24 May 2011

Why I do not like to invest more in bull (a.k.a bubble) market?

There are several reasons why I do not like to invest more during bull market:

  1. As a long term investor, I stay investing during low and peak season. During the peak season, too many rumors 'flying' around you and you are more tempted to buy in a stock which you are not familiar with. In my previous post, <margin of safety> is the key element to keep you calm in your investment journey. I have too many friends who are more excited to share with me on the paper profits they earn at the moment. However, they will keep on pumping money after taking profit from the stock markets. I believe this is the human nature to treat their profits not as their hard earned money. To few of them, stock market is like a casino, where you can try your 'luck' over there. However, I cannot find a lucky person who can earn profits always through the 'rumors' or 'luck'. Please let me know if you can find any. I will try to find out the reason behind.
  2. Too little profit yet too high risk during the bull market. Based on my humble opinion, the value investor always enter the bear market earlier and exit the bull market earlier. They will take into account the risk and possible return before making an investment decision. They are group of rational investor, and they will not take any emotion behind a made decision.
  3. As a value investor, I cannot find many good investment choices during this period. However, as I know, patience and perseverance will bring you to a higher level. To invest when people are fear and invest when people are greed.
However, if you ask me whether it is a bull market in Singapore and Malaysia stock market, I will answer to you 'Sorry, I do not know'. But I will assure you that through some investment principles that you can hold such as 'margin of safety', I believe we can achieve a better result in our investment journey. 

What is your opinion on investing in bull makret? Please tell me your comments in the comment box below. 

Related Posts:
  1. Margin of safety - first thing in your investment
  2. Behavior of business like investor
  3. My way of portfolio rebalancing
  4. Equity is still one of the best investment tools

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