Sep 102018
 

Billionaire investor Warren Buffett recently celebrated his 88th birthday and told CNBC in an interview that he thinks stocks are still more attractive than bonds or real estate. In fact his company Berkshire Hathaway recently picked up some more shares of Apple Inc (AAPL) making it the largest position in the holding company.

The value of BRK.A shares increased by an astonishing 1,000,000% between December 1964 and December 2015. Meanwhile the S&P 500 market index increased by only 2,300% during that time. This is a testament to the will and dedication by Buffett & his team to create wealth for shareholders. I suppose you can say that if Berkshire has a will, Berkshire Hathaway. 😎

One thing to remember when investing is to keep it simple. You don’t have to be a genius to be good at it. 🙂

When we keep track of something it tends to grow. Building up investment experience is no different. That’s why every investor needs to track their investment decisions. This is going back to basics but it’s crucial to becoming better investors.

Investment Tracking 

This can be done by creating a simple table or spreadsheet like the following, and updating it over time. You can think of this like an investment journal. 🙂 I will demonstrate using the 2 new companies I blogged about purchasing earlier this year.

InvestmentTypeActionReasons for decisionDateExit plan
  • Parkland Fuel Corp (PKI.TO)
StockBuy 100 shares
  • Large network of retailers
  • Stable dividend yield (with growth)
  • Recession resistant
01/02/18Hold into retirement
  • Automotive Properties (APR.UN)
REITBuy 190 units
  • High 7% dividend yield
  • Relatively low payout ratio (60%)
  • Canadians love to buy cars
01/02/18Hold into retirement

 

Here are some additional columns we can add to track our investment decisions even more closely:

  • Timeline horizon (how long we plan to hold something)
  • Current market value of said investment
  • How to measure the success or failure of our decision
  • Any concerns that go against our final decision
  • Does the original reason for buying a stock still apply in the present day
  • What process did we use to evaluate the investment, eg: P/E ratio, Graham formula, or analyst predictions

No matter how good we are at evaluating investments, we’re eventually going to be wrong. Sometimes we may be wrong due to unpreventable reasons. But there are many factors that we can control, such as our own psychology and behavior.

Keeping a detailed investment journal of our decisions is the best way to remind us in the future of the feelings we had at that time to avoid making the same mistakes again. We’ll understand why we made the choices we did, whether or not it was worth it, the process behind our decisions, which strategies worked and which didn’t, and do our best to hopefully replicate past successes. 🙂 Hindsight is 20/20, but only if we remember how we thought and what we did in the past that lead to the current moment.

 

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Random Useless Fact:

What it’s like having a motorcycle.

Apr 022012
 

I’ve noticed that many other financial bloggers like to challenge themselves to limit their number of days they spend money, for example, they may try to go for 5 no-spend days for a week to see if they can restrain their spending to only 2 days. Up until now, I have only planned for, and kept track of how much I spend, but never how often or how many days I spend, which I’m now quite curious about (゜゜)~ I don’t think no-spend days are super useful from an accounting perspective because if I don’t buy milk today I can always buy it tomorrow, along with anything else I might need for the week. But I think it teaches us to plan our spending more efficiently, like maybe grouping errands together to save time or gasoline. Lots of other bloggers say no spend days are very beneficial for their financial lives, so I’m going to give this thing a try too and see how it goes (゜o゜)

For the Month of April I challenge myself to 25 no-spend days.

I think the effectiveness of no-spend days depends on one’s discretionary expenses. If I don’t spend too much on toys, fast foods, and luxuries then most of my expenses are probably basic needs which I can’t do anything about and have to pay sooner or later anyway, like hydro (electricity) or groceries.  April has 30 days, so with 25 days of no spending, I still have 5 days remaining when I CAN spend money. This will be an interesting experience for me because I have never done this before. I’ve created a new table on the right side of this blog which I’ll try to update everyday (April’s 25 No Spend Days Challenge) 

Unfortunately today is only the 2nd day of the month and I have already used up 1 of my 5 days of spending. My mortgage and strata fees (HOA) are always due at the beginning of the month and since yesterday was a weekend, the mortgage and strata payments were automatically debited from my bank account today. This means I have 4 more days in April to spend in order to be successful with my challenge. I will need to plan my spending carefully so that I can combine multiple expenses on the same day, like groceries and loan repayments for example. Ok, I’ll give an update later this month (=^_^=)

[edit]
Here is the mid month update
and here is the end of month conclusion
[/edit]

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Random Useless Fact: For every $100 spent at a locally-owned business, $68 stays in the local economy compared to only $43 if spent at a national chain.