Create Wealth Through Long-Term Investing and Short-Term Trading

Passive income ONLY - You can't really get rich with it! (2)

2012-01-29T20:43:00.000+08:00

Read? Passive income ONLY - You can't really get rich with it!

Anyone has read an article or personally know someone who is NOT rich and became rich through passive income investing. Not me. I have yet to read one on it.

But, I knew there are people who became rich either through huge capital gains or successful leveraging up on their investment.

Passive income ONLY - You can't really get rich with it!

2012-01-29T08:25:00.003+08:00

Read? Does Your Account Size Matter? - Part 3

You can't really get rich with it!

When your account size is not extremely large, you can't get rich with passive income ONLY. Passive income from property rentals, stock dividends or bond coupons. However, it may be possible; but it will take decades of doing it right to become rich.

To Get Rich = Getting more and more Total Return

Total Return = Capital Gain + Passive Income.

Passive income is generated from the "utility" of property, stock or bond. It is an expected form of return from this "utility".

So where does Capital Gain come from?

The Greater Fool theory!

Your capital gain must come from "Greater Fool" in the market who will hand over part of their hard earned money from their jobs to you in the form of speculation. The large Capital Gain in the market must come from many Greater Fools speculating and handing over part of their hard earned money from their jobs slowly to the Better Fools. When more and more Greater Fools start chasing it you can become rich pretty fast.

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

DOW

2012-01-28T08:05:00.000+08:00

12,660.46 -74.17 -0.58%

By: JeeYeon Park

CNBC.com Writer

Stocks finished mixed Friday, as investors digested a handful of tepid earnings and economic reports in addition to ongoing jitters in the euro zone. The S&P and Nasdaq posted their fourth weekly gains, while the Dow finished in negative territory for the week.

Still, all three major averages are still on pace for their best monthly gains since October 2011.

The Dow Jones Industrial Average fell 74.17 points, or 0.58 percent, to finish at 12,660.46,The S&P 500 cut most of its losses but still slipped 2.10 points, or 0.16 percent, to end at 1,316.33. The Nasdaq added 11.27 points, or 0.40 percent, to close at 2,816.55.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished below 19.

STI: Who will be the Boss next week? Bull or Bear???

2012-01-27T22:59:00.002+08:00

STI 2,916.26 +21.83 +0.75%

DOW

2012-01-27T07:40:00.000+08:00

12,734.63 -22.33 -0.18%

By: JeeYeon Park

CNBC.com Writer

Stocks finished lower in thin trading Thursday following a disappointing new home sales report and as earlier enthusiasm faded over the Fed's decision to hold interest rates near zero until at least 2014

The Dow Jones Industrial Average slipped 22.33 points, or 0.18 percent, to close at 12,734.63, led by AT&T [T 29.45 -0.76 (-2.52%) ] and H-P [HPQ 27.99 -0.33 (-1.17%) ].

The S&P 500 fell 7.60 points, or 0.57 percent, to finish at 1,318.45. The Nasdaq declined 13.03 points, or 0.46 percent, to end at 2,805.28.

Despite the day's losses, all three major averages are on pace for their fourth straight week of gains, for the first time since December 2010.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended above 18.

In addition to keeping rates near zero, the Fed also took the unusual and historic step of setting an inflation target of 2 percent, when it released its economic forecast and said it will maintain its highly accommodative stance to support the recovery.

Kep Corp - Order book and deliveries

2012-01-26T19:41:00.000+08:00

Look like deliveries in 2012/2013 is still healthy despites much lower order in 2009/10

10% dividend yield for 10 years? Fact or Fiction? (2)

2012-01-26T17:45:00.000+08:00

Read? 10% dividend yield for 10 years? Fact or Fiction?

Kep Corp FY 2011 full year dividend = $0.17 + $0.26 = $0.43 after bonus issue.

Highest dividend yield = 32.7%
Average dividend yield = 16.6%

High yield for a blue chip is not a fiction!

Kep Corp FY 2011 Report Card

2012-01-26T17:23:00.002+08:00

1. Net profit improved 14% to S$1,491 million, compared to FY 2010's S$1,307 million (restated).

2. Earnings Per Share of 83.8 cents, up 13% from FY 2010's 74.3 cents (restated).

3. ROE of 21.6%.

4. Economic Value Added increased from S$964 million to S$1,024 million.

5. Total dividend increased to 43.0 cents per share, comprising a final dividend of 26.0 cents and an interim dividend of 17.0 cents already paid.

6. Net gearing of 0.17x.

DOW - The bulls are still in control. You can see with it with a small pullback.

2012-01-26T07:35:00.000+08:00

DOW 12,756.96 +81.21 +0.64%

By: JeeYeon Park

CNBC.com Writer

Stocks ended near session highs Wednesday, reversing their early declines, as the market cheered news that the Fed will not raise interest rates until at least 2014 in addition to maintaining its highly accommodative stance to support the recovery.

The Dow Jones Industrial Average soared 83.10 points, or 0.66 percent, to close at 12,758.85

The S&P 500 added 11.41 points, or 0.87 percent, to end at 1,326.06. The Nasdaq jumped 31.67 points, or 1.14 percent, to finish at 2,818.31.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, closed near 18.

“The fact that [the Fed] extended low rates for another year and then left the door wide open for another stimulus…implies that things are still not as good,” said Kenny Polcari, managing director at ICAP Equities. “This is a manufactured rally—there’s nothing fundamental about this.”

The Fed kept its funds range unchanged near zero and extended its pledge not to boost interest rates until at least 2014, in order to help bolster the weak but modestly growing economy. The Fed has kept its key interest rate at a record low near zero for three years.

Meanwhile, the Fed also downgraded its outlook for economic growth this year to between 2.2 percent to 2.7 percent but pruned its projection for the unemployment rate, saying it expects the rate to fall to a less severe 8.2 percent.

STI

2012-01-25T17:53:00.000+08:00

STI 2,891.64 +42.26 +1.48%

Singapore's CPI up 5.5% on-year in Dec

2012-01-25T14:21:00.000+08:00

SINGAPORE: Singapore's consumer price index (CPI) rose 5.5 per cent on-year in December.

That's down from 5.7 per cent in November.

This is according to data from the Department of Statistics (DOS) released on Wednesday.

DOS said the lower CPI reading was largely due to a smaller increase in the cost of private road transport - which moderated at 12 per cent year-on-year compared to 14 per cent in the previous month.

But housing costs - which was 11 per cent higher during the month - kept inflation elevated.

For the whole of 2011, inflation averaged at 5.2 per cent.

This year, inflation is expected to hover between 2.5 and 3.5 per cent, according to the Monetary Authority of Singapore and the Ministry of Trade and Industry.

- CNA/cc

DOW

2012-01-25T07:25:00.000+08:00

12,675.75 -33.07 -0.26%

By: JeeYeon Park

CNBC.com Writer

Stocks closed narrowly mixed in lackluster trading Tuesday, with the S&P breaking a 5-day winning streak, as Greece's failed debt restructuring negotiations and a handful of tepid earnings reports weighed on the market.

The Dow Jones Industrial Average fell 33.07 points, or 0.26 percent, to finish at 12,675.75

The S&P 500 slipped 1.35 points, or 0.10 percent, to close at 1,314.65, failing to extend its five-day winning streak. The Nasdaq eked out a gain of 2.47 points, or 0.09 percent, to end at 2,786.64.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, jumped near 19.

Daily Portfolio XIRR Trending Pattern - Bullish?

2012-01-24T11:13:00.000+08:00

DOW - Really tough resistance to overcome!

2012-01-24T08:01:00.000+08:00

12,708.82 -11.66 -0.09%

By: JeeYeon Park

CNBC.com Writer

Stocks ended flat in quiet trading Monday as investors continued to monitor developments in the Greek debt negotiations and ahead of the Fed's two-day FOMC meeting this week.

The Dow Jones Industrial Average slipped 11.66 points, or 0.09 percent, to close at 12,708.82

The CBOE Volatility Index, widely considered the best gauge of fear in the market, closed above 18.

“Today’s move is markets getting ready for the rest of the trading week—The Fed is having its two-day meeting and will release more details on how bank presidents voted for the first time…The market’s lost stream because the recent numbers are implying that the Fed won’t introduce QE anytime soon,” said Brian Battle, vice president of trading at Perofrmance Trust Capital Partners.

In addition, Battle noted that the situation in Greece is pointing to a default for the debt-ridden nation in the near-term.

“It’s just a matter of how they will default—will it be orderly or will it be an uncontrolled event? No matter what happens, there’s going to be a shock to the system when it happens,” explained Battle.

Finance ministers and officials in Europe were still discussing terms of a Greek debt restructuring as part of a second bailout package for Athens, as well as other issues in the euro zone debt crisis, in an aim to avoid a chaotic default that could put the whole currency bloc in danger.

Also on the agenda for the meeting will be the European permanent bailout fund and the European Stability Mechanism (ESM). Meanwhile, France and Germany are expected to call for a relaxation of global bank capital rules to prevent lending to the real economy being choked off, the Financial Times reported.

My yearly living expenses (cash only)

2012-01-23T16:52:00.000+08:00

Read? Year-end budgetting for the next 2 years

Tightening the belt in 2009 due to sub-prime crisis in 2008/09 as expected. LOL

Entering the Year of Dragon!

2012-01-23T10:31:00.000+08:00

Just For Thinking ....

Your investing goals for the Year of Dragon!

Property, Stocks, Bonds, Gold or Silver?

It doesn't really matters!

It is not any particular investment instrument that brings us more wealth in the Year of Dragon. It is the successful execution of 3M's - Method, Mind and Money that will bring us more wealth.

It is you! The man or woman behind the 3M's that counts. If you believe you can't. You can't!

The last newspapers reading on property vs. stock debate before leaving Rabbit and entering the Dragon

2012-01-22T15:42:00.000+08:00

Just For Laugh ...

How come we never hear stories of property investors who have burnt their backside in newspapers?

But, I often hear from friends and relatives that so-and-so are holding stuck properties (net losess) like stuck stocks. Monthly rental also not enough to cover losses.

Entering the Dargon Year. Gong Xi Fa Cai!

2012-01-22T08:44:00.000+08:00

Wishing all readers Good Health and a very Happy Dragon Year!

XIRR/CAGR: Investor's true performance indicator! (6)

2012-01-21T23:45:00.004+08:00

Read? XIRR/CAGR: Investor's true performance indicator! (5)

Uncle8888, how to back track my investing capital and investible cash to compute XIRR since investing?

If you have all your stock transaction records and dividends statement, you can back track your capital and work out your current investible cash and then proceed to compute your XIRR.

One reader, OT has done it with the assistance from Uncle8888. He can now measure and visualize his portfolio XIRR and can fine-tune his investing strategies to meet his long-term investing goals.

If you like to have the sample file to compute your XIRR since day one of your investing, email me. LOL!

XIRR/CAGR: Investor's true performance indicator! (5)

2012-01-21T10:31:00.004+08:00

Read? XIRR/CAGR: Investor's true performance indicator! (4)

Read? Two Bank Accounts? No, You may need Four! - (4)

How can I easily maintain and track investible and virgin cash?

It is lot easier if you have your investment bank account linked to your broker and CDP.

See the following examples. No sweat tracking.

When I add more spare cash e.g $20,000 into investment bank account for future investment opportunity in stocks

When I sell $20,000 stock, my bank account will be credited with 20,000 by my broker.

Still blur?

Then you have to buy Lasksa set at ToastBox for 1-to-1 coaching. LOL!

Will STI Bulls have the spirit of the Dragon to catch up with DOW next week?

2012-01-21T09:09:00.000+08:00

DOW - Dow Logs 4-Day Rally, Stocks Post Weekly Gain

2012-01-21T08:05:00.001+08:00

12,720.48 96.50(0.76%)

By: JeeYeon Park

CNBC.com Writer

Stocks ended mixed in a quiet session Friday as investors were reluctant to jump in ahead of a weekend and after a handful of weak earnings reports weighed on sentiment.

Despite the lackluster session, stocks still capped a strong finish for the shortened trading week, with all three major averages adding almost two percent, despite ongoing woes over the euro zone debt crisis and some disappointing corporate earnings results.

The Dow Jones Industrial Average jumped 96.50 points, or 0.76 percent, to finish at 12,720.48, posting a four-day rally, led by IBM [IBM 188.52 8.00 (+4.43%) ] and Microsoft [MSFT 29.71 1.59 (+5.65%) ].

The S&P 500 eked out a gain of 0.88 points, or 0.07 percent, to end at 1,315.38. The Nasdaq slipped 1.63 points, or 0.06 percent, to close at 2,786.70.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, tumbled near 18.

For the week, the Dow soared 2.40 percent, the S&P advanced 2.04 percent and the Nasdaq soared 2.80 percent. All Dow components logged a gain for the week

XIRR/CAGR: Investor's true performance indicator! (4)

2012-01-20T19:35:00.000+08:00

Read? XIRR/CAGR: Investor's true performance indicator! (3)

Another good reason why we must fully aware of our average rate of return over market cycles.

Read on. You may understand it better.

Retirement: how much is enough?

Funding your retirement years comfortably is a trade-off between playing it safe, taking risks and spending prudently

By BEN FOK

AT A FAMILY function, my 60-year-old cousin Peter asked me for my views on retirement planning. He said that over the last 35 years he has worked hard, consistently saved and prudently invested his money. When he retires in two years' time, this should provide him with a nest egg of about $500,000. As I listened to him, it seemed that he had secured his financial future. But he kept asking: 'Is it really enough?'

At this age, many would expect to have a significant retirement nest egg. If they don't, they had better do something about it now.

In Singapore, our official statistics show that there are more than 300,000 individuals aged between 50 and 54 who are due to retire in 10 to 15 years' time. As a financial adviser, I often discuss this subject with my clients but often this issue is not treated as a top priority. Understandably, there are other priorities, such as children's education and mortgage repayments or other immediate needs, that take precedence over retirement planning.

Given the current economic volatility, the outlook for those planning their retirement is very cloudy. Over the last two years, we have seen the cost of living here increasing yearly, making retirement more expensive and resulting in many more Singaporeans having to put off retirement for a few more years. With higher longevity and people not saving enough, the working population of those aged 60 and over will inevitably continue to rise.

In Peter's case, he and his wife are healthy and they are likely to have a long life ahead of them. So it would be a mistake to concentrate solely on what's happening now or even on what might happen months from now. Rather, they should focus on coming up with a spending and preservation plan that can assure them of enough money to live comfortably for the next 25-30 years, if not longer.

Hence, funding your retirement years is a trade-off between playing it safe, taking risks and spending prudently.

With the nest egg that Peter has accumulated, he can create a cash flow, and that is the most important consideration during his retirement. At this point, he has to set a reasonable withdrawal rate that will give him the spending cash he needs but won't deplete his nest egg too soon. Peter asked: 'How much can I safely withdraw from my retirement fund every year?' It is obvious that a miscalculation could result in an involuntary return to the workforce or having insufficient funds for retirement.

To help Peter understand how much he can withdraw, I produced a table to show the number of years his money will last.

The table shows withdrawal rates ranging from 4 per cent to 13 per cent and annual growth rate of investment from 3 per cent to 12 per cent, which resembles a 100 per cent stocks to a 100 per cent bonds portfolio.

It also shows how many years a sum will last at various withdrawal rates and various rates of return. If the withdrawal rate and the rate of return are the same, the principal will not change. For example, when $100,000 earns 8 per cent per annum and 8 per cent is drawn, the principal stays the same. This is another strategy by which a retiree can create an income stream. So if Peter invests $500,000 in a diversified investment that can give him 5 per cent returns, he can make $25,000 per year of withdrawals without affecting his principal.

However, if $100,000 earns 4 per cent per annum ($4,000) and 8 per cent ($8,000) is withdrawn annually, the $8,000 annual income will continue for 17 years before the principal is gone.

It is important to understand that the rate of return and the withdrawal rate determine how many years the principal will last. There are no guarantees, of course, but generally the lower your withdrawal rate, the better the chances that your money will last throughout your retirement. But when the earnings are less than the amount that is taken out, you are dipping into your principal, so your money will not last for a long time.

If you start withdrawing a small amount from your portfolio, and adjust it for inflation, the chances are that your money will last longer whether you invest relatively conservatively or aggressively.

So to enjoy a decent retirement, you need to be responsible for your old age by starting to save adequately and invest prudently for your retirement as early as possible. I also believe that it is just as important that people take financial advice well in advance of their anticipated retirement. We have to carefully assess their investment portfolios, as this could make all the difference in the long run.

Singaporeans are intending to retire later, and those planning to stop working between the ages of 60 and 65 will double in the future. With increased longevity comes increased risk of potentially outliving one's retirement assets.

Another point to note is the unexpected 'life events' that may happen. No one can predict what lies ahead in their retirement journey. While we can determine when we want to retire and exercise to keep in good health, there are no certainties in life. Planning for one's retirement years must include taking into consideration life events that have the potential to disrupt your retirement years.

Hence, certain protection products - like medical, hospitalisation and long-term care insurance - are still needed during one's retirement to protect against the potentially devastating effects of unexpected life events like death and chronic illness. We need to have a financial strategy that is flexible enough to adapt to a person's changing needs and circumstances. Retirement can truly be great, but only if you carefully manage your money throughout your golden years.

Note: The strategy described in this article may not be suitable for all readers. If you are in doubt, consult a financial adviser.

Biosensors: A real nice way of entering Dragon Year!

2012-01-20T19:06:00.000+08:00

A new all time high closing @ $1.575 and also set a new all time high record @ $1.60

Are the bulls pulling it to the next higher box?

STI

2012-01-20T17:54:00.000+08:00

STI 2,844.62 +33.42 +1.19%