Category: invest_gtmp

trade time for$

Posted on by tiger40490

H.Yi and Ash.S both mentioned something about “trading time for money”. The proposed alternative is to make your money work harder to provide for livelihood [3], so you don’t need to do it yourself. So you could spend your time on something else. What’s that something else? For me, it is some form of office work, rather than endless vacation. Therefore, I willingly trade time for … something to engage me.

[3] If we could _control_ exclub comparison, then livelihood burn rate can be taken care of already, so we don’t need to trade time for money since last year.

— babysitting still required… in reality. Very few nonwork incomes are truly passive and buy-n-forget, like CPF.

In the proposed alternative, you still need to spend time managing your portfolio. Some people like to say “It requires only 30min a day” but I suspect that’s partly exaggeration partly cheating. The individual needs to commit herself, review past trades, apply mental energy, take it on as a serious business.

REIT and div-stocks require babysitting when DYOC declines.

Rental properties (like mine in SEAsia) require some work with the local agents.

If the passive income stops being passive, then you are still trading time for money. That includes rental property management and day trading.

Risk_Capital [def]

Posted on by tiger40490

https://www.fool.com/investing/general/2015/08/20/what-is-risk-capital.aspx says “It refers to funds that are invested in high-risk, high-reward investments…. Risk capital is money that, if lost completely, would not have an overly harmful impact on you financially. It’s money you can afford to lose.” Exactly what I told my sister.

Investing (he didn’t write “investment”), at its core, is about accepting a certain amount of risk to achieve a reward.

Some people can’t (won’t bother to) articulate and formulate their risk appetite, risk sensitivity, risk profile and risk attitude as carefully as I did in my blog.  For them, it may be useful to decide on the amount of risk capital. It’s a concrete amount of money.

In fact, every investor need to decide for herself an amount of risk capital. There’s nothing wrong with a zero risk capital. My wife once had a zero risk capital.

Note risk capital is a form of capital, a seed to grow.

A defining experience of risk capital — In 1997, my 3rd year in college, I failed to define my risk capital cap and committed my entire family’s savings (600k?) into high-risk, leveraged commodity day trading. I now have probably .5 to 1 million risk capital invested across

— eg: E12
— eg: PE assets from Jill
— eg: overseas rental properties
— eg: SIA investment .. defines my wife’s risk capital
— when you decide the risk capital amount for yourself, you need to determine the amount and quality of a stable foundation beneath the risk capital.

Q: What’s the stable foundation for me? See mail to Joshua.

late90s engineer salary^curInvInc ^unrealizedProfit{trad` #NUS

Posted on by tiger40490

At NUS while I was immersed in academic study, there is a lot of quiet chatter among fellow students, about investment and leveraged trading. Rumor was spreading that active trading could generate 100k/Y profit. How about an engineer’s salary at that time? About 5k. Some evidence ..

  1. in 1992, My HJC classmate EnJia said his engineer dad was earning 3k+
  2. in 2005, some Tyco engineer was earning 5k.
  3. In 2013, I heard that some Japanese MNC managers were only earning 6k.

Now in my late 40s I have a different perspective/perception — 1) unrealized profit is not an income replacement 2) Consistent periodic cash payout is, but much harder to achieve 3) engineer’s salary is modest but reliable over 40Y. An engineer needs to stop comparing with the exclub — zzcl[知足常乐].

With current income, we feel confident to spend the income. In contrast, with unrealized gains
* sometimes we are unable to cash out easily and quickly .. consider rEstate
* sometimes the bid/ask or commission is too high, eroding actual net profit .. consider bccy
* sometimes the paper profit can quickly turn into paper loss

Am I effectively an retiree-investor@@

Posted on by tiger40490
  • Yes in terms of my medical plan, housing situation
  • Yes in terms of my college fund for my kids
  • Yes in terms of my Fuller Wealth
  • Yes mostly in terms of my focus on steady current income rather than appreciation
  • No, because I have non-working young kids to support
  • No, because I have 50Y more to live
  • No, because my body is not sending aging signals.
  • No, because I have no CPF or social-security income
  • No, because I have salary for 30Y or longer

##Rbh process=efficient: imt SG platforms

Posted on by tiger40490

— This blogpost started as a comparison with safe bond mufu (as another platform to highlight the differences)
Even safe bond funds on FSM involve much higher effort than my Robinhood process.

  • 👎 my recent amounts are too large, typically 10k. Sugg: reduce to 1k
  • 👎 risk/diligence: when I sell, I have to stay alert and ensure I don’t sell the wrong lot i.e. from the wrong account
  • 👎 the profit has to be recorded in my exp recon s/s
  • 👎 I check the PnL for each position too often.
  • 👎 my tolerance is too low for large cash balance. sugg: accept 30k cash balance in cash account

— other efficiency advantages (+disadvantages) of Rbh, half-ranked by unfamiliarity (sunshine needed)

  • 👍 $0 commission, small trades .. 3-min due diligence buying compared to bonds or Sreit
  • 🙁 .. pre-clear when buying/selling
  • 👍 sustainable and long-term trend .. only in U.S. market .. less babysitting about exit timing
  • 👍 $0 exp ratio .. can hold. less babysitting about exit timing
  • 👍 small commitments to each stock .. less babysitting
  • 👍 multiple quality web sites summarizing forecasts + stock analysis .. efficient xx if you want to spend the time
  • 👍 funding .. as simple as a few clicks
  • 👍 😉 div and realized gains too numerous to be recorded in exp recon s/s. Double-edged sword.
  • 👍 GTC limit order .. more efficient than watching and sending market orders during night sessions
  • 🙁 U.S. tax
  • 🙁 monthly reporting

gain`traction {20Y wheel-spinn: eq investing

Posted on by tiger40490

See also [21] %%G9 strengths as investor #specifically

div-stock picking after years of disappointing mufu-research + FXO trading — this is my vision/traction.

I wrote this blogpost as a retrospective and also to highlight my presumably improving wisdom(?) and competence(?) relative to the lay public. Am growing to a wise investor.

A random list of my vision secrets:

  • Dividend is more reliable, higher ROTI. In contrast, dividend is dismal in mufu (mutual funds) + FXO.
  • Blue-chip stocks are more dependable than mufu
  • mentally segregate my stock portfolio into growth ptf + income ptf etc. Even the growth ptf could be fine without benchmarking against SP500.
  • — minor insights:
  • Easy to find rich research insights on individual stocks, much better than mufu .. With mufu (or FXO), the info available online is 1% compared to stocks. There’s no dividend history (My vision secret) to look at. The online reading experience can be fun but aimless, often time-consuming, but some other forms of analysis can be enjoyable as I feel accumulating a bit of insight and vision.
  • mufu would eventually lose out to SP500 due to expRatio cumulative erosion. Important to long-term buy-n-hold investors
  • eqMufu div yield > 3% is inevitably unsustainable. (I have multiple blogposts) Underlying CDY is up to 4% but expense ratio is 1.5%, so it’s hopeless to aim at DYOC of 5%.  Stocks are superior.

A random list of my traction secrets:

  • Favor US.. see U.S.beats other markets over3Y+ 
  • decent marginal ROTI, due to effort, not completely luck or dumb timing.
  • The effort has to be sustainable and compatible with my lifestyle.
  • sustainability .. buy-n-forget with firewall, without babysitting
  • zero commission + fractional .. permits quick and frequent experiments
  • 100+ stocks diversified .. made possible by buy-n-forget habit
  • recording annual return is futile and poor ROTI

==== historical review
For decades, I never really perceived equity as a suitable investment for my financial needs. Too unstable, unpredictable. Unacceptable liquidity by my definition (blogpost). A long trough could last 10Y+, so I never had the conviction to invest 10k (“$20k” later on). Even now, on Futu trading app or elsewhere, when I look at the 100 well-known stocks across my familiar countries [US, greater China, SG, Japan, EU, Korea], I see the same absence of long-term trend. Well-known stocks attract hot money, leading to boom-n-bust… that’s one of my theories.

My eqMufu journey since 1997 has been long and wide. It confirmed those “theories”. Instinctively, I always cash out my mufu at some modest level of profit, because I felt that the profit is impermanent. In hindsight I tend to blame the expRatio — forever erosive. 2% over 5Y means 10% erosion.

Then in 2013 it occurred to me (unknown to the lay public) that US large-caps exhibit much better long-term trend than other regional markets.

In 2019, I discovered Robinhood. Thanks to the one-share minimum I was able to pick dozens of stocks, rather than “handful” in a typical portfolio.

Only in 2020 did I create my “system” based on DYOC/firewall/buy-n-forget.

How about non-eq? With FXO and FX, I did a lot of research but did rather few trades, largely due to per-trade commissions. My traction secret? Robinhood lets me act on my research more easily

— gambling?
FX, commodities, futures, options are zero-sum games, more gamble-like than equities. Index investing is actually just as gambling as stock picking, but div-stock picking feels less gamble-like. Blue-chip div-stock picking is esp. thrilling, even though my picks are sometimes unspectacular.

Remember many retirees rely on dividend stocks + bond coupons. Investment-grade bonds are comparable to annuities (least gamble-like)

 

investments: small recurring costs do Add Up

Posted on by tiger40490

past title: “investments: small costs AddUp to become significant”

— eg: commodities futures 1997 — My 11k loss was roughly equal to the $200+ commission for each $100k trade.
— eg: annual fee of mutual funds vs stock picking
— eg: FSM trailer fee — 35 bps/Y vs 0 bps if buying the same fund from a bank.
— eg: BGC monthly fees. HDB too.
— eg: pTax

@%%age,how important is pff blogg #Rebecca

Posted on by tiger40490

I told Rebecca of UOB that investment analysis is an obsession among some friends I reconnected recently. I think analysis on big investment decisions (200k+) is legit.

I think my biggest tcosts and worst ROTI was in stock/FSM.

I told Rebecca that health and career longevitiy (job security) are more important.
I guess the underlying message was — my wealth planning job is basically done. Note “wealth” can be a modest amount. like 50k

In response to my bold claims, Rebecca pointed out most of the spare cash can (had better be) invested, leaving only some contingency reserve in the bank account earning 2%.

I feel the classic example is Kun.h. He seems to overanalyze until he couldn’t take any action.

— teach .. If you intend sell training or advisory service then yes ROTI is justified.

professional competence ^ over-reliance@investment #LZ.Y

Posted on by tiger40490

I think Investment should be … supplementary. Consider

  • Warren Buffet and RichDad — not passive investment, collecting dividends and growing fat as portrayed by some investment training marketeers
  • Li Ka Shing — shifted focus to investment in his 80’s ?
  • Qatar Investment Authority — You can read about them
  • SG GIC — there are many more online articles I can reference

We need to be competitive and productive in our core competence. Rather few people’s core competence is investment analysis. These invidividuals are employed by the likes of GIC.

If you neglect the core competences and rely too much on investment you will /drift into irrelevance/.

  • Liangzhong seems to rely a lot on property investment windfall
  • Anthony Lin?
  • Some of the 拆迁户