…be more proactive to learn about investing basics…
…set a goal and strategise as soon as possible…
…have a slightly higher saving rate…
…venture into US markets earlier…
In the past year, I have written quite a bit of my past 20 years in investing. This is probably the second last post about it where I reflect on what I could have done better. If you are new to the investing world, I hope this is helpful to you.
In the beginning…
I was a late learner and only started to know about investing world when I started working. A total noob and with relatively less available resources then, my return was 13% down even after 5 years in the market. Instead of just going with the flow, I could have been more proactive to learn about the investing basic and set a goal earlier. The good thing about suffering a loss early in the game is that the investment amount was relative smaller as compared to the active income. Hence, the pain was not as bad and it did not douse my interest in investing.
To the new investor, sit down and set your goal as soon as possible as this will set you into action. Make sure you put in the necessary effort to learn investment basics fast too. A year save is a year to compound your gain.
Growing the portfolio…
The next three 5-year periods saw me getting return varying from 12% – 15%. Of course, year to year variation is great but I am happy with the average return. For these 15 years, my compounded return is about 13%. In another word, my initial capital of about 30k then has grown to about 180k now. A 6x return that I am proud of, even if it does not amount to a lot in Singapore today, especially when you have a family to support.
With fund injected regularly for about a decade, my portfolio is a few times larger than what is stated above. I could have injected more fund in the earlier years to maximise the compounding effect. Looking back, I would not change the trajectory of my career path even though I did have a choice to move faster. What I probably could have done was to save a bit more when I had less commitment. I probably won’t save a lot more as I would still spend money on experience such as travelling.
Besides growing your portfolio, it is important to grow your active income and save as much as possible. The idea again is to compound the gain as soon as possible. I am not a fan of extreme saving, so my advice here is to pay yourself more first with each pay rise, then enjoy spending the remaining.
Venture beyond Singapore…
It was only in the last 2 years that I have gone into the US market. I have missed a whole decade of tremendous grow in global companies! The books that I have read were based on the US companies. Applying the ideas imperfectly, I was fortunate to have a few bigger winners that provided me the return mentioned. However, none of them gave me returns like Apple, Disney, Netflix, Starbucks etc etc. My lack of action in my thirties to find out more about overseas has resulted in me not having a much larger portfolio now.
It’s always good to start with the local market. However, if your strategy is to find multi-baggers, then deploying some of your fund to overseas will definitely improve the odds. Is it too late to invest in US companies? Is it better to invest in China companies? My sense (which I hope I am right) is that both countries will remain relevant in the next few decades and US corporations will still be doing well.
Going forward…
I could have definitely do better if I have been more proactive and decisive in my investing journey. Having said that, I am grateful to the 25-year old me for taking the first step in the journey. I enjoyed it thoroughly even though I performed averagely.
This year marks the end of a 20-year journey but also chaperons the start of another journey that I am looking forward to.
Towards Financial Independence 