About me

Thank you for stopping by at my blog. 

First, a little bit about me -

I was born in 1982 in a small village outside United States. There were about 20 families. My dad is a farmer and mom, a housewife. My parents barely finished 7^th grade. Thankfully my parents knew the importance of education and they put me into school. I know how hard it was during those times for my parents. And story goes on….  I do not want you guys to yawn with my childhood story but I'm fortunate enough to have graduate degree. I'm very thankful to one person in my life and without him, I wouldn't have been in this position today. I will be always greatful to him no matter how far I get in my life.

I'm working in IT for a reputed organization and make decent money.

What I believe in -

I believe in corporate America than government. I don't know what/how our government will be in another 20, 30 or 100 years but I know there will be corporations for sure. We need a way to exchange goods and services and the only way we can get that is with corporations!!! You need some belief in corporate America to invest in financial markets. Think about this, more than 80% of world's richest people make money in financial markets and have vested interest in financial markets. They are the most influential people and have the power to influence policies and politics. If you don't believe in corporate America than financial markets is not for you.

Why I want to invest in financial markets -

You definitely cannot put money under your mattress and sleep. You need to generate some return out of that. Here are the ways you can generate return with the amount of risk.

Asset type	Returns	Risk level	Comments
Money	0%	No risk	You lose purchasing power with inflation
Money Markets	0-1%	Very little risk	You lose purchasing power with inflation
CD's	1-3%	Very little risk	No positive return and you will lose money for inflation
Government Bonds	1-5%	Little risk	You might earn very little positive return if you commit your money for long term
Corporate Bonds	2-6%	Medium risk	You might earn positive return if you commit your money for long term and below B grade companies.
Real Estate	3-5%	Medium risk	You could earn positive return and hedge against inflation.
US /Developed Markets	7-9%	High	Markets are volatile, so you can lose principal in short term. Historical average is 7-9% return.
Developing/Frontier markets	7-11%	Very high	Markets are volatile, so you can lose principal in short term. Historical average is 7-9% return.

I'm willing to take reasonable risk to generate some positive return.

Here is the purpose of my blog -

After testing and trying lots of strategies, I've found a way to make money in the market and make you sleep at night. That is the experience I intent to share.

I started reading about financial markets during 2006-2007 bull market. I slowly put some money to work and trust me, I doubled my money investing in so called "hot" or "momentum" stocks. I thought making money is very simple in the market. I was thinking about retiring by 35. I started putting more money in the market and I was making money. Real fun starts in 2008 when markets started to tank. My money started to evaporate like there is no tomorrow. I started putting more money thinking stocks are on sale and I invested in companies like AIG, Fannie Mae, Freddie Mac, Bank of America, Solar stocks etc. I lost more than 75% in matter of few months. Most of my stocks lost more than 90%. I remember one Monday (they call it black Monday), there was a lot of panic and all gloom and doom stories started to emerge over the weekend. I panicked and placed orders to sell my holdings prior to market open. I had never sold anything/placed orders in pre-market/after-market before and after that day. After selling my stocks at open, Dow snapped back up 500 points in a matter of hours. I wish that I did not panic and sell my stocks at open. I tried investing in leveraged ETF’s like TNA, ERX, ERY etc trying to time the market – again lost my money. I tried to invest in options and LEAPS, I lost money again. Still not learning a lesson, I started putting more money in the market in early 2009. Again I lost money like crazy. I decided this market is crazy and not efficient. I sold pretty much all my holdings like AXP, WFC at around 10-12$. I stayed outside the market and market took off. Today I could have easily made 4-8 times if I still had those holdings.

Again I got frustrated seeing the market going up, I started to slowly put money to work in 2011. To my bad luck, market went down again. But this time, I did not panic nor sold any stock. Having learnt a lesson, I stayed put and put more money to work. We all know where the markets are today!!
Ignore the media noise and stay put !!!

My Goal -

It’s simple - I want to live off on dividends without touching my original principle. I want my portfolio to generate ~3% dividends and I need 35-40k to live comfortably. I will continue to work till I hit that target and I’m confident I will reach that goal in 18-25 years. 

How will I reach my Goal -

Passive investing – I want to invest 80% of my investments in Index funds (where available). I want to control the rest.

Active investing - I enjoy researching about companies and reading 10-Q/10-K filings. So I want to pick investments for 20% of my assets. I do not want to invest in get rich tomorrow companies, I will invest in slow and steady growth.

If I’m significantly off the index for years, I will increase my holdings in index. If I beat the market, I do not anticipate to reduce my index funds allocations.

I’ve put my holdings in portfolio section. 

 

Feel free to comment and I hope you enjoy the blog!!