STE's Stocks Investing Journey

We all want to know what happens next One of the most natural things for an investor to do at the beginning of every year is to look ahead and ask a very simple question: where will the market be by the end of the year? We want to know whether the STI will rise, whether Hong Kong stocks will finally recover, whether the US market can continue its rally, whether interest rates will fall or rise, and whether China will eventually return to stronger economic growth. Once we have made our market forecast, it is quite natural to go one step further and set a target for our own portfolio. Perhaps we tell ourselves that we should make 10 percent this year, 15 percent next year, or maybe even 20 percent if we are feeling more optimistic. There is nothing wrong with having expectations, and I do not think investors should completely stop thinking about the future. The problem begins when we start believing that the future can be predicted with much more accuracy than it actually can. After many...

This lecture, delivered by Professor Jake Xia to   MIT OpenCourseWare class, provides a comprehensive and critical application-based perspective on portfolio management, moving beyond traditional theoretical frameworks to address the realities of investment and risk. <Ai Image > Executive Summary: Portfolio Management Beyond Theory This presentation offers a rigorous, application-focused deep dive into modern portfolio management, critically evaluating established theories and proposing practical, behavioral-based enhancements. The central challenge in investing is fundamentally a sizing problem : determining how much capital to allocate to any given investment, a decision dictated by clear objectives, time horizon, and loss tolerance. The lecture contrasts personal finance with institutional investing, highlighting the Endowment Model used by perpetual funds like MIT's. These institutions have a crucial nominal return target (e.g., 8%) to cover spending and inflation, ...

The stock market often feels like a rollercoaster, but investing isn’t only about spreadsheets, ratios, or balance sheets. At its core, it’s a psychological journey. The market’s sharp swings and tempting narratives don’t defeat most investors ,our own instincts do. These instincts were shaped over thousands of years to help us survive, not to manage a modern portfolio. That’s where behavioral finance comes in. It shines a light on how emotions, biases, and mental shortcuts quietly influence our decisions, often to our detriment . By blending age-old wisdom with modern insights, we can better understand why investors stumble and how to avoid the same traps. Sun Tzu’s words from The Art of War still ring true: “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” In investing, the real enemy isn’t the market—it’s our own behavior . Learn to recognize it, and better decisions tend to follow. <Image credit https://jingyan.baidu.com/article/a3a3f...

Managing a portfolio is not a one-time effort. It is an ongoing journey of discipline, patience, adjustment, and self-awareness. For long-term value investors, the goal has always been the same: build a resilient structure that grows steadily and survives volatility. Markets will continue to shift between optimism and fear, yet the investor who has a strong foundation can navigate these waves calmly. Portfolio management isn’t glamorous, and it certainly isn’t about chasing short-term excitement. It is about creating a system that withstands shocks and compounds quietly in the background. When we examine successful long-term investors, the patterns are clear. Their strategies rest on a few important pillars: asset allocation, diversification, rebalancing, continuous review, risk management, and behavioral control . Each plays a different role, but together they form a complete framework :  A compass that helps you stay on course even when the markets are unpredictable. Asset Alloc...

Investing is a game of numbers, logic, and patience. It’s about understanding businesses, assessing their potential, and making calculated decisions to grow your wealth over time. Yet, too often, I see investors letting their political beliefs cloud their judgment, swaying their decisions in ways that can lead to missed opportunities or costly mistakes. Whether you lean towards democracy, socialism, or any other ideology, investing should remain apolitical. It’s about seeing the world as it is, not as you wish it to be. In this piece, I’ll dive into why separating your political views from your investment decisions is crucial, how policies—whether from communist or democratic systems—can create opportunities in the market, and why a long-term, fundamentals-focused approach always wins. Let’s get started. The Political Noise and Market Reactions Politics has a way of stirring emotions. Whether it’s a fiery speech from a world leader or a sudden policy shift, the markets often react wi...