No need to reinvent the wheel.
Read the article below and take the 4 test questions and you'll know:
How?
Let me refresh you with some financial history, if you still in denial...
1) Remember the Lehman minibond saga of 2008? Why did those "savers" jump onto the path of Earn More instead of sticking with their Save More fixed deposit accounts? Was that extra few % really worth it?
2) How about Peer-to-Peer lending a few years back? Did you bite? I mean lending your money out at 18% interest is surely better than voluntarily contributing to CPF at 4%! Why today so less hype?
3) Did you invest in "High Yield" corporate bonds over their rated cousins? Why? It was all fun and games until you realised they were called Junk bonds in the past for a reason!
4) Where did all the Shipping Trusts go? I mean when they were launched, their yields were on average 3-4% more than their REITs counterparts. There must be a reason so!
5) Did you choose the "lowest" wholesale electricity plan last year? It never occurred to you they must be a reason big daddy very low key - never promoting it to the general public? Maybe wholesale plan is more suitable for corporations who know how to hedge their electricity exposure? Just like how SIA hedges their fuel costs?
Dividend investors are not the same as yield hogs.
I'll leave it to you to figure out the difference yourself.
I too was once a yield hog... Until "crash got sound" straightened me out.
LOL!
Yup, I no better than you.
Hi hi SMOl,
ReplyDeleteSuprise suprise. After answering the 4 questions, I am NOT a yield Hog. I was close to answering "somewhat" for Qn2 then I realise the key word is highest.
The word Hog means pig, and is a provoking article which to put it bluntly, is a more "literature" way of saying "stupid"
Well, I was a "low PE" hog, "7 percent REIT" hog and the list go on.
I notice I have start to acquire zero dividend stocks too. But then ...
Whatever hog, as long as u have a record to show u can make money 💸
Is more important to be left standing than to be right
Sillyinvestor,
DeleteI not smart; I learn from "crash got sound"...
That's how I learnt dividend investing is not just choosing the vehicle with the "highest" yield.
Or value investing is not picking stocks with "lowest" P/E.
And trading is not just drawing some "imaginary" lines on a chart and simply buying at support or selling at resistance.
If anyone and everyone can do it, then its probably not a skill or craftsmanship that's worth a lot...
Parents frighten their kids if they don't study hard, they'll end up at occupations anyone and everyone can do...
But the same parents, when it comes to the Earn More path, believe "shepherds" peddling anyone and everyone can do it snake oils!?
Smol,
ReplyDeletePeople forget that wholesale electricity is a trader's market ... you need to monitor oil prices, at least on monthly basis, and keep abreast of news like Mid-East geopolitics. ;)
Unlike OEM electricity retailers, where it's more of a fixed deposit market lol.
Glad I made the move from wholesale to Keppel in early-2021 (Uncle8888 would be happy lol). The moves in oil prices even then was not assuring.
Haha used to have 1/4 of my portfolio in junk bond funds throwing off 5%-8% "dividends".
The rule of thumb in the old days (pre-2000) was that if junk-treasury spread closed to 4.5% or less, watch out!
It went to 2.5%. I held on. And GFC happened. It's currently at 3.5%.
Luckily on aggregate my junk bond funds "only" dropped -35% at the worst point. Double luckily Ben Bernanke started QE lol.
With the Fed on my side at that time, there was nothing for me to do but to hold on collecting dividends. I finally exited all my junk bond positions in 2014 when the high yield spread compressed back to below 4% ... overall a nice profit. But haven't touched junk bonds since.
They can be very good investments ... when the spread hits 10% or more, which occurs during capitulations in crashes & bear markets. (Also a signal to buy big in stocks ;) )
The last time it happened? On 4 days from 20-25 Mar 2020.
Spur,
DeleteNothing wrong with buying junk bonds, stocks with highest dividend yields, or farming cryptos with obscene yields - provided we know what we getting into.
Right sizing these SPECULATIVE positions (no, they are not SAVE MORE vehicles) as part of our overall risk management is key here.
You are the few retail investors at this watering hole who plays bonds. Glad to have you adding to our diversity here!
I do follow the bond markets, but that's for my forex trading. Same, same like you use bonds to market time stock entries ;)
Luck plays a part right?
I've been "right", but lost money...
I've been "wrong", but made money anyways!?
Its like your junk bond funds. You were wrong, but Ben Bernanke came on his white horse to bail out speculators!? LOL!
Of course the money to bail out speculators came from savers.
Imagine doing the "right" thing all your life and being "punished" for other people's mistakes???
With inflation in US hitting 7%, if the Fed don't increase interest rates fast, savers will be wiped out...
But if the Fed hikes too hard, too fast, speculators will be taken to the cleaners...
Ben Bernanke and Janet Yellen must be giggling at Jerome Powell, "You're it!"
The position of US Fed Chairman cannot Buy-and-Hold.
Its a trade. Do your tour of duty, pass the balloon to the next patsy, and get the hell out before the balloon bursts!
Not that bad to be yield hog if net result of being yield hog with lots of passive income and lies flat in the market. Counting passive income less stress. Same as trading. Just win more and lose as yield hog.
ReplyDeleteSorry. Lose less
DeleteCW,
DeleteHey! We are on the same side!
It's never about the labelling or nouns ;)
Its always about the adjective!
Just as long we are successful and money-making at investing or trading , who cares what we (or others) call ourselves!?
LOL!
Meow.