Investing is for long term

When investing, consider putting money in stocks that have potential for dividends and capital gains on sale in the future. Very short-term buy and sell strategy or punting is not my kind of investment style.

For each stock I bought, I set up a spreadsheet and track the dividends received. If I did sell the stock, any capital gain or loss was also tracked for that particular stock. In this way, I can then factor in the money received for that particular counter and average down the actual purchase cost price of the stock.

In the previous blog post, I mentioned that my Singapore equity portfolio lost 27% in value. This is paper loss based on actual purchase cost prices and the current market prices of stocks still held by me. If I consider the money received on stock investments (dividends and realised capital gains/loss) since the time I started investing, I am still in the black. 27% paper loss became 11.4% gain. (This simplistic calculation ignores time value of money.)

I regard investing is for long term. Therefore, if one were to pick stocks that were meant for long time frame, then it is important that one picks them as if they going to own these businesses. As owner of the business, you certainly do not want this business to fail. Business owner would also not jump ship, if the business encounters some turbulence. This is Warren Buffett way of value investing.

Copyright © 2016, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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