WHAT IS THE 4 TESTS OF A GREAT INVESTOR?
|Patience||Earnings method||Flexible to rebalance||10-15%p.a. for LT|
|Independence||NTA method||Cash:Equity||(10-20 years)|
|Rational in biz sense||Cigarette butt method||expectation|
|Avoid FOMO||Theme method|
|Invest during crisis only|
|Blue Chip/small cap|
Set a reasonable time frame and reasonable target, and use comparison as a reference, not a real determinant of your perforamce because you start investing at different time, different capital, different time frame and different stocks. Based on KLCI long term return is about 10-12% p.a.(for 10-20 years).
Some friends asked what is your strategy now. I would say, now is the time you take out your contingent "investment savings" to invest. Meaning, if your portfolio is 60:40 (Equity:Cash), now is a time to go 90:10 (but still within you planned exposure). Why? Many small and medium cap become a bargain because of post GE14 uncertainty.
Post GE14 uncertainty is more towards constructions and infrastructure sectors, and also toll roads and other things included in the new government manifesto.
Generally, its true, negative on construction sector as big mega projects are abolished. But, this will impact more for big construction companies. This may also reduce competition from China contractors (which is good for the locals).
Toll roads - still unclear at the moment. But, if we really follow rule of law, private toll operators should be reasonably compensated. Why no news at the moment?
INVESTMENT CAPITAL TO BE INVESTED
This is normally your excess fund that you do not need it during emergency (2-5 years). Balance your portfolio between Equity:Cash.
The finish line for investment is when you disposed all your shares and stop participating. That is the day you actually calculate your gain or loss. No one will know your gain or loss. Enjoy the game.