After ten years of investing, I decided to publish a book – “Dividend Vault”.
It is a journal that documents my investment journey: my beginnings, the philosophies & strategies adopted, my successes, my mistakes and the lessons learnt. I have compiled my past investments and accessed them. Of which, I wrote case studies to highlight the main drivers of both successes and blunders.
It was a fun book to write.
In this article, I’ll make a list of the best lessons that we (myself included) can learn from the book. I believe these lessons will enable us to build better and sustainable portfolios in the long run.
They are as follows:
1. Choose Your Game and Stick to It
In general, there are three types of people in the investment markets.
They are speculators, traders and investors.
They exist in all investment markets: stocks, bonds, ETFs, real estate and so on and so forth.
What defines them is the mindset, the philosophy and the strategies they use to buy these assets.
Take Apple Inc as an example.
A speculator can buy Apple’s shares as they hope to get lucky with the stock. It’s no different from them buying lottery tickets.
A trader can buy Apple’s shares to ride on a certain price momentum.
An investor can buy Apple’s shares based on his or her belief on its fundamentals and valuation.
The key is to choose who we want to be: a speculator, a trader or an investor.
Once the decision is made, it is best to stick to it.
I derived benefits from this. As an investor, I chose to invest in fundamentally solid stocks and keep them for the long-term. I don’t trade or speculate. So, if the markets are chasing hot stocks, I have an easier time avoiding them as I recognise that such isn’t part of my game plan. Likewise, if there is a market crash like the ones in March 2020 due to COVID-19, I would invest and not panic sell as investing in such market conditions is beneficial to my game.
In short, if you invest, stick to investing.
2. Focus on Education and Experience
There are three ingredients to successful investing: education, experience and excess cash.
In my early twenties, I had none of the above.
But of the three, I prioritised education and experience over excess cash.
This is because one who is educated and experienced can raise cash to invest. Even if that person makes mistakes and incurs losses from investing, he or she can still bounce back and recover from them and build stronger portfolios.
If we reverse this with one who has excess cash to invest but has little education or experience. As you can see, that sounds very risky.
To put it simply, the wise can go from nothing to riches. The fool can go from riches to nothing.
Hence, in investing, I found it best to keep focusing on education and experience.
3. Survive the First RM50,000 In Investing
Many aim for instant huge profits from investing.
That led to a lot of disappointment for many aspiring (investors).
With disappointment, many quit and failed to capitalise on years of compounding wealth that can be worth at least six-figures of personal wealth over time.
Instead of instant glory, I found it more practical to focus on survivability and sustainability.
In my twenties, I hoped to build a portfolio that is worth RM100,000.
But, I was okay to first learn the basics, start small and build from my experiences. Looking back, it was when I hit my first RM50,000 that I became more confident of my investment skills. Of which, it was easier to hit RM100,000 and sums beyond.
All of these took time (around two years).
But once you had the mindset, skills and experience needed, they will serve you for a lifetime.
4. Fundamentals > Valuation
Once, I was more attracted to valuation and yields over fundamentals.
I recalled that I had many choices to invest in fundamentally strong stocks that offer decent yields but failed to do so. Instead, I went ahead with a stock that had offered the most superior yields. In my case, it was a big mistake and I suffered my first big loss from it.
Since then, I learnt that fundamentals of a stock are supreme and shouldn’t be compromised. The PEs and dividend yields are secondary.
I carried that lesson into my subsequent investments and they turned out mostly well.
Now, I aim to improve the business fundamentals of stocks in my portfolio. The returns would then present themselves over time.
5. Continuous Improvements
In my first ten years, I survived as an investor and built myself a six-figure portfolio.
It was not bad.
But, there is always room from improvement and progression.
Till today, I continue to study financial reports and investment letters (from investment greats). For my portfolio, I’m learning growth investing and would aim to build a diversified portfolio that could strike a fine balance between dividends and capital growth.
Future mistakes that cost money could be made and are to be expected as I expand my horizons and expertise in the game of investing.
I’m also looking forward to what I would be learning and experiencing over the next ten years and probably, over my lifetime.
Dividend Vault Book
What if you are new to investing?
If you are new to investing, you don’t need to repeat the same mistakes I made in my early years.
This is not a theory. This is real money, real stocks, real mistakes, and real lessons.
Inside Dividend Vault, you’ll discover:
- How I actually evaluate dividend stocks before putting money in
- The investing mistakes that cost me money — and how you can avoid them
- A proven, fundamentals-first mindset to build a durable, long-term portfolio
If you want a clear, disciplined approach to investing, this book is for you.
Link: Dividend Vault Book
