Consolidate Accounts to Discover “Free money” Part I

free moneyOver the last few months, as part of my 2014 financial plan, I wanted to consolidate my financial accounts to have better visibility how I am doing with my investments.  This process turned out to be more tedious and time consuming than I had originally anticipated, but the reward was also very high.  Below are the step by step process I went through. Continue reading

Trailing stop loss orders to protect your investment profit

stock bond mutual fund portfolioAs I mentioned in my 2014 financial goals post, I believe that the market correction will happen and want to protect my profits for my stock holdings.  I have been monitoring the stock market regularly, but was looking for a more automated to do this.  Trailing stop loss order and trailing stop limit order are my answers.  I came across it by accident as I was setting up manual stop loss order on After investing in stocks for 15+ years, I’m just learning about it.  I thought it was super useful and wanted to share.

What is trailing stop loss order?

In short, trailing stop loss order and trailing stop limit are ways to set a floor for the stocks/ETFs you hold, if the stock price drops below the floor, it would trigger the sell order to activate.  Then depends on whether you have setup a stop loss order or stop limit order, it’ll execute accordingly. The beauty of this approach vs. a regular stop loss order is that the floor moves up as the stock price rises and set a high watermark.  If the stock price drops, the floor stays at the high water mark and does not move down, therefore protecting your gains.

Why is it useful?

Let’s take a look at why it’s useful.  I think there three main benefits.   Mark’s market blog had this very useful graph to illustrate the point.  I will walk through the graph as a example to illustrate the benefits.  Trailing Stop loss stop limit order

Protect downside

When I purchase a stock, by setting up a trailing stop loss order with either $ amount of %, this allows me cap my loss or the downside.

Let’s go through the example illustrated in the graph above.  Mike purchased stock at $40, he create a trailing stop loss order with $4 below the purchase price, which is $36.  If the stock dips below $36, it would trigger a stock sale, limiting his loss to be around  $4 per share.

Instead of using $ amount, Mike can also use %, say 10% below purchase price.  I personally like %, because I can set the fixed %  across all my stock holding without worrying about the stock price.

Protect profit

Continue with the previous example, Mike’s stock did well and rose to $53.  The trailing stop loss floor would rise along to $4 below the new current price to $49, which is $9 above the his purchase price of $40.  If now the stock drops to $50, nothing happens, Mike will continue to hold the stock.  The floor is still at $49, it doesn’t change when the stock price drops from its high.   Now, the stock drops further to $49, it would trigger the stop loss order and sell it at market price of around $49.  If he had set it as a trailing stop limit order, it would  trigger a stop limit order to activate.  This would ensure he still have a profit of $9 per share, or 20% gain for his investment.  For simplicity, I didn’t take into account of the transaction fee which is small nowadays.


For me, the big value on trailing stop loss order is peace of mind so I don’t have to worry about monitoring the market so regularly.  For those of you who have followed my blog for a while, I’m a big proponent of streamlining and automation (for example, streamline paying bills).

By setting a trailing stop loss order for my stock and ETF holdings, I know if there is a sharp drop in the market, I know i won’t lose too much of my gains.

Limitations to trailing stop loss order

Doesn’t work for mutual funds

The biggest gap I see for trailing stop loss order is that it works for stocks and ETFs, however it doesn’t work for mutual fund.  I have a fair amount of index funds which can’t be protected by this method.  This may force to switch my mutual fund holdings to ETF.   As I hold mostly index funds, it’s available through both mutual fund and ETF.  One draw back with switching to ETF I can foresee is that I need another way to do monthly automatic investment.  Currently, I make monthly contribution to my mutual funds, and there is no transaction fee.  For ETF, it would be considered new purchases, and I would have to pay additional transaction for each ETF I invest into.  I don’t have a good solution for this yet.

Set the floor carefully

Don’t set the floor too low, as the market fluctuates throughout the day.  3-5% in my opinion, would be too low if you don’t want to deal with lots of buys and sells, and not to mention tax implication.

Don’t set the floor too high either, 20% in my opinion would be too high as it would mean you may loss up to 20% of your investment before the sale would kick in.   Somewhere between 8-12% is reasonable depending on your own risk tolerance and volatility of your stock.

I can’t believe I only just learned about this method after all the years of stock investing, but hey better late than never.  Now I can sleep a little easier at night.

My 2014 Personal Goals – Restoring Balance

While this is intended to be my personal finance blog, I thought I would add my personal goals for 2014 here as well as a reminder to myself.

1. Exercise more regularly

exercise regularlyI’m sure it’s on most people’s list.  I want to create a goal i can actual stick with.  I’m in pretty decent shape, mostly just want to do some toning and stretching to stay healthy and look good.

Phase 1: Get into a habit (Q1)

Setting modest goal to start with, 2-3 times a week, 20-30 minutes each. Mostly Pilates and yoga.  I busted my knee over the holiday skiing, once the doctor gives me the go ahead, I will add some strengthening exercise for my weak knee.

Phase 2: Tone (Q2)

While I’m pretty okay with my weight, I like to tone a couple of areas, tummy, arms and butt specifically.  I like to add 20 minutes of weight training to my routine, and dare I be ambitiou, increase the frequency to 4-5 times a week.  I recently read The New Rules of Lifting for Women: Lift Like a Man, Look Like a Goddess.  The basic premise is not to bother with barbie weights (2-3 lbs), push yourself to get the maximum benefit.  Sounds like a reasonable approach, I’ll give it try.

2. Reading

readingReading is one of the things I truly enjoy, fiction, non-fiction, I like to read widely.  With my demanding life right now, I have gotten out of habit.  At the end of the day, it’s easier to turn on the TV or turn to my ipad to vege out for a while rather than reading.  I have a not so good habit of finishing the entire book in one shot if I find it interesting at the expense of sleep and other things. For this year, I like to get back into the habit of reading a little bit everyday with the modest goal of 2 books a month.

One effective for me to “read” books is actually listening to audio books, I know I’m cheating a little bit here.  Though my commute is about 20-30 minutes, it’s amazing how quickly I can finished a book.  I just finished Too big to Fail by Andrew Sorkin.  It  took me about two weeks, not bad for a 640 page book.

3. Chinese Zither (Guzheng)

Chinese zitherI’ve always like the sound of this instrument and have started lessons a few months ago.  It has a beautiful, soothing sound.  I have a lot more to learn, but already I can play a few songs.  It helps me to relax.  I like to keep it up and practice 15-20 minutes each day and learn a song each month.  I plan to reduce weekly lesson to biweekly lesson,  it’ll give me more time to practice and save some money as well.

4. Spend more quality time with my kids

jugglingOften while I’m spending time with my kids, I realize I’m not really with them, my mind is wondering somewhere, about work, about my to-do list and a bunch of other stuff.  My kids would notice right away and say “Mommy, you are not listening to me.”  I need to learn to focus on them better and really be with them and devote my attention to them.

You will probably notice several of the goals is all about me.  With my work, family and friends, in the past few years, I felt I haven’t had enough me time and feel somewhat out of balance.  This year is about restoring that balance.

2014 Financial Goals

New year new goals.  I have slacking off on posting lately, work has been extremely busy and frankly I just got out of the habit of writing.  With the new year, I thought I would try to get back into the swing of things.  Here’re my financial goals for this year.  I have broken the post into four major categories.  The categories has changed a bit since my 2013 review.

  • Real estate – deal with all things related to real estate (primary residence or investment)
  • Major purchase – big ticket items
  • investment – stocks, mutual funds, stock options, restricted stock units etc.
  • Financial Protection – life insurance, living trust Continue reading

Review: Ziprealty vs. Zillow vs. Redfin

I get this question quite often, what’s the best real estate listing website?  Which site should I use?  The answer is, they each have their own strengths and weaknesses, I use all three actively.  Which one I use depends what I am trying to do.

All three sites have many similar functionalities to provide search and browse capability for real estate listings, all have decent iPhone/iPad applications for on the go usage.   Let me highlight the key differences I see and how use them.

Redfin – Most up to date information

Most up to date information

redfin.comRefin has the most up to date information, the data is refreshed on 30 minutes basis.  For example, when I bought my new house, the money was transferred in the morning, in the afternoon Redfin sent out update on the final closing price.  It was amazingly fast, most other sites takes days and weeks to update the selling price.  If you are in a very competitive market, faster access to information can give you an edge.

Redfin also offer instant alert, essentially a notification pops on your smartphone to give you latest information for your saved searches and favorites.  It can get to be too much distraction, I would only recommend turning on the instant alerts when I’m really active in the market.

Search is weak

Search is not one of Redfin’s strengths.  I’m particularly disappointed with its lack of tools to search for a particular area.  You can search on city, county, zip code, but that’s about it.  This is where Ziprealty really shines.

Opt-in facebook model can be annoying

If you use Facebook to sign in Redfin, any time you add a favorite to your its, it would show up on your Facebook activities.  I certainly didn’t intend to broadcast that type of information, it wasn’t until a friend mentioned to me a couple of weeks later i realize this was happening.   It took quite a bit of work to figure out how to shut it off.

Ziprealty – Best search capability

ziprealty.comZiprealty employees their agents, if you buy or sell home using Ziprealty agents , they used to that offer 1/3 of their commission as a rebate to buyers and sellers, though I don’t see that anymore.  I used zip realty to buy a town house years ago, generally a good experience. But individual agent matters more than the agency, so i wouldn’t place too much value in that.

Most comprehensive search capability

Search is Ziprealty’s strength.  Ziprealty allows user to specify all kind of parameters for your search.  Beyond city, zip, county, Ziprealty allows user to search based on sub neighborhood inside a city, school district, all kinds of property features like 1 story, 2 story, lot size, pool etc.

It’s easy to setup very target search on Ziprealty so you don’t get bombarded with too much information.  For each of my rental property, I sat up saved search to monitoring how similar properties are selling to keep my finger on the pulse of market.  I use this as a passive way of monitoring, for active monitoring, I prefer to use Redfin as the information is more up to date.

Zillow – Most comprehensive information

Zillow has most comprehensive information for people who like to analyze data.  I found particularly helpful for real estate investor.   As investor, one of the key metric I look for its rental price for the property, it helps me to determine the the price I’m willing to pay.  Particularly when I’m trying to decide which areas to invest in and don’t know too much about the area.

Rent estimate is decent

Along with property value estimate, rental estimate is also listed for each property.  Depends on the rental activities in the neighborhood, the estimates can be very accurate or quite a bit off.  But it gives me a general ballpark information on level of rent for the area, this very useful for investor who are rental properties.

Zillow recently lanched zillow rental iphone/ipad app which shows the rental properties in the areas, aggregating from multiple sources.  I used it as another source of information.

Most comprehensive but least up to date information

On the listing, Zillow provides the most complete property history – when the property listed, sold, foreclosed etc.  In the bay area, where the prices have gone up significantly in many areas, I find it fascinating to check the property history information.

Zillow also provides recent sold information in the neighborhood for doing comps with recent sold property.    This is very useful when you are deciding what to bid.  While Zillow has the most comprehensive information, it’s the least up to date.  I usually all three sites for comps to figure out the optimum price to offer.   Zilllow provides information about the nearly school, walking scores etc.   For people who like data, it’s great.

When should I use which one?

To quickly summarize, here’s how I used these sites:

  • For active buying and selling, use Redfin.
  • For passive watching and target search, use Ziprealty.
  • For investment analysis, use Zillow.

5 Things to Do While Your House is on the Market

1. Keep your house looking picture perfect

house picture perfectAfter all that preparation, your house is looking picture perfect.  Now keep it looking that way while your house is on the market,

This is hard if you are still living in the house.  When we were selling our house we still living there.  Every morning, after the kids are gone, I spent the next fifteen minutes doing a whirlwind of clean up and tidy up. Continue reading

2013 Review of Major Financial Decisions and Progress

financial progress reviewWe are nine months into 2013, I thought this would be a good time review the major financial decisions and progress for 2013.   2013 thus far has been very very busy year and I’m pleased to see not only how much we were able to accomplish but also how well we were able to accomplish them.  At the same time, putting this post together has reminded me how much more I still need to do.  I have broken these financial decisions into four major categories:  House, Major Purchase, Investment and Financial Protection.   Continue reading

Smart Guide to Automate Your Bill Payments without Losing Control

 automate_bill_payHow many bills do you have to pay every months?   At last count, each month I have electricity, gas, water, garbage, cable, internet, phone, cellphone, auto insurance, life insurance, multiple mortgage payments (primary residence and rentals), multiple home owner association dues, and multiple credit cards..  In all, 20 plus bills each month.  In our busy household with dual working parents with young children, time is precious.  I have automated all of these bills about ten years now.  I don’t spend more than 10 minutes a month on paying bills and have not had a late payment in years. Continue reading

How to Negotiate a Lower Realtor Fee When Selling Your House?

negotiate real estate commissionWhen putting up your house for sale, the standard realtor fee or commission is 3% of the house price for the seller’s realtor (listing agent), and 3% for the buyer’s realtor (buyer agent).  The seller would pay about 6% commission in total for both the listing agent and buyer agent fees.   In this post, I will discuss how to lower the realtor fee to the listing agent. Continue reading