Tag: loss
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Choosing Either Monthly Or Lump-Sum Investment
In my previous post, I shared how lump-sum and monthly recurring investments can produce different returns. In this post, I will explore further but this time I will flip the chart (as shown below) to simulate a market downtrend scenario. Negative Investment Returns As expected, the returns will be in negative territory. But do notice…
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Stockdale Paradox: Realist vs Optimist vs Pessimist
The law of karma is the law of cause and effect. Effect is determined by the nature of the cause. So the result of action is determined by the nature of action. Action is only an extension to the thought processes of the mind. Therefore action is determined by the nature of your thought. The…
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Loss Aversion: The Emotional Impact Is Real
11th November 2019, around 2.10 AM Malaysia Time zone. It’s the 77th minute of the game. Liverpool FC (LFC) was leading by 3 goals but Manchester City (City) managed to sneak a goal in. For City to equalize they need to score extra two goals in the next 13 minutes plus stoppage time. Based on…
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Why Do We Fail as an Investor?
I’ll start this post by admitting I have failed as an investor previously. I’m sure I will fail again in the future, but the difference is now I have a better coping mechanism when it comes to losses, especially unrealized losses. I guess I got better at managing my investment risks. Returns There was…
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Don’t Fall for One-Year Investment Return
Say you come across a person or an article indicating a particular investment has made a 10% return in the past year. Let’s try to be a bit more dramatic and say 40% return. I bet this will catch anybody’s attention. Our mind goes “This is a sure win. Everyone is investing in it and…
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Discount Rate is not Markup Rate (Part 2)
In my previous blog post, I shared the below two points:– Differences between discount and markup rate – Markup rate is always higher than the discount rate How can we apply this knowledge in investing? Well, the goal of any investment is to earn a return or profit at a future date. It simply means…
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