Friday, April 19, 2013

Are you having investment savings fatigue?

Savings is a form of accumulation of wealth.
 
This is especially true when you are in the stage of accumulation. The higher your savings rate are, the higher your ability to put those funds into investment and get higher returns thereafter.
 
I've had a fairly solid savings rate since I started my investment portfolio in 2010. Since then, I have utilised them resourcefully to build up my arsenal of solid dividend payers. These include shares in Reits which give a consistent cashflow to my portfolio as well as similar dividend blue-chip grandmaster like Singtel, SPH, ST Eng and SIA Eng which give very decent yields. As my portfolio has grown over the last couple of years, I noticed the result is becoming more and more dependent upon the performance of the stock market. If the market does well, my portfolio would grow at a faster rate and if the market turns bearish, the opposite would occur. Over time, it will grow to a point where it will depend much lesser on the elements that are within my control. So how do folks keep up with the motivation of maintaining their savings habit then?
 
I spoke to a few seasoned investors who are using a different metric to gauge their performance over time. Based on their response, it seems that they are not keeping track too much of their capital gains or losses. To them, unrealised gains or losses mean nothing to them, as long as the company fundamentals remain strong and dividends continue growing - that's what they are more interested in. When they invest their savings of $10k, they are seeing S$500 of extra income annually or S$40/month. This is where they get their motivation in savings. It is always going to earn them extra income annually.
 
How do you keep up with your investment savings habit? How do you deal with investment savings fatique?
 
You're most welcome to share.
 

3 comments:

  1. Good for you brother but I thought the term investment savings is not appropriate. Shouldn't it be investment yield or return?

    Perhaps you might want to diversify your investments and consider asset allocation in bonds, precious metals and property.

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    Replies
    1. Hi Greatsage

      Yea you are right. Investment return would probably be more suitable to describe the above :D.

      I do own a property and an office in Indonesia which i bought in 2011 and 2013 respectively. Bonds is certainly something which I would want to look out for in the near future, but probably not at the moment as the interest rate is at its lowest.

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    2. Warren Buffet's investment in Coca Cola is one amazing example of rising dividends.

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