Posted by ks55 > 2015-02-25 17:23 | Report Abuse

Under no circumstance one should use OPM to buy share. Invest with your excess/idling money. If you can achieve 26% consistently for 10 years, your portfolio will go up 10 folds; for 20 years, you will achieve 100 folds. Don't be greedy, try out with 100k, in 20 years time you will have 10m.

SO IF YOU ARE 40 NOW AND HAVING 100K, YOU ARE A MILLIONAIRE AT 60 WITH 12.5% RETURN, AND A MULTIMILLIONAIRE IF RETURN IS 26% PER ANNUM CONSISTENTLY.

This is the power of compounding rate. Remember Warren Buffet's first rule : Don't lose. Make less is ok.

Posted by Wong Heam Kiew > 2015-02-25 19:58 | Report Abuse

Consistently 15%~18% for 20 years? I think it is very not likely. KLCI's historical return (including dividend) is less than 10%. ICAP's historical return as of today is less than 13%.

Posted by Wong Heam Kiew > 2015-02-25 20:00 | Report Abuse

ASB's historical return is less than 11%.

Posted by Alphabeta > 2015-02-26 15:20 | Report Abuse

Before we get carry away in counting the chicks before the eggs hatched. Take a hard look at your portfolio – equity and cash holdings, what sort of return are you getting every year. Stop dreaming of the 26% CAGR, give yourself a pat on the back if your annual return fall within the range of 6% to 15%. Make sure your holdings comprised on businesses which are fundamentally sound.

Too much complacency also breeds excessive risk aversion when conditions change. If all you've become accustomed to is the market going up, well when the market falls, many are going to panic hard and panic fast. And you’re likely to sell. Most studies found you’re likely going to sell close to the bottom. Buying low and selling high rarely happens; many people tend to buy high and sell low instead.

Deep down, you know that you should buy and hold and just ride out the volatility wave but emotions and panic will likely override your better judgment. Studies have proven time and time again that bad psychology is one of the worst enemies of successful investing.

Do some what-if exercises. What if your biggest holding drops 10% or more? What if the market drops 20% or 50%? What if your friends or analysts started yelling “sell! sell! and sell!”?

While you are still cool and collected. Write out some plans, how long is your horizon, remind yourself how you can navigate the financial crisis, will buy and hold on diversified assets is a proven method. You really need to put down some logical numbers and rational conditions for what will make you sell a holding.

Not trying to be pessimistic here, sometimes it is better to be prepared for the next down-cycle if you want your nest egg intact.

http://www.marketwatch.com/story/stock-market-crash-of-2016-the-countdown-begins-2015-02-25?page=1

Posted by Kevin Wong > 2015-02-27 10:53 | Report Abuse

Well, the KLCi was around the 1,050 level 20 years ago. So including dividends...shouldn't the returns be around...