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Lessons from Winning Investors

Too much diversification leads to mediocre results too. Got to strike a right balance between putting all eggs in one basket and diversification.

 

to me, trading is an alternative to putting money in the bank, rather than punting.. instead of yielding 0.125% p.a. you put your money in a company, maybe after a year the value of stock increases by 5%.. you still be better off..

of course, we should never put all our eggs in one basket.. so, diversification is also important.

 

Thanks iPunter.

I know what you mean. Have a great weekend.

 

Your confidence will come when you are deeper into Technical Analysis. If you are keen to participate in the stock market, then you must make it a point to get to know TA as soon as possible, maybe just as a hobby first.

Like I said, you don't have to be in the market. I mean what's the point of being exposed in the market when you don't see the danger because you don't see the trend? With the charts (TA), you can see the market action before your very eyes.

Take care.

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Hi iPunter

I have no confidence on StarHub.  As regards SPC, the fluctuating oil price movement weary me as well.

I plan to do a TA course but have not had the time. So for the movement, my stock investment is very limited.  I dont jump in too deeply. In addition, unlike the veterans, my trading experience is nowhere theirs. 

 

Hi IreneL,

At the moment most bluechip stocks are rather expensive  as the market has  risen  so much already. But if you take a look at say, SPC and StarHub, etc, you'll find that they are possibly falling lower over  time. But you must have the charts to see this. Why not attend the TA course (<2OO bucks) first?

If you have no basis to enter the market you don't have to be in the market.


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Hi singaporegal

Of the 3 blue chip stocks, only OCBC was > $5/-.

And neither do I believe in buying overly expensive stocks.  Exception was OCBC.

 

My take is this ... I never buy stocks that are too cheap (<$1) or stocks that are too expensive (>$5).

The reason is that cheap stocks are prone to fluctuations and expensive stocks are prone to be stagnant due to lower volumes.

 

Hi iPunter

Agree that one ought to select "stable" stocks.  And these means blue chips.  However, these stocks are no longer cheap so buying them at a "low price" is no longer possible.

One mistake I made with Sembcorp, ST Engineering and OCBC was that I was too quick in selling them.  Result is I made peanuts.  These stocks have now move very much northwards. 

The other problem is that some other blue chip stocks I am eyeing right now are too expensive to buy.  So its a catch 22 situaton.

 

ChoasTheory you are right,

Plus, you get to earn the dividends. For safe investors, it is important to choose  'stable' stocks which are not known to be volatile (lazy snakes). If not, if volatile stocks are chosen, any significant price rises will not move you to sell (since you have already resolved to be a long-term holder), thus wasting the benefits of the volatility.

But the of utmost importance, no matter which stocks are chosen, it is important to buy at a low price as seen from the charts. :)


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to me, trading is an alternative to putting money in the bank, rather than punting.. instead of yielding 0.125% p.a. you put your money in a company, maybe after a year the value of stock increases by 5%.. you still be better off..

of course, we should never put all our eggs in one basket.. so, diversification is also important.

 

Hi Singaporegal, :)

You are right. Day-trading is only for the super-nimble. It is a different  cattle of fish from investing. :)

Investing is relatively safe - you simply buy at a good price,  hold it for a few months and  there's a great probabilty that it will be much higher than when bought. But the price bought must be low.


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Jack Be Nimble,
Jack Be Quick,
Jack Jumps Over The Candlestick.

 

I don't believe in day trading because its prone to too much fluctuations. I'm not surprised by the results of the Prof's study at all.

There's so much noise happening in a day that its difficult for day traders to make sense of it all regardless of what TA (day traders are definitely TA practitioners) tools they use.

 

Hi lwesh88,

This is a good posting and it's very educational for all.

Stock trading, no matter how diligent and dedicated one is, is more suitable as an activty for small-time punting than anything else.

Take care, all. :)


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>>>Money is Good - Trade With Care.

 

Hi folks,

A very interesting article for thoughts in todays (17 Nov) ST page 35 on above subject by Robert J. Shiller, Professor of Economics at Yale.



The article states that a study by economics professors at University of California and Taiwan's National Chengchi University found that "only the top 1 per cent of day traders made a profit - after deducting trading costs - in two consecutive six-month periods, and the median profit was hardly worth the effort: only about US$4,000."



I hope I am not dampening your spirits out there. But I would also like to hear from all of you do day trading and who have actually made money from stocks to post your views here.



Cheers and Merry Christmas.