It has been an exciting week with the Biden victory in the US election and possible Covid-19 vaccine. This caused the stock markets to rise as investors cheered the positive news. The STI finally had a decent run after being one of the worst-performing stock markets for a while. Not sure how sustained it would be but it’s nice to see my Singapore stocks in the green for a bit. After being in the red for so long. Then again, they could start sliding back into the red again from next week so you never know.
When stock markets are rallying, it’s easy to look back and start thinking or wishing you invested more of your cash. I admit that I did have such thoughts and wondered whether I should have been more aggressive with the equities allocation in my asset portfolio for the year. This would have meant ramping up my rate of investing with higher returns as a result. Easy enough to consider in hindsight but much more difficult to implement practically. Things could have gone either way and I rather lose out on gains than make more losses.
My biggest fear is taking such a big investment loss hit that I cannot recover from. I’m not confident of becoming a full-time investor because I don’t think I can generate consistent returns from the stock markets. I have more confidence in maintaining my job but I know there are limits on my career earnings. There’s a cap on salary growth and a higher salary always comes with more responsibility and stress. Companies just want to cut costs in a declining revenue environment and just want to squeeze out as much as possible from their employees.
I rely heavily on the active income from my job to generate my investment income. It would take time for me to see significant gains. I don’t see this changing unless I put in the effort to pick up substantial new skills to do something new. Or pivot into another area that has higher earnings prospects. I’m also becoming more cautious financially as I see my kid grow up and we start considering whether to have a second child. When you are responsible for your family’s finances, you feel the weight of your decisions more heavily. Because it’s not just you who has to suffer but your family too when mistakes are made. This is why I always keep a large cash balance as a buffer and will only draw down on it for the family or as a last resort.