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Shares: Should You Buy-And-Hold, Buy-And-Sell Or Sell-And-Take-Loss?

If you are into investing with shares, you would have came across or learned about the above three phrases:

– Buy And Hold

– Buy And Sell

– Sell And Take Loss

I am not a Professional Stock Investor and I have not really made Thousands out from my investments. But I am starting to understand the significance of the above three phrases through my personal in a negative manner and I wish to share what I know about them with this post.

If you are just starting to go into shares, you may wish to take note of them and I hope this can be useful to you!

1. Sell And Take Loss

You can have a good laugh at this. When I first got into shares in 2008, all I knew was Demand vs Supply and the impact of Inflation that will drive up the share prices. These are the two schools of knowledge that I apply to buying of my shares.

So I bought into a Stock that’s around $0.25 for 10 lots (10,000 shares). That’s a total of $2,500 not inclusive of the charges. The economy did not turn well for this company and the shares started to go downhill. And there’s no sign of it going up again.

When the share prices dropped by the 10 – 15% range. My friends recommended me to sell them and take loss. Being a sore loser by then, I did not give in and told them off that with time and Inflation, the share price will naturally go up!

Long story short, that company’s overall business did not improve. Shares dropped to the current range of $0.025. My current loss is at $2,000+ range. I am still holding onto it, because I do not need the money (which I may still be silly) and really hoping that the situation will have a turnaround (another silly thinking) and I can sell them off to minimize the loss.

Lessons To Learn From This:

  1. There’s no winning stocks every time. Shares go up and down depending mostly on the economy and the management behind the company and not just because of demand and supply and inflation.
  2. If your stock buy is experiencing a loss and there’s no sign of it going up again because of many factors like the annual reports have been bad – learn to sell and take loss. It’s painful but you can take this money and invest in other shares that will give you better returns and cover your initial loss.
  3. Set a benchmark for your stop losses. Some people recommend a loss of 10% to the maximum of 20%. Once you have this, follow through and apply to your investments.

2. Buy And Sell

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How To Financially Prepare Yourself For 2011

2010 is coming to an end soon and we will be welcoming 2011 in around 11 days time! And before the year ends, this is a good time for you and I to look into our Financial Planning.

What Are The Areas That We Can Look Into?

In simple terms with regards to Financial Planning, as long as it involve some form of monetary sense, it’s always good to look into. And if you like to know something concrete, here’s a list of what you can start looking into:

>> Your Financial Investments

Financial Investments would include your Investment-Linked Plans, Stocks, Shares, Unit Trusts. This can also include your investment properties (though not much changes can be done in the physical area). And basically, you will need to know with the past and present economical changes, how has it impacted your investment portfolio?

You may ask yourself these questions:

What Am I Doing These Investments For? Retirement? Mid-Term Wealth Accumulation? On Impulse? Answers to these will help you to keep track of your final objectives.

How Are My Funds Performing? As compared to end 2009 and now end 2010, how’s the performance been? Any changes needed to make sure that I am on track to my objectives?

Do I Need To Pay Particular Attention To Any Investments? This will better prepare yourself for 2011, keeping track of funds that need your most attention will make sure you will not face any last minute economical shock.

>> Review Insurance Portfolio

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Learn The Basics To Stock Trading With These Two Books

As you know, part of a good Financial Plan, would include having instruments that help you to

1. Make your money work harder (not you working hard to make the extra dollar) so that you can achieve your goals faster and having adequate savings for your retirement

2. Beating the inflation (when the price of a certain good increases by a X%, the interest rate on your savings/investment account is more than X%, that’s beating inflation)

There are common methods to help you achieve the above like Investment-Link Plans (through Insurance Companies), Investing into Unit Trusts (through Financial Institutions or Brokerage Firms) or through Stock Trading (On your own and Trading like Warren Buffett).

And for the purpose of this post, I would like to recommend the method of Stock Trading with the introduction of two books, that I have personally read, that would help you to learn the Basics of Stock Trading.

Image by Christian Ferrari -

These two books are :

  1. Ho Kok Mun’s How To Make Money From Your Stock Investment Even In A Falling Market
  2. Adam Khoo & Conrad Alvin Lim’s Secrets of Millionaire Investors

What You Can Expect To Learn From These Two Books

1. Ho Kok Mun’s How To Make Money From Your Stock Investment Even In A Falling Market (187 Pages)

Read More »Learn The Basics To Stock Trading With These Two Books