How much do you/I value 10% return?
I recently asked myself this question.
We always hear about theoretical 5% or 7% or 10% annual returns, then we project it over 50 years and anyone can get rich.
Of course, life isn't so simple.
Recently I thought about guaranteed 10% return.
Getting a guaranteed 10% return on an investment for 1 year is quite a good return.
Getting guaranteed 10% return over a 2 year investment isn't too bad.
Getting guaranteed 10% return over a 3 year investment is starting to become like a FD.
4 years is under 2.5%, some people are ok with this. Well, it's still a good FD rate.
5 years, also still a good FD rate.
What if the chance is 90% chance of 10% return?
When the market is doing poorly... Example like 6 months ago.
There are a lot of bargain opportunities. So there's good chance to make 20%, 30% returns on other stocks.
And there's a stock that has a 90% chance for 10% returns.
Which is better?
Of course everyone has their own risk tolerance and greed levels.
I recently did some calculations and had this dilemma.
Now that's only looking at 10% returns...
A stock I was looking at had a very high chance for 20%-25% returns. With almost 90% chance of 10%-15% returns.
And so I put some money into it.
Cos I wanted to save some additional capital for other opportunities which might come about in future.
On hindsight, I should have put a lot more. 20-25% returns are very good returns.
Even if I ended up with 10%-15%, that's already pretty good as well.
Shouldn't be greedy to try to shoot for other opportunities which may or may not come about.
A bird in hand is really worth way more than the illusionary 2, or 10 in a bush.
They may not be in the bush, or might not even be able to catch them.
Lesson learnt. Ouch.
<<PREVIOUS POST // NEXT POST>>
Did you like this post? If so, could you "belanjah" me 1/4 cup of my morning coffee pls.
You may also consider subscribing to receive the articles in your email, link in the column on the right.
I recently asked myself this question.
We always hear about theoretical 5% or 7% or 10% annual returns, then we project it over 50 years and anyone can get rich.
Of course, life isn't so simple.
Recently I thought about guaranteed 10% return.
Getting a guaranteed 10% return on an investment for 1 year is quite a good return.
Getting guaranteed 10% return over a 2 year investment isn't too bad.
Getting guaranteed 10% return over a 3 year investment is starting to become like a FD.
4 years is under 2.5%, some people are ok with this. Well, it's still a good FD rate.
5 years, also still a good FD rate.
What if the chance is 90% chance of 10% return?
When the market is doing poorly... Example like 6 months ago.
There are a lot of bargain opportunities. So there's good chance to make 20%, 30% returns on other stocks.
And there's a stock that has a 90% chance for 10% returns.
Which is better?
Of course everyone has their own risk tolerance and greed levels.
I recently did some calculations and had this dilemma.
Now that's only looking at 10% returns...
A stock I was looking at had a very high chance for 20%-25% returns. With almost 90% chance of 10%-15% returns.
And so I put some money into it.
Cos I wanted to save some additional capital for other opportunities which might come about in future.
On hindsight, I should have put a lot more. 20-25% returns are very good returns.
Even if I ended up with 10%-15%, that's already pretty good as well.
Shouldn't be greedy to try to shoot for other opportunities which may or may not come about.
A bird in hand is really worth way more than the illusionary 2, or 10 in a bush.
They may not be in the bush, or might not even be able to catch them.
Lesson learnt. Ouch.
<<PREVIOUS POST // NEXT POST>>
Did you like this post? If so, could you "belanjah" me 1/4 cup of my morning coffee pls.
You may also consider subscribing to receive the articles in your email, link in the column on the right.
RSS Feed
