Imagine you have SGD100k in investments. 
You earn SGD2k more and you put that into your investments as well. SGD102k.
The market does poorly and market value drops back down to SGD100k.
Next month, you invest another SGD2k more, back to SGD102k.
Market  continues to do poorly and market value drops back down to SGD100k.
This happens for a few more months. 
How do you feel?

Sometimes I fee like a fool for continuing to pump investments in and lose the value after a few weeks/months. Maybe you would too.
However, I keep telling myself, that I need to stick to the analysis and process I thought up of before the market did poorly. Which is to buy at regular intervals and ride the market down and ride the market up again. The opportunity to buy is when the market is doing poorly. When the market is doing well, that's not particularly the best time to buy. That's my system. You can agree with it or not. But that's not the point I'm driving at today. 

The main point today is to have faith in your own analysis and system which you have thought of. Mine is for long term investments in good income producing assets and to buy in at regular intervals so that I accumulate more when the price drops. Similar to dollar cost averaging but not on the same stock. The aim is to keep accumulating assets so that as time passes and when markets do well, my returns would be amplified as I would be holding more assets which I bought at a cheaper rate. 

Unfortunately, this is a really hard system to follow as it makes me feel foolish when I keep injecting money and losing the money, but I know I need to overcome myself. As I know that in 10 years time, all these losses would be nothing, and that my investments would be performing well after the longer horizon. I just need to keep accumulating the assets when I have additional funds at hand. 

Of course this does not mean holding on to non-performing stocks or sunset industries. Many people shift out of their investment as things turn sour. Example REITs. I read many financial blogs warning against REITs. Newspapers say to avoid REITs as interest rates will rise. I'm not saying that I invest in REITs or asking people to invest in REITs. But the way the markets turn is very short term thinking. If you have faith in the property market in Singapore and are planning to invest for 10 years. Then the 1-5 year fluctuation of REITs due to interest rates should have nothing to do with you. Here I'm talking about long term investments. 

If you have an investment which hits a target price and that's your system/process, then by all means sell it.

What I'm trying to highlight is that researchers and analysts will do their analysis based on the recent developments. If you keep reading and being affected by all these news, you will get distracted. It is definitely good to read and keep them in mind. However, think about them for a while and see how the news affects your investments and your goals. If your intention is to invest for the long term and your homework indicates that in 10 years Singapore will be the gambling capital of the world, then do your investments based on what you think/analyse and believe. Cos your analysis is for the long term. Market researchers don't suggest investments based on 10 year horizons. They usually just comment on the next 3mths to 1 year max. Your goals and investments could be a longer horizon than their opinions. 

So stay on target. Do your own homework and not get swayed by all the noise all over the place. Have a goal, have a target, aim and shoot. Trust your homework and training and research. Your target is different from others. Everyone has a different goal. If you're looking for short term returns or long term returns, they have different approaches. So don't keep changing your strategy according to how the wind blows. If you do that then you will be changing your strategy every year as each year will have a next big news. That would eventually result in your investment direction deviating from your goals which you have set. 

So good luck and stay on target.
Ok the ending of the youtube wasn't so nice. But you get the picture.

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For the Chinese folks out there and anyone who celebrates the New Year using the Lunar calendar, Happy New Year.

I've been busy the past few days so I missed writing one post. Unfortunately...

Chinese New Year in Singapore is a really happening time for singles. They get ang baos, or red packets, containing money. For those married, well... the married folks give them out to unmarried juniors and seniors regardless of marital status... I got married last year... 

It was quite a novel experience to give out money to people for no apparent good reason. Total damage, about SGD1200. That's quite rough with nothing in return. One thing to note, I'm not particularly cheapo. I've been receiving these ang baos from senior family members for years, and now it's time to give back some. Ok it affects my savings for this month. It's one of those duties which need to be done. There are folks who bail out by going overseas during this period, which is fine. The thought did cross my mind. But I realised that the damage would be relatively the same anyway.

After more in-depth calculation, going overseas made no sense. Reason being, I could only avoid giving the insignificant family members. I won't even give much anyway. For the closer family members, the ang bao would still be given anyway and that's where the main damage lay.

Upon further breakdown, ang baos to close family members totalled SGD900 with the other members at SGD300.
The SGD900 included parents, grand parents, siblings, close uncles/aunts/cousins who grew up with us. These are ang baos which are in the need to give category. ie, even if I'm out of the country, when I return, I'll still have to give them.
The remaining SGD300 will be the give only if met category. So if I'm able to avoid them, then I won't need to give. Well, to book a flight to another country + hotel to escape SGD300 expense sounds really duhz...

The SGD1200 is a net loss. This means. I/We also receive ang baos from our parents, grand parents, siblings, close uncles/aunts/cousins, etc (I will refer to this group as "seniors" from here on as I'm tired of typing out the same group of people again.). After netting the difference between what we receive and give out, the SGD1200 is a net loss. Why the large net loss? Considering that we also receive from others?


Well, my mentality on this is that, the seniors have given me for 30 years. It is time to give them back with some gain/"profit" on their end. I have already gained/profited for 30 years as before I was married, I did not need to give them any ang baos. So my take on this is that I will let them have some gain on every exchange. So essentially, every exchange I gave with the seniors, my loss is about SGD50-100 per person. This totalled the SGD900.


The remaining SGD300... well these can't be helped as it's just the other kids, etc which I encounter during the period. 


Do I feel particularly sad that I have to take this loss/damage during this period? Nope not really. Yes the money could probably be better saved. But this is how society works. You give and take. There's no running away and all that. That defeats the purpose of society and goodwill. Eventually, we all have to build our own stash of goodwill and trust and family bonds. It's not a given. There are aunts and uncles who are not in the close relatives category as they have not bothered to maintain a close relationship with the rest of the family. It's their choice. No issues on my side. But I think it is probably better to maintain a closer relationship with family members as these are really the things that matter in life. Else there's really no point in living if you're only living for yourself only. Someday, we might need help from each other and a closer relationship would help to aid each other in times of need. 


You give what you get and if you're not willing to put effort and time in a relationship, it will eventually just crumble. This is pretty much the same with all relationships. So instead of moaning over the losses I made during this period, I think of all the goodwill gathered throughout the years. I think of the past years and the goodwill we have accumulated resulting in receiving bigger ang baos as close relatives when we were younger, and now as I am older, how we give more to the closer younger folks and the seniors as the amount given is a reflection of our level of relationship with them. By giving more, to me, it essentially "quantifies" how much more you value them over the other misc folks which you give. 


Happy Lunar New Year to you all and wishing you and your family good health and prosperity in the year/years ahead.

Yours Sincerely,
EarlyRetirementSG



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