STE's Stocks Investing Journey

  A person watching the tide coming in, and who wishes to know the spot which marks the high tide, sets a stick in the sand at the points reached by the incoming waves until the stick reaches a position to where the waves do not come up to it, and finally recede enough to show that the tide has turned. This method holds good in watching and determining the flood tide of the stock market. The average of [stock prices] is the peg that marks the height of the waves. Like those of the sea, the price waves do not recede all at once from the top. The force which moves them checks the inflow gradually, and time elapses before it can be told with certainty whether the high tide has been seen or not.” — Charles Dow, creator of the Dow Jones Industrial Average, on January 31, 1901, edition of The Wall Street Journal Dow Jones Industrial Average:  Celebrating 125 Years < Sources: S&P Global > "As of May 26, 2021, the Dow Jones Industrial Average will have been determining the ...

We often relate Index ETF as one of the asset class for “passive investing” and one of the main tenets of passive investing is the strategy of long-term holdings and less active trading . Because there are very infrequent buying and selling, fees are low. In short, this means you’ll lose less of your returns to management due to higher transaction cost in the long run. But recent fund flow data seems to show in a different result as what we had always thought. Traders Get Whiplash After Fastest Ever Fund Flow Swing From Euphoria To Despair <source:trulytimes.com>   “US equity funds and ETFs reported $26.87 Bil of outflows, the largest weekly outflow since December 2018 and the third largest outflow ever, more than reversing a $22.67 Bil inflow one week earlier .”   It seems that ETF no longer meant for “passive investors” but more for trading nowadays. New trading platforms with a much lower or zero commission have also contributed a lot to such huge...

image credit to sginvestors.io Not All Index Are Created Equal I think most of us are using Index as bench-marking against our portfolio’s performance and from time to time, we often hear about buying index as a kind of passive investment. Some financial advisors are even proposing “ DCA” or dollar-cost averaging for Index with “buy and hold” strategy. “The average annualized total return for the S&P 500 index over the past 90 years is 9.8 %.” Guess this is the most “eye-catching” a phrase that often mentioned in the news which is also the most powerful words to attract investors pouring billions of dollars into Index ETFs under the so called a “passive investment” strategy. But remember that not all Index are created equal if the index is added with many “toxic stocks”, such an index will sure underperform than other world indexes.

image credit to TheBusinessTime.com On 19 th April, The Business Time published an article on issues related to ETF, “ Vanguard is growing faster than everybody else, combined !! “. No doubt, ETF which is tracking indexes from all over the world is getting so popular because of lower cost as compared to active management. “In the last three calendar years, investors sank USD$823 billion into Vanguard Funds, by any measure, these are staggering figures. Vanguard’s asset under management have skyrocketed to USD4.2 trillion from USD 1 trillion seven years ago. “ according to the company.