Look at how time flies! It has been 2 years since I started this blog to track my journey in investing. And so far, I'm loving the process. Here are just random thoughts I could think of as I try to remember the things that happened this year.
I started investing in the stock market following the ideas I read in books. Without any prior experience, the authors were my only guide.
Needless to say, the first years were almost red. I was on the edge if I should trust a person who wrote a book about investing. But today, their wisdom has guided me. They proved to me that value investing works. You just need to have the temperament to hold on tough times.
If it works all the time, it wouldn't be effective as more people would be doing it. The down times for value investing is what makes it effective. Not many people can withstand a 2 year loss of -30%. And not many people are willing to sit through it. Thinking that trading and doing something with the portfolio will make it produce money.
Wealth is created when value is created. And many more wealth when majority has mispriced them. But the real premise is to find value.
Mutual funds adds no value. To the one who knows what he's doing. But takes money from you.
Consider this, a mature economy, the US' stock market returns only 7% per year. Minus inflation of 3%, you're left with 4% of your investment to use for living expenses or whatnot. Now then if mutual funds charges 5.5% per year on management fees, you are -1.5% down. You lose money. If you're not angry about that, you should be.
Even with the least management fees I could find in Philippine Mutual Funds of 1.5% per annum. You're looking at 2.5% per year yield on your investment.
My portfolio is up 20%. Based on capital appreciation alone (dividends are not included). Compared to the PSE Index 4.87% as of this writing. I've beaten the index! YEAH!
Most of the stocks I hold now have yields from 10% reaching 50%. Though not yet a tenbagger, I already have the proof and confidence that I need to continue this style of investing. I do have some losers but I'm still up on the bottom line and they still give me dividends from 3% - 10% per year.
My goals have changed. The original goal of this blog was to reach $1 Million through investing. But I have come to realize that I do not need to have that amount of money. Because the investment income that I have, would already be sufficient for me to live comfortably at P46,000 / month. It is then more practical to pursue other things in life. I have made a page for the goals.
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