Patience Is Your Biggest Investment Asset



One of my reader ask me what am I doing since market has gone down by more than -10% from early May, am I buying or selling ? My answer is "No" , I don’t do any major adjustment on my portfolio , except nimble a little bit here and there with the dividend I received. Basically, my war-chest remained same in term of percentage in my portfolio.

For me, I don’t think it is compelling for me to do major adjustment on my portfolio at this point of time , although the STI Index has corrected by more than -10%, but it sitting just at long term mean level.







I would rather wait patiently  for better opportunities or Mr. Market to act irrationally. If market rebounded from here , I am also happy with my current holding which enjoy the uptrend , else I may just keep calm and collecting the dividend. J





Patience, and the ability to sit down and wait, is the primary trait that links all of the world's greatest investors. If you do not possess this trait, it might be best to avoid stocks altogether. Indeed, as Jesse Livermore once said:

“Throughout all my years of investing I've found that the big money was never made in the buying or the selling. The big money was made in the waiting.”


Unfortunately, the environment today has developed in such a way that works against patience. In other words, investors are constantly bombarded with information/ news in an attempt to get them to buy or sell a stock, everyone seems shouting “ hit the button”.

A vast amount of information is available to investors on daily basis. Fortunately, you only need to understand a small portion to be a successful investor, doesn’t necessary to act on every piece of news we received. 

Diversify broadly, keep costs low, re-balance periodically and be patient which I strongly belief that patience is more important than being smarts.


Remember that in the long run, active investing is a zero-sum game (exclude cost). For every outperforming dollar there is a dollar that under-performs by the same amount. As a group, all investors share the market's return, some made more and some lost more , long term Index ETF holder may just enjoying the Beta”.

If you may realize, I intentionally chose this as the sub-title of my blog , to always remind myself about the important of being patient in investing:

"The stock market is a device for transferring money from 
the impatient to the patient " by Warren Buffet .


Cheers !



Comments

  1. thank you.. always appreciate your linear regression chart analysis

    ReplyDelete
    Replies
    1. Hi Steven,
      Most welcome...but remember that this is just a general Long term market valuation,,,we will still need to look at sectors n stocks individual valuation for buy n sell .... cheers ✌️✌️😁😁

      Delete
  2. Hi STE,

    hmmm, meanwhile, I am keeping calm and keep buying! Hope this is the right way and that I have not started buying too early. I know for sure I do not know how to time the market.

    ReplyDelete
    Replies
    1. Hi MIM,
      Although the linear regression is at mean level, but that was a general market situation, value may appear in some stocks if price has gone down much...remember what Warren Buffet said,,,'price is what u pay, value is what u get'....cheers 😁😁

      Delete
  3. Can i know what is the percentage of your war chest?

    ReplyDelete
    Replies
    1. Hi LKH,
      Is around 18% at this moment, not so high as compared to some bloggers who are holding more than 40-50%, I guess this is very much depend on individuals' risk tolerance as well ,...cheers ✌️✌️😁😁

      Delete
  4. Good advice “Diversify broadly, keep costs low, re-balance periodically and be patient which I strongly belief that patience is more important than being smarts.” ����
    I’ve a question: How broad? How many stocks should we have in our portfolio? How Low should cost of each stock be? I currently have 4 stocks in my portfolio 2 REITs, 1 ETF & 1 telco. I put a cap of $500 on each stock. Some stocks I put less than that. Also what Budget should we set? Based on monthly salary or total savings? Thanks!

    ReplyDelete
    Replies
    1. Hi Mr Unity,
      For diversification, I think it depend on your portfolio size as well, for beginner , I think one should not hold too many stocks as the value of each stocks will be very small and it may increase your brokerage cost, less than 10 should be ok across different industries. Save up to max, there is no budget , we used to save more than 50% ... so it also depend on your lifestyle as well... cheers !! :)

      Delete

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