Author: (The) Boring Investor

You Don’t Need To Be Good In Investing To Be Rich

I first read about this chart from Investment Moats. Still, it took me a good couple of months before I realised its implications. In essence, the chart means that you do not need to be good in investing in order to be rich! Pushing the envelop further, it can also mean that everyone could be rich, provided you follow the advice in the chart. The chart is extracted from Vanguard’s Principles for Investing Success. Take a look at the chart above. It plots the value of several portfolios with different savings growth and annual returns. The interesting part of...

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Be Cautious While Being Greedy

The roller-coaster ride of the stock market this past month has brought back memories of the events 6 years ago. Whenever I write about the Global Financial Crisis (GFC), it invariably comes with a tinge of pride. After all, it was a major crash and we managed to recover from it. However, was victory assured right from the beginning, that all we had to do was, in the words of Warren Buffett, to be greedy when others were fearful, or was it a narrow victory snatched from the jaws of defeat? In other words, was buying at the depth...

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Knowing When Others Are Fearful

The correction in this past month has been fairly amazing. Stocks had been falling faster than I could juggle and yet, the Straits Times Index actually ended the month basically unchanged. The Dow Jones Industrial Average (DJIA) even closed at a record high, as if no correction had happened. Whenever the stock market goes on a nosedive, I would be reminded to check an indicator, which is the Chicago Board Options Exchange Market Volatility Index, or VIX in short. VIX is used by some investors as a fear indicator, spiking up whenever there is great volatility in the market...

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Experimenting with Investment Strategies

When I first started investing my Supplementary Retirement Scheme (SRS) funds 7 years ago, I wondered how should I invest the money. Should I invest in the same way as my cash account, i.e. adopting market timing and buying individual stocks, or should I keep it as a cash reserve to be used during severe market crashes like my CPF funds? If I invest like my cash account, I wondered what if my investment strategy had been wrong all this while? Would I then still have sufficient funds to retire? Since the SRS account is small compared to my...

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Not All Market Indices Are Equal

One of the most popular and time-tested investment strategies is to invest passively in an index fund. I too have adopted this strategy for my Supplementary Retirement Scheme (SRS) account. However, not all markets are equal. If you pick a market index that is performing well, you are well on your way to financial independence. Conversely, if you pick a market index that is underperforming, you will take a longer time to reach there. The chart below shows the performance of 5 more familar stock market indices, namely, Singapore’s Straits Times Index (STI), US’ Dow Jones Industrial Average (DJIA),...

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Review of My SRS Investments

I have been investing my Supplementary Retirement Scheme (SRS) funds in unit trusts for the past 7 years. Yet, it is amazing that I have never reviewed how my SRS investments have been performing on an annualised basis. I do not know for sure whether the returns have beaten the inflation rate, the CPF Ordinary Account rate or the Special Account rate. Today, I have finally carried out a review of my SRS investments. They have returned 3.8% on an annualised basis since I first made my initial contribution to the SRS account in Nov 2006. A breakdown of...

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Different Mentality in Stock and Unit Trust Investing

I have investments in both stocks and unit trusts.  However, the investing mentality in both can be quite different. These different mentalities can both be a boon and a bane for successful investing in them. Before I go into the details, I should mention that I generally adopt a market-timing strategy (for when to buy and sell) and value investing (for what to buy) for my stock investments. Please see Have A Plan for more details. However, for my unit trust investments, I adopt a Dollar Cost Averaging strategy with monthly investments into index and balanced funds. The differences...

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Experience with Lifecycle Unit Trusts

When I started investing my Supplementary Retirement Scheme (SRS) funds 7 years ago, it was with several experiments in mind. Firstly, the SRS account adopts a monthly Dollar Cost Averaging investment methodology, as opposed to market-timing for my cash account. Secondly, the SRS funds were invested in an index fund and a balanced fund, as opposed to individual stock selection for the cash account. Thirdly, the monthly investments were split between an index fund and a lifecycle fund, to understand whether lifecycle funds could serve the needs of an investor throughout his lifetime. What are lifecycle funds? These are...

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The Value of An Education in Investing

Last week, I blogged about the value of a Chartered Financial Analyst (CFA) education to an investor and concluded that while it is useful in providing a basic grounding on the various investment concepts and methods, it does not guide an investor on what he should look out for in investing. See The Value of a CFA Education for more info. Does it mean that investors should not pursue an education in investing? On the contrary, education is important to achieving success in investing.I have been exposed to the stock market for 28 years and been investing with my own money for the...

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The Value of a CFA Education

I took a course in Masters in Applied Finance and sat for the Chartered Financial Analyst (CFA) examinations in 2004 – 2006. The purpose of studying and sitting for the CFA exams was to understand the various economics, accounting and investment concepts so as to be a better investor. Hence, the topic of this blog post applies to an investor rather than a person working in the financial industry. The CFA programme covers very wide topics, as follows: Ethical and Professional Standards Quantitative Analysis Economics Financial Statement Analysis Corporate Finance Portfolio Management Equity Analysis Fixed Income Analysis Derivatives Alternative...

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Giving Back to Society

It is rare for financial bloggers to talk about donations, but as the Chinese saying goes, “取之于社会,用之于社会”, which translates to “giving back to society what we take from society”. It is important that we occasionally gives back to society, to pass on the help that we received from others. We can do this by sharing our knowledge and experience, but I believe we can do more by making a donation to a charity of our choice on a regular basis. I’ve set up a new page on this blog that links to SG Gives, which is an online charity portal,...

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What Happens When Your Shares Are Compulsorily Acquired?

Two months ago, I had blogged that I would not accept fully Capitaland’s privatisation offer for CapitaMallsAsia (CMA). I wanted to have a taste of being a shareholder in an unlisted company. Unfortunately, Capitaland managed to acquire enough shares to compulsorily acquire all the shares, even from dissenting shareholders like myself. How was the compulsory acquisition carried out? After the close of the privatisation offer on 9 Jun 2014 when Capitaland announced that it had acquired sufficient shares to exercise its rights to compulsorily acquire all the shares, Capitaland sent a letter on 16 Jun 2014 informing all remaining...

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An Advice for Myself

A reader left an interesting question after reading my post on Investing Is A Life-Long Learning Journey. His question was “28 years is almost 3 decades, if you can start all over again, what would be your best advice to the past you?” This is by far the most thought-provoking question I have ever received on my blog. I replied with a short answer, but after thinking more thoroughly about it, I decided to post a fuller answer to this question. There are many investment strategies that work, be it value investing, growth investing, dividend investing, index investing, etc....

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The Bounceback Portfolio of STI

One of the good things about blogging is that you get to learn from your readers as well. A reader introduced me to the Bounceback Portfolio and requested me to carry out a review of it in Singapore’s context. The idea of the Bounceback Portfolio is that a portfolio of the 10 worst performing FTSE350 stocks in one year has historically beaten the index in the first three months of the following year. However, when I apply the idea in Singapore’s context, I faced 2 issues immediately. Firstly, the corresponding index to FTSE350 is actually the FTSE ST All-share...

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Investing Is A Life-Long Learning Journey

It is often said that it is important to start investing early, so that the magic of compounding can do its wonders. For investors who are keen in active investing, there is another reason for starting early, which is that it takes time to learn about investing. Thanks to my father, I was introduced to investing at the age of 11, and yet after 28 years, I am still learning about investing. Below is an account of my learning journey in investing. The Growing Years (1986 – 1998) From 1986 till 1998, I was helping my father monitor stock...

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