Dealing with Losses in the Investment Journey

It has been an eventful month filled with an emotional roller-coaster ride.  Amidst the stock market turbulence, the unstoppable rising interest rate, the heated inflation on consumer products etc, the biggest black swan event definitely goes to the disastrous and sudden crash of crypto Luna and UST.  It has caused many investors to lose their investment capital.  Although I did not invest in the UST or Luna, I feel the pain of the investors.

This turn of event is unexpected for many, while some may say that there has been warning signs.  Regardless how we see it, many notable financial bloggers and YouTubers are affected by this event in some way or another.  Sg Budget Babe and Kelvin Learns Investing have recently posted a video on YouTube to discuss this event, share their situation in the Luna-UST crash, and to encourage other investors to remain their composure, especially when there has been post(s) in forums about investors wanting to 'seek an end'.  This is devastating to hear.  Personally, the first blogger who came to my mind is '$$$ KPO and CZM $$$'.  I do read their blog post regularly, and know that a significant part of their portfolio is in crytocurrencies with some leverage.  Thankfully, in the latest (and final in the near term) post update, they have accepted the loss and are prepared to move on.  I believe this set-back will not defeat them, as they are still young.  Time is on their side to let them get back to where they were, and I believe their child will be their best motivation. 

I believe whatever we say now is meaningless as it is all on hindsight.  Learning to deal with losses, and continue to move on is an important lesson for investors to learn.

Being an investor, I had my fair share of losses in the market.  As mentioned in my earlier posts, I only came up with a concrete investment plan, and stick to it starting from late 2017.  Prior to 2017, I was investing (speculating) based on hearsay, hype and yield.  I was just blindly following the crowd, or buying the shares because of the high yield.  Below are some of the SGX listed shares that burnt me in my early investing (speculating) years.

1)    Rotary Engineering

Capital: SGD 13,406.56        Dividend: SGD 584.00         Sale: SGD 8,462.59            Loss: SGD 4,359.97 (32.5%)

2)    First Ship Lease Trust

Capital: SGD 9,925.26          Dividend: SGD 1,460.17      Sale: SGD 3,971.22            Loss: SGD 4,493.87 (45.3%)

3)    FJ Benjamin

Capital: SGD 16,800.42         Dividend: SGD 510.00         Sale: SGD 13,349.56        Loss: SGD 2,940.86 (17.5%)

4)    Super Group

Capital: SGD 22,157.38         Dividend: SGD 0.00             Sale: SGD 18,296.65        Loss: SGD 3,860.73 (17.4%)

5)    Sembcorp Marine

Capital: SGD 25,999.61         Dividend: SGD 750.00         Sale: SGD 16,767.09        Loss: SGD 8,482.52 (32.6%)

6)    Overseas Education

Capital: SGD 3,965.93           Dividend: SGD 123.75         Sale: SGD 2,800.34          Loss: SGD 1,041.84 (26.3%)

Above are the notable realized losses that I suffered prior to 2017.  I can blame no one but myself, because I am buying into these shares without any research, neither do I understand how the business worked.  The total loss that I have incurred in the years are rather crippling.  Imagine investing this absolute amount into the S&P 500 index, I would have reached my goal of Barista FIRE by now.  However, I believe it was a learning journey that I had to go through, before I concluded the most suitable investing style I am practicing currently.

Losses are definitely crippling, and defeating.  It makes one feel bad, feel negative, feel that the world is crumbling and it is the end.  However, reality is far from that.  Money is important, but family is more important.  As long as you have the ability to work, and you still have your family and loved ones around you, you will be able to pick yourself up, and in time, bounce back higher to be a better investor, and be in a better position than today.  

Never give up, because the one who definitely fail is the one who gives up.  Hang on and may we continue to support one another as a community during the hard times.  Despite having wasted 7 years of my time in the market (2010-2017), I am glad I have improved as a person and an investor.  Lastly, remember to diversify.  Barista FIRE, here I come...!