December 15, 2011

The Journey into Stock Investment

When i first made my investment into unit trust in mid 2008, I have the confidence that i have the necessary knowledge, know how and platform to contruct a balanced portfolio for long term investment. However, half year through the investment jorney, I have to face with the greatest financial downturn in history in the mould of 2008 Global Financial Crisis (GFC). My balanced portfolio dived to a negative 22% territory but i stuck through it and pump in more money into my portfolio and yet still managed to achieve postive returns of 7% to date. I know that my portfolio still under perform my objective of annualized return of 8%, but unit trust investment is a long journey, so i will have to monitor and tweak the portfolio to enhance the performance in due time.

The GFC in 2008 made me realize that the importance of having sufficient cash flow to sustain your finance commitments. There are many ways of generating cash flow to supplement your monthly income. For me, I narrowed my choices of cash flow products/tools to these few:
  1. Cash-related fund, such as fixed deposit, money management fund, ASW, ASM, and AS1M.
  2. Bond fund, mainly local fixed income/bond unit trust fund.
  3. Rental income
  4. Dividend stocks
  5. REIT
  6. Side income generating tools, such as ads, online surveys, product sales and affiliates.
As of now, I'm trying to grow the my income pipelines for item 4 - 6. Even though their income streams are small for now, but i guess they will grow as i accumulated more capitals and gain more knowledge. It's a life long journey to get things right.

I will explain more on my stock investment criteria and current stock holdings in the future articles. If you do have comments/recommendations, do leave a note in the comment section.

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