Monday, October 13, 2008

Stock Portfolio Down by 50%. Feeling Weak in My Stomach

My Stock Portfolio is down 50%. I am totally weak in my stomach when I opened my UOB Kay Hian today to take a look at my portfolio. This global financial crisis has virtually wiped away all my gains over the past few years. I fear that the worse is still to come.

Nevertheless, to drive up my passive income, I have have decided to buy 1000 x First REIT @ $0.425 and 2000 x K1 Ventures @$0.205.

Cash is really King in this kind of stock market now. And I have been thinking about quitting my job. I keep thinking what if i had liquidated all my stock holdings earlier this year. I would have been able to use all my current paper loss to pay off my car loan! Aargh..

This is a painful lesson for me....I was too rash in making certain financial decisions...
But guess I still have 30 over more years infront of me. Compared to those retirees who bought the Lehman bonds, I am much better off. And I seriously thank God for that. I cannot imagine retiring and then losing all my retirement money due to bad investments. I really really cannot imagine. .. it is a totally scary thought. For the retirees, it is like lsoing all their 30 years of savings and hard work..... all gone down the drain just because of 1 single financial decision.

Passive Income is the way to go in these bad times.

6 comments:

  1. Why were you still holding on? Put in protection (stop losses, etc).

    You don't have to suffer through this. This may be a little late, given that most of the fallout has occurred in the past week. But you can still implement these strategies going forward. I was lazy and only started putting stops in a month ago. I was finally stopped out of all my portfolio when everything triggered 2 wks before...I'm now down 25%.

    The buy-and-hold strategy is flawed for people like you and me. At least for me, I don't want to cash out decades from now when I'm old. I want to enjoy the money now and turn my profits into more passive-income generating assets. Since you're already actively managing your own money, why not be proactive in your trades rather than let it sit there when the market (sellers) are obviously against you? Even if you're supremely confident in your stock selection, there'll always be times when it goes down. It's perfectly ok to sell and buy it again when the trend is with you.

    Fyi, I'm a singaporean working in chicago, and I can appreciate your enthusiasm to grow and gain wealth in your youth. I'm the same age age as you and I've been actively managing my own investments for over a year, learning from fellow day-traders, gurus, clubs, advisories, etc that are in Chicago. Its been tough filtering through the established crap from America's self-proclaimed "financial gurus", but I emerged wiser. Hope you can do the same.

    ReplyDelete
  2. Hi fellow investor,

    Thanks for your comments. Yes it has been painful ride for me as I see my stock portfolio get beaten down. the only thing that is keeping me up is that I have some dividends to collect though it is not alot. Will definitely want to hear suggestions on how I can manage this crisis.

    ReplyDelete
  3. hey buddy, good that you're responding. the past week has been really volatile and i hope you haven't made any reckless decisions. technical analysis has been damaged with this kind of volatility, with the market moving more on news than ever. fundamental analysis, needless to say, is completely out. at least for the time being.

    given that you've already experienced most of the fallout, it might be a good idea to not make any reckless sell decisions. you should still put in stop losses, but its worth holding on to the more volatile stocks in light of possible quick reversals.

    despite what warren buffett said recently about starting to buy in, its a good idea to not go all in until the market is behind you. that said, you can put some in money to speculate on the wild swings and hopefully profit in this volatility. but do that with caution.

    ReplyDelete
  4. Yup. I am still buying in to increase the amount of passive income. Basically looking for high dividend yielding stocks that are not highly geared and that are able to sustain the kind of dividends which they have been giving out previously.

    ReplyDelete
  5. On stocks:

    Trading with options is definitely a good strategy given the high market volatility (you sacrifice little to guarantee a position). Since there are so many volatile stocks these days (UAUA, MT, LYG, etc), they might be worth looking into.

    On passive income:

    If you're serious about passive income, why work through dividends? The earnings are too low/too hard to gauge, and its worth changes frequently based on the nature of your stock (i.e. if your stock value depreciates, aren't you comparatively paying that much more trying to squeeze out some dividends?).

    There's always real estate, more specifically, multi-family unit housing. You get a much more steady cash flow and if done well, you can get significant home equity as well. Singapore may not be the appropriate market for that though.

    ReplyDelete
  6. Yes. I am looking towards a 2nd property for rental income within a 4 to 5 year timeframe. Still saving up money for the downpayment. Hope to be able to generate at least $1000- $2000 in passive income from the rental of the property.

    Am currently also exploring business opportunities that might arise.

    ReplyDelete

Popular Posts