Warren Buffett once said, “it is not necessary to do extraordinary things to get extraordinary results.” When it comes to finding stocks worth investing in, we simply need to ask the right questions.
We share 3 of these questions with you, and 3 financial ratios that can help answer your questions.
What if you don’t have a stock in mind? After all, there are over 9,000 stocks on the Singapore Exchange (SGX), New York Stock Exchange (NYSE), NASDAQ and Hong Kong Stock Exchange (HKex) alone and brokers like us offer access to many more markets including Thailand, China, Indonesia, Malaysia and the Philippines.
There are tools out there that can help you identify stocks using ratios like the ones above. Click here to learn how stock screeners can help you identify trading opportunities.
It is no secret that Singaporean and expat workers have to face a higher cost of living compared to other cities in the world. In order to cultivate a sufficient retirement fund, these employees have to save nine years longer than the preceding generations. This information is according to the recent HSBC report that included 1,008 Singaporeans who are either working or retired.
Findings in “HSBC’s Future Of Retirement: Generations And Journeys” report showed that the average Singaporean begins saving for retirement at age 32 and continues it for another 29 years. Simple arithmetic will tell you that the previous generations of Singaporeans used to save at an average of 20 years.
Despite having the advantage of saving for a longer period of time, 41% of the participants wished that they had started to save earlier. This tone was supported by the 38% of the participants who stopped saving money due to several difficulties.
Mr Matthew Colebrook, the head of retail banking and wealth management in HSBC Bank Singapore, highlighted that: “in many instances, life events are also getting in the way of setting aside money earlier or in a consistent manner.” This is one of the significant roadblocks that keep Singapore workers from maximizing their retirement fund.
Another roadblock that is worth mentioning is the “tunnel vision” that Singaporeans apply when investing. Often they exclude other forms of assets and focus on cash savings and properties. In fact, the report found that 21% of Singaporeans anticipate that selling or downsizing a property can help them fund their retirement.
Mr. Colebrook made another potent statement concerning this tunnel vision. According to him, “all asset classes’ performance will rise and fall as the current softening of the Singapore property market and low deposit rate environment show us. This speaks volumes for why it is important to seek diversification in a savings plan.”
To gain information about the diversification of a retirement plan as well as other strategies to grow your wealth, you must educate yourself or even seek the help of a financial professional. A financial professional can help tailorize a strategy that suits your personality and lifestyle the best.
With the modern convenience to shop and transact online, comes the great responsibility to protect the users privacy!
Providing information for your online activities can put your identity and your wealth at risk. To avoid this, you must be informed, cautious, and vigilant at all times.
1. BE AWARE OF YOUR SURROUNDINGS
One of the easiest ways to protect your sensitive information is by being sensible about where you transact. Do not input your details in public where people can intentionally or unintentionally view your screen. This may sound obvious for most but, it is not for some! I have witnessed some people who gave out their credit card details while calling their creditors on the train.
It may be extremely convenient for you to close a transaction while on your way to work, but think about the people who might be catching a glimpse over your shoulder.
2. CONTROL YOUR AUTHENTICATION AND PRIVACY SETTINGS
Maximize the use of your privacy settings by using two-factor authentication. Often used in online banking, two-factor authentication involves “what you know” (e.g., 8-digit password) and “something you have” (e.g., verification code sent via SMS). This way, people will have a difficult time to break through your walls.
3. SPOT UNUSUAL TRANSACTIONS
Just because your bank is known worldwide because of its sophisticated security does not mean that they are 100% free from errors, frauds, and glitches. It is important to watch out for any unusual transactions both on virtual and physical statements. Call your bank immediately if you spot anything fishy.
4. KNOW THE OFFICIAL DOMAIN NAME
When you are receiving emails from banks or online shops, always check the attached links’ domain name. This can be a tad tricky as some scammers use a slightly different domain name to trap the vulnerable consumers.
Hence, you shall be familiar with the official domain names ass well as the URLs of your banks before processing your transactions. The moment that you find anything wrong, call them directly.
5. SECURE YOUR BROWSER
Search engines, especially those with big names, track your search history and build personalized profiles to provide results based on your search history. To escape from this “filter bubble”, you must switch to a search engine that does not track your every move.
Emphasizing on protecting the user’s privacy, DuckDuckGo is always my go-to safe search engine!
6. DO NOT CLICK THE RANDOM LINKS
Before clicking any links that will re-direct you away from the online bank or shop, verify its legitimacy first. Always think twice even if the message comes from a familiar place. The same goes routine must apply when you receive an email from any financial institutions.
7. UPDATE YOUR SOFTWARE REGULARLY
Aside from backing up your data, it is vital to update your software regularly as latest security patches minimize the threats of bugs, viruses, and other malwares. Increase your shield by using free programs that scan your computer for bugs, viruses, and other malwares that come from external sources.
Shielding yourself when transacting online takes focus and dedication, but it is definitely doable. May the “7 ways” mentioned above give you a head-start to better cybersecurity!
By definition, maximizing refers to “increasing [something] to the greatest possible amount or degree” while simplifying refers to “making [something] less complex or complicated”. Applying these two opposing strategies to your investments can lead to different results.
Let us find out which strategy is more productive.
With the sole purpose of increasing the value of their portfolios, “maximizers” are vulnerable to the trap of purchasing a product off the bat. They may be too optimistic and expect the best possible outcomes. This idealistic thinking can be far from reality. The truth is, there will always be a few decisions that would not work in your favor.
Aside from investing on the wrong products, maximizers can be overwhelmed and stressed about the abundance of investments that they bought. The mindset of a maximizer is focused on the overall potential that various investment can offer rather than optimizing a single investment.
Sure! You can actually earn five times more than your initial cash-out if you added all of these options. However, can you really pay attention to all of it?
Most people cannot. They end up putting “so-so” effort into each of their investments and fail to achieve the best scenario that they previously envisioned. Also, they end up being drained. Drained investors can become unproductive. Being unproductive may later result to a significant loss.
With all the money at stake, do you still want to maximize?
If your answer is “NO”, try the second strategy called simplifying. Simplifying allows you to create a portfolio that is easier to manage by eliminating complex investments. To tell you frankly, investing does not have to be difficult! You just have to focus on one thing at a time.
Start by analyzing all the possible investment options that you can afford. Next, determine which options suits your personality the best. Remember that investing is more than just about the outcomes.
A powerful mindset that “simplifyers” possess is contentment.
According to Psychologist Barry Schwartz, people who are preoccupied with the best possible outcomes are less satisfied and more susceptible to “buyer’s remorse” than the people who are satisfied with the outcomes that are good enough.
Maximizing can be counterproductive to your investments. The more you try to grow your wealth, the more you can inflict strain and stress to yourself.
No matter how abundant or scarce your money is, spending it wisely shall be your top priority. It not only enables you to get the most out of your dollar but it also allows you to make life-changing decisions.
Determining the reasons behind your spending is the first step to knowing whether your money is allocated properly or not. Are you spending your money on the latest gadget by Samsung because you need it or because you want it?
There is usually a conflict in differentiating between needs and wants. Perhaps, the confusion is due to our subjective definitions of the two terms. Let us take Cheng Ling as an example.
Cheng Ling values the perceptions of others toward her and her daughter. Since her daughter is starting a new school year, she bought her two new pairs of shoes.
She argues that she does not want her daughter to feel embarrassed by wearing the same shoe she wore last school year. Although the last year’s pair is still in mint condition, she bought another pair of shoes to prevent repetitions.
Do you think Cheng Ling’s purchases are necessary in this scenario? Or, was it a matter of personal desire?
Examine your purchases in this manner along with these helpful queries:
“Will this purchase make my life easier and more efficient?”
“Will this purchase provide a lasting pleasure?”
“Will this purchase be meaningful to my life?”
“Is this something I will use regularly?”
“Is this something I can afford?”
“Is the potential gains from this item realistic?”
Carefully assess all these questions and the interplaying factors that can influence your decisions. If your response to all these questions is “YES” then, by all means, make the purchase!
Aside from distinguishing between your needs and wants, you must sort out your “essentials” first. When I say essentials, I pertain to the fixed expenses that you encounter every month. This includes your groceries, utility bills, and school fees. Plan your spending before you receive your paycheck.
Some people spend their hard-earned money like most lottery winners. They get a huge pile of cash now and spend it all in a snap! Remember that wealth is accumulated over time and not something that you can earn overnight.
Image Credits: pixabay.com
At the end the day, it all boils down to the decisions you make!
