pace.

"知己知彼,百战百胜". "Buy LOW, Sell High"
I'm still learning.

[cellobear]

I think there are only a few things in life that people really fear and worry....

- Health
- Wealth
- Relationships

For each, there is a quantitative and qualitative aspects which are important.

For those who know that I jumped out of my previous life into the present unknown, I deal with this 3 areas almost on a daily basis. Of course I deal with them all along but being a self-employed, it brings all these to much greater clarity.

[dragon]

Hi James,

Frankly speaking, I too have my fear of losing my hard-earned money. On the positive side though, it is this fear that provides part of my motivation to sacrifice all my personal time (which is very little) to learn as much as I could regarding investment...

[AndrewNg]

Hi James and team,

Since this thread mention about Fear and light hearted discussion, would also like to share my views on investment and hopefully get some encouragement and support. Please forgive if this message feels a bit heavy.

It is suggested that we save 10% or more of our income for saving and through investment we can achieve financial freedom. Sometimes, my journey to achieve financial freedom is challenged because of the following scenario :

I am in late 30's and can only manage to have 5% (sometimes even less) savings because rest of it goes to parents (both of them way past retirement with insufficient CPF savings and little medical coverage) and household and kids expense. Wife works on freelance part time to support her parents (also aging with no medical coverage) and take care of kid. I take public transport and live in HDB. Trying to cut down all unnecessary expense and live a frugal life but still feel the pressure of money not enough. Biggest fear is what if both parent and in-laws encounter big time illness....

At 5% per month saving with bonus, took me average 2 years plus to get 3 months of income safety net. To get 6 month, probably would need another 2 plus year. So sometimes, i take risk to invest with just 3 month safety net. When market is down, my first thought is will I be able to support aging parents my wife and me when i reach retirement.

With 25 plus year before retirement age and maybe 6 investment cycle ? ( assuming average one cycle about 4 years ? ), some time, i work evening to increase the capital needed for investment and it is affecting my health. So also learning how to balance finance, health and relationship. Three most important skills which is not properly passed down to me from our ancestor and from education system.

When i see Dennis success, it make me feel that there is still hope. I am changing my mindset to think like the rich and along the way, feel very lonely especially when learning investment. I sense that some of my colleagues, friends and even relative shun me when i talk about investment. They feel that i am gambling and finding way for a quick buck and i am not "leg step on firm ground" to work hard. Very discouraging if it is from close family members. I think investment is a lot of diligent hard work and can even train us to be better manager of our own emotion and risk. Nevertheless, i still subscribe to Dennis school of thought on investment and hopefully, this forum have enough people sharing same dream of financial freedom to keep the momentum going.

Thanks for reading and spending time with my inner feeling.

regards
Andrew

[sereneloong]

Dear Andrew,

I feel for your circumstances, and I applaud your efforts. Especially working evenings to earn more for your investment fund.

Naturally I do not know what it is that you are doing part-time. As for me, I am a part-time Wealth Educator with Dennis, promoting his programmes. Because of my deep belief in what he teaches, I find that it is very natural for me to share with others what I have gained. And so doing this doesn't seem like a job at all. I feel like I am contributing to others. I feel good doing it. Perhaps you might like to consider this "avenue". I think it could add to your sense of well-being; rather than rob you of your health like your other part-time job.

Good luck! And don't forget about living in the present and enjoying our time with our loved ones even as we work towards our future.

Sincerely,
Serene

[djwongdj]

I empathize totally with James.

Since attending Dennis' seminars, I've witnessed at least 2 such steep corrections across my portfolio....

To become a market cycle investor, obviously the knowledge, the need to develop greater patience and a less microscopic view of the numbers in order to invest with confidence, is necessary; so is the steely nerve and resolve to stay put and to exit safely respectively: the purpose is to live and embark on the ride....again.

But still I have to say that the experience of seeing 10%-20% paper loss is heart stopping, like riding the rapids; but not as enjoyable.

It takes a lot of guts to be Jesse Livermore.

[Dennis Ng]

Hi AndrewNg,

there are only 2 ways to increase savings. One is to cut down on expenses, which knowing that you don't spend much money, I don't think there is much room for cutting expenses.

The other way is to increase your income. You have skills, it is up to you to see how these skills can be converted into income.

11 years ago I earned total of S$30,000 a year. 11 years later, I donate S$30,000 to Charity a year. That can only happen becos I increase my income over the years.

Cheers!

Dennis Ng

Hi James and team,

Since this thread mention about Fear and light hearted discussion, would also like to share my views on investment and hopefully get some encouragement and support. Please forgive if this message feels a bit heavy.

It is suggested that we save 10% or more of our income for saving and through investment we can achieve financial freedom. Sometimes, my journey to achieve financial freedom is challenged because of the following scenario :

I am in late 30's and can only manage to have 5% (sometimes even less) savings because rest of it goes to parents (both of them way past retirement with insufficient CPF savings and little medical coverage) and household and kids expense. Wife works on freelance part time to support her parents (also aging with no medical coverage) and take care of kid. I take public transport and live in HDB. Trying to cut down all unnecessary expense and live a frugal life but still feel the pressure of money not enough. Biggest fear is what if both parent and in-laws encounter big time illness....

At 5% per month saving with bonus, took me average 2 years plus to get 3 months of income safety net. To get 6 month, probably would need another 2 plus year. So sometimes, i take risk to invest with just 3 month safety net. When market is down, my first thought is will I be able to support aging parents my wife and me when i reach retirement.

With 25 plus year before retirement age and maybe 6 investment cycle ? ( assuming average one cycle about 4 years ? ), some time, i work evening to increase the capital needed for investment and it is affecting my health. So also learning how to balance finance, health and relationship. Three most important skills which is not properly passed down to me from our ancestor and from education system.

When i see Dennis success, it make me feel that there is still hope. I am changing my mindset to think like the rich and along the way, feel very lonely especially when learning investment. I sense that some of my colleagues, friends and even relative shun me when i talk about investment. They feel that i am gambling and finding way for a quick buck and i am not "leg step on firm ground" to work hard. Very discouraging if it is from close family members. I think investment is a lot of diligent hard work and can even train us to be better manager of our own emotion and risk. Nevertheless, i still subscribe to Dennis school of thought on investment and hopefully, this forum have enough people sharing same dream of financial freedom to keep the momentum going.

Thanks for reading and spending time with my inner feeling.

regards
Andrew

[Dennis Ng]

Remember the Law of Attraction, we attract what we think often about. If you fear losing money, guess what will happen?

For me, my No. 1 question is "what if I'm wrong, will I be financially ok?" I only think of the Worst Case Scenario ONCE and thereafter I don't think about losing money anymore.

Whereas if you invest and you cannot afford to lose money, you will keep thinking about the Fear of losing money, and guess what is likely to happen?

Read and re-read what I wrote. This might be the Turning point in your finances.

[Stradlinz]

A very timely advice by sifu Dennis. I think in times like this we all need this kind of reminder. I'm well aware that this round of correction has been very fast and furious. I'm sure a lot of weak holders have been weeded out in the markets as of now.

The most glaring evidence is that a lot of us in this forum is very worried by now. Even some of us who have attended dennis's courses and know the rules of the games have been shaken. Maybe we forgot that even QE2 will last us until at least June this year, so the probabilities of stock market crashing is low in my opinion. And not forgetting that the FA of many companies are very sound and still not at dangerous level, so the probabilities is reduced further.

I am very sure that this forum can be the "Pillars of Support" that guide us from this temporary setbacks to achieve financial freedom.

Remember the Law of Attraction, we attract what we think often about. If you fear losing money, guess what will happen?

For me, my No. 1 question is "what if I'm wrong, will I be financially ok?" I only think of the Worst Case Scenario ONCE and thereafter I don't think about losing money anymore.

Whereas if you invest and you cannot afford to lose money, you will keep thinking about the Fear of losing money, and guess what is likely to happen?

Read and re-read what I wrote. This might be the Turning point in your finances.

[Susan Lee]

It is heartwarming to know that we are not alone when it comes to "FEAR' - especially during the recent correction where even companies announcing profits do not drive up the market. Through this forum, we get to understand how each individual feel as well as get some support / even in making decisions to enter/exit the stock market. Personally, I would like that my head rules my heart so that I can make sound decisions. However, sometimes it is difficult as we are still humans with emotions - especially when we are talking about our hard earned money.
Nevertheless, I hope we can get some positive news in the stock market in the coming weeks.

Cheers
Susan