Rainbow on FI

It is in the human psychology to want to win back what we have lost. It is exactly this psychological notion which set us back and made us sit on our paper losses hoping that one fine day those losers would make a comeback. It is also this that made us 'throw good money after bad money'. Createwealth8888 did a very good chart illustration here on why we should control losses. We should treat our stocks like poultry instead of antique. If the hen has stopped laying eggs or fell sick (lost its value), then we should say bye-bye to it. Don't live in the illusion  of hope or hold on with sentimental value. There's no need to time the market when cutting losses - because bad hens do bad whether in good or bad times. (See fundamental analysis  and High value is not the same as low price  in choosing the good hens.) I first published this post back in 2012 but the articles here are still very much relevant. *Note the following links would bring you to external sit...

STI snapshot STI components are down an average of 22.9% from their all time high this year. Highlighted in yellow are the "more shock-proof" stocks which are currently down less than 10%, whereas those in red are down by at least 30%. The generally shock-proof ones are namely SATS, ComfortDelgro and SPH. I would expect Telcos to be resilient but I guessed because of being over-valued at the high, the rebounds are limited. Most of the blue chips have slightly rebounded since my previous post in September, which were down by an average of 26.2%. How many of these blue chips could ride the waves and retain their operating profits in downturn? Contract-based companies, those with steady income stream, those dependent on crude oil prices - go figure. If you are vested, do keep a lookout for their annual reports. Most of the companies has already published their quarterly unaudited earnings on the SGX website.

I realised there was a same titled article published in Straits Times according to Investmentmoat's Kyith  http://www.investmentmoats.com/budgeting/saving-100k-by-the-time-you-are-30-years-old/ . I didn't read that article but just thought I would share my 2-cents worth here. Assuming one starts working from age 22, there's 8 years to save this amount (for ladies, for SG guys you gotta add 2 more years). If you are a poly grad, then you would start work earlier, so plus-minus again. To save $100k by age 30, you would need to save at least $12,500 a year. In the table illustration below showing yearly saving sums, you see that you could actually start off with a lesser saving amount and increase your savings gradually by 5% a year  (an estimate, assuming yearly and promotional pay rise, investment yields etc) and still reach your goal by age 30. That's barring any unforeseen event requiring huge expenditure. If you have started saving from young then you would alrea...

That's me, I am the real budget barbie (er ok just kidding, I do spend on big items now and then... *sheepish smile*). This year my trusty UOB One card has increased its tier for quarterly rebate from $300 a month to $500. It is quite difficult to hit since I do not drive and I have just quit my gym membership. So now my credit card spending just revolves around groceries (fyi I don't cook), dining, lifestyle shopping and holidays (max twice a year). I was disappointed to find out that I failed to hit the quarterly rebate before they up-ed the tier as my July spending did not hit $300 (I was still naively spending on big items the following month with the card). This is because UOB's definition of July spending is really 'June spending' as they take the month reflected on the statement date rather than the month which the spending took place. PLUS one must spend on at least 3 transactions in those months. Blur me. The famous OCBC 365 is out of my picture ...

[Links in the post lead to external sites.] The bearish stock market has led me to revisit this post on Contract for Difference which was what I have read up to kick-start short selling. BUT this is not a post to encourage anybody to do so, it's more of an FYI. CFD is one of the instruments that can be used for short selling which gives you more flexibility to investment and also hedging power, read more here . Only some brokerages offer CFD and it is traded using a margin (leverage) account. Type of CFD The brokers that offer CFD can be subdivided into DMA or MM . DMA seems like a better option with higher transparency. DMA stands for direct market access which reflects the actual stock market prices. Here's an interesting read about what is short interest . But I have yet to discover where can we find short interest ratio for sg stocks. Using CFD - Risks Short selling can be used as a hedging tool. It can also be used to earn money in a bearish market. However, d...