Monday, June 26, 2017

Investment is a psychological game

Recently I bought a few lots of Boustead. Since then, I seldom check the price of the stock.

I was trying to practise what Warren Buffett taught. When you buy a stock, you buy thinking that the market will close for the next 5-10 years. If you can't do this, don't even think of buying and holding the stocks.

My investment goal every year is to invest a fresh 10k into stocks.

This is a goal that is attainable. Although my ultimate goal is to make a million dollar, I need to start small and 10k a year is my baby steps.

I had a lunch conversation with my colleague last week and we briefly talked about stocks. She told me her mum bought SIA when it was 15 dollars a share and is holding onto it as the price have drop to around 10 dollars.

It reminded me that when buying a stock, it is no different from buying a property. You would want to make the purchase at a reasonable price. Hence the entry price of a stock is very important.

For me, when I bought my HDB, I looked at past transaction prices. Same for stocks, I would look at the price history for the past 10 years. Coupled with the nav etc, I could determine a reasonable buying price.

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