Making your first stock investment? Here’s what to look out for

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#1
A good starting article for those are starting their stock investment journey...

Making your first stock investment? Here’s what to look out for

Buying shares in a company is exciting. You’ll own part of a well-known brand in Singapore, and the firm may pay you part of the profits in the form of dividends. You can even tell a high-profile CEO, whether it’s Mr Ho Kwon Ping at Banyan Tree or Mr Wee Ee Cheong at UOB Bank or someone else, how you think they should run the company, by voting or asking questions at the annual general meeting.

Investing in shares has also historically provided a better return than other investments. Looking at return and risk, for example, national financial education website MoneySENSE said shares have had the highest risk but generally have also produced the highest returns compared to bonds or cash.

Finding the right company to invest in, however, is more challenging. If you bought shares in ComfortDelGro at its low of S$2.52 in January last year and later sold it in June at S$3.27, for example, you could have made nearly 30 per cent. If you bought shares in Keppel in 2014 when shares cost just above S$11, on the other hand, you would have lost about half your investment now.

Fortunately, good information is readily available about where and how to invest.

CHOOSE THE RIGHT COMPANY

The key to successful investing is indeed choosing the right company with good potential for growth in share value. While there is plenty of information available, starting with down-to-earth advice from several well-known investors is quite practical.

Renowned investor and author Peter Lynch, for example, suggests buying shares in companies or industries you already understand. “The best way to invest is to look at companies competing in the field where you work,” he explained to Dow Jones. “Use your specialised knowledge to home in on stocks you can analyse, study them and then decide if they’re worth owning.” It’s important, though, to understand the company well. “If you’re prepared to invest in a company,” Mr Lynch also said, “then you ought to be able to explain why in simple language that a fifth grader could understand.”

Taking a similar though slightly different approach, Singaporean investor Peter Lim has said he starts by looking at sectors and then figures out which companies in the industry are the best investments. He also invests with a longer-term outlook, buying shares that he believes will rise and planning to hold them for at least about half a dozen years.

Singapore resident and billionaire investor Jim Rogers also emphasised in in his book, Street Smarts, that analysis is essential. “Get the fundamentals right and the good news keeps coming,” he said. “Lucky? If you want to be lucky, do your homework.”

ANALYSING THE COMPANY

Once you decide on a company that you may wish to invest in, it is important to follow Mr Rogers’ advice and dig deeper so you can find out whether the company is actually likely to grow in value. Analysing the industry and the company’s performance as well as its business prospects is essential. Many firms offer booklets or videos that can help you understand how to research a company effectively as well as information to use in your analysis.

The Singapore Exchange (SGX) has nearly 20 videos on investing, for instance, while sites such as TradeHero Academy have dozens of videos on buying shares.

A number of brokerage firms, including PhillipCapital and Maybank Kim Eng as well as others, offer seminars or online booklets that range from introductions for investing to highly technical insights for experienced investors.

There is also a plethora of other information and advice online. Online tools such as WeInvest, for instance, can provide suggestions for investments based on your profile. Yahoo Finance, The Motley Fool and Bloomberg are among the many sites that collect articles and information that may be useful as you look at particular companies.

INVESTING

Once you do your homework and analysis, you can decide whether you want to own shares in the company you’ve selected or to look at others instead.

Once you’ve decided on which shares to purchase, you can sign up with a brokerage firm or a bank to buy shares. Sites such as MoneySENSE have details about how to select a firm and go through the actual process of buying shares.

Mr Peter Lim’s practices notwithstanding, simply buying share and holding them may not be enough. Given how quickly companies and markets can change, it is important to track the company regularly and even to consider selling shares if the investment outlook turns negative.

While you’ll start with buying shares in one company, over time it is better to buy shares in several companies so that you can diversify your investment and reduce risk. Whichever company you choose to start with, though, select it carefully and then take time to follow the company to maximise the value.
http://www.todayonline.com/business/what...investment
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#2
OK article with good advice to where to find out more about investing, but just want to point out this article may not be that suitable for a true VALUE investor. Examples of peter lynch style is growth rather than value.

Commenting that how markets quickly change and selling the shares also seems more a TRADER advice. Though I do follow Peter Lim style of buy and hold in sector that are doing well or on the rebound from a down cycle.

They should have mentioned index investing as well and that it has been proven that beating the market is very hard to do over long term Tongue
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com
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#3
Try not to lose money first, invest in STI Index ES3 lah, Tongue
monitor your behaviour for a while, then slowly branch into SIMPLE biz FIRST!
before taking on huge companies which u cannot understand their biz.. Tongue

step by step, a little at a time, soon, u'll know how far u wanna go in this... Smile
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
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#4
Doing homework needs time. To be politically incorrect, contrary to what some advertisements say, not everyone should be investing in stocks. If one doesn't want to spend time on understanding a stock, then invest in an index fund is best as per what Buffett advised (and often misquoted). Stocks can go zero, stock indices very unlikely go zero (Can't think of any that did unless exchange suspension is considered one) and it is lifted longer term by inflation. So the risk / reward of that vs a haphazard DIY equities portfolio is very clear.

And it is almost always better to lose than make money in the beginning so that 1)the lessons learnt can be carried forward... higher future value 2)lessons are "cheaper" and can be earned back vs if one is old 3) one learns that you don't have to be vested in everything you spent time on
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
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#5
This is what I've learnt...

I was lucky to have bought a few stocks during the AFC and ride that wave. I was even luckier to have exited the market as I was moving to another country forcing myself to liquidate most of my holdings. I was hit with >60% losses (although i had only a small position in the market).

Lesson 1: Timing is almost everything when you're a noob. I do my noob research pick a few good stock and I feel like a stock god. Very dangerous feeling this is.

Lesson 2: Be the noob. Stay a noob. Keep learning and make sure I remain a noob. Make myself feel like I'm the ant in a room full of giant elephants so that I continue to learn and avoid that 60% portfolio hit!
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#6
Totally agree with lesson 1. Lesson learnt is money well spent

Stay hungry stay foolish 👍
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
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#7
(11-04-2016, 05:32 PM)Sampling Wrote: This is what I've learnt...

I was lucky to have bought a few stocks during the AFC and ride that wave. I was even luckier to have exited the market as I was moving to another country forcing myself to liquidate most of my holdings. I was hit with >60% losses (although i had only a small position in the market).

Lesson 1: Timing is almost everything when you're a noob. I do my noob research pick a few good stock and I feel like a stock god. Very dangerous feeling this is.

Lesson 2: Be the noob. Stay a noob. Keep learning and make sure I remain a noob. Make myself feel like I'm the ant in a room full of giant elephants so that I continue to learn and avoid that 60% portfolio hit!

really timing is everything meh? i was thinking of just investing a fixed sum buy into the stock market every quarter or every year
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#8
hi dividendangel,

You need to read the comments by Sampling in closer detail and put it in its context.

The way i interprete it, is that if a noob gets a stock selection correctly n makes money, it is generally all due to luck (timing) than anything else (feeling like a God). Hence come the final sentence "very dangerous it is".
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#9
i also feel timing is everything.. stock does goes up and down, even lousy stock. its about when to sell and buy..

i bought a share recently before go holiday.... my 4 days holiday make me lose 50% of the stock value.. haiz..
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#10
(02-06-2017, 01:39 PM)siangteck10 Wrote: i also feel timing is everything.. stock does goes up and down, even lousy stock. its about when to sell and buy..

i bought a share recently before go holiday.... my 4 days holiday make me lose 50% of the stock value.. haiz..

If you are aiming for above average return(> 20%? p.a.), then good stock selection, some luck and good timing are necessary.
But, if you are content with a nominal return of 5-10% p.a. over a time span of 10-20 years, timing is less of an issue if you buy the stocks at reasonable valuation.

Since the SGD fixed deposit is around 1%, a 5% return will get you ahead of most savers in the long run.
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