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The 4 Keys to Becoming a Successful Investor

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Many investors believe success hinges on timing the market or spotting undervalued stocks before anyone else. However, decades of data across numerous markets show that achieving this consistently is incredibly difficult, if not impossible. The path to successful investing lies in building the right mindset and strengthening your financial literacy. By focusing on long-term principles and developing habits that improve resilience and decision-making, you will be better equipped to navigate the ups and downs of the market and build wealth over time. Here are some core principles I believe will increase your chances of success in the market. 1. Conviction in Your Market and Long-Term Vision To succeed in any market, you must have conviction in the assets you invest in. Long-term success isn’t about quick wins—it’s about letting your investments grow, sometimes over years or decades. This means genuinely believing in the long-term growth potential of the stocks, funds, or other assets you
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Networth Update 3Q 2024

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It's been a while since I last updated my finances. Since then, the renovations for my flat has been completed, and my wife and I have hosted a wedding banquet. With these major expenses behind me, I can now focus once again on building my wealth. I took this opportunity to consolidate my investments. Specifically, I have completely liquidated my positions in Stashaway and sold the cash-funded investments in my Endowus account. I switched to an All World ETF (ISAC) and a US small-value ETF (USSC) through IBKR. Besides streamlining my portfolio, the primary reason for this switch is to reduce the recurring fees. Going forward, I plan to DCA based on the following allocation: $3,000 in ISAC, monthly via IBKR $1,000 in CSPX, monthly via IBKR $1,500 in USSC, quarterly via IBKR $1,500 (SRS) in Dimensional US Core, monthly via Endowus $1,000 (CPF) in Amundi World, monthly via Endowus With these, I'm looking at a roughly 80% US 20% international portfolio with a slight tilt towards sm
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Net worth Update 3Q 2023

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CPF: $304,500 (-$79,000) The large drop in CPF was due to a downpayment for my  resale   HDB flat. Cash: $264,800  (+ $300 ) Consists of a combination of: Cash in UOB One, OCBC360 and DBS Multiplier Money market fund in robo cash management A small amount in SRS, awaiting allocation into Endowus ETFs: $111,100 (-$2,400) Both CSPX and QQQM moderated in 3Q23. Endowus: $130,800 (+17,300) My DCA portfolio for international exposure and tilt toward small cap, value, profitability and momentum. The portfolio consists Dimensional US Core Equity (25% of DCA amount) Global Core Equity  (25%) Global Targeted Value  (17%) Emerging Market Large Cap  (8%) Pacific Basin  (8%) Endowus 80% Equity 20% Bond managed portfolio (17%) Gain consists of capital injection of $18K and capital loss of $700 SG Stocks: 54,800  (-$1,900) Individual stocks with focus on dividend-paying companies. Most were purchased during my early foray into investing. Will reduce my exposure to SG stocks whenever I see the opportu
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The Flaws of a Dividend Investing Strategy

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Dividend investing is a popular strategy for many investors who are looking to generate passive income. The idea of receiving regular cash payments from your investments is appealing but the concept of dividend investing is based on a behavioural error where investors incorrectly treat dividends as free money that is disconnected from capital value or share prices - a phenomenon known as the Free Dividend Fallacy   ( Hartzmark et al., 2018 ). The Dividend Disconnect To begin, it's crucial to have a clear understanding of what dividends truly represent. At its core, dividends reflect the capital allocation decision made by company's management on how to deploy their earnings. They constitute payments made by a company to its shareholders from a portion of its profits, typically disbursed in the form of cash or additional shares of stock. These payments are typically paid regularly, often on quarterly basis. Dividend investors view this as companies paying out "free money&qu
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Collective Wisdom of the Lazy Investors

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  I am a firm believer of low-cost diversified portfolios for long-term investing as this approach is backed by decades of empirical evidence and financial research. However, constructing our own diversified portfolio tailored to our investing preference and risk profile can be a challenging task. It involves meticulously identifying the suitable allocation to asset classes, geographical regions, and even the appropriate level of factor exposure. Questions like, "What percentage of my portfolio should be allocated to US small-cap value stocks?" can leave many investors scratching their head. Fortunately, many great investors and portfolio managers have developed a plethora of potential portfolios including Ray Dalio's All Weather Portfolio and Harry Browne's Permanent Portfolio that you may have heard of. A valuable resource in this regard is LazyPortfolioETF.com , a repository of over 100 "lazy" portfolios that can be easily implemented using a few ETFs and
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Net worth Update 2Q 2023

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CPF: $383,400 (+$7,400) MA was topped up to BHS at the start of the year, while SA has exceeded FRS due to OA->SA transfer and RSTU over the past few years. Cash: $264,500 (+ $3,800 ) Consists of a combination of: Cash in UOB One, OCBC360 and DBS Multiplier Money market fund in robo cash management A small amount in SRS, awaiting allocation into Endowus ETFs: $113,500 (+$13,400) Both CSPX and QQQM saw quite a substantial gain this quarter Endowus: $113,500 (+24,000) My DCA portfolio for international exposure and tilt toward small cap, value, profitability and momentum. The portfolio consists Dimensional US Core Equity (25% of DCA amount) Global Core Equity  (25%) Global Targeted Value  (17%) Emerging Market Large Cap  (8%) Pacific Basin  (8%) Endowus 80% Equity 20% Bond managed portfolio (17%) Gain consists of capital injection of $18K and capital gain of $6K SG Stocks: 56,700 (-$4,700) Individual stocks with focus on dividend-paying companies. Most were purchased during my early f
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Making Decisions in an Uncertain World

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The stock market is unpredictable. No matter how much research you have done, there is always an element of uncertainty involved. Despite this, it is a common tendency for people to evaluate the success of their investment decisions based on outcome of the stock market, even though it is impossible to accurately predict these outcomes at the time of decision making. A bad decision can lead to a good outcome, and vice versa A bad investment decision, such as placing a large bet on a highly risky asset, may result in a good outcome (e.g. scoring a multi-bagger) by sheer luck. However, the investor may overestimate their influence on outcome which may in turn encourage him/her to continue making risky bets. Conversely, a sound investment decision can result in unfavourable outcome. For instance, the decision to invest in a (basket of) low cost broad market index fund/ETF could be a prudent move for long-term wealth growth. However, in the short to middle term, the market return could fal
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