Monday, June 07, 2010

A little reflection

These days I hardly look at the market. I remember when I started, I keep staring at the prices, as if by some eye power, I can change the prices of the stocks that I owned. These days, it's just a waste of time.

I suppose as I get more mature and hopefully wiser, my feelings and emotions are kept more constant. There are a lot of things that require my time and presence, and I certainly do not want to spend my life staring at numbers jumping on the screen. It's such a far cry when I first started (on the wrong foot obviously) in the market by trading with warrants. It requires so much time and effort, with my emotion going up and down according to the ups and downs of the ticker. It's very stressful, not to mention distracting, when you have a job to do as well.

I think going forward, I would reduce the time spent on looking at the watchlist. I foresee that I can only get more busy in my work, thus more of my stocks holding had been changed to hold more dividends. Basically I intend to hold more dividend yielding stocks, such as reits and the standard 'defensive' fare, and leave a few bullets here and there to either buy more upon crisis, or trade when I see the opportunities. Unlike in the past, I completely realise that the trading game is not for me, and that is after having experimented with it for myself. I also realised that I cannot be those steadfast investor as well, because it would have completely bore me to dig deep into the statements to find out the business.

I think the self realisation of what you can do and what you cannot do is important, because that will shape your style of investing/trading. To find out the viscosity of honey,  you cannot look at a static jar of honey. You must tilt the jar to one side to find out the dynamic properties of honey. Likewise, you cannot know your risk appetite by filling out some questionnaire, you have to try it out for yourself in the market.

You cannot discover the dynamic properties of honey by staring at it statically

My main income has been, will be, and will always be my main job. Knowing this, I think I would not spend so much time searching the ocean for that one multi-bagger stock that will yield me tremendous profits. Neither will I stare at the ticker all day just to get the perfect entry and exit. I simply do not have the time for such things. I realised that a day will come that I cannot work anymore, I would have to rely on secondary sources of income, and that will have to be from my investments. That will be my second line of defence. I think I would focus on building up a nice passive income to prepare for that eventuality.

It's very different when I first started out because I shun dividend yielding counters, thinking that I'm still young and I should aim for capital appreciation. I can afford to lose blah foolish of me and nobody told me so. Still, without the past me, there will not be the present me.

May fortune smile on you in the market.


unicorn78 said...

That is very powerful! I am happy that you realised that without the past you, there will not be the present you. You need to be present as well!

AK71 said...

Do I hear someone trying to build up passive income? ;)

Anonymous said...

Dear LP,
It's great to hear that you are settling more for building a dividend yielding portfolio. I shall not comment on trading whether it is a lucratve means of income. I am sure there are some who are suitable to be traders making good income while others are not.

However, a dividend yielding portfolio does ensure one accumulate a steady passive income source that compounds over time. I have read up that there are already proven cases this method worked to get the investors into financial freedom, though this way may not be 100% guaranteed depending ultimately on how one's individual invested companies perform.

I agree with you that there are more things meaningful to do than starring at the screen watching the stock tickers change by the second. One's life is short, so I will not waste it away starring at the screen.

Yours sincerely,

Createwealth8888 said...

If you are not a day trader there is no need to watch by the minutes or hours. End of day or end of week charting is good enough.

If you don't have stop-loss strategy like me, you don't sell any way.

You only need to set profit target SMS alert. When the price target is hit, you just queue to sell.

Who said you need to watch the market with your eyes glue to the screen?

PanzerGrenadier said...

Dear LP

I also reached the same realisation some time back after my daughter was born. Going through a stressful period of looking after a new-born baby and supporting the spouse recovering from post-natal depression made me realise that money can only go so far.

Financial freedom is a worthwhile target for me but I go about it in a more philosophical way; to continue to live within my means; to save and invest and to grow and protect my means.

I know achieving financial freedom requires me to keep healthy, happy and holistic in my approach to life and not rely on a single metric, money or finances to define my own happiness.

Be well and prosper. :-)

la papillion said...

Hi unicorn,

Haha, you seem to be enjoying yourself...still have time to look at my blog :)

Glad that you've found a new you :)

Hi AK,

Haha, read that inspiring post before :) You can do it, I can do it :)

la papillion said...

Hi Jeremy,

Long time no see :)

I just thought it'll be good to have at least the passive dividend covering up most of my fixed expenses. That'll be a great start :)

la papillion said...

Hi bro8888,

I used to watch the market out of addiction than anything else. But these days, I will watch it closely on down days with an aim of buying counters that I've been eyeing, hoping to get a good price. That's what the watching is for. But I've lesser time for such intra day ticker watching, so I'll be content to Q overnight at the price I want (perhaps a bit higher) and leave it as such. Same for selling.

I think it's not worth it to squeeze a few more dollars by watching at it intently. That's the point of my article.

la papillion said...

Hi PG,

Indeed. I think change of mindset is more important than anything. These days, I'm quite stingy on my time. I figured out that I've to be a good steward of time in order to be a good steward of wealth, not the other way.

Very impt distinction.

Dou said...

lol that is very personal i feel.

I love to see is my interest. Whether i trade or not is another matter.

Maybe one day i will lose interest in trading but surely is not now