Balance⚖️ is the Key🔑 to My Investing-Adapt to the Changing 🌎
Investing has changed a lot since technology & social media advanced-there’s no longer a clear direct relationship between a company’s fundamentals & it’s stock price.
⭐️ A company with strong fundamentals doesn’t necessarily have a high stock price & a company with poor fundamentals doesn’t necessarily have a low stock price. Classic example: Unpopular Value stocks VS Popular Meme stocks 🤷🏻♀️
⭐️ 2 companies with similar fundamentals can have very different stock prices as well😅
⭐️ The same company listed on different stock exchanges can have very different stock prices. Classic example: Piedmont Lithium is less than 1 AUD on the ASX🥳 BUT it’s USD 50-70+ in Nasdaq😨
⭐️ I’ve come to realise that as the 🌎 progresses, we need to adapt & grow along-Resisting to change is tiring & futile😅 This applies to investing as well🤓 To purely go by companies’ fundamentals & not use technical charts & market psychology to guide our investing is like choosing to trek water in the open seas after capsizing while waiting for the lifeboat to arrive & refusing to use the 🛟 in the meantime when it’s available😅 We should keep learning & adding new tools to our investment toolbox🧰 so that we get better results as the years go by💪💪💪
There’s always been 2 opposite investing camps-Value Investors VS Speculators
(1) Value investing is an investment strategy that involves picking stocks that appear to be trading for less than their intrinsic/book value.
➡️ Value investors actively ferret out stocks they think the stock market is underestimating. They believe the market overreacts to good & bad news, resulting in stock price movements that do not correspond to a company's long-term fundamentals. The overreaction offers an opportunity to profit by buying stocks at discounted prices. Warren Buffet is probably the best-known value investor today.
(2) Speculative trading refers to the act of conducting a financial transaction that has substantial risk of losing value but also holds the expectation of a significant gain or other major value. With speculation, the risk of loss is more than offset by the possibility of a substantial gain.
➡️ An investor who purchases a speculative investment is likely focused on price fluctuations. While the risk associated with the investment is high, the investor is typically more concerned about generating a profit based on market value changes for that investment than on long-term investing.
I started out being a value investor & my 1st stock was none other than our favourite blue chip $SINGTEL(Z74.SI)$Bought it at a good low price of $2.2🥳 I was stock-watching SG & US stocks for months & saw how other US stocks were jumping 10-30% while Singtel was moving slowlyyy & repeatedlyyy from 2.23-2.38 & I got bored 🥱😴 Subsequently the meme stock frenzy came along, & it was too fun to miss out so I decided to try speculative trading. I sold my Singtel & bought some meme stocks🤗🤗🤗
Did I make $ from Singtel❓Yes but it was 🥜
Did I make $ from meme stocks❓I initially made 💵 from $AMC Entertainment(AMC)$but after that I lost a lottt more from BlackBerry (BB), Workhorse (WKHS), Clover Health (CLOV), & Cenntro Electric (CENN)💸💸💸
After trying both extremes, this is what I found: Value investing protects my capital better🤓 but the returns are too little & too slowww for my liking…Speculative trading has a high risk of losing my capital with attractive returns🤩 but I don’t want to lose my capital😬 After that, I adopted a balanced approach⚖️ to my investing-Value Investing + Speculation (see photos) ➡️ This allows me to preserve my capital while using my profits to do speculative trading‼️At most I lose some profits, not my capital😉 As I haven’t started trading options yet, I allocate my capital as such:
⭐️ 20% Low Risk (Base Stability & Safety): SG stocks with about 5-7% dividend yields e.g. DBS/UOB/OCBC/Starhub/Golden Agri-Resources/Olam🤓 or US ETFs e.g. LIT
⭐️ 30% Low Risk (Mid Stability & Safety): Big Popular Tech e.g. AAPL🍎, GOOGL, QCOM or established pharmaceutical/Biotech PFE, BNTX, MRNA. I also started investing in ASX stocks so that I can choose blue chip stocks with higher dividend yields of 8-12% e.g. BHP🥳
⭐️ 20% Medium Risk: I use ASX high dividends stocks for my speculative trading/swing trades e.g. GRR 🤗
⭐️ 20% Higher Risk Speculation Stocks on EV & clean energy e.g. $Tesla Motors(TSLA)$SQM, PLL.AU, LTR.AU😉
⭐️ 10% Cash to buy the dip🙂
🤨 I don’t do meme stocks anymore though I did ponder about BBBY for awhile🤣 I don’t do crypto but I did buy Coinbase previously to invest indirectly in the crypto wave as it has 1 extra level of security-I can use crypto pricing to determine when to sell COIN.
❣️1 area I really haven’t grasped well is when to take profit😓 I am unwilling to sell at times as I bought the stock at a really good price & I’m concerned that I may not be able to get back that same good price later on…When I choose to keep it long-term, the price dips & I missed out on an opportunity to secure profits. Fellow 🐯🐯🐯 please share your tips &/or thoughts on this, need to learn from you🤓‼️
As usual-🤔💭 Consider POV & Actions of investors + 👩🏻💻👨🏻💻 Research + 🗑FOMO & Greed = Investing Wisely 🤓🤗 + Accumulating Wealth 💵💰
Source websites: Investopedia.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- Lionel8383·2022-08-22Profit taking, i would suggest taking in stages, eg if you see a topping pattern, take out 50% of your position, and leave behind the rest to capture the remaining movement2Report
- BenjiFuji·2022-08-22Nice share. How did you learn or derive the 20% 30% 20% 20% 10% allocation model? Curious [Great]2Report
- NewbieEP·2022-08-22Interesting…thanks for the sharing1Report
- BerniceCarter·2022-08-22I 'd like to be the one who do long investment and choose good stocks.1Report
- ZenInv·2022-08-22But how to balance your emotions?1Report
- Mojo Jojo·2022-08-22thanks for thr wise tips!2Report
- LeonaClemens·2022-08-22So many good tips for Investing Wisely,thanks!1Report
- LMSunshine·2022-11-27@GoodLife99 Have a read on this. This is my current portfolio make-up % Stock list not accurate as I sold and bought new onesLikeReport
- jethro·2022-08-23thanks for the share1Report
- rinl·2022-08-23good sharing, thank you [smile]LikeReport
- Nglt23·2022-08-23Thks for sharingLikeReport
- RK0948·2022-08-24LogicLikeReport
- S7Wong·2022-08-23👍🏽LikeReport
- Roi90·2022-08-23Ok1Report
- Meowhui·2022-08-23ok2Report
- SR050321·2022-08-22Smart move 👍1Report
- AE2·2022-08-22💪💪1Report
- Mtortise·2022-08-22ThanksLikeReport
- JarvisKhong·2022-08-22okLikeReport
- tomomeow·2022-08-22[Like]1Report