Always keep an open mind

 

After investing for the last 30 years, only the last 2 years have prompted me to keep an open mind about investment - thanks partly to Covid which has changed people's life, economy and many more aspects.

Though I have invested in Bursa, HKEX & SGX for many years but was dragging my feet to explore US market, partly because of the time zone that caused the concern if anything major happened in US stock market while I am sleeping, I could not re-act fast enough. I always felt more comfortable with companies that I think I understand more because they are closer to Malaysia :(). In addition, I always imagine with so many derivative products on US market and so many hedge fund in the market to slaughter small retailers, the risk is so much higher. After all, I heard some very successful investors in Malaysia only invest in Bursa !!

What happened the last 2 years ( especially after the departure of both my parent in 2020) has prompted me to think more openly and continue with my passion in investing - to earn and also to learn more about financial products. That is my passion.

The 1st thing that came to my mind, comparing all the stock markets' historical  performance, US stock market has the most impressive long term return for whatever reason (whether QE, or almost all the world's Top 500 companies are there etc). So I asked myself, is it easier to invest in good companies in a market that has shown long term growth or try to find a few hidden gems in a market that has not been growing?? If I have very good insights and industry knowledge in a particular slow or no growth market eg Bursa , yes, I should focus there because I believe I could find the shining star easily. Otherwise, I believe it is easier to pick good companies in a growing market and likely end up a winner in the long run. 

I have learned so much more about investing in US recently,  ETF - leveraged & inverse, options and gain reasonably good understanding of the usefulness of these products in risk management eg hedging using inverse ETF or options, there are in fact very good products if one understand and manage the risk accordingly. 

Options is something that I have been resisting in the past as many investors/fund collapsed due to this product. Though I had some basic knowledge about it from my Uni studies but that's far from adequate to give me the confidence to even learn more and explore this product. Well, I finally told myself to keep an open mind, learn and learn more about this product and why some investors lost big and how to avoid that, why this product is still available if it is all that bad, how Warren Buffet made good use of this product. It is in fact a very useful product - it provides avenue for monetisation of the equity holdings that we have and make some return for idle cash while waiting to fish at bottom. If we don't understand the purpose of option and just see it as stocks/products for trading purposes, then we could expose to unlimited loss when thing goes the other direction. 

I am glad that I keep an open mind and finally look at what option is all about,  I saw something I didn't or refused to find out in the past. Investing is not just about earning, it is learning too !!