My long-term stock shopping style

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Times Square 2’s lovely fake courtyard

Hi guys! It’s been purely hectic at work I’ve been buried under a ton of cases. February just crept up and I’m sure everyone is looking forward to a long weekend next week. I sure am.

 

Shopping time

 

On the finance front, everything is going on auto-pilot as usual. I finally found the funds to buy more shares of stock this month, so I went shopping twice in one week! I try to resist timing the market. I buy shares once or twice a month, whether in an up or down market.

I just lucked out this week as there was a huge dip in the market allowing me to buy blue-chip shares at a bargain so I bought twice in a week. I also opted to buy blue-chip in anticipation of cash dividend payment in less than 30 days. I should profit twice – from the cash dividend and from the future capital appreciation (if stock price appreciates in future).

As a long-term investor though, the short-term moves in the market aren’t relevant to my buying and selling decisions as what matters more to me are the financials of each company (profit, long/short-term debt etc), the health of the industry it is in, and the macroeconomic fundamentals of our country. I’m a lazy investor. I check these things once before buying into a company and just keep buying thereafter until harvest time comes (a minimum of 50% profit in one or two years [or at least a 20% per annum profit], which unfortunately hasn’t been possible the last few years).

It does get boring being in it for the long-haul. On the plus side, you avoid paying the transaction costs associated with frequent buying and selling (commission, VAT on commission, percentage tax (which has now increased to ¾ of 1% of gross price from ½ thereof)).

If one holds dividend-paying stocks, you enjoy double profit from such dividends and from the sale of the shares themselves.

I’m a long-term investor by necessity as I just don’t have the time to do careful financial analysis on the daily or as frequent as is required to profit at day-trading. Lastly, I just don’t think it’s that profitable to day-trade.

 

Admittedly I have attempted to do short-term trading during those times in law school when I was bored. The expectation of an expected profit always perked me up like no coffee can. However, this lasted for a minute as I often regretted selling too soon when the stock later shot up just two years later (as an example I bought GLO at 700 and sold at 1,000 at 42.8% profit. I think I held it less than a year. It later shot up to 2500 just some years later. I also sorely missed GLO’s huge cash dividends). I later learned the value of patience and regular stock-buying every month. Consider your stock investments as your nest egg, which will hatch when you decide to FIRE. Also, take comfort in that it is a relatively liquid asset one may access in the event of an emergency, illness or job loss.

I still have fun though. Haha. I keep a portion of my portfolio in short-term or “play” stocks which are volatile and meant for some speculative buying and selling. This portion is for growth stocks which I expect to shoot up in the short-term. I mostly enjoy trading, can you tell?

 

Blog feature

In other news, Jim at acceleratedfi did a feature on yours truly. The interview is here. Jim is an engineer in the US who went from zero USD net worth to USD 161,402.00 net worth in five years. That’s accelerated AF!

What’s your stock-buying style?

George

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