I am frustrated when I read comments on social media when Financial Agents are saying to do Dollar Cost Averaging to their clients and not to time the market.
I picked this stock, XOM which was Warren Buffett's favourite stock once upon a time. Had you done your DCA method from Jul 2002 to Jul 2014, a period of 12 years, you would have made a tidy profits of 243% (average of 20% per year which beats S&P500)
On the contrary, had you been advised by a FA or listened to the crowd without doing any due diligence, your portfolio is definitely going belly under. Coincidentally, you are buying at the peak of XOM and buying more when it begins to slide further. Your loss would be around 71% if you continue to hold to current period.
So you see, my friend, do take others advice with a pinch of salt. As I have said umpteen times, nobody should manage your money better than you. You and only you are responsible for your money.
Over the last 6 years, not only had you lost your capital, incur a huge loss but more importantly, had lost a great opportunity to compound your capital for a higher returns. To compensate this loss, you will need to do the following
1. cut partial loss, transfer part of capital to better deployment
2. wait for XOM to recover to your purchase price, stop all DCA
3. increase your capital deployment to other assets to make up for the loss
By learning to draw simple trend line (blue dotted line), one can see there were several failed breakdown (mark in orange) before it eventually break down in 2018.
If you have not learn to short sell, by looking at the chart, you would know to avoid buying this stock and move on to better opportunities. Such is the simplicity and power of using trend lines.
I picked this stock, XOM which was Warren Buffett's favourite stock once upon a time. Had you done your DCA method from Jul 2002 to Jul 2014, a period of 12 years, you would have made a tidy profits of 243% (average of 20% per year which beats S&P500)
On the contrary, had you been advised by a FA or listened to the crowd without doing any due diligence, your portfolio is definitely going belly under. Coincidentally, you are buying at the peak of XOM and buying more when it begins to slide further. Your loss would be around 71% if you continue to hold to current period.
So you see, my friend, do take others advice with a pinch of salt. As I have said umpteen times, nobody should manage your money better than you. You and only you are responsible for your money.
Over the last 6 years, not only had you lost your capital, incur a huge loss but more importantly, had lost a great opportunity to compound your capital for a higher returns. To compensate this loss, you will need to do the following
1. cut partial loss, transfer part of capital to better deployment
2. wait for XOM to recover to your purchase price, stop all DCA
3. increase your capital deployment to other assets to make up for the loss
By learning to draw simple trend line (blue dotted line), one can see there were several failed breakdown (mark in orange) before it eventually break down in 2018.
If you have not learn to short sell, by looking at the chart, you would know to avoid buying this stock and move on to better opportunities. Such is the simplicity and power of using trend lines.
Comment:
Selling pressure have eased this week. A rebound is in sight.
Comment:
Congrats to those who longed this stock, more to come