Posted on October 15, 2009 - by musicwhiz

The Importance of Monitoring

Photo by nolifebeforecoffee

I guess I cannot emphasize this more – but monitoring is one of the aspects of investing which an astute and dedicated investor CANNOT miss out on (the caps are intentional to highlight the significance of this activity). By “monitoring”, I mean not just monitoring business news about the health of the economy and the latest industry trends and news, but also to monitor, on an almost microscopic level, the corporate announcements and strategic moves made by the companies you own (as well as do not own). I will elaborate below……

The lack of monitoring is actually the leading cause of failure to obtain a decent and sustainable return in the stock market. After all, doing the research is only the first part in an investment decision – we must still stick around to ensure things are going smoothly, and beat a hasty retreat when things are not going as planned or if we discover we had made a flawed judgement call.

I’ve actually met many friends who express surprise when their investment falls in value sharply, as in the case of Jurong Technologies where a few of my friends expressed surprise and amazement that it was suspended. A simple cursory glance at the financials would have told something, and the frequent announcements made on SGXNet would have alerted one to its potential troubles and its eventual suspension due to inability to service their debts. I am really surprised when friends approach me for simple, basic information about the companies they own as this information is readily available on SGXNet or the Company’s website. This seems to imply that most people are just lazy – they do not bother about where their money goes and do not seem to care what happens to the company in which they are part-owners of. This heck-care attitude can only lead to financial disaster because if you do not put in effort and time into growing your wealth, then it’s like a plant which has not been watered and given sunlight! Read more…

Related posts:

1. May 2009 Portfolio Summary and Review
2. A Review of Past Divestments
3. Stock vs Spouse