B is for Busy

Last week had been a hectic whirlwind in terms of work and assignments which has left me so exhausted at the end of the day that I have hardly had the energy to blog about financial matters.

Busy as a Bee: The Silver Lining in the Cloud
How does being busy help you manage your investments? I realised that this hectic period made me realise one thing... That in investing for the long-term, sometimes doing nothing is the best strategy. This recent correction due to the write-downs of billions by US financial institutions has also affected my portfolio as I didn't have the time to monitor my investments closely. Hence, on paper, my paper gains have been severly trimmed leaving me with only a miniscle 0.78% return if I were to liquidate my entire share portfolio right here right now.

But I do not intend to do so as I am holding on to my portfolio for the longer term. And it made me realise that I was getting into the trading trap where I felt the urge to buy or sell something as the market moved up and down during the days, weeks and months. I cannot time the market, hence, my approach in selecting blue-chips based on their fundamentals and dividend yields has helped me. But my few speculative punts have turned sour.

My ability to hold allows me to be cool enough not to liquidate or sell my shares when sentiment is bad. Hence, I can ride out the storm for the time being. However, this episode again makes me re-examine my approach to investment, in that I should concentrate on my game plan, to invest in quality blue-chips for the longer-term capital appreciation and regular dividend income.

Investing for the long-term
The other thing that has happened to me is that there will be a new addition to my family soon next year. Hence, my investments now can really be benchmarked to what I will bequeath my child who will be born next year. :-)

This really makes me think longer term as I have a real-life investment horizon of about 19-20 years which will be the age when my child goes to University. I hope she will make it to the best of her ability and that I will be able to fund it well when the time comes.

Also, my shares can be bequeathed to her and really reap the benefits of long-term capital appreciation but staying vested for the long-term.

Changing perspectives
A long-term horizon sometimes doesn't sink in until one is able to visualise it clearly. For me, my daughter's coming will herald a new age in my investment philosophy, that is to create value by investing in blue-chips that will be part of her university tuition fund or her coming of age present. In the meantime, I look forward to teaching her to be financially literate and to equip her with the skills to survive in our modern world and beyond.

What type of financial legacy do you wish to leave behind?

Who and what are you investing for?

Be well and prosper!