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(27-07-2023, 08:31 AM)i4value Wrote: If you come from the angle that you want to improve yourself, then I am not sure opportunity cost is a good benchmark. There are many investors who have shown that you can beat the index and that EMH is not really true. So the best benchmark (for improving yourself) is to look at the great investors and try to develop your skills to match them.
Would the aggregation of "Tuition fees paid and opportunity cost (ie. risk free rate)" be a better benchmark?
I come to realize that there are similarities between investing and getting into business. Unless one is naturally talented like WB or inherited a mature business, else things are never as linear as that of a salaried employee.
For most of us, investing or getting into business - is a case of "nothing happens for a long time....and then suddenly something everything happens exponentially". At least that is my experience in terms of investing so far. As you shared, you had similar experience.
But of course, another way to approach this...is that many of us still can't keep up (not even say outperform) the whichever benchmark we chosen. So if we are wise enough, we give up and index.
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.
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27-07-2023, 11:46 AM
(This post was last modified: 27-07-2023, 12:00 PM by specuvestor.)
This is a good simple example of opportunity cost on AA. If you use OA or SA to invest through CPFIS then your opportunity cost is actually 2.5%/ 4%
Just as a reference GIC SGD CAGR return is about 5%+. And we know that most people lose money in CPFIS
(27-07-2023, 01:14 AM)Wildreamz Wrote: Agreed.
Everyone knows according to EMH, we are not favored to beat the index, long term.
We also know, the approximate index allocation that suit our risk appetite (be it CPF SA, dividend etf, STI, SPY, QQQ, VTI etc.).
Hence, "your opportunity cost", is probably the best benchmark.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
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(27-07-2023, 08:31 AM)i4value Wrote: If you come from the angle that you want to improve yourself, then I am not sure opportunity cost is a good benchmark. There are many investors who have shown that you can beat the index and that EMH is not really true. So the best benchmark (for improving yourself) is to look at the great investors and try to develop your skills to match them.
Could you share how long you have been investing and what is your portfolio returns on an annualized basis during this period of time?
Please do your own due diligence. Any reliance on my posts is at your own risk.
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(27-07-2023, 11:46 AM)specuvestor Wrote: This is a good simple example of opportunity cost on AA. If you use OA or SA to invest through CPFIS then your opportunity cost is actually 2.5%/ 4%
Just as a reference GIC SGD CAGR return is about 5%+. And we know that most people lose money in CPFIS
They posted USD denominated 6.9% CAGR over 20 years and nominal real returns of 4-5% CAGR. Respectable, but probably below SPY (
http://www.lazyportfolioetf.com/etf/spdr-sp-500-spy/).
https://www.gic.com.sg/newsroom/all/gic-...rtunities/
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger