A Healthy & Wealthy 2014

The Earth has made one round around the Sun and it is time for a calendar year change. It provides a marker and serves as a reminder to take stock, reflect and plan. As the saying goes, to know where you are going, you need to first know where you came from.

Time heals all wounds, some may disagree but human memory is not perfect. If we were to base solely on personal ability to recall the events of 2013, what were perhaps three most significant ones? At the national level, the news that took over the country from my perspective was in chronological order, the sensationalized case where Ng Boon Gay and Cecilia Sue became infamous, followed by dengue and the haze where PSI and N95 were all everyone could talk about, and lastly the Little India riot is still recent enough to be mentioned occasionally.

Now, do you recall the stock picks by analyst in January 2013? What were their predictions of the STI level? Had the crystal ball gazers been accurate to see that STI was going to be unchanged? Maybe its time to review your broker or financial adviser’s past advice or your personal performance - Did it beat the benchmark, is it worth the fees paid, was the performance attributed to skill or luck.

Those that were right will make sure to remind you about it and those that were wrong will bring focus to what lies ahead instead.

In the mood of the festive season of giving, it seems it is also the season for FREE financial advice. Lists of stock picks for 2014 are being thrown around freely, predictions on technical analysis – support and resistance levels are dished out freely, advice on value investing to be the next Warren Buffett are also recommended freely.

I recall the words of the Father of Value Investing, Benjamin Grahman - learn to ignore the noise. Everyone’s situation is different and it calls for different approaches. He advises that there are only 2 types of investors – the aggressive and passive.

Taking a leaf from Malcolm Gladwell’s book, “Outliers: The Story Of Success”, the magic number is 10,000 hours for the key of success. To be a successful aggressive investor, one should put in at least 10,000 hours of practice before embarking on this role.

In the meantime - 2014, I shall be a passive investor with real money while carrying on to clock the 10,000 hours of simulated money to grow in my investment journey.

For a Healthy & Wealthy 2014, CHEERS!