Author: Create Wealth Through Long-Term Investing and Short-Term Trading

Measure, Measure, Measure – Part 2

http://createwealth8888.blogspot.com/2009/07/measure-measure-measure.html <— Part 1 Investopedia explains Compound Annual Growth Rate – CAGR What Does Compound Annual Growth Rate – CAGR Mean? The year-over-year growth rate of an investment over a specified period of time. The compound annual growth rate is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period being considered. CAGR isn’t the actual return in reality. It’s an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate. You can think of CAGR as...

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Investing in Property or Stocks – Revisit

Given that you only have enough capital for just one type of investment, will you invest in Property or Stocks? I have been asking this question again and again as I want to seek a better option to invest my limited capital to create wealth for my retirement fund. I am sure you too asking this question. Size of Investing Capital Even if you only have smaller investing capital, you can easily without using any leverage to start investing in stock market; but, unlike investing in property market, you will need a fairly larger capital, and use certain degree...

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Why a Buy and Hold and don’t even bother thinking of Selling Can be Wrong Strategy for You?

Who are they? They are the small boy Value Investors who practice Buffetology. I am NOT saying that value investing is wrong and don’t EVER get me wrong. Quite the contrary – if you are the likes of Warren Buffets (and those big institutions) with very, very long holding period where the base unit of time is a Decade (A decade is a period of ten years); buy and hold “forever” strategy makes a ton of sense. These Warren Buffets have that kind of resources to know the inner workings of a company, and can meet the Management to...

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Tips On Child Life Insurance – Part 2

You may wish to read it first http://createwealth8888.blogspot.com/2009/07/tips-on-child-life-insurance.html Sometime ago, the topic to buy Child Life Insurance or not was hotly debated among the super friends. Personally, I don’t believe in buying Child Life Insurance as I don’t think why parent should be looking for financial gain from the death of a child. But, some argue to buy Child Life Insurance that have coverage on major Critical Illnesses. OK. Let examine what are the 30 major critical illness that are covered: Put your emotions aside, and examine carefully what is the risk level that the child will be affected...

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So … Are You Married To You Stocks?

Are you married or will you marry? If you are married, surely I bet you won’t like the divorce! So … are you married to your stocks? If you are married to your stocks, I am betting that you won’t like the divorce (SELL)! http://createwealth8888.blogspot.com/2009/07/time-in-market-or-timing-market.html <— If you may want to read on Time In Market or Timing The Market The primary reason to buy a stock is to make a reasonably high rate of return on capital (ROC) at an acceptable level of risk to you. You have to determine what is your high rate of ROC and...

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The Best Secret in Investment and Trading – Compound Interest

Albert Einstein’ once said that Compound Interest was the greatest mathematical discovery of all time“, and some said this is the 8th Wonder in the World of Investing & Trading. Before you make any investment or buy a stock, you have to look at the expected “high” rate of return on capital (ROC), but it is the compounding of the interest (or ROC) on that principal or capital which creates the biggest returns over time. The compounding of profits, or dividends, or interest or ROC applies in all financial markets, so if you are a short term stock market...

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Saving, Life Insurance and Investing

What are the main differences related to Saving, Life Insurance and Investing? Saving is NEVER an INVESTMENT and will never get better return as it is almost risk free. There will NEVER be such investment product where there is almost risk free and yet gives good returns. All investment products by nature carry risks and you may potentially lose some or all your investing capital. The provider of such investment product need to be able to earn good margins for them to assume the risks on your behalf. In another word, they assume your risks and expected to be...

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Safety Net in the Market?

Once upon a time, in the Land of Unknown, there was a hut. Inside the hut, it was total darkness except for some dim light shining upon a wooden beam which was placed in the middle of the hut from one end to the other. The beam was wide enough with the help of the dim light shinning upon it for someone to see the beam and walked on the beam towards the other end. One day, Mr. Not Knowing called me for a challenge. He said: “Paid me a fee, and if you could cross the beam to...

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When Market moves, were you be ready?

Remember this in your heart: The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth. – Dr. Alexander Elder How do successful Investor/Trader differ from Amateur? Some important factors to note: 1) Hard work – They spent their time studying the market, companies, industries, and sectors. They understand their businesses. And, the traders will pay more attention to financial news, and market movement. The traders had a keen eye for how their market might be moving, and how the...

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Home for Living and not for profit taking

Quote from Albert Yang , http://createwealth8888.blogspot.com/2009/02/buy-your-house.html A man is not a man; until there is a house that he may call his castle. A woman is not a woman; until she has a place she may call her home. And neither a man nor a woman can say anything about their house, until they are the masters of it, and own it outright and unencumbered. ——————————————————————————– Many years ago, my neighbour who was staying one floor below me told me he was selling his 4 rm HDB flat and bought another resale 4 rm HDB flat in another part...

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Art of Survival

The art of war teaches us to rely not on the likelihood of the enemy’s not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that we have made our position unassailable.” – Sun Tzu, The Art of War The art of survival teaches us to rely not on the likelihood of the LOSSES’s not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that we have made our position unassailable.” – Createwealth8888,...

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Stock picking is part science, part art, part luck, part tuition, and always uncertain – “not precisely knowing.”

A while ago I could have been convinced that if I put in a lots of effort into FA , TA and watching the market closely to gain knowledge, skills, market view, and a lots of experience, and with intelligence would produce some good returns from the stock market. But, while the intelligence and experience will help me avoid unnecessary risks, apply money management, reduce day-to-day emotional stress, it doesn’t assure me of the desired returns from the market. The market does whatever it wants, rational or irrational, it’s just the market. It is always uncertain and not precisely...

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Negative Equity – Can you can survive out of it?

Your brokers love you most if you use leverages and margins for trading. Why? The rules are there to protect them but definitely not you. If you got it wrong, you are wiped out due to your own greediness. Your brokers WILL NEVER LOSE. Your BROKERS ARE NOT YOUR FATHER OR MOTHER!. They exist to make money for themselves, but they always seem to be there to HELP you to make money. They also appear to be your GOD OF FORTUNE. At least, some of them will behave like your friends or personal financial consultants. When you use your...

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The Buy and Hold Investors’ Nightmare

Being a Buy and Hold investor is like living through a nightmare where you find yourself the main character of the Greek “Myth of Sisyphus.” Futile and Hopeless Labor: In this myth, Sisyphus is condemned by the god Zeus to an eternity of futile and hopeless labor. He must roll a heavy stone to the top of a mountain. But then the stone rolls all the way back down … and Sisyphus has to push the stone back up again to the top. A sentence of “futile and hopeless labor” is similar to the situation that Buy and Hold...

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Active and Passive Investing

There are 2 types of Investing. Passive Investing and Active Investing. One requires frequent time and effort in seeking opportunity, while the other requires less frequent time and effort. Passive Investing could be thought of as a stock account that pays high interest (dividends). You add the stock, and passively it grows. Hopefully, You can look back in 10 years and find that constant addition made you a nice growing wealth. However, it can be very disheartening, instead of growing wealth, you are staring at diminishing wealth and made you feel poorer. Passive investor can be thought as a...

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