Rules of Investing

I started investing in SGX listed stocks about 2 ½ years back after a successful 3 years of investing in HKSE stocks.

As at last Friday, my AUM of SGX stocks has hit record high. Since beginning of 2014, my AUM has grew by about 14.4%, which has exceeded expectation. My annual target is a CAGR of 10%.

Currently, my portfolio comprises of 26 stocks and of which 21 are in the black. Presently 5 holdings are in marginally loss position. The adage of “letting your winners run” holds very true in my experience as I have recorded success (still holding the stocks) in core stocks such as Jaya Holdings, UMS, Valuetronics, King Wan, Straco, Q&M, UE E&C etc.

I am primarily a value investor focusing on fundamental small cap stocks.

I will share my rules of investing and hopefully this will help fellow readers of this forum.

- No short cut to success
- Be patient
- Stick to your strategy (even when going is rough!)
- Don’t time the market
- Invest in fundamental stocks (avoid speculation)
- Cut loss if mistakes are made
- Cut loss on serious corporate governance issues
- Let your stock profits run
- Be humble with your success
- Diversify your portfolio

The first and fifth rule are so important and we must be prepared to work hard to achieve success. Greed is the downfall of many investors and the recent collapse of micro cap stocks provides a clear testimony.

I do follow some investing blogs, but I must admit Nextinsight is one of the “must see” site. Some of the contributors are astute analysts whom we can learn from.

Lotustpsll, I share your view. Building up core stocks and let your core stocks profit run is the key to sucessful investment. Slowly sell down when over-run its value.

Diversify our porfolios but 26 stocks maybe too many. As for me not more than 15 stocks.

Your view on: Stick to your strategy (even when going is rough!)
When going is rough we either stick to our strategy or reduce holding, its all depends on the situation.

Your point on: We must be prepared to work hard to achieve success.
Your point of work hard maybe its because your porfolios of 26 stocks maybe difficult to manage.
My view is: "let our money work not working for the money". What we need is PATIENCE.

I only follow Nexinsight as I believe in staying focus.

Hi Rock,

Thanks for your feedback.

As I am retired after 32 years with a financial institution, I do not have much problem in managing my portfolio. It is a matter of knowing what to look for and to keep abreast of developments.

My stock picks are based on sound business model, strong management, solid balance sheet and sustainable dividend yields.

Timing the market is not my focus as based from my experience market will always bounce back after a tough spell.

Most important, be confident of your stock picks and stay the course.