I got some free time this week, so I did a quick review of my investment journey, including going through the transactions, the notes from discussions and my own diary.
The outcome was shocking.
I could have easily earned 200K SGD extra returns from my investments.
And the number could potentially be much bigger because it is just a ballpark figure.
I spent more time reviewing my thinking process rather than trying to get the figure accurate. The number does not matter too much now anyway.
I always knew I deviated from the simple strategy, which caused negative impact on the investment returns.
Still, 200K! I never expected the impact to be so shockingly big!
This is a significant amount, even compared to our Net-Worth now, after we both have worked for more than 10 years!
After reading a few books, discussion forums and discussing with the friends in the industry, I gathered a few investment strategies.
After evaluating my interest, estimating the time I can invest in the area and recalling my inability to balance a balance sheet in university, I decided to take up a simple one and a proven one:
Use CPF as bond component
Invest all my other investable asset in stocks with 90–10 split into world index and SG index
Adopt the DCA method with monthly capital injection
The first deviation from this strategy came almost immediately after I started.
SG index started to drop significantly and continuously and I thought that was the chance to lower my cost.
So I invested more and more in SG index.
Thinking back, that was so stupid.
I added positions so frequently that the price difference was barely noticeable between buys.
I added positions so heavily that I emptied my war chest very quickly.
And that was only the beginning of the drop.
When I had to stop to review, SG index was so heavy in my portfolio that the split was inverted.
90% of my capital was invested in SG index.
And during the same period of SG index dropping, world index was growing incredibly well.
Seeing the deviation from the strategy, with an empty war chest and SG index continuing to drop, I struggled between continuing to invest in SG index and switching to invest in world index, with my only cash flow — what’s left over from my salary after expenses.
I was lucky to take a rational look at that time.
The event that Creative decided to go public in HK made me realize that SG market was small and lacked the upside potential.
So I switched to world index.
That was when my return started to recover.
I thought of selling the SG index to restore my portfolio split, but I was a firm “buy and hold” believer at that time and the fee with the banks was high (there were less choices for brokers then).
For the next one year or so, I stayed the course to invest in world index on a monthly basis.
And the amount was quite consistent since my salary and family expenses were quite consistent.
So I was actually DCA-ing. This is probably the only period I really practiced DCA.
Before I deviated again from the strategy, my portfolio split was only close to 50–50.
The returns were good.
During the same period, I also took my money in China out of P2P lending and started to invest in China index.
The return was also good.
To be continued!
Note: This is much more time consuming than I thought as I had to flip through my notes and transaction history to confirm my memories and get the facts right.
I definitely do not want to rush this entry, as I believe this could be a good summary for both you and me.
I had to stop here as the rest of my day is filled with meetings.
I will split this into two posts or even three if I have much thoughts to share after the journey.
Sorry for this and hope you can stay tuned. I really hope you enjoy the read and at the same time, take away my lessons to avoid mistakes in your lives.
My progress has again been hindered by the mistake I made 3.5 years ago.
Fair or not, it is what happened.
However, I feel not so bad about it this time!
Naturally, I was again brought back to the scene mentally.
I thought I would again feel wronged and feel like shit for a while and then helplessly move on, like so many times in the past.
To my surprise, I found myself recalling only the good “reactions” of the people involved, and that made me feel better.
Previously, I always thought I did not deserve it and resented the behaviors of some people involved in the incident.
They could have easily prevented the incident from happening. Instead, they made things worse unnecessarily.
Previously, I also told myself that I could only blame myself . But that was mostly from a practical point of view.
Punishing those people is not within my circle of influences. If it were, I believe I would have acted long time back. So I told myself I could only blame myself.
Now, however, I think I really see the point why I can only blame myself.
People were not evil and I was ultimately responsible for my own mistake, intentionally or not.
These thoughts have allowed me to feel not so bad about the recent setback.
The third reason, probably also the most important one, is that I start to take a different perspective.
Will it really be better for me to lead a busy and tough life with the hope to become successful and rich one day, compared to living a relaxing life where I can probably still have enough money to get by?
I have always pursued the former, because I want to have options, because I have the desire to prove myself and because I have been educated to do so.
After the incident, I had one more reason to stick to the former. I really do not accept that one single mistake can limit my life in any way.
I have been fighting against it.
I never really allowed myself to think about what I really want. I never thought I deserved the “luxury”.
But once I start to take that thoughts, things look different.
All the lost opportunities during the past 2–3 years, including the recent one, are basically just “trades” — I spend much more time in work and expose myself to much more pressure, to trade for much more learnings, money and higher positions.
I did not get those opportunities and therefore, I had time to maintain this blog and do many other things, including sitting in the sofa and look stupid.
The opportunities are not pure gain or loss situations. They simply allow me the option to carry out the trades.
I have been miserable for being denied those options to trade.
I have never evaluated whether those trades are indeed good for me. If they are not, why would I need the options in the first place?
Since fate has been so insistent in keeping me in the latter, maybe I should accept and relax and see where life takes me.
I can give up planning everything ahead, worrying about potential risks in the future that may never happen, and taking all the responsivities on my own shoulder. I can simply relax.
A joke was very popular over the internet a decade ago:
Living a life is like being raped. If you cannot resist, just lie down and enjoy.
Once a wise man gave his opinion:
Life is hard itself and it is fine as long as you have tried your best.
Maybe I can just relax and things could just work out, because so far, it surely feels “The harder I fight, the deeper I am trapped”.
