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What to buy next?
25 Nov 2015
(Updated: 7 Jul 2016)
"What to buy next?" Almost every month, I ask myself this same question whenever my salary arrives or when a good amount of dividends have accumulated. When I first started investing, I wanted a diversified portfolio which is why I built the tool, iSuggest (iSuggest is free for all registered users). It worked well at first, as it quickly brought my portfolio risk down to a minimum. However, for those ...
Bull or Bear?
27 Oct 2015
"No price is too high for a bull or too low for a bear" - an old Wall Street proverb It is a known fact that investors can be over-optimistic or over-pessimistic at times. When a series of good news happens, investors switch into the optimistic mode, often over-optimistic, and significantly bid up the price of a stock ditching any rational pricing theory whatsoever. Any high price will be justified ...
How to retire?
28 Sep 2015
Many people that I know invest not to be rich, but simply hoping to be able to retire one day. Likewise, my main goal of investment is to retire. Naturally, I am curious to know how I will be able to retire. More specifically, how much do I need to invest annually? What rate of return do I need? When I can retire? To answer these questions, I decided to build a simple simulator. Basically, it assumes ...
How Much is a Stock Worth?
17 Aug 2015
Recently, I read a book, A Random Walk Down Wall Street by Burton G. Malkiel. In the book, he discussed two ways to valuate a stock - The firm-foundation theory and the castle-in-the-air theory. The firm-foundation theory assumes that each stock has a true value which is equal to the present value of all its future dividends. It is likely that you have heard something similar because this approach ...
A Simple Trend Analysis of Dividends
6 Jul 2015
One factor that affects whether I purchase a stock or not is how much dividends it gave out last year, and for how many years it has been doing so. This is because when I purchase stocks, I am hoping mainly to benefit from dividend gains rather than capital gains. One obvious question would be: how much can we rely on the dividends that was paid out in the past to predict future dividends? One might ...
Can you avoid investing?
16 Jun 2015
Recently, a friend of mine sent me an article about how you should create a "total portfolio" that takes your career into account as part of the portfolio. That is, if you have a stable job, you should buy risky stocks so that you would have opportunities for huge gains since you are unlikely to get large pay raises. Likewise, if you are an entrepreneur, you should hold safe bonds since your career ...
How diversified are you?
5 May 2015
(Updated: 26 Jun 2016)
As the idiom goes, "Don't put all your eggs in one basket". It is common knowledge that diversification is very important when it comes to investing. However, the questions are: How to diversify? How diversified are you? How do you measure diversification? Google "How to diversify" and there are countless articles out there "teaching" people how to diversify. In my opinion, many articles are either ...
23 Apr 2015
Everyone has a limited time on earth. Are you making full use of your time? Are you truly doing what you want with your limited time? If money is no concern, would you still be working in the same place where you are now? I would not be. Don't get me wrong; I do have a wonderful job. It pays well, management is great, colleagues are awesome and the workplace is always full of fun. The easiest way to ...
How "unlucky" can you get from investing?
11 Apr 2015
Investing in the stock market is often deemed as risky and difficult by many. Here, I would show how a simple strategy would perform for a someone who does not know much about the stock market and is very unlucky when it comes to investing. Firstly, for someone without much knowledge in investing, index investing is ideal because it gives good diversification with just one stock. Also, rather than ...
My investment strategy
15 Mar 2015
(Updated: 26 Jun 2016)
I generally prefer a buy and hold approach. It is because I view shares of companies as entitlement to profits, and profits of good companies would only increase over time even if their short-term share price fluctuates. Also, capital gain is not recurring income whereas dividend gain is, and the latter is important to me since I am investing to retire. Of course, the question would be how to differentiate ...