Lessons from 2015 that send me cringing
Lessons learnt from Mr Stock Market:
- What looked like 'pretty good' deals then (in a bull or not-yet bear market), do not look good now (bearish market). Perspectives change together with market outlook and current stock prices. Although it would be good opportunity for some value fishing.
- Dividends in good times should be put into my pocket
When a stock's share price is high, it's dividend option for reinvestment would be pegged to a lower price then the current share price. This makes getting scrap dividend shares look like premium. This would not be the case when the stock price plumage, as I could have used the dividend payout money to buy the shares at a cheaper price now when the market drops. Conversely, it would be a good idea to get dividend shares when the market price is low.
- Impatience and itchy fingers
This is the most silly mistake I made, on top of my untimely averaging down approach. Double ordered Keppel due to a buying mistake in the confusing DBS vickers portal (cash and cash upfront crap). Failed to cancel the order via correct portal successfully and was quickly filled as it was a falling knife.
Then not forgoing it at a small loss snowballed into big paper loss. !!@#$@
- When Hope is poison and Passive is complacence
Looking over a short-term STI chart (in 2015), I deduced it's trending up with some points of minor volatility. Oil prices can't seem to go any lower.
Looking over a long term STI chart (here), we can see that STI has in fact come to a point of resistance at that time. If I have realized that, I would have sold my 'look good' stocks bought during the Greek crisis period and locked in some profits.
Yes, that's a trader mindset.
A long-term investor mindset would be - hibernate through the bear (few months, few years, 10 years...?) and things would be fine. Have dividends to collect and STI zig-zag trends upward anyway, right? Zzzzz....
***
自言自语的一章‘事后孔明篇’。
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| Source: threekingdoms.wikia.com |
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美眉，
ReplyDeleteThe needle don't prick you, you won't know the pain.
Reading about other people's mistakes is only good for entertainment only.
I'm sure you have read similar mistakes from other writers and bloggers before ;)
This is better! Now you are using your OWN examples and OWN experiences.
If you find yourself making the SAME mistakes again, well, you should know what to do with yourself...
Yes Sir SMOL. Hope you are entertained by this post!
DeleteRead? Help me! I am still losing money in my Investment Quadrant (5)
ReplyDeleteHi Uncle8888, thanks for the post link. What's meant by your 'averaging in'?
DeleteRead? Why I Don't Average Down?
ReplyDeleteI needed remedial lessons, so also read:
Deletehttp://createwealth8888.blogspot.sg/2012/07/average-down-or-pyramid-up-2.html
and
http://createwealth8888.blogspot.sg/2010/08/understanding-stock-market-risks-edited.html
Good posts :)