Post by oldman on Oct 19, 2013 7:41:52 GMT 7
I met a friend recently and I told him that I have not been actively investing for the past 6 months. He was surprised that I can be so 'lazy' for so long. I smiled at him and told him that fundamental investing is also about timing the market. Not the minute to minute timing of a speculator but the timing of one's entry and exit over a period of years.
Right now, the market is toppish. Our STI is hovering near its all time highs and the property market is at stratospheric levels. Sure, the stock market as well as the property market may go up even higher. But from a fundamental investor's perspective, the risks of a significant collapse are very real. Now is the time to take a long break and leave the market to the high risk takers. I seriously wish them well as the higher the market goes up, the more significant will be its future collapse. Hence, the higher the market goes, the better it will be for fundamental investors who like collecting bargains.
Like it or not, to make good money from the markets, one has to time the market. One has to buy when no one wants to buy.... and this is when the market has collapsed and every news seems to be bad news. When one buys cheap, it is much easier to make a good profit even if one sells at a fair market price because the price of a share after a collapse is usually far below its intrinsic value. Put another way, if one buys at a significant discount, then even selling at the fair market price will rake in a good profit. To me, it is far easier to make a profit from buying cheap and selling at fair market value than to buy at fair market value hoping to sell higher.
To be able to do this, one has to change one's mindset of the market. One has to think in terms of years rather than months or weeks. For me, I set aside money for my daily expenses for at least 5 years. This then gives me at least a 5 year horizon for my shares to perform. To maximise my gains, I plan my investing cycle such that I will be buying after a significant market collapse and then selling into strength in the years that follow.
The market has been bullish since early 2009 and we are now 3 and a half years into this bull run. Yes, I have been liquidating a number of my positions over the past year especially. However, for some of the shares that have not moved much, I am likely to continue holding on to these for the next cycle. Nothing is certain in the investing world and sometimes one has to be prepared to hold on to some babies.
More than likely, with the babies will come some winners that will more than compensate for the inactivity of the babies. Also, the babies of today, may become the winners of the next investment cycle.
My hope is that investors will look longer term at their investments and don't count on these performing within weeks or even months of their purchase. If your track record is like mine, most of my stocks will only perform after a few years of buying these. My experience tells me that a reasonable time frame for my investments to mature is about 5 years and this is why I use 5 years as my investing cycle.
Right now, the market is toppish. Our STI is hovering near its all time highs and the property market is at stratospheric levels. Sure, the stock market as well as the property market may go up even higher. But from a fundamental investor's perspective, the risks of a significant collapse are very real. Now is the time to take a long break and leave the market to the high risk takers. I seriously wish them well as the higher the market goes up, the more significant will be its future collapse. Hence, the higher the market goes, the better it will be for fundamental investors who like collecting bargains.
Like it or not, to make good money from the markets, one has to time the market. One has to buy when no one wants to buy.... and this is when the market has collapsed and every news seems to be bad news. When one buys cheap, it is much easier to make a good profit even if one sells at a fair market price because the price of a share after a collapse is usually far below its intrinsic value. Put another way, if one buys at a significant discount, then even selling at the fair market price will rake in a good profit. To me, it is far easier to make a profit from buying cheap and selling at fair market value than to buy at fair market value hoping to sell higher.
To be able to do this, one has to change one's mindset of the market. One has to think in terms of years rather than months or weeks. For me, I set aside money for my daily expenses for at least 5 years. This then gives me at least a 5 year horizon for my shares to perform. To maximise my gains, I plan my investing cycle such that I will be buying after a significant market collapse and then selling into strength in the years that follow.
The market has been bullish since early 2009 and we are now 3 and a half years into this bull run. Yes, I have been liquidating a number of my positions over the past year especially. However, for some of the shares that have not moved much, I am likely to continue holding on to these for the next cycle. Nothing is certain in the investing world and sometimes one has to be prepared to hold on to some babies.
More than likely, with the babies will come some winners that will more than compensate for the inactivity of the babies. Also, the babies of today, may become the winners of the next investment cycle.
My hope is that investors will look longer term at their investments and don't count on these performing within weeks or even months of their purchase. If your track record is like mine, most of my stocks will only perform after a few years of buying these. My experience tells me that a reasonable time frame for my investments to mature is about 5 years and this is why I use 5 years as my investing cycle.
