A wealth building strategy that has worked for AK.

Investors must have the temperament to be philosophical about market fluctuations.




This blog post is in reply to a reader's long and thoughtful comment on AK's wealth building strategy which a screen capture could only snap partially:

Read the full comment: here.

My reply to the reader as follows:

Hi Millionfaith,

Thank you for the very insightful comment. :)

Here are my thoughts:


1. I agree with you, generally. 

However, if we invest in a business for income, if it has good income generating ability and if we entered at a good enough price, it could be a case of simply sitting back and not doing very much after that. 

An example in my case could be ST Engineering which I started buying at $1.55 a share donkey years ago. 

There are probably a few other examples in my portfolio.





2. For most of us, it is about working hard and smart while being financially prudent to accumulate wealth. 

Then, the next step is investing in fairly good income producing assets to grow our wealth, taking care not to do something foolish (too often). 

If we did not overpay, there might also be a chance of capital gains which should give us a leg up. 

I am only human and I was very greedy during the GFC and my war chest was emptied. 

Being pragmatic has helped me on my journey.





3. I always say that I have been mostly lucky and I truly believe this. 

I have been able to capitalise on opportunities to buy at lower prices offered by Mr. Market when he felt depressed. 

GFC aside, I deployed almost $100K into the stock market last August. 

More recently in February this year, I bought more DBS shares at $13+ a piece. 

These were times when Mr. Market felt depressed.




Was there any way I could tell when Mr. Market would feel that way? Nope.

I could not predict but I was prepared.


The journey towards financial freedom needs preparation. 

It is not just about gaining knowledge in FA and TA. 

It is also about having the right temperament.






Of course, temperament is not the easiest thing to acquire, unlike knowledge of FA and TA. 

This is why self knowledge is so important.


Know ourselves and know that there are many ways to build wealth and find the way that is best for us. 

What has worked for me might or might not work for another person.






Related posts:
1. The mystical art of wealth accumulation.
2. Financial prudence at any age.
3. The "secret" to AK's success as an investor.
4. Journey to financial freedom needs preparation.
5. To be richer, be comfortable with being invested.

AK anyhow picks 5 stocks for income investors.

UPDATE (January 2017):
"...with CRT no longer having an external trustee-manager, we believe this may remove a hurdle to a potential takeover by a J-REIT as speculated by some market participants due to CRT’s persistent high yield and discount to its NAV. " DBS Research.
Is Croesus Retail Trust an asset play that pays a good dividend while we wait? Sounds like Saizen REIT? Another Saizen REIT?
-----------------------------
Hi AK,
Thanks for your reply. :)
Rest assured I'm not trying to dig your portfolio value, rather, I have an planned/budgeted for a 5% yield on my portfolio returns and am not sure if this is something that is achievable or I might even be too conservative and should be aiming for something in the 7-8% range?


Hi,

7 to 8% yield is not unrealistic if we are invested in AIMS AMP Capital Industrial REIT, for example. ;)

Something higher? I-REIT and Croesus Retail Trust should do it.

If you don't like REITs and Biz Trusts, you can still get close to 4% yield (e.g. DBS) and 5% yield (e.g. SPH).

Best wishes,
AK

Note: 
AK is just throwing some ideas in the air. If they fall and hit your head, don't scold me. DYODD.

Related post:
1. AIMS AMP Capital Industrial REIT.
2. 1H 2016 income from S-REITs.
3. 1H 2016 income from non-REITs.