Creating Wealth in a Volatile Market

When I started blogging early in 2007, the market was for the picking! Now things have changed starting from the subprime crisis and the so called impending recession in the US and later that fateful election when the government lost its two third majority, the stock market has gone haywire though the KLCI index has actually risen compared to the years previous to 2006.

I was quite naive to buy MRCB just before the election... as it was sliding and I thought it would have not declined any further..... gosh I lost so much on that stock... luckily it was all my money gained from the sale of Sarawak Plantation stock which I bought at RM3.08 and it went up to RM3.46, in fact a few days after I sold it , the blinking stock climbed up to RM3.80!

Then I heard this market rumor that IOI Corp was going to buy over UNICO plantation so I went on a buying spree and acquired quite a number of lots... somehow the parties have been putting on hold that plan... and now I am stuck with this "minnow" stock. I also happened to read "nice" articles on the prospects of another plantation stock MHC and went on another frantic buying and again suffered colossal losses. Another losing plantation stock is KWANTAS... such is my luck in 2008! I also lose on HSL despite the attractive write-up on the company about getting construction jobs in Sarawak!! It looks like a volatile market is not for the uninformed and giddy retail investor like me. My only consolation is that these companies pay pretty good dividends minus 28% tax!

How to create wealth in the current stormy market? May be the opportunity is there because for every down, there will be an up... but how long? The so called investment Guru Warren Buffet made his millions through long term strategies... well I do not know when he first started to invest, looks like he started very young as surely I cannot wait years to see my investments grow! I will be too old to enjoy my wealth then.

I have one jewel though in my portfolio, the fledgling company PICORP, I am breathless looking at how the stock has appreciated within five months! This jewel has offset my other losses. Hey Zak and T, thanks for persuading me to put PICORP in my portfolio, it is my life saver. I had thought the plantation stocks would help me ride the volatile market but PICORP is really a dark horse... thank you guys... please work harder for "my company" ;)

My THPlant is doing well at the moment, do you know why? Simple, because they are going to declare a 21 sen per unit dividend on 21 May. Shall I sell now? I have already made 60% profit and do I ever need the money to renovate my new house! I love this stock which I bought in the middle of 2006 at RM1.95, well it is often said that it is best to dispose of the stock when you begin to love it...

Creating wealth in a volatile market means having a longterm strategy, buying those undervalued stocks with strong fundamentals and hold them despite what some smart Aleck banker's advice that we must keep our money in "liquid" form, ie keeping in banks and make those guys richer with our hard-earned money. I would put my money still in the stock market in volatile times and just wait for the storm to boil over like old smart Warren Buffet... of course that guy got millions to start with.

After all I went into the stock market like a skipping child going into the garden, looking at the flowers, smell them and just enjoy. The "losses"? it is part of the game, just do not borrow to buy stocks.

I re post in this blog to share my joy and tribulations in a wealth creation journey .