This is also an 'issue' for most of us. Many of us do not know the differences and at times, we thought we are investing. Actually, these are very few investors in KLSE, most are traders. We buy a stock and sell in weeks, days or even hours. Many do hold to their stocks when the stocks going lower. It is because we are 'afraid to lose'. To realise a loss, we rather hold and hope it will rebound. Somehow, most of the time, it did not. Then, we turned into accidental investors.

There are some people who do buy-n-hold those good solid stocks which give good dividends. That is respected as they are the people with patience and do not lose money. In fact, they will continue to benefit as the stock continue to move higher, tho in a slow pace. Slow and steady win the race.

Most of us do listen to rumours, news, read the borker reports, some blogs, gathering opinions from forums and such ... to buy a stock. It is not wrong to do such but we need to be careful about where the resources came from. We need to know their motives ... is it a trap?

Actually, there is no such thing as right or wrong. We may disagree with the way a person trade, we may think that another person could do better if only he/she could have a little extra knowledge. I used to think of it as such ... but now, I do realise and accept that we are all VERY different.

You see, when I started to be in markets merely 4 years ago, I got to know about many stocks which pay a better dividends than our 3% Fixed Deposit(FD ) or even putting our money with Unit Trust(UT). So. I was excited(as what all newbies will) to share with many my new-found knowledge. I will tell those I knew about it ... how these good stocks(will not be de-listed. of coz) paying dividends of 5-8% per year for past many years!! WOW ... it is like ... I found it!!

But, then ... the general feedback is 'bad'. Stock-markets? No way I am going to put my money into a gambling-den. Or asking me to be careful as I am lured into gambling activities with me realising it!! I was always wondering ... we could control our thoughts and emotions, why many are seeing investing in stock markets as gambling? I am using the word ... INVESTING.

If you are going to place your money in the bank(FD) for a long period of time, dont you think so it is only logical to buy a good dividend stock and put it there instead? This is LOGICAL to me. If you are buying some household names stocks, why are you afraid it might be de-listed? It doesnt make sense, right?

What I do realise further ... is that many lost a lots of money in markets. In fact, the stats showing 80-90% of them lost money(and quitted), are losing money(paper losses) and will continue to lose money. What is actually going on in stock-markets? Why do people lose money? Why am I going into stock-markets when the chances that I will lose money is so HIGH? These are the questions I searched for ... and read many many books regarding it, to understand why many are losing money in markets!! Yes, I have a mentality to understand the 'risk' part ... to know why W.Buffett placed his first rule "do not lose money'.

Well, today ... after being in markets for 4 years, after reading many books, after attended many talks, after 1900+ posts in this blog ... after attended technical-course and moving into 'teaching trading' .... I would say that I could answer many questions form newbies and novices. Nope ... I am not in advance level, not even intermediate level(yet). I do still see myself as advance-novice in FA and TA. I am just being honest to all here ... I gave myself 5-years to move out from a novice level, with daily improving myself in these two aspects --- FA and TA --- Hence, it is not right to call me 'sifu' or master. I am humbled by so many good and real ones around.

Fundamental Analysis is important for an investor. No doubt they are the persons that should be in top 10-20% in markets. They understand the businesses of the company and very patient to wait for better valuation(20% undervalued?) before acquiring the stocks. They are the people who will only buy when the whole market crashes.Yes, we could only profit much during market crashes. At the moment, markets are fully valued.

Technical Analysis is used for timing the entry and exit points. Many fundamentalists would not agree with these indicators and argued that these are pure 'luck'. Well, I was skeptical of TA too at initial stage. But, seeing many of things make senses ... I do increase my knowledge in this aspect. Yes, you could be a short-term trader using shorter time-frame or you could do well swing-trading. Perhaps, you are a positional trader with a longer time frame. Whichever time frame you choose, it is the knowledge that is needed to increase our confidence in our trades. I will put it this way ... trade only good tradble stocks!!

As majority in KLSE are traders, it is only logical to share with many about trading. Trading well and consistent, with discipline and system, will do you well and better than those buy-n-hold. I will elaborate with examples later.

Trading vs. Investing




Have to go for my classes from 8am-12 pm and followed with my trading class from 2.30 to 5.30pm today. It is yet another long day ... of .... teaching.

Good weekend ahead.

TEH