Friday, August 26, 2011

Discipline to keep one's emotions at bay

Currently, my percentage of cash comprises 35% of my portfolio with 65% fully invested in equities. At present, my portfolio in terms of paper profits is still yielding a positive return even after the market sell down. ( I have not included the dividends i have received over time.) Having said that, i did consider liquidating some of my equities when the 50 EMA crossed the 200EMA from above but alas, i am not disciplined. I find difficulty in selling some of my equities after a sell down. It is emotional for me and i think i need to improve on this.

Having said that, another factor why im not selling is because my companies are still fundamentally strong and yielding at least 6% -7%dividends based on my buy price. When i include the lending fees which i receive when i let people short my shares through SGX, my returns are slightly more. I am not emotional when my shares drop 50% in value because of market risk . I dont mind as i will buy more but i get emotional when the companies i buy go fundamentally weaker resulting in share price decrease. I hate that.Really hate that.Furthermore, i dont know if QE3 will be annouced. If announced, equities could have a rally in the short to medium term.

This 35% cash that i have will be there to take advantage of any property correction or massive share price correction. Jackson hole speech is upon us. I hope that Ben Bernake doesnt do a QE3. I hate it when he said that interest rates will remain low till 2013 I hate it when governments impose short selling bans. I love it when Gold price goes up because i think its a bubble. I hate it when Moody's and Fitch dont downgrade US debt. Its not the time to get emotional...

AAAAAArrrghh, I am frustrated and i need inner peace. God please help.

1 comment:

  1. Controlling ones emotions when investing is the biggest problem most investors have.

    ReplyDelete

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