When I was 15, I bought my first share under my dad's account. Singpost almost 21 years back.
That's when I learnt about dividends cos Singpost had some good dividends back then.
But I didn't hold Singpost for long, I saw it go up and down a couple of cents, and at 15 years old, I got too excited over a couple of hundred of dollars.
So I requested my dad to sell it and I just took a couple of hundred of dollars of profit.
That was my first experience with shares. I think I requested my dad to help me trade in and out of Singpost a couple more times before he got irritated by the short term requests, then I stopped.
Soon after came the Asian Financial Crisis. I saw how my dad watched stocks drop and he didn't dare to buy. Then stocks recovered a bit, then he didn't dare to buy, then stocks recovered a bit more, then he said to wait til it dropped back again then he would buy, then stocks increased even more, and he waited again, and stocks recovered even more and he felt that he missed the boat...
The lesson I got here was that, when the market crashes, just buy when I felt it was reasonable and be willing to sit on the losses if the continued to drop and have confidence that they will recover as the companies should be good companies.
By then, I had an idea that I wanted to be in the finance industry when I got older.
So when I went to Uni, I studied in NTU Business Studies majoring in Banking and Finance.
That's where I got most of my finance knowledge from.
In truth, financial analysis... is not for everyone. Everyone can look at numbers. Not everyone can see the picture behind it. The numbers are all calculated already. Just go online, the P/E ratios, debt ratios, EBITDA, whatever, they are all available... but not everyone can look at the numbers and pick good value stocks.
Then I went to work and started playing with STI options... Exciting stuff.
Made some money, lost some money... then suddenly the market tanked. A batch of my options expired out of the money. I lost almost 99% of my initial capital for the options. That was a learning lesson... I lost quite a bit of money but still manageable. So not too bad...
I told myself that I would stop doing short term trading and just wait for a market crash and just make big investments.
And a few years later...
The Great Financial Crisis came along... I bought in early... not the bottom of the crash, no real regrets. It was also a learning lesson though. Cos I realized no one can pick the top and no one can pick the bottom. I have to buy when I'm comfortable enough and sit through the down turn and be confident that the shares that I selected would recover.
So I was sitting on 40% losses for a period of time and eventually, they recovered and I almost doubled my money.
After the recovery, I decided to sell off most of the stocks and switch to dividend producing investments. So I went into REITs and other dividend producing stocks. And I sat on dividend stocks for a number of years, which gave a great return during those years.
In the recent years, I've sold off most of my stocks waiting for a significant market pull back. It hasn't happened. So it was poor market timing.
On hind sight I wonder how my stocks would perform if I didn't sell them off, cos some of the REITs I used to be invested in aren't doing well currently, so I'm not sure if I would be better off even if I held on to my previous portfolio.
Somewhere in between in the recent years, I forgot my lesson on trading in derivatives and got myself burned with FX trading. Another painful lesson but still manageable.
Throughout the years and experiences, I've come to more or less a simple conclusion.
It's not hard to make money. It's also not hard to lose money.
What's important is to be contented with what I make.
Buying a good investment at a high price... it doesn't matter. Cos after 20 years, I'd still get a good return on it.
But losing money is just as easy. Just a bit of recklessness or carelessness and large amounts of capital could be wiped out.
So now, I'm taking a more prudent view on investing. Buy good simple stocks which are easy to manage. Not to invest in stocks which could be just fads, like Tesla. It may be good, but it may also be bad, and to me, it's not worth it if it turns bad... So maybe I would prefer McDonald's cos there's a higher chance that McDonald's will survive longer than Tesla.
Cos in the long run, how much more returns do I need? Cos for me, I don't spend much so a good enough return is sufficient to last me forever. As long as I don't wipe out large amounts of capital recklessly.
All it takes is $500,000 @ 5% return, $25,000 per year as an end goal.
OR I could even start off at $300,000 @ 5% return, $15,000 per year and that would still be fine, cos my wife is still working and we hardly spend much, so there's still time for accumulation.
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