Investment is an asset purchased with a purpose to generate more income in the future or to sell it for a higher price. There are a myriad of investment selections available in the market today but here are a few 3 simple investments you can start with…
1. MUTUAL FUNDS
Being a newbie in the investment scene is not a problem anymore. With Mutual Funds, you can entrust a professional investment manager to produce capital gains for you and your co-investors. Mutual funds are investments that gather the investors’ money into a pool to make multiple types of investments, known as the portfolio. Shareholders participate proportionally in the gains and losses. Lastly, it gives the budding investors the access to professionally manage, diversified portfolios of equities, bonds and so on. This can be difficult and nearly impossible to create with a small amount of money.
2. CENTRAL PROVIDENT FUND INVESTMENT SCHEME
The Central Provident Fund (CPF) Investment Scheme is a way to invest your CPF savings to various banks such as OCBC, DBS, or UOB. This will enhance your retirement or housing money. Simply, the money you will generate from your investments will eventually go to your CPF account and not your pockets. To be eligible, you need to be above 18 years old and have over S$20,000 in your Ordinary Account (i.e., used for housing, education, investment, and insurance) and over S$40,000 in your Special Account (i.e., used for retirement). Compare the investment options and their charges. Instead of complaining about the CPF, why don’t you start investing?
3. REAL ESTATE INVESTMENT TRUSTS
Real Estate Investment Trusts (REITs) allows you to invest your money to a range of properties. REIT investors pool their money to buy buildings then, they divide the rental returns. This is a cheaper alternative to buying a property. Furthermore, REITs receive special tax considerations and mostly offer investors high yields and liquid method (i.e., converting your assets into cash) of investing in real estate. Although there are benefits, it is important to hire a trusted REIT Manager. One REIT in Singapore is CapitaMall Trust including properties such as Plaza Singapura, Junction 8, and JCube.
This article does not form part of any offer or recommendation, or have any regard to the investment objectives, financial situation or needs of any specific person. Before committing to an investment, please seek advice from a financial or other professional adviser.
According to Investopedia, Savings Account is an account managed by the bank which provides principal security and a moderate interest rate. Personally, I value this financial tool because it serves as an accessible shield to cover the immediate expenses. Before you open your own savings account, here are the 5 helpful and feasible things you should consider…
1. HOW MUCH TO SAVE
Having enough money in reservation, especially in an expensive country such as Singapore, is very important not just for you but for your family too. A savings account with an emergency fund can pay for the unforeseen expenses instead of using credit cards or applying for loans. You need to ask yourself this: “How much do you need to save?” Consider your needs and that of your family.
2. CHOOSE YOUR BANK WISELY
The first thing you should look out for aside from your eligibility to open the savings account, is the initial fee and the maintaining balance requirements. For example, UOB’s passbook savings account has an initial fee of as low as S$500 (for Singaporean/PR) and a maintaining balance of S$500. While, OCBC’s passbook savings account has an initial fee of S$1,000 (for Singaporean/PR/Foreigner) and a maintaining balance of S$1,000.
3. ATM AND BRANCHES AVAILABILITY
It is important that you can withdraw the cash from your savings account at your convenience once the need arises. Be sure to examine the bank’s ATM locations. Are there ATMs near your home, workplace, or frequented shopping malls? Also, if you are traveling a lot then, a bank with branches around the world is a better option.
4. SCOPE OF FACILITIES
In today’s world, most banks allow Internet banking and even Mobile App banking to check your savings account balance and to make various transactions. Consider this. Also, know whether your savings account comes with a passbook, a debit card (e.g., with VISA, NETS, or MasterCard), or an ATM card. This will help your options to narrow even more.
5. ESTABLISHING THE SAVINGS
To establish your savings, it is better to have a fixed amount to put inside every month. First, you must set a long-term goal about the money you can accumulate. Second, you must set a time frame that allows you to complete your goal.
Image Credits: Ken Teegardin via Flickr
Do not forget that different banks have varied interests rates that may affect your savings.
You’ve probably heard about Technical Analysis from my previous articles and may be wondering to yourself, “How should I begin?” I feel that a great start would be learn about Trend Lines because it is the first step to knowing what Support and Resistance mean. You may wonder why is it important, and I hope that by the time you reach the end of the article, you would see it’s effectiveness and be convinced yourself. Perhaps, even try it out for yourself! I have been using trend lines faithfully and they have always served me well in my investments.
What are Trend Lines?
Trend lines are basically lines that you draw on charts that shows you the general direction of a trend. It is useful to help find potential support and resistance levels so you can time your entry and exit better. And the best part of it all, it’s not hard at all and can be performed on any charts! All you need to do is to find the best fit support or resistance line via trial and error by connecting the bottoms or tops of a trend. Here’s an example:
Here I have presented you with a chart that shows you two support lines (S1 and S2) and one resistance line (R1). It definitely doesn’t look too hard to draw isn’t it? Simply connect the bottoms of a trend and there you have it, a beautiful trend line that can help you spot the next bottom to enter your trade! You’ve always heard of people trying to “time the market”, this is one of the ways traders time their trade. Take for example the trade towards the right of the chart, at S2. Look at how easy it would have been for traders to time their entry and exit just by drawing two lines! Buy when it touches S2, and sell when it touches R1.
Trend Lines Keep Changing!
Had you not drawn the trend lines, would you have known at what price you should enter and at what price you should have exited at? Drawing trend lines help to clearly show where the next potential support and resistance will be at. I place emphasis on the word “potential” because it is not a guarantee that the trend will stay the same forever. Look at S1, it stayed in effect for about 6 months before the trend line is broken, and then we ignore S1 and move on to S2. Same goes for R1 where it was effective for 7 months before it was penetrated in mid-March. This penetrating move then renders R1 meaningless now while S2 is still in play because it hasn’t been breached.
It’s All About Practicing
I understand it can get a little confusing, but when it comes to trend lines, it is all about practice! Keep drawing and fine-tuning your accuracy when drawing these trend line because you will be rewarded at the end of the day! You can practice charting using the software I’m using, Chartnexus. (Note: I’m not receiving any commission for introducing this software from Chartnexus, it’s just that it has helped me a lot and I wanted to share with readers who are interested in Technical Analysis and it would help when I teach more about TA in the future.) Some of you may already have access to charts, do give it a try! Some charts are harder to have their trend line drawn and some are easier. Keep trying and eventually move to harder charts to improve your accuracy!
Disclaimer: The above chart is for learning purposes only and not a recommendation to buy or sell. Always conduct due diligence when making a purchase or sale of a stock.
Visualize beautiful and serene sandy beaches of Boracay, Philippines or the bountiful shopping escapades in New York City, USA. Your everyday spending using your frequent flyer or air mileage credit card can turn your dreams into reality. Bringing the world closer to you, here are the best credit cards in Singapore that you shall consider:
DBS Altitude American Express Card offers rewards for air mileage and dinner deals. Dinner deals include discounts at over 1, 000 places nationwide with the DBS Indulge program. For example, cardholders get 1-for-1 Buffet Dinner at Hotel Jen Singapore.
With a fee of S$180 every year (waived for 1 year), and a minimum annual income of S$80, 000 for Singaporean, PR, and Foreigners, you can earn 3 miles for every dollar spent on online flight and hotel transactions. Earn 2 miles for every dollar spent overseas and 1.2 miles for every dollar spent locally. The best thing about this is that your accumulated miles will never expire! Use it at your convenience.
ANZ Travel Visa Signature Credit Card’s minimum annual income eligibility for Singaporeans/PR is S$60, 000 while its S$90, 000 for Foreigners. With ANZ Travel Visa Signature, you may indulge on the complimentary access to airport limousine at departure or to airport lounges around the world. Earn 2.8 miles per S$1 spent on direct flight booking with Qantas and Jetstar airlines and 1.4 miles per S$1 for local spending. Aside from giving you rewards on air mileage, this card lets you convert your Travel$ to Cash Credit. The annual fee of S$200 is waived for a year.
I cannot begin to enumerate the wide selection of rewards, Citi PremierMiles Card can gives to its faithful cardholders. You earn 2 Citi Miles for every dollar spent overseas and 1.2 Citi Miles for every dollar spent locally. These miles are redeemable in 70 airlines worldwide!
By signing on to S$193 fee a year (waived in the first year) and a minimum annual income of S$60, 000 for Singaporean, PR, and Foreigners, you are entitled to not just milage rewards but also dining and petrol deals. Enjoy up to 14% discount at Esso stations and 13.6% discount at Shell stations. Exclusive dining deals to Wooloomooloo Steakhouse, Yan Ting, LaBrezza, Tiffin Room, Long Bar Steakhouse, Bar & Billiard Room and more, are courtesy of Citi Gourmet Pleasures. What’s more? REceive 10, 000 Citi Miles upon annual membership renewal and round-trip ticket to Bali on Singapore Airlines with S$12, 500 (15, 000 miles) spending.
With the lowest minimum annual income eligibility among these 4 cards…American Express Singapore Airlines KrisFlyer Gold Credit Card requires S$30, 000 annual income for Singaporean/PR and S$60, 000 for Foreigners. Enjoy 1 KrisFlyer mile for every S$1.60 spent. Earn 50% more KrisFlyer miles when you charge S$5, 000 or more to your card in a year and 50% additional KrisFlyer bonus miles for a minimum spend of S$12, 000 in a year. Not only is the first year waived but you also get a welcome bonus of KrisFlyer miles.
Worry not about the accumulation process since miles are credited directly to your KrisFlyer account.
What is investment? Isn’t it just buying and selling an asset? That was what I thought so too when I first began investing. Along the way, I learnt a great deal about what investment is about. It goes beyond just buying and selling. I remember when I first begun investing, the questions that went through my head were questions like “What stocks should I buy?” or “How much does it cost?”. It was simple as that. Perhaps like me, you asked yourself these two questions and found your answers. Subsequently, the ‘Buy’ button was clicked and now you own your very own stock. You were happy, with emphasis on the word ‘were’. Maybe you got lucky, things went your way for awhile, and suddenly it happened. Your stocks went from profit to loss. You’re not alone and it’s not uncommon. When losing, you begin to enter the denial phase and convince yourself that it’ll go back up again. Weeks passed, and you suddenly realise that you’re holding onto a 20% loss. What now? Now, you learn that investing is not just buying and selling.
I’ve been there and done that, but most importantly, I’ve learnt from it and I want to share with you the lessons I’ve learnt so you don’t have to go through it yourself. But just like investing, easy to understand, hard to apply. However, I will still attempt to offer some practical tips that I use in my investment process. “Investment process”? You mean it’s not just buying and selling? Plainly speaking, it is, but there’s more to it. There’s a whole lot of thought process going on before the ‘Buy’ button is clicked.
The Plan
“If you fail to plan, you plan to fail.” – The overused quote indeed. But it’s only because indeed, it works. Here are some of the questions that go through my mind before I click that ‘Buy’ button.
What is this company that I am about to buy involved in? What is its business like and is it profitable? – This is your fundamental analysis phase.
What’s the price now, can it fall further or should I take action now? – This is your technical analysis phase.
What price am I going to buy at, and why? – Based on the above two analyses.
If I buy at $X, when do I take profit and when do I stop my losses? – Contigency plan: Setting profit targets and stop losses.
Why am I buying this stock? – Are you in for the long-run or a quick bite off the market?
If you can answer these questions, you’ve already answered “What”, “When”, “Why” and that should be almost good enough. Feel free to add on more questions to this list. The more you plan, the better prepared you are when emotions try to block out your rational thinking. When you plan well, you’re setting up barricades against emotions that confuse the rational mind after the ‘Buy’ is clicked. It will be useful to know that it has served me very well and I am confident that it will serve you well also.
The Execution
“Plan your trade, trade your plan” – So after you’ve done your planning and have convinced yourselves that this is a good and profitable company, you click the ‘Buy’ button. Congratulations, you’re now an official stockholder! The real challenge of investing starts now – “Trade your plan”. Anyone can plan, but how many can execute without allowing emotions to get in the way? When things go your way, you pat yourself on the back and say to yourself “Good job!”. Perhaps like myself, you were 20% up, and before you know it, it became 20% down and you feel the pinch. Now, what would you do? As good as my plan was, I found out that my emotions blocked out rational thinking and I started creating false beliefs and adopting a whole new plan(that’s based on emotions) to make myself feel better. Check if you’re saying or doing the same things to yourself.
From a short-term trade, you turned it into a “long-term investment”. – You’re suddenly trading for a whole new reason which doesn’t make sense.
Cut your profits and let your losses grow – Don’t get mixed up! It should be the other way around.
“It’s cheaper now, maybe I should buy more?” – It’s not a bad plan, but it only works if you’ve got deep pockets. Do you? And is it deep enough? Remember, you are adding to a losing position, why not add to a winning position?
Ignored your stop losses and allowed it to be breached.
If you’re saying or doing these things, sit down and reflect for awhile. Think about what your game plan was and if you are still following your plan. If you’re no longer trading the same plan based on rational thinking, you’re likely to be trading based on emotions. If you allowed yourself to trade on emotions, be prepared to see yourself wiped out of the market. It’s okay to lose a few battles, but win the war. Don’t get wiped out in one bad hand because you allowed your emotions to run wild.
The Review
After all is said and done, it’s always good to look back and ask yourself these two questions:
What went right, and what could I do to make it better?
What went wrong, and what could I have done instead?
Two simple questions, yet packed with so much wisdom and knowledge that will guide you on your next investment.
Hope this helps you realise that there’s more to investment than just buying and selling. When you have a comprehensive plan and discipline to carry out your plan, you immediately become a successful investor just based on that two criteria. Keep working on it with undying persistence and improve the accuracy of your trade plan. All the best in your investments!
Anna Agoncillo
MoneyDigest
