Given the recent correction and really red stock markets globally, huge gains were probably wiped out. Capital gains wise even my portfolio dipped into the red from a substantially strong green. One might question oneself if holding through all the gains and the bull market is even worth it, actually it's not that bad.
Here's a hypothetical scenario of purchasing 100 shares of STI ETF every time it falls below $3.10, 100 shares each time. This is rather similar to what I have done, except that I buy them in chunks of 1000-2000 shares each time. Regardless, this scenario is easily replicable for your average retail investor with blue chip investment plans.
Refer to the excel document below:
https://drive.google.com/open?id=162oGGkmsorrF7F_KcbboscZ_Tx6oJnY6
From a starting period of 3 years ago (November 2015) where the closing price was $2.95, the hypothetical portfolio would purchase 100 units of STI ETF in the month whenever it closes below $3.10. Fast forward to today, STI ETF closed at $3.10. On the surface, it's only a $0.15 gain over 3 years, which is roughly equivalent to 5%, that seems really pathetic - might as well place that in time deposits.
However, in the months where it fell even lower, investors who have the courage to buy in would have accumulated shares at a cheaper average cost per share. Inclusive of (averaged) dividends, the actual returns would actually be 17.2%, with the highest profit being 33% when it peaked. Nowhere after the 3rd month will the investor be in the red even though prices tend to fall or stagnate.
End of the day, nobody likes it when the market plunges, but everybody wants to buy stocks when the prices are low, so be patient and accumulate, even though times are not exactly great. Chances are it will pay off when you least expect it.
Disclaimer: Fees, commissions, and taxes are not taken into account for these purchases. The author is currently LONG on STI ETF, and have been for a rather long time.
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