What is investment?
Investment is time, energy, or matter spent in the hope of future benefits actualized within a specified date or time frame.
What is stock?
According to investopedia, stock is a share in the ownership of a company.
Putting Stock Investing together it mean, you putting partial of your time, energy and money into purchase a company share in the hope future that company share can give a higher return than your purchasing price.
When i met people around me who got invest in stock, i like to ask them this question: why do you want to invest in stock? What is your main reason?
All replied that i get so far — Because of profit.
and you must be thinking right now too, ya, of course, if not what can it be?
The fact what makes me start in investing in stock is profit too. When i started my investing journey, i find stock is something fascinating, is like you buying a product that you cannot see yet it can give you a return. It also give you a chance to own the company partially although you only have a little capital invested, you are now a shareholder of that company stock you bought! That’s really cool and i really like that concept.
But when you grown up and you started investing in stock, you realized what concern you most is what stock’s price is soar now and you want to participate in the hot stock and benefit from the uphill ride. After you buy the stock what you concern is that how much return you can get from your stock investment. A lot of things start to turn to number, profit and loss.
I mean nothing is wrong with that…as a good investor we should have part of that profit and loss sensitivity in our portfolio management. Ultimately, no one want to invest in the losing side but the thing is if profit is your main focus in investing journey…I will say your journey won’t last very long and most of your investment won’t have a good return. When your investment has a bad return and you can’t generate profit for a certain period, ultimately, you will quit stock investing.This is because your journey lack of certain substance.
What substance? The substance of enjoyment. You can’t really do something for long without able to enjoy and be happy by doing it. This applied to stock investing as well.
What makes me able to stay in investing journey and my passion still stay high is because I like stock investing not just because it can give me a good profit (by investing correctly) but I enjoy the process of investment. I found stock investing is a platform for me to connect to various business in the world and be part of it.
Warren Buffet once said, “Shares are not mere pieces of paper. They represent part ownership of a business. So, when contemplating an investment, think like a prospective owner.”
When come to purchase a stock, I look at the company shares as an entry to own partial of their business. So i will go and understand that company profile, business modal and their company fundamental. Within next 5 years how will it be, am I excited to be part of it?
After a period of time in observing the stock market, understanding different listed company in Singapore, there’s where my trading journey begin.
What is Trading?
According to investopedia, Trading is an active style of participating in the financial markets that seeks to outperform traditional buy-and-hold investing. Rather than seeking profits from long-term uptrends in the markets, traders look for short-term price moves to profit in both rising and falling markets.
When i cultivate the habit to look at the market everyday, that’s where my interest in trading arise. I spent some time in fundamental analysis and technical analysis, I read some articles about great investor like Warrent Buffet, Peter Lync, John Templeton and more to go. Then, i also understand the arguments between investment school and trading school.
After learning the ideas from both school, i incorporate investment and trading strategy into one and formed my own investing strategy “Dynamic Investing” system. What is the system for? The system is formed basically to constant get profit from the stock market not matter the market is in bullish or bearish. It also improvise the value investing weakness which they suffer from losses due to buy-and-hold during financial crisis.
Imagine if you buy a stock at 1 dollars and on 7th year of your investment, your stock is now 7 dollars and it potentially can go up to 10 dollars on the 10th year. Unfortunately the world financial crisis happened and stock market go into a crash, your stock is now worth bac 1 dollar…all your time and money for 7 years just go off….of course if you put for another 5 to 10 years you might able to see your stock grow back to 10 dollars or even more…but….with dynamic investing strategy…
you will be able to sell the stock at 7 dollars..and secure the capital, then use the capital to borrow stock and short it….and buy back at 1 dollars. Then you use the extra capital from the profit to hold at the new market cycle.
That’s the idea of dynamic investing and a lot of hedge fund try to achieve the similar strategy.
The interested part of investing or trading is fun, excitement and the journey to the mastery is very very enjoyable and has a reward in it. When i was student I always want to be the best in online multiplayer games like DOTA or League of Legend unfortunately I don’t have a team to pursuit such dream with me. Fortunately, investment and trading can make this possible as it is something that can be mastered and can be done alone.
With dynamic investing the system I start to see some result and I hope one day i am able to surpass what Warren Buffet achieve today with half of the time length that took him achieved what he achieve today.
Cheers! Have fun in investing and trading! 🙂