02 November, 2016

Getting Started

Investing can be rewarding but yet a frustrating hobby. The unpredictability and volatility of the market probably gives us cheap thrills.

Let's say your research have been complete and intensive while the stock prices moved towards the directions that seems ever rational to your research results, that is good.
However, the typical stock market and prices does not follow along company's actual performances. It can also move irrationally despite effective company management/ strong profit returns. With that being said, share prices of strong companies can get under-valued at times due to short-term speculations (while share prices of poor performing firm may get their short-lived hype through manipulations and rumors)

I have only recently started investing in November 2015 (months after the big August selloff in the stock market), when many good blue chips stocks fell below their net book value (NBV). Being new, it was uncomfortable to even see a 1% drop in price. Additionally, you may first struggle with jargon of the trading platform and financial news if you are not a student of finance, accounting or banking.

Pertaining to the new terms and jargon, they can be very useful determinants of our future investments once you start to get familiar. They can come in NAV, NBV , Debt to Equity ratio , EBIT , Payout ratio and a lot more. Still, there is never one single measure that can fully determine if a stock should be bought/held/sold because it is subjected to factors such as different industrial settings, company sizes, different country regulations and even manipulated reporting. For instance, some companies acquire more debts but are able to offset them with higher revenue while some does not - thus if Debt to Equity ratio is the sole index being compared, they will tend to look similar.

As a new investor, you should first get prepared and always make your own judgment on others' analysis. Do not just believe what is on the news headlines. Below are some useful research tools for Singapore investors.

4-Traders
One of my favorite platforms. It consists of analysis, earnings, calendar events, technical analysis, strengths/weaknesses/profitability and forecasts/consensus.

SGX i3investor
This is one very useful platform for Singapore market where news/announcements are well consolidated under one roof. (Yahoo Finance provides a more complete story in terms of charting)

FX Street Economic Calendar
Check this out from time to time for major financial events/meetings that might affect the markets or your next call. Mostly, it shows when indexes/measures such as GDP, jobs data and non-farm payrolls were being reported.

Investopedia
The Wikipedia for finance fanatics. If you are new to financial terms, this site provides short explanations and videos to clarify your doubts. Investopedia also tells of the breakdown and limitations of each index/measure.

Do check out CNBC and Bloomberg for professionals' opinions and forecasts but always do your own due diligence on what was reported. There are also many great financial blogs out there you can look out for. For books, look out for The Intelligent Investor by Benjamin Graham.

Once done, believe in your research and stay with your investments.
Never allow short term movements/win/loss/noises alter your decision.
If you make a mistake, admit it by selling.
If you feel it is time to take the profit, honor it by selling.


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