Long Term Investments

We have not blogging for more than a month. It's not that we are losing interest in the market, it's just that we are way too busy with our personal life!

Managing a portfolio is not an easy task, we had come all the way and we are still learning. At this juncture, we might be slowing down a bit in the futures and stock market, as we are busy with the new home and office renovation; plus, our newborn just arrived not long ago.

To us, these are achievements! A new house and a newborn in the same year. They are also our long term investments!

Important people in our life

Apart from your family and your loved one, there are a few important people in your life could help you succeed in your life and financially.

These VIP are known as accountants, brokers which include property or equity brokers, bankers, solicitors, insurance agents and tax advisors.

If you could not find a good accountant, it is better for you to be the one. After all, it is best to know your own financial situation rather than leave it to accountants! Plus, it save your money if your don't hire one.

If you are running your own business or you are holding a high position in corporate life, you certainly need a good broker to get the best deal for you, in order for your investment to grow. Unless you are the one who do your own research and you are the one who make the deal. Again, it save you broker fees!

Sometimes you need a banker to advise you what is the latest trend in the banking industry. Interest rate changes, latest deposit rate or borrowing rate etc. A banker can help to make your money work harder.

It is a good idea to have a trusted solicitor to help you in advising all the legal matters. Not that advising on how to run away from tax man; but at least to help in speeding up the legal process in your business or buying and selling investment properties. 

Whether are you rich or not, we think it is a good to have an insurance agent in providing services and advices on protecting your life and your assets. From advising what is the appropriate insurance package to have in different stages of life and helping in making claims whenever we need it. We definitely need this person's help!

And finally, everyone wish to have more money in their account rather than donating them to the government- the tax department! If you have a tax advisor, he might be able to help you to save some money so you have extra allowances for holiday!

These are the people we think are important in helping us succeed in our life financially. However, the most important person still "us" who make the decision and execution!

Johnny Walker & Sons XR 21

During our three weeks holiday, we had quite a lot of good and quality wines. Of course not to forget to add an extra item to our collections- Johnny Walker & Sons XR 21. Cheers!

Kavalan's Fino & Seppelt

Though we were away from the trading desk last week, we got ourselves some bargain stocks. We bought Taiwan Origin Single Malt Whisky- Kavalan Solist Fino Sherry Cask and the Australian based Seppelt Original Sparkling Shiraz. 

The awards winning Kavalan's Fino is for collection purpose; added into our collectible items portfolio and displayed in the mini bar. As for the Sparkling Shiraz, this is one of our favourite red wine and we are going to enjoy it during this holiday season.

J&M Investing mistakes

When we looked at what we achieved today, especially this year, we made good money.

Before we came to this stage, we actually paid a lot of tuition fees to learn about the market; lost money in trading and along the way learn about trading vs investing, as well as some life experiences.

There are investing mistakes we could have avoided and not losing money. But, these are the mistakes we made and we will remember forever in order not to repeat again. We think it is alright to lose money, but not okay to lose confidence. Losing confidence is the worst thing can happen as this will affect our judgement and action towards investing decision in the future. Losing confidence might cause us not having the chance to see ourselves moving into a successful financial journey.

What had we done so badly in the past that we have to remember not to repeat again?

1. No knowing what we invest or speculate

Before we invest or speculate in a stocks, it is important to find out about the company's background and work out the investing capital. This is to reduce the risk of failed investment and capital protection. If we are lazy to do this simple homework, why not we just spend the money or donate to the needy.

2. No exit plan when we have paper profit

Very often when we see paper profit in our portfolio, our greed kicked in and made us thought we will never lose money. When we are not cautious about the risk we are facing or not alert about protecting our profit, it is the most dangerous time as the winnings could turn sour.

3. Invest in the stocks we previously made money

Never fall in love with our investment especially with those we had made money previously! Because of the decision we made, picking the right stock at the right time, we might have the thought of we could made money again with the same stocks. No doubt, we might made money again. But sometimes it might not be the case. When the trend is over, jumping into the stocks we previously made money could made us lose more than what we made.

4. Jump into the market because afraid to lose the trade

It is not difficult to made small money, but big profit? It requires hard work, patience, timing and a bit of luck. Just because we afraid of missing the chance to make money and jump into the market; chances are we will lose money...

5. Invest or trade with correct mindset

Correct mindset is necessary when we are trading or investing. Sometimes we mixed up between trading and investing and therefore we could be very headache when market is against us. Trading usually is a short time frame; if we are at a wrong position, we need to cut our losses in order to protect our capital. Investing is a longer time frame and we need to handle the volatility before we see the result. If we don't have the correct mindset, our decision and action can put our capital in a dangerous position.

6. No emotional trading or investing

Emotional came in normally when we see the market is in our favour, but we did not act according to our plan. Just like Blackmores, if we don't calm ourselves and rush in to buy the shares at any price anytime, we wouldn't know when is the trend over.

7. Following tips

With our networking, it is possible to get investing tips anytime. BUT, how many tips can we follow and how accurate are there? By the time it reached us, is that the beginning or the end of the trend? It is no harm to follow the tips, provided we do our own research.

Conclusion: These are the investing mistakes J&M did in the past. These can be the common mistakes most investors made too. It is not a big deal, but if recognising them can help us improve ourselves and our financial situation, why not?

Performance Review

No matter what happen to the market in the coming week till last day of the year, we are going to take a break from the market. We think we have achieved quite a lot this year, so we deserved a break until when we are ready.

We always believe we need to rest, switch off from the market and come back again with a fresh mind. Of course, if market rally and our portfolio have a nice paper profit, we don't mind to lock in the profit; and if market drops badly, which we think unlikely, we will continue bargain hunting.

To sum up the year of 2015, we enjoyed the roller coaster ride. During the downtrend, we've collected some undervalue stocks which we think need to keep for months or years. Meanwhile, we also collected some blue chip and REITS, attracted by their dividend payout.

When market rally, we sold our holdings; keep the cash and turn it into other investments. So far, we are quite happy with the result and hopefully we'll perform better in the coming years.

Our portfolio's result year to date:

Australia: +25%

Hong Kong: +14%

Malaysia: +5.5%

REITS: +4%

The above result does not include the dividend and interest received throughout the year. As our Ringgit had depreciated quite badly against other currencies, to us it's a bonus since our portfolio consists of Australian Dollar, Japanese Yen, Hong Kong and Singapore dollar, not to mention Chinese Yuan which just included into SDR.

We'll remain our currencies portfolio for the time being. Will increase our holdings if Ringgit strengthened; otherwise, we'll travel to these destinations to spend the currencies.

Blackmores Ltd

We always stay in touch with the market and pay attention to the potential upside stocks. Before we pull the trigger to invest in them, we will do a thorough research about the company background and decide when to buy by looking at the technical chart.

Of course, we do not always invest on all the research we did.

We couldn't remember what was the reason we didn't pull the trigger on Blackmores Ltd (AU: BKL), an Australian company specialize in manufacturing vitamin and natural health products.

At that time of research, the share price of Blackmores Ltd was trading at $30; if not mistaken, it should be in the year of 2014. When we looked at the share price yesterday, we were shocked to find that the stocks was at $185! 500 percent increment from the price we last saw! 

Well, these are the things will happen along the investing journey! Sometimes, we might missed the chances of making big money, just like Blackmores Ltd! Sometimes we might just pocket small profit before the big uptrend happens! Or, we might be too late to join the bandwagon; as soon as we invested, the trend turnaround.

That's why we have our J&M investing rules- no emotional trading or investing, never chase a stock we've missed without doing homework, never fall in love with your investment, never look back on a stocks we've sold, never consider to invest in the stocks we had previously made money...

We always believe if we missed this opportunity, there will always be a better one coming soon. We believe there will always be a right stock at the right time bring us a big fat profit. Have we meet the right stock at the right time yet? Yes, we did! And we believe there is more to come in the future.

Suntori Hibiki

We added two collectible items into our portfolio. Opps, it should be our collections in the mini bar. There are the limited edition Suntori Hibiki 17 years and Suntori Hibiki 21 years. Fresh from Japan!

Suntory Yamazaki 18 Years

Apart from investing in stocks, currencies and properties; we are also interested in collectible items such as liquor and coca cola, just to name a few.

A year ago, we requested a friend who traveled to Japan bought us some Japanese Whisky- Suntory Yamazaki 18 years. At that time of buying, we just wanted to collect and display in our mini bar.

The whisky is intact and sitting in our mini bar. Recently we are surprised to find that the price had doubled as Yamazaki 18 years won the "Best in show other Whisky Category" and "Double Gold Medal Award" at the San Francisco World Spirits Competition. Not only that, thanks to weakening of our Ringgit, it is more expensive to buy now compare to a year ago.

We are glad we bought it. In the world of investing, sometimes it is not about the money we've made, it is about the future we can foresee, the right decision we made and most importantly, we execute what we analysed and planned.

Buy and sell OR buy and hold?

Do you always ask yourself, what is the investment strategy before you buy a stock. Buy and sell once you see profit? Or buy and hold for more profits? Is this mid to long term investment? Or short term speculation? It is important to have a plan before we enter the market. This is because human tends to be emotional when in the market, driven by fear-when market tumbles; by greed when market soars!

In a volatile market like Hong Kong market, we always set a target price to take profit; or a cut loss point to protect our capital. Even in a bull market, the paper profit can easily turns into paper loss if there is no investment or trading plan. Therefore, it is important to have an exit price, to secure the profit, to cash in and to grow the capital.

Different market requires different strategy. In a less volatile market like Malaysia market, ongoing buy sell not only hard to generate profit, it is also drain our mental energy. We'll only become brokers' best friend-by generating more commission and income for them. Sometimes, buy and hold is more suitable in Malaysia market. However, market changed and different strategy need to apply in different market condition. We have to adapt to market changes and act accordingly.

It is always a right move to exit market when we see paper profit, lock in the cash into our account. This is what we thought. We sold Emperor Capital Group (HK:717), made 8% return in less than two weeks. Not a bad deal. At least, it is better than fix deposit rate in Malaysia which is around 3.10% per year. Meanwhile, we parked our capital into another financial service company, Convoy Financial Holdings (HK:1019), an independent insurance and MPF schemes brokerage firm in Hong Kong.

For Hang Seng Index, it closed at 22726.77 (-140.56) and spot futures closed almost day low at 22608, down 130. Range of the day for Hang Seng futures is between 22598-22951 (353).

The Best Investment

We think the best investments we made so far, is not from stocks, futures, properties, bonds or business...In fact, the best investment we made is invest on ourselves.

We could not have made money without proper financial knowledge. We could have made lots of mistakes and incurred heavy financial losses if we did not educate ourselves. We spent lots of time and effort in reading, researching, learning from successful people and implementing our strategy. Failed, start all over again and repeat all the processes...

Different financial instrument comes in handy at different stage of financial cycle. Without educating ourselves with appropriate risk management and know how and what should do, we could not have come so far along the financial journey.

Though we are not making billions right now, we are glad we are wealthy, living peacefully and happily, and most importantly, enjoying what we are doing.

The best investments is not invest to generate more money, it is to invest in ourselves, be healthy and happy.

Investing vs Trading

Sometimes we think we have split personality when we look at market. One side of our brain tells us to look at big picture of the market outlook, be patience and look for value buy stocks; ignore the noise, sit tight and wait patiently to see our result. As a result, we have an investment portfolio where our time frame is mid to long term.

On the other hand, the other side of our brain tells us; while there is potential upside or downside in the market, we shouldn't sit there without doing anything. We should take the opportunities to look for trading signal, make use of the volatility to make money on price fluctuation. Therefore, we came out with a portfolio of short term trading in indices and commodities.

Each of the strategy requires different mindset and execution. To make money successfully in investment; we need to find out what are the stocks that have potential upside base on current price and fundamental of the companies. We need to know about the dividend yield; just in case market is not doing well, we have dividend payout as bonus. Then, base on technical chart, this provides a check point for us to enter the market. When we are in the market, next thing to do is sit tight, ignore the noises and price fluctuation, enjoy the journey and wait patiently. For this strategy, the time frame we are talking about is mid to long term. It could be months or years to see the result.

In the fast trading world, it is a different kind of mindset and strategy. We need to identify are we able to take risk and cope with losses if the market is against us. If we are ok with it, then we can proceed to the game. If not, keep the capital and look for other option.

In trading, a trading plan is crucial to support us before we enter the market. We need to know where is our target price if we are right, in other words, we need to know where to exit the market to secure our profit. Meanwhile, if we are wrong, we need to have a cut loss point; to stop our losses in order to protect our capital.

It is easier to say than execute. This is because human tends to be emotional when in the market, be it making paper loss or paper profit. Therefore, discipline and risk management are important to help us in trading successfully.

Is there a chance we'll lose all our capital? There is a possibility if we are not discipline in following our trading plan. When it's time to take profit, but our greed kicks in and we cancel our order; is time to cut loss, but we refuse to do that in order to believe the market will favor us...These funny funny action will jeopardize our trading capital. 

We know it takes time to build our wealth; and it takes second to destroy it. Hence, J&M investment portfolio is a slow and steady race. Our trading portfolio, we believe with a good trading plan, combine with discipline and risk management, we can slowly increase our capital. The worst thing can happen is we lose all of our trading capital and we will not trade with margin lending. Just like when you go casino, you walk out from casino with your winning and a happy face; but never ever walk out with sad face plus borrow money if you lost all the capital.

Patience, discipline and risk management

Thanks to the advancement of internet, we manage to learn and invest globally.

Although J&M base in Malaysia, not only we invest in the local market, we made full use of the resources from internet and expand our portfolio globally.

To achieve financial freedom, the most important thing is to educate ourselves with proper financial knowledge. We begin with understanding ourselves and our risk profile; create an investment plan and strategy, and finally execute according to the plan and review every now and then.

We believe in creating wealth through buying undervalue stocks; creating cash flow through holding quality stocks and receiving dividend. We also hedge through short selling futures when market goes through correction. Of course, saying is easier than doing. Over the years, we made a lot of mistakes and we are still in the learning process.

It is not the matter of right or wrong in stock selection or short selling futures. It is the risk management. How much you made if you are right and how much you lose if you are wrong. Patience, discipline and risk management are what we learn throughout the years. Not to forget, we must have the passion and enjoy what we do.

Rich Dad Poor Dad

Rich Dad Poor Dad was written by Robert Kiyosaki and was published in year 2000. It was one of the best selling book talks about personal finance and investing. In real life, there is always Rich Dad and Poor Dad surrounding us. Poor Dad emphasizes on the importance of education and secure your life with a safe and stable job while Rich Dad sees the importance of investment and financial management.

The formation of J&M Investments partly was influenced by the real life of the Rich Dad and Poor Dad we witnessed personally. Rich Dad retired 20 years ago and up until today he has no financial issue. He doesn't rely on the funding from social security or money given by his children and yet he manage to travel overseas very often. He enjoys the financial and time freedom by doing what he likes without working from any company. 

On the other hand, Poor Dad retired 10 years ago from the company he had worked for more than 20 years. Unfortunately, due to miss management of his savings and retirement funds; he had enjoyed the retirement life for only 2 years, after that was involved in a financial disaster. 

You think Rich Dad Poor Dad only happens in the book Robert Kiyosaki wrote? Nah..It happens in our real life too. Because of Poor Dad, we had the opportunity to study hard, excel in our education and landed a high income job. And because of Rich Dad, we foresee our future living in financial freedom, enjoy spending time with our love one and enjoy doing what we love to. 

We think we are on the right path, but still long way from our goal and destination. Investment is a life long journey, we need to learn as we go; learn from our investment mistakes and celebrate our winnings. Learn from the pasts and enjoy the ups and downs.