Motivations and methods in investing (Part 2).

Hi AK,

I am a 38years old male and have been following your blog since the start of the year.

Firstly, i must say i am truely inspired by your example and most importantly enlightened on the need for passive income for people like us in SG so armed with a little warchest of $50K i have picked up a number of stocks based on your advice on your blog.

Acromec - Entry price : 0.3
Capitaland - Entry price : 2.9
China Aviation oil - Entry price : 0.835
AIMS Amp - Entry price : 1.3
Sheng Siong - Entry price : 0.86
Venture - Entry price : 8.35
Singapore O & G : Entry price : 0.8

My problem is i do not have an exit plan. Based on current situation, should i take profit and sell  off some of the stocks? I do find a few of them overpriced at the moment like O & G.

Hope to hear your advice soon!

Thanks in advance!
 

Cheers
Y

Hi Y,

Alamak. I don't give advice. I am just talking to myself.

So, I say to myself:

"Always question what was your motivation for buying into a certain stock. If it is for income, then, price movements should not matter as long as the fundamentals are intact and it is bringing home the bacon. Of course, if you could find a better income stock than the one you have and if funds are limited, liquidating and moving your funds makes sense. Money should go to where it is treated best.

"If you are investing in something because you feel that it is undervalued and that its price should be higher, then, you probably have an idea of its intrinsic value. You could then sell if you find that your investments are now trading at prices above their intrinsic values."

Best wishes,
AK

Related post:
Motivations and methods in investing.

Progress and learnings in money and investment matters.

Hi AK,

1) I've automated my monthly fixed expenses to be paid out of my credit cards - actually just one credit card - where possible. I now just need to refer to my month-end statements when they come, and cross-check them with the respective companies' billing statements for discrepancies (usually stat boards are accurate to the tee lah hor). 

2) After much research and small A/B tests, I've also decided to use the same credit card for my other everyday spends as well. Hence maximized and optimized, at least for now while the T&C is still to my spending patterns' favour.

It also gives me a good black-and-white copy of my expenditures, and I often use it as a form of accountability check on myself if I'm actually spending my monies wisely or am I regretting some spur-of-the-moment purchases. 

3) I've cultivated a habit of putting aside monies for savings towards my personal goals: opening savings accounts and filling them up to the minimum amount required is my new-found hobby (though it will die out soon as there are only so many that I can open). 

I'm just gamifying what seemed to be a mundane task i.e. saving money. May seem bo liao, I know. Maybe for your level, it's opening various priority/premier/privilege banking accounts? :P

4) Now each time after I receive my pay, I do a 30 min exercise of paying of my credit card bill (see point #1) and transferring amounts to my different saving accounts (see point #3), and soon after that, I'll know how much more excess cash I have for myself. 

5) Also automated (because GIRO) the amount that I set aside for long-term savings cum investment. It's just STI ETF for me for now, and I'm still working towards increasing and maximizing that monthly amount as my personal goal. Again, gamification of things. 

6) Outside of all these automations, I've also developed this habit of not paying items in full value, or at least their full face value. 

So I'm very auntie liao because I always keep a look out for discounts, coupons, credit card rebates for the items that I need to buy. For my wants, the decision-making process always get stuck in the deliberation stage, and more often than not, I forget about it. But if I don't, it probably something that I really, really wanted or am willing to reward myself for.

7) To occupy my time, I've also started to invest in stocks by paper trading with $15,000. 

Initially it was exciting: I took out my watchlist, screened them once more with my own self-approved parameters that I've learnt from different sources, and added a couple of counters to my portfolio.

It's not so exciting for me because I've reached a stage whereby I only have limited amount in my war chest to spend on, and gotta spend wisely. Assuming all the fundamentals are already self pre-approved, it's really more of waiting for the right entry points (negative P/B? lower end of the 52-weeks MA?) So what do I do? Wait for the next GSS (Great Stock Sale) lor. Told you I very auntie liao.

But one of the things I do learn on the side is why having a ready-to-deploy war chest becomes very important. 

I also learnt that looking at my portfolio everyday is not gonna help in anything. So long as I've bought the businesses for the right reasons, it doesn't really matter if the price moves up or down because I'm not trading and earning from margins anyway. 

Aside from capital gains, which will not be realized unless it's a time horizon of a few years, I'm just awaiting for dividend payouts which only happen on a bi-annually or quarterly basis. 

Right now I'm only sitting on 0.363% paper profits :D 

From this I also learnt why people always ask "if $x.xx is a good price to enter for counter A", and perhaps more importantly, why you always choose to be neutral about sharing such calls or actions. Because really, to each their own set of reasoning. 

8) Growing wealth is really like watching grass grow. Now I know why you started gardening. :D

Maybe this is why I always see the same aunties and uncles lim kopi at Toast Box, in an air-conditioned shopping mall near my place or doing line dancing in the CC. If all the pillars of your life are already sound and strong, and money no longer an worrisome issue, really what more is there to be done? Just smile and live life happily lor. :)

Sincerely,
F

Sunflower seedlings.

Hi F,

Your update made me smile.

1. You are doing a great job in saving money and tracking your expenses while trying to have fun doing it.

2. Priority/Privilege/Premier banking relationships are all attempts by banks to make more money from us. Seriously, give me OCBC 360, UOB ONE or BOC Smartsaver any time.

3. An STI ETF is a good way to start your journey as an investor.

4. Why pay full price for anything if we can pay less? I agree. A penny saved is a penny earned!

5. Paper trading to gain experience is a good idea. The stock market will always be there. No hurry.

Finally, welcome to "gardening" as a hobby. ;)

Best wishes,
AK

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