Sunday, May 27, 2012

You only know how much your profit or loss is when you stop investing.

Investing is about putting your money in an asset class in the hope of generating return. All investments come with risk, and this risk could sometimes make you lose most or all of your invested money. As long as you are still investing, you will never know whether you are making or losing money. If you are not careful, your gain in your past investment might be lost in your next investment.

Sunday, May 20, 2012

Banned from Adsense

I had been using Adsense for the past two and a half year in my blogs until I received an email last week from Google. The email said that my Adsense account is deactivated. I was told that it is due to “invalid click activity” which I don’t agree as a valid reason to ban my account as I don’t click on ads in my blogs.

After appealing unsuccessfully, I’m no longer able to earn any money from this income source at this moment. I believe it is time to move on and not to get too emotional. I see this problem as an opportunity to me to try out other advertisers. Do let me know if you are using other advertisers that work equivalently well or better than Adsense. Thank.

Saturday, May 12, 2012

What is the buy price of my current stocks after incorporating all realized gain/loss and dividends?

For those who have been visiting my share investment blog might know that so far I have gotten $17580.92 worth of dividend and $ 17785 worth of realized gain. So overall, my return is $35365.92 for the last two and a half year.

Currently I am holding stocks from four different companies and in total I have paid $128100. By taking away $35365.92 which comes from my overall return, I am only paying $92734.08 ($128100 – $35365.92) for my current holdings. This is around 72.4% ($92734.08*100/$128100) of $128100.

To see what the buy prices of my current stocks are after incorporating my overall gain, I use 72.4% to multiply by all my stock buy prices. The result is shown in the table below.
I personally feel that this method of calculating the buy price will result in clearer view whether I am making money in the stock market or not.

Sunday, May 6, 2012

How do I calculate the return from my share investment?

Normally I just take the absolute dollars to measure my gain and loss in my share investment as it is the most “TRUE” indicator which tells me whether I am making money or not. I am choosing to avoid popular function like XIRR to calculate annualized returns as it is just an indicator to make thing look nicer only.

Let me give an example, if you have invested for 10 years, the XIRR will just show 10 different values of return in each of the 10 years. What is the point to see these values if your true return in dollar is zero?

If your return is negative, XIRR values may only have the consoling effect telling you that some percentage of the investment money is lost in each of 10 years, but in effect you are losing much more in term of absolute percentage.

If your return is positive, XIRR values are just nice figures to show other that you are making some percentage from your investment for each of the 10 years. But how much in absolute dollar, no one will know.

Have you started your journey towards financial freedom?