In this turmoil, I met a number of people in roadshows saying that they have been “burnt” by their investments.
Practically, they have lose money in shares, lose money in funds, lose money in forex, lose money in anywhere….practically all losing money in their INVESTMENTS.
Well, I got 2 news, if you belong to the group who practically lose money in funds. I got good news, and I got bad news for you.
Bad news? You already doomed yourself of losing money, if you SELL today. Yes….You realised your net loss by selling your units at a cheaper price (bid price) than your buying price (offer price).
It is no brainer, if you buy your apple at $2 AND THEN YOU SELL IT FOR $1, you confirm realize your loss. You dont have to be an investment guru to know that.
Good news? You are a smart investor if you hold on to your units right now, and do top up to take advantage of buying the cheap units. Come on, if you buy your apple at $2 and now it cost $0.80 due to recession, poor market sentiments blablabla…..is it a good bargain?
The answer is YES….Provided the apple DOESNT ROT in the time horizon you want to sell it at a PROFIT!!! (lolz) 
Same with your money which you use to buy the additional cheap units. You make money ONLY if you have the HOLDING POWER not to use the money till the day the market recovers, and when your unit price goes up, you sell them at a profit. Simple right?
Then, some says, my cash value already reduced to 30% of the principal amount. I DONT WANT TO LOSE EVERYTHING…..
hello….Like I said earlier in my blog earlier, you have to segregate emotions and logic when investing.
So….If your investment is now losing money, dont sell. When you dont sell, you dont lose money. It is called “paper loss”. If you sell, you confirm lose money. Then, what should you do?
If you have money, buy some more….This is what we call Dollar Cost Averaging.
If you dont have money, hold on. The market will recover. Minister Mentor Lee Kuan Yew says that the market will recover in 5 years if the world bank economy is fundamentally sound.
To be safe, try to look at it at an investment horizon of 10 years. Oct 2007, STI hovers 3800 and today, 16 March 2009, only 1575.98, half of its original value. Just waiting for the market to recover, you make 100% return. Like easy right?
Still want to wait for the bottom? Nobody knows when is the bottom. What you can do is divide what you want to invest in 10/20 installments and go in monthly. Dollar Cost Average. No need to wait and time the market.
Worlds richest man, Warren Buffet says, “Why wait till the spring is over?”
Former Federal Reserve Chairman, Alan Greenspan says, “Let’s recognise that this is a once in a half century, probably once in a century type of event.”
Yeah people. As what Barack Obama says, “Our moment is NOW!!!“
Mon, Mar 16, 2009
Investment