Warren Buffett famously said to investors the following.
"Don't worry about economic predictions."
In his opinion,
"... it really doesn't make any difference in what I do today in terms of buying stocks or buying businesses what those numbers tell me."They're interesting, but they're not guides to me.
"If we buy a business, we're going to hold it forever.
"So we're going to have good years, bad years, in between years, maybe a disastrous year some year."
Now, this perspective is very interesting and also instructive.
It should be interesting to all investors.
However, it is only instructive to certain investors.
Who are these certain investors?
Investors whose circumstances are similar to Warren Buffett's, of course.
Not everyone has money gushing in regularly and, definitely, not everyone has more money than they would ever need.
We do not have the resources that Warren Buffett and Charlie Munger have.
When we read such opinions, therefore, we have to think of our own circumstances.
For most of us, paying attention to the early signs of where the economy might be headed is not a bad idea.
In a YouTube video I recently produced, I said that the Monetary Authority of Singapore is worried about the economy and if they are worried, we should be worried too.
Singapore's economy is slowing down fast and it is likely to get worse as many major economies seem to be heading for a recession.
So, the Monetary Authority of Singapore has decided to put fighting inflation on the back burner and not to tighten in a move that is expected to help support the economy.
Most people still need their earned income and they should worry about possible retrenchment.
Indeed, massive layoffs started in the tech sector and if a recession hits, other sectors would most likely also be impacted.
Only iron rice bowls will be safe.
What to do?
If we do not have an emergency fund, we should really start one.
If we have an emergency fund already, do a review and see if it is still adequate.
Even if we have passive income, we should have an emergency fund because passive income could dry up.
Whenever I recall how my interest income and dividends reduced during the COVID 19 pandemic, I get PTSD.
If we are fully invested in equities, we might want to start building a war chest.
If we already have a war chest but it is somewhat empty like mine, try to fill it up.
There are so many things that could go wrong in the next few months.
Geopolitics in many places could worsen.
The banking crisis really isn't over yet and, in a recent interview, Warren Buffett said so too.
Depositors will not lose money but investors will lose money because they made bad investments.
I am very "kiasu" but, given the uncertainties, I am more "kiasi."
I tell myself that I want to do a better job of preserving capital and having more cash really isn't a bad thing.
This is especially when the front end of the yield curve stays elevated.
A risk free return of 3.65% to 3.85% p.a. with zero volatility is very decent.
It isn't a bad idea to be more defensive, especially if it gives me peace of mind.
I said this to a reader in the comments section recently:
At this point, it is important to remind anyone who is eavesdropping on me that all of us have different circumstances.
So, just like how we shouldn't accept what Warren Buffett says as being instructive for everybody, we should not accept what AK says unquestioningly as well.
We are also wired differently and will have our own beliefs.
Do the right things and the right things will happen for us.
If AK can do it, so can you!
Recently published:
T-bill ladder completing.
References:
1. Fixed income strategy.
2. Survivability and opportunity.
T-bill ladder completing.
References:
1. Fixed income strategy.
2. Survivability and opportunity.
16 comments:
During the T-BILL up cycle, invest T-BILL using OA, converted OA holding to cash holding to refill war chest when T-Bill mature.
Hi Kelvin,
We should always have a plan, our own plan.
Sounds like you have a plan. :D
Reference:
Have a plan, our own plan.
Kelvin, sorry I fail to understand how it can covert OA holding to cash holding after using OA to buy T bill?
O, need to clarify this only applies to those above 55 with FRS amount in RA. The way to go is after buying T-BILL using OA, you close your CPF investment account. CPF will inform your investment bank of the CPF investment account closure which will then inform you the invested amount will be transferred to your CDP account with a small transfer fee. Just a note to be prudent when cashing out from CPF as the only way to put it back is via yearly voluntary contribution.
Hi Kelvin,
When you shared your plan, that's what I thought too.
Applies to only those above 55 who already have the FRS in the RA.
I was going to kaypoh when I saw Sunny's question but decided to wait for you to reply.
Thanks for the clarification. :D
Gambatte!
Hi Kelvin,
I also say. Gambatte!
Kamsiah you plenty plenty. :D
hello ak,
was wondering if you could talk to yourself about the current trading price. is it already fairly valued? I reckon you're about done nibbling but there are other mice about curious about this cheese and would appreciate your input/ramblings.
thank you muchly for writing about ireit. especially for sotong aunties. my only strategy for retirement planning this year has been incorporating intermittent fasting to see if I could survive on one meal a day when i am decrepit and poor. very kuku I know.
but I just reread your post again on investing for super bloomers. it was a timely reminder.
happy gaming ak!
hello ak,
was wondering if you could talk to yourself about the current trading price. is it already fairly valued? I reckon you're about done nibbling but there are other mice about curious about this cheese and would appreciate your input/ramblings.
thank you for writing about ireit. especially for sotong aunties. my only strategy for retirement planning this year has been incorporating intermittent fasting to see if I could survive on one meal a day when i am decrepit and poor. very kuku I know.
but I just reread your post again on investing for super bloomers. it was a timely reminder.
happy gaming ak!
Hi yuhui,
I have published my reply to your comment as a blog:
More in equities or fixed income? Update on my health.
Gambatte! :D
HAHAHA... i really champion sotong auntie, ak. because i originally wrote you an email with the header aim apac reit but it bounced back and i'd cut and paste but forgot my title!! wah biangz
i'd meant to ask your opinion on aim's entry price because i'd trawled your posts in vain. ALSO, i left out the 'late' before 'bloomers' by accident. but thankfully, you understood. lol
thank you for taking the time out from gaming to write a full post, i'm thrilled. what a bonus! will mull over the points made. (still secretly hoping you'll talk to yourself on the current price for aim. hee.) i'm only a few years younger than you but 1000 times more tam jiak so IF omad too ambitious for me.
wishing you many more years of good health! :)
ps. i also never block google ads
Hi yuhui,
My public email account kaput liao and I did not get a new one.
Having a lot less social interaction means I have a lot more time for other things in life.
My blog and YouTube channel are hobbies and the interactions with followers here are not too overwhelming.
I am lazy and I don't miss the days when I was active on Facebook and had numerous emails to reply to. ;p
Of course, it also means I don't get offers from sponsors to do paid content but it really isn't a big deal.
As for whether to buy AIMS APAC REIT now, I won't give a direct answer but there are enough hints in my blog reply to your earlier comment. ;)
Finally, thank you plenty plenty for not blocking Google Ads which helps pay for my meals. Appreciate! :D
sorry, ak. i thought i read a post on ireit price range when u felt that anything at 0.5 or below was considered a steal so i guess i had been hoping for such titbits on aim apac reit. lol. owise, i am so nervous about misreading between the lines in the past ( i'm an arts stream student who failed maths every year) your posts on frugality, especially the food ones, ended up being more inspirational.
i could never hit more than 14 hours until i started adding mct oil during my final hour of feeding and hit 20hrs effortlessly. i'm not hungry but my mouth is lonely liao. tcm says cannot skip breakfast so i try to skip dinner instead.
i bought a ticket but i'm usually ready for bed by 9pm so i might not stay till the end. but thank you for showing face :)
Hi yuhui,
Who says Arts students cannot be successful in finance and investments? ;)
Well, I don't know if it applies to you but I already have a significant exposure to AA REIT and, at the current price, I am not adding as I don't find the unit price attractive.
The last time I added to AA REIT was during the COVID 19 pandemic.
I waited for the dust to settle, making sure that downside pressure had subsided before adding at $1.15 per unit.
As for intermittent fasting, I don't know about TCM but I find breakfast easier to skip than dinner.
Anyway, we just have to do whatever works for us. :)
After doing intermittent fasting for a few weeks, you should find your mouth getting less lonely because your stomach would have shrunk and you would not feel like eating as much.
At least that has been my experience.
See you on 10 May but I won't be showing my face. ;p
hee. thank you for letting me eavesdrop, ak. it took me forever and half to understand the calculations for dividend yields. i made many people who tried to explain to me cry. lol.
i live to eat so i get itchy mouth even when i'm not in the least hungry.
see ya 10 may, all the posters so funny!
Hi yuhui,
All of us are good at something but no one is good at everything.
However, if something is important enough to us, we would make the effort to learn.
So, you are doing the right thing! :)
Glad you like the posters.
People should come to AK for entertainment and not education.
That way, they won't be disappointed. ;p
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