Anna Agoncillo, Author at MoneyDigest.sg

What Exactly Is Short Selling?

In the dynamic world of the investments, you will encounter the term “short selling”. How does it work and what are the rules behind it?

The age-old practice in investing is that you will profit by purchasing stocks in a low price and selling them for a higher price. Although you have invested in a seemingly good performing economy, some stocks or securities may go down. You cannot earn money by “buying low and selling high” in this circumstance. Fortunately for you, there is another way to make money! That is short selling.

Short selling plays a soothing music to the risk-taker’s ears. Its concept is relatively simple. It takes advantage of the market transitions from higher to lower prices. It occurs when an individual borrows a stock, sells it for a higher price, and purchases the stock again at a cheaper price. Watch this short video to grasp its essence:

Most local brokerage firms let you experience the ease of selling short. Just place an order to sell the stock and communicate with the broker. The brokerage firm will borrow the shares for you to sell. Then, it loans the shares to your account and conducts the sell order.

As with everything, rules shall apply. Here are just some of the common rules in short selling:

1. The “Uptick Rule” is one of the key edicts that short sellers abide. It refers to selling a stock short only when the last trade was a move up. You cannot short a stock that is moving down.

2. The odds may not be in your favor if you heard that a flock of investors are shorting the same stocks that you are shorting. There are so many risks if you short a stock that everyone else does. They can simply abandon their shorts if things do not go as planned. Doing so will drive the price to hike.

3. Short selling during seasonal holidays or during “options expiration week” may attract painful losses because those circumstances do not follow the natural or normal supply and demand.

Short selling takes advantage of the market transitions from higher to lower prices. The steep learning curve intimidates some investors, leading to avoiding it entirely. It is undoubtedly a skill that experienced investors develop!

Sources: 1, 2, & 3

Why I Failed At Budgeting

Making New Year’s Resolution is synonymous to crafting a new budget plan. Creating these two signifies an act of self-improvement. However, no plan is entirely foolproof!

These are just some of the reasons why I previously failed at budgeting:

I FOCUSED HEAVILY ON THE PRICE

Before purchasing a new laptop for work, I inspected some of the contenders from the well-known brands. My new laptop must not only fit my physical preferences, but also my financial limit of up to S$1,000. I searched vigilantly through the store and found a 14-inch HP laptop as well as a 14-inch Dell laptop. These two devices have the same processors and operating system. However, the main memory of the former is 8GB and the latter is 4GB. An important fact is that only the Dell laptop was within my budget.

Which one did I chose? The one with better specifications. Although it retailed for S$1,099, I still taught that it was a smarter investment.

According to a 2012 study published in the pages of the “Journal of Marketing Research”, people fail to follow their budget because they are more likely to spend more than they planned. You must not always beam too much focus on the price. Instead, compare the value (e.g., which has laptop optimal screen size and RAM) of what you are getting before committing to a sale.

MY BUDGET WAS TOO STRICT

Upon getting my first full-time job, I started to restrict myself. My goal was to make enough money to save up for my graduate studies and to help my parents in the household expenses. I did so. I gave about 10% of my salary to my parents and 50% would go to my savings account. I removed my trips to the spa and the cinema. A hefty savings greeted me at the end of every month. But, I felt burnout as there was no room for pleasure. This is when my budget failed me.

To turn things around, I started to make money on the side. I became a blogger that solicits money for endorsements. Eliminating unnecessary expenses is a good idea, but you must reward yourself (from time to time).

I FELT EXHAUSTED WHILE TRACKING MY SPENDING

You need discipline to track your own spending. I realized this firsthand. I used to compile all my receipts and banks statements. But, it got too exhausting! I started with a willpower to succeed until the constant vigilance took a toll on me.

A study supports my statement as it was found that self-control and intelligent decision making involves one’s energy supply. Once this energy runs out, you are more likely to go on a spree.

Image Credits: pixabay.com

Get things by following thru your plan. Practice is the key! Improved decision making and control will become second nature to you as time passes.

Sources: 1, 2, & 3

Fantastic Fitness Tips For Busy Singaporeans

Most Singaporeans desire to improve their health, but many find it difficult to squeeze an adequate amount of time for a fitness regimen. Not for long! Money Digest has you covered.

#1: WORKOUT AT THE OFFICE

You will be surprised to know how much you can accomplish by merely spending 5 minutes to exercise at your desk. You may do a few lunges while you are waiting for the meeting to start or a few arm stretches while you are on the phone. There are a variety of quick workouts online. This is a good example of total body toning:

#2: CHOOSE A “HEALTHY” HOTEL

When you are travelling for business, choose a hotel that has its own gym. This ensures that you can practice your exercise routines outside from home. Alternatively, you may avail the “guest or tourist” pass at a local gym.

#3: PREPARE HEALTHY SNACKS

A surefire way to cut back some weight is to switch your junk food with healthy snacks. It takes less than 5 minutes to whip a pack of container filled with sliced fruits and assorted nuts. Keeping these healthy bites at a convenient reach will prevent you from indulging on the candy bars from the office’s vending machine. Also, these snacks will increase your energy to survive the day.

#4: EAT OATS FOR BREAKFAST

Whenever I am running late or feeling ill, one of my go-to healthy fixes is the oatmeal. Oatmeal contains soluble fiber which helps lower your cholesterol and your risk of heart disease. Embrace the power of oats by topping it off with grated apples, almonds, or honey.

Try the Quaker Quickcook Oatmeal Hearty Supreme as it retails for only S$2.95.

#5: RELAX WITH BREATHING EXERCISES

After a day of hustling through a mountain of tasks, your stress levels may be off the charts! This is something that you must wary of as prolonged stress may impact your overall well being. Thus, you must learn how to relax.

Spending 10 minutes or less in breathing exercises will help. Know about the 6 breathing exercises: Equal Breathing, Progressive Relaxation, Guided Visualization, Alternate Nostril Breathing, Skull Shining Breath, and Abdominal Breathing Technique by clicking this.

Image Credits: pixabay.com

Go! Take the stairs for someone who is busier than you is exercising at this moment.

Sources: 1, 2, & 3

Why Many Singaporeans Are Not Tying The Knot

About 4 out of 5 Singapore residents express their intentions to get married. But, why are they not pursuing what their hearts deeply desire?

In 2013, 83% of the participants in the survey by National Population and Talent Division said that they want to tie the knot. This figure is slightly lower than the reported 85% in the previous survey (2007). We can only predict that the decline will continue by 2019.

The leading reasons why most of the respondents are not employing immediate marital plans are saving up for the wedding and saving up for the housing. Furthermore, 84% of the 4,646 participants intended to have 1-2 children only. Those people who are not planning to have any children or to have an extension to their family cited financial costs as one of their top reasons. It does not take a notable genius to understand how money gravely influences the Singaporean’s approach to marriage and parenthood.

Many residents of Singapore are delaying the the event of matrimony as they want to earn more money, to build an attractive career, and to be financially independent. These factors push up the national median age of first marriages.

MAKING MONEY IS HAPPINESS

“Making money is happiness…”, said Nobel Peace Prize winner Muhammad Yunus. Along with happiness, money seems to go hand-in-hand with marriage. Many Singaporeans perceive that the primary focus of life is building careers and gaining more pay. A relatively significant amount of the population delay marriage to save money for cushioning the high cost of living. They are wary about certain expenses too. I cannot deny the fact that the wedding ceremony, home renovation, and infant care costs an overwhelming wealth!

The recent report by the Department of Statistics Singapore support these sentiments. It found that the median age for grooms at first marriage rose to 30.3 years old in 2015. During the same period, the median age for brides rose at a faster rate to 28.2 years old. These respondents wanted to attain “some level of success” to attract potential partners.

I AM A STRONG WOMEN WITH OR WITHOUT THIS OTHER PERSON

“I am a strong woman with or without this other person…”, said American performer Queen Latifah.

It is probably no coincidence or sorcery that as women gained more economic power in the recent decades, they have been less likely to get married. Women are less likely to wed due to financial security alone. Dr. Norman Li, the Associate Professor of Psychology at Singapore Management University, has his own take on this trend. He said that: “Women are now becoming more and more educated and earning increasingly more income. So, there are increasingly fewer men who meet their standards.”

Do you agree with Dr. Norman’s statements? Well, one thing is for sure. Birth rates have been hit due to women marrying later or not marrying at all.

Image Credits: pixabay.com

In order to entice more Singaporeans to get married and have children, institutions may employ different rewards. Banks may start to offer matrimony loans that specialize on the expenses of the wedding and the early years of marriage. Moreover, employers may provide a baby bonus (i.e., a cash gift) or a paid maternity leave.

Sources: 1 & 2

Do Singaporean Women Have A Specialized Insurance?

There is a new trend circulating the insurance market. This trend is none other than women’s insurance. Have you heard of this?

I cannot deny the fact that women are more prone to certain diseases due to the workings of the female body. Health issues such as pregnancy complications and ovarian cysts are peculiar to women. Some of these health conditions are not covered by life or health insurance due to its exclusivity. This is why women face encouragement to add special riders. But, this scenario is a thing of the past! More and more insurers are offering women-centered maternity and critical illness plans.

Parents who are experiencing the miracle of childbirth for the first time can be overtly “kancheong” (tensed). Who can blame them? Maternity is a vulnerable period that you must not take lightly. To safeguard yourself and your child, you may purchase maternity insurance policies. Some of them are in the form of bundled plans to cover the child’s needs beyond the early stages. Consider signing up for the “PINKLIFE” by Great Eastern Life Assurance.

PINKLIFE covers allows the policyholder to feel safe while she is pregnant. Women (between ages 17 to 40) have the option to upgrade their plans to include coverage for pregnancy-related conditions such as stillbirth or miscarriage due to accident. The newborn will also be covered for premature birth requiring ICU care and congenital conditions (e.g., Down’s Syndrome). This plan stands out from the rest because is protects the policyholder from 37 critical illnesses too.

Image Credits: pixabay.com

Aside from maternity bundled plans, insurance policies for women occur as critical illness insurance. Critical illness (CI) insurance usually pay a lump sum when an individual is diagnosed with a disease covered in the terms. It is important to note that most policies depend heavily on the policyholder’s age. Insurers will charge you with a higher premium if you belong to an older age group. This is because the risk to certain diseases increase as age does. So, examine the point of coverage. Is their an age allowance? How about a “stage” allowance (e.g., the coverage takes place only at the early stages of breast cancer)?

As this CI policy is targeted at women, you can commonly find that some of them offer free health checkups such as mammogram. Speaking of free health checkups – I introduce you to the AIA Glow of Life. It is a CI that is especially made for women. You may enjoy a complimentary medical checkup every two years starting from your 3rd year with the policy. It gives you payouts for a wide range of illnesses including breast cancer, osteoporosis, and rheumatoid arthritis.

What’s more? Policyholders can expect to gain from a 100% reimbursement for a reconstructive surgery due to an accident.

While some insurers offer standalone women-centered plans, others do not. Please make sure to read the fine print to understand what you are covered for! Feel free to contact a financial adviser for an appropriate consultation.

Sources: 1, 2, & 3

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