used to just buy in. drop 10 to 20% n then avg down. I find this damn bad, sucking up my small war chest and hence switch to monthly nibble. so far so good. although the average price is not the lowest price but won't get stuck at the first entry price if i buy in too early.
I have been think what method is the best to buy into a shares. I think have to depend on market situation. bull market can buy in and hold for it to go up. volatile bear market like this switch to buying a fix amt every month until i hit the cap i am comfortable with
tried on valuetronic for the pass 6 mnth at price 0.705,0.7, 0.635,0.64, 0.69,0.74. avg abt 0.68.
would you consider putting liquidity of the owned shares and size into the variable? because as a retail investor we enjoy significant structural liquidity advantage compare to those institutions or people who has a lot of money. for example, 1 mistake and they had to sell their stock, it will be much more painful and take longer for them to off load. and also additional cost when they buy because large volume of buying pushes price up. thus I normally 100% invested in the business that I consider a value without consulting market.(like graham said, treat market as your servant not your teacher) I use Kelly criterion for sizing depending on certainty and magnitude. In long run i think the return should be larger if the business' ROE and cash flow is uninterrupted.
Thanks for sharing. Similar approach but it makes me think whether I should simplify/modify my criteria to deploy the fund.
I also decided to deploy more in the initial stages as the the chances of them happening are higher than the later stage.
Current plan:
If my portfolio is down as compared to end of last year’s value AND the drop is triggered by market correction/crash, then I will
• deploy the first 30% when portfolio is 5% down (deployed)• deploy the next 30% when portfolio is 10% down• deploy the next 20% when portfolio is 20% down• deploy the last 20% when portfolio is 30% down
used to just buy in. drop 10 to 20% n then avg down. I find this damn bad, sucking up my small war chest and hence switch to monthly nibble. so far so good. although the average price is not the lowest price but won't get stuck at the first entry price if i buy in too early.
I have been think what method is the best to buy into a shares. I think have to depend on market situation. bull market can buy in and hold for it to go up. volatile bear market like this switch to buying a fix amt every month until i hit the cap i am comfortable with
tried on valuetronic for the pass 6 mnth at price 0.705,0.7, 0.635,0.64, 0.69,0.74. avg abt 0.68.
Reply to @layers : thx. will consider for buying etfs.
would you consider putting liquidity of the owned shares and size into the variable? because as a retail investor we enjoy significant structural liquidity advantage compare to those institutions or people who has a lot of money. for example, 1 mistake and they had to sell their stock, it will be much more painful and take longer for them to off load. and also additional cost when they buy because large volume of buying pushes price up. thus I normally 100% invested in the business that I consider a value without consulting market.(like graham said, treat market as your servant not your teacher) I use Kelly criterion for sizing depending on certainty and magnitude. In long run i think the return should be larger if the business' ROE and cash flow is uninterrupted.
Reply to @vincentwong10 : haha thanks for explaining more. indeed a LOOOONG time is needed to study an industry. much to learn from you :)
Thanks for sharing. Similar approach but it makes me think whether I should simplify/modify my criteria to deploy the fund.
I also decided to deploy more in the initial stages as the the chances of them happening are higher than the later stage.
Current plan:
If my portfolio is down as compared to end of last year’s value AND the drop is triggered by market correction/crash, then I will
• deploy the first 30% when portfolio is 5% down (deployed)• deploy the next 30% when portfolio is 10% down• deploy the next 20% when portfolio is 20% down• deploy the last 20% when portfolio is 30% down
Reply to @kc2024 : Agree much.