Wow... I was marveling at the sudden fury of posts in my thread within a short span.
Hi Franko,
Back to your statement on targeting 20-25% annual returns for your investment, do you know of anyone either through research or personally who has achieved that on a long term basis?
The reason why I am asking this rhetorical question is you will realize the answer to that is probably close to, if not, zero. I don’t want to frame this entire discussion into a put down session along the lines of how unattainable your goals are, but would rather like to encourage you to instead think along this track:
What competencies do you possess that makes you confident enough to outperform virtually the entire investment community out there?
In theory there is nothing wrong with setting high standards, but what is more important is to be able to take a step back, do a self-evaluation and objectively assess what it is that gives you the competitive edge to achieve frontier results.
On a personal level, I started out with somewhat similar but less ambitious goals (I am the thread starter in case you haven’t noticed). My expertise has always been on the property front and I only seriously dabbled in equities recently, but there are certain underlying principles which are similar be it property or equities. Besides learning a lot from the knowledgeable contributors here, I had the good fortune of getting to know someone personally who is really good in equity investments - I am talking about someone who delivered long term ~15% p.a. and beat indices by large margins (7-8 ppt consistently).
It is a piece of luck for me not only because of what I learnt in terms of investment thinking from him, but more importantly, to recognize the kind of gap between a relatively financial savvy manager in a MNC like me and a top money manager. I began to sense that it takes certain zen-like and unquantifiable innate qualities besides the usual reading financial reports, following news, looking at charts, talking to management or churning out financial ratios and Excel models to achieve outstanding portfolio performance. Anyone can do e-learning, play with spreadsheets and even take up a CFA or MSc Finance, but demonstrate 15%p.a. over the long term? Very rare. 25%p.a.? You do the Math. Even the hedge fund stars who made a good call during GFC have failed to replicate their success in recent years.
For your case I suspect it’s an issue of not knowing what you do not know. No offence to Dividend Warrior, but based on what was disclosed, he is neither a high net worth individual nor exemplary of a well respected investment guru like you claimed. The fact that you think he is, though, is telling of the extent of your knowledge deficiency.
Until you are able to convincingly answer the question I posed to you above, I strongly encourage you to focus more on upskilling and picking up as much as you can at this age rather than setting arbitrary performance targets on something which you do not have control over. Such thinking encourages excessive risk taking which in turn leads to emotional instability and knowledge stagnation, none of which helps you in striking rich and retiring before 50.