Investment Diary

There is one common important sign in compounding effects that we need to focusing on is quality of the business. The quality to change for the better or quality to fight competition or even better there's no competitors in their field let the growth continue and reward shareholders by distributing healthy dividends . Why is it important? Holding a long-term asset will usually result in capital appreciation just imagine if you bought a monopoly/Duopoly company 10 years ago. You will find that company growing steadily able to manage crises like AI era and interest hike because of their strong balance and free cash flow to face off such risks. Your portfolios should be benefit from sustained market exposure by seeing the compounding effects. How identify such quality businesses? You can start reading their 10 to 5 years annual report to see how the management manage risks and whether their then-future projection fulfilled as planned. Most of them able to produce durable growth in p...

Recently, I and my gf discussed about weathering the storm of our future and we concluded that there’s a need to build a portfolio. We are considered a young couple waiting to collect key and we need some funds such as renovation, expenses and protect our downside.  I projecting this fund (building the foundation) as mid-long term 3-5 years. After we should able to proceed growth index or stock pick in small allocation. I believe using S&P 500 as a benchmark is reasonable because the holding majority derives from US and tech stocks. During the drip cycle we need to buy even more than usual DCA to beat S&P 500. I suggested investing small amount of world index as a foundation since she has mild knowledge about investing. World index ETF is the safer to invest passively in the long term which adjust the market cap over time by geographic basis. We aware the world index is not a growth massively than S&P 500 or Nasdaq but it provides us a good sleep during uncertainly. O...