Newbie advice

[opmi]

Was it a Keppel Bank Fund?

I too started with a modest investment at 21 years old. It was the legal age to open a securities account.

My 1st purchase was OCBC's fund that invested in Malaysian & Singapore stocks. Its now renamed to LION Malaysia-Singapore fund. I bought 2,000 units and they have grown to 4,000.I still own them! (for sentimal reasons.)

Being new, I thought being invested in stocks listed in 2 neighbouring countries could capture the economic fortunes without much brain work!

In some sense, its a very broad strategy.But there are no distributions of any sort... no cash, no units.. it just sits there.

I think one way is to select a company with:

- a business model that you understand

- that pays out dividends

- that is a price that you can afford to own and also to lose!


To motivate you and keep you invested, perhaps a company that pays dividends 4 times a year with a return higher than fixed deposit interest rates.

Dive into it with eyes opened and a consiousness to reflect and to understand your own greed, fear, aspirations, ignorance and stubborness.

Its not only about money
Its about what and who you are.
Its a journey of a lifetime!

[jjlim84]

I am just 20 year old and quite a newbie in investing.

I will reframe the question into "how do i turn myself into an investing savvy 20y.o" i/o the current "what proportion of 7k to invest and how many stocks". Without the historical awareness and technical knowledge, i think it doesn't really matter what proportion of cash to invest or how many stocks to buy.

1) Read almost every thread in valuebuddies starting from Personal Finance and then
every thread on every company in Listed Companies.

2) Read Intelligent Investor and then every book in the NLB on investing (this is not that extreme - most of the books are rubbish and you prob just need to skim thru the books after reading a few heavyweights)

Not sure how long this will take but it will probably be quite many months - but you have one advantage that a 20y.o. has - you have time. All the knowledge will give you an advantage not just in investment savvy but also very handy when it comes to interviews for a well paying finance job if you are keen in the future.

I think after you do 1) and 2), you'll probably have a good answer to your own question. (and prob by then even more capital)

yea, Intelligent Investor is really a good book for beginners, based on my personal experience, I was 24 when I started reading it

I also recommend Securities Analysis by Benjamin Graham & David Dodd, the two best books on investing I have ever read

[CityFarmer]

Advice

- Treat your $7k as gone/lost when you invest. When it does not matter, then there will be less emotional baggage
when investing. That is important because the markets will test your convictions through your emotions. When you
start personalizing the unrealised gain/loss, the markets will inflict emotional pain to make you cut your position so that
you can feel better despite it is the not the right thing to do at that moment.

I was confronted with a question before.

Mr. Buffett said, “Rule No. 1: never lose money; rule No. 2: don’t forget rule No. 1″, but value investing gurus said "Treat your capital as gone/lost when you invest"? Which is correct?

My answer was both were correct. The former is the "Tao of Warren Buffett's", while the latter should be interpreted as "your capital should be spare cash". It will allow you to stay vested during the irrationality of Mr. Market, rather than to take loses lightly.

(to clarify, in case any confusion)

[orangetea]

With $7K, i would

A. Open a SCB account that can trade in all markets
B. Change 3.5K into USD. Half to invest on normal basis and the other half for opportunistic buys. Invest this into US market blue chips
(US allows buying 1 share. Use this experience to learn and "pay" school fees. I favour US over SG because of board lots and brokerage charges
So your tuition fees in losses is smaller

Upon getting used to investing, deploy the other half.

C. Other half into SG markets after Jan 19 when the board lot changes into 100 board lot from 1000 board lot
D. Divide the remaining S$3.5k into 2 portions. First into companies you like. The other half for opportunistic buys

[ValueMushroom]

This is an easy read but it teaches you how to begin your search for "value" stock: "Warren Buffett and the Interpretation of Financial Statements...".

The most important is to enjoy your investment journey... : )

[Hill]

With $7K, i would

A. Open a SCB account that can trade in all markets
B. Change 3.5K into USD. Half to invest on normal basis and the other half for opportunistic buys. Invest this into US market blue chips
(US allows buying 1 share. Use this experience to learn and "pay" school fees. I favour US over SG because of board lots and brokerage charges
So your tuition fees in losses is smaller

Upon getting used to investing, deploy the other half.

C. Other half into SG markets after Jan 19 when the board lot changes into 100 board lot from 1000 board lot
D. Divide the remaining S$3.5k into 2 portions. First into companies you like. The other half for opportunistic buys

Hello bro orangetea

I am currently with Kim eng but I find the brokerage quite high... SCB is cheaper? I like your recommendation on the share allocation but is it too high now to buy into US market?

[WBJR]

Hi all,

Didn't think that this thread would gain so many replies.
Thanks all for replying.

Let me intro myself first,
I am 20 this year and I am still studying. I was
first fascinated by the Stock market when I was
watching Greed of man (tvb drama) back then.
Well, that is just a show and the real stock market is
totally different from that. I had read numerous number
of books like Beating the Street, Learn to Earn, Buffetology
etc and of course Intelligent investor and security analysis
as well as saving up for investment when I graduated from Sec
school. Fast forward, I am now a finance student studying
and manage to save up 7K but it seems it still not really enough
to do my Investment.

By reading above replies from some former, 7K would be the best
to purchase 2-3 Stocks or half of it for opportunity. Any comments
on how can I deploy my capital?

Any forumers can share with me some experience when the GFC strikes. I do remember, I was 13 at that time and it don't really
affects my family much.

Thanks in advance.

[Musicwhiz]

Any forumers can share with me some experience when the GFC strikes. I do remember, I was 13 at that time and it don't really
affects my family much.

There's generally an empathy gap when we talk about a crisis as acute as the GFC. I've been through the crisis and it's changed me in such a way that I will never invest the way I did pre-crisis. But for those who have yet to go through a major crisis, it will be tough to imagine what it felt like.

Basically, there are some aspects you should be aware of:-

1) Focusing on corporate fundamentals is important through the crisis but companies do change during crises as well. It's important not to assume "things always remain the same". Investing demands attention to detail and you need to understand how companies change and evolve over business cycles. A study of history is instructive but every crisis is different.

2) Remaining liquid is very important during a crisis - it's very easy to run out of cash for investments even as prices keep plummeting to new lows. In other words, you must allocate capital very carefully and always ensure you have a steady stream of income, whether through active income or dividends.

3) Asset allocation is actually very important during a crisis - everything is cheap during a bear market (no kidding), so you have to be very careful on how you choose to allocate your capital. During normal or good times, people always target a few companies for purchase "if there was a crash". But a real crash and extended bear market changes our perceptions of what is "cheap" and what is "expensive". If everything was cheap, you don't have the capital to buy everything.....

Hope this helps.

[orangetea]

With $7K, i would

A. Open a SCB account that can trade in all markets
B. Change 3.5K into USD. Half to invest on normal basis and the other half for opportunistic buys. Invest this into US market blue chips
(US allows buying 1 share. Use this experience to learn and "pay" school fees. I favour US over SG because of board lots and brokerage charges
So your tuition fees in losses is smaller

Upon getting used to investing, deploy the other half.

C. Other half into SG markets after Jan 19 when the board lot changes into 100 board lot from 1000 board lot
D. Divide the remaining S$3.5k into 2 portions. First into companies you like. The other half for opportunistic buys

Hello bro orangetea

I am currently with Kim eng but I find the brokerage quite high... SCB is cheaper? I like your recommendation on the share allocation but is it too high now to buy into US market?

yes SCB brokerage is very affordable and no custodian fee

US market is huge. You can invest across the world on NYSE, NASDAQ, AMEX

Commodities are out of favour, and i look at them like BHP, VALE, GG
These are bigger players with some deeper pockets to outlast the smaller players in the price war.

Oil - I am looking at services like SLB and HAL
https://www.youtube.com/watch?v=7ZN3IBVFrYI (14th min on SLB thesis investing) Also on same link at 18.25" on AMZN

You can look at countries like Brazil
I took a position on CIELO (CIOXY) after reading David winters during the sell down currently
http://www.marketfolly.com/2013/07/david...cused.html

[opmi]

Advice

- Treat your $7k as gone/lost when you invest. When it does not matter, then there will be less emotional baggage
when investing. That is important because the markets will test your convictions through your emotions. When you
start personalizing the unrealised gain/loss, the markets will inflict emotional pain to make you cut your position so that
you can feel better despite it is the not the right thing to do at that moment.

I was confronted with a question before.

Mr. Buffett said, “Rule No. 1: never lose money; rule No. 2: don’t forget rule No. 1″, but value investing gurus said "Treat your capital as gone/lost when you invest"? Which is correct?

My answer was both were correct. The former is the "Tao of Warren Buffett's", while the latter should be interpreted as "your capital should be spare cash". It will allow you to stay vested during the irrationality of Mr. Market, rather than to take loses lightly.

(to clarify, in case any confusion)

Actually I really mean treating invested money as dead money. If see as spare cash, there is still emotional attachment to it.