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I'm a Singaporean. The purpose for all my blogs is to share my life experiences in Singapore.

My Lessons on Investment

What are Shares, Unit Trust and ETF?
See which investment instrument is suitable for you.
What are Preference Shares?
It is different from the common shares.
How to invest using your CPF saving?
Enhancing your retirement saving
How to invest regularly if you do not have a lot of saving?
You still can invest if you can save $100 per month
How to buy gold in Singapore?
Different ways of investing in Gold.
My Investment Strategy
Having a winning strategy is important
Be a investor or a trader?
Reasons on why I want to be a investor rather than a trader
Peace of mind after buying shares?
Reasons on sleepless night after buying shares
Things to avoid in stock market.
Don't attempt to try these even you are an expert
My favorite quotes from Warren Buffett
Very meaningful and useful investment quotes
Buying stocks based on price and value
This is the method I use when buying stocks
Investor, Traders and Speculators Charts
Charts are affected by different players in the markets
My Quotes/Rules of Investment
My own investment rules and quotes
The Goose That Laid the Golden Eggs
Protect them at all costs
Dealing with Market Randomness
Reasons on why market direction cannot be predicted
Who can be trusted in the market?
Beware of people who give you tips
Why I am not afraid of losing money in my investment?
Know your own limits and rules of the game.

My Market Analysis

STI Index
Comparison between 1998-2000 and 2008-2000
STI Index movement
Prediction from Oct 2009 to 2011
Reason Why Gold might be a good investment
EUR/USD 10 years chart
Will it go up or down?
Taiji Symbol VS S&P 500
S&P 500 25 years chart
True value of S&P 500
Based on dollar index from 1988 to 2009
US Dollar Index
Using Taiji to Analyse
S&P(2007 to 2009) VS NIKKEI (1990 to 1992)
Is there any similarity?


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Tuesday, January 5, 2010

Rule no. 5: For a wonderful company, be delighted when its stock price falls, be regretted when its stock price rises.

A lot of investors do not like to see the prices of their stocks fall. However I do have a different view for this. I always buy stocks that have good fundamentals and at my fair price. If the price drops before my fair price, I will average down by buying more instead of cutting loss. My theory is very simple, buy when it is cheap, and buy some more when it gets cheaper.

Stock with a good fundamental will have a good chance of going up again. Furthermore I can collect dividends while waiting for the stock to go up again. That is why I always choose stocks that offer good dividends.

I have a friend who had bought Singtel at $3.40. The price started to drop until $2.85. I advise him to hold rather than cutting loss, and if he has extra money, he may want to consider averaging down. The price of Singtel at the point of writing this post has gone up from $2.85 to $3.10. He had collected a total dividend of $0.131. Though he is still making a loss now, but in my opinion, he will have huge gain in the future eventually.

I feel regretted when I see the stock price rises. It is because I am seeing myself buying stock at a higher price.

My Quotes/Rules of Investment


Eric See said...

interesting post

Thomas said...

Hi Freedom Achiever,

Instead of averaging down, how about sell off everything before the market goes down?

Assuming the example if your friend bought Singtel at $3.40 and so unlucky it's during economic crisis, then he sell at $3.35 assuming, then when price dropped till $2.85, buy in again?

Freedom Achiever said...

Hi Thomas,

Market direction cannot be predicted. No one will know whether the stock price will go up or go down. So don't ever assume. As long as you bought the stock at your calculated fair price, you should hold your stock until it reaches your target sell price.

Freedom Achiever