In perhaps one of the most disturbing scenes ever shown on TV, Adam Cheng’s character in TVB’s block-buster drama threw his four sons from the top of the stock exchange building after losing his fortunes in the stock market. That was in 1992 and the controversial scene was aired during the first episode of the epic drama. If the Hong Kong producers wanted to deliver a devastating impact on viewers, they succeeded because until today, this drama set the gold standard for a stock market drama series.
I was only 12 when The Greed of Man was shown and obviously I knew nothing about the stock market back then. Nonetheless, the drama has delivered a shocking message and that is to always respect the market. You can make a fortune from the stock market and conversely, you can also lose everything to the stock market if you cannot manage your emotions. At the end of the day, you must remember that nobody can beat the market.
In the real life, many Singapore investors and bloggers were taught a sobering lesson on how cruel the market can be. Within a year, the mighty Keppel Corporation’s stock price plummeted from $9.00 to $5.00. The stock is expected to continue to decline given the plunge in oil price and weak market sentiments. Many investors who had bought Keppel shares last year or even earlier would have lost a lot of money. Local investment bloggers who had gushed about investing in Keppel must be sweating right now on whether to sell or hold.
Losing money from bad investments is a terrible feeling. The worst case scenario is losing your entire fortunes in the stock market. I believe there were many cases of people committing suicide after losing all their monies during stock market crashes and incurring massive debts. Some people could not take the blow and choose to end their lives with their children.
Maybe I have never been through the feeling of losing everything overnight but I cannot imagine dying together with my kids. Just this morning, my wife and I talked about this topic and she said that the reason why people do that is because they do not want their children to suffer. Although I agreed that orphans are very pitiful, my view is that no parents has the right to end their children’s lives.
The mantra of this blog is “To make money. To build wealth. To preserve wealth.” This is my guiding principle since this blog is founded. Time again, it has served me well. Since 2010, I have not invested in the stock market using cash. My only stock investment was K1 Ventures which I purchased using my CPF-OA account and it was meant to serve as an emergency fund to pay for my property mortgage in case I got retrenched. I have since sold off all my shares two years ago.
Of course I am no guru and did not predict the current market correction but I just did not see any value in the stock market back then. Some readers may think that I am an armchair critic and some had even challenged which stock I have invested in the past two years. I am glad that I have not been goaded into buying stocks then. Otherwise, I will now be worried and depressed like many of them.
There will always be winners and losers in the stock market. Certainly, I do not take pleasure in seeing others suffer from stock market crashes and thus, has been advocating readers to diversify their investments across different assets like bonds and gold and silver bullion. Investors who refuse to diversify and choose to invest in stocks only will live to regret. Usually these people do not understand what risk management is all about and overestimate their abilities. Do not join the dark side.
SG Wealth Builder