Friday, 14 October 2011
SGX market update news
http://www.sgx.com/wps/wcm/connect/design_new/site/sa/news_flash?presentationtemplate=design_new/PT_Print_Friendly
Wednesday, 12 October 2011
Peter Lim - king of remisier secret to successful investing
Peter Lim king of remisier secret to successful investing
1) Prospect
2) Patience . 10 years
3) Longer term mindset.
WHAT is Peter Lim's secret to successful investing?
Prospect, he replied.
He looks at sectors.
'Like if I think solar is good, I go into solar; if I think palm oil is good, then palm oil.
'Share prices go up because the sector grows. So if I think this sector is going to be good in the next 10 years, then I'll just invest in it.'
Another key reason for his success, he said, is patience.
Mr Lim, who also acts as a consultant to companies and helps them find multi-million-dollar investors, does not subscribe to buying one day and selling the next to cash in.
His advice to young investors: 'You have to invest with a longer-term mindset. You buy a good stock, leave it there for 10 years. Come 10 years, this dollar can be many, many multiples.
'I think the trick is really to think long-term.
' You may not have a lot of money, but you have a lot oftime.'
'The minimum length of my investments are five to six years, if not 10 to 12 years.'
He cites the example of his condominium.
He owns an entire 11-storey block at prestigious Ardmore Park, near Orchard Road. He and his wife, with his 85-year-old mother, live in one apartment, while three other maisonettes and the penthouse sits empty.
'I bought it in 1994 for $13m and I just hold there and wait. With the current property market, it is worth more than $100m.'
Same with Wilmar, which he invested in in the early '90s. It was then a US$10m investment. Now, his stake is worth some US$700m.
Information extracted from http://finance.kampungtalk.net/2007/08/stock-market-turmoil-singapores-7th-richest-man
1) Prospect
2) Patience . 10 years
3) Longer term mindset.
WHAT is Peter Lim's secret to successful investing?
Prospect, he replied.
He looks at sectors.
'Like if I think solar is good, I go into solar; if I think palm oil is good, then palm oil.
'Share prices go up because the sector grows. So if I think this sector is going to be good in the next 10 years, then I'll just invest in it.'
Another key reason for his success, he said, is patience.
Mr Lim, who also acts as a consultant to companies and helps them find multi-million-dollar investors, does not subscribe to buying one day and selling the next to cash in.
His advice to young investors: 'You have to invest with a longer-term mindset. You buy a good stock, leave it there for 10 years. Come 10 years, this dollar can be many, many multiples.
'I think the trick is really to think long-term.
' You may not have a lot of money, but you have a lot oftime.'
'The minimum length of my investments are five to six years, if not 10 to 12 years.'
He cites the example of his condominium.
He owns an entire 11-storey block at prestigious Ardmore Park, near Orchard Road. He and his wife, with his 85-year-old mother, live in one apartment, while three other maisonettes and the penthouse sits empty.
'I bought it in 1994 for $13m and I just hold there and wait. With the current property market, it is worth more than $100m.'
Same with Wilmar, which he invested in in the early '90s. It was then a US$10m investment. Now, his stake is worth some US$700m.
Information extracted from http://finance.kampungtalk.net/2007/08/stock-market-turmoil-singapores-7th-richest-man
Investment styles I (Time)
http://finance.kampungtalk.net/2008/01/investment-styles-i-time
So what kind of investor are you? Are you a typical 25 year old with not much spare cash, some debts, willing to take lots of risk, and will put in money every month? Or are you a 50 year old, semi retired, got $500k in the bank, and looking for stable but not necessarily high returns.
Those are some of the questions you've gotta ask yourself before you start to invest. Questions pertaining to: Time horizon, Risk portfolio, Active/Passive investing, types of research, amount of capital, etc..
While I won't go into all those topics on personal finance (for now), lets just look at how all these factors do affect your investment styles.
Time
Time is a very important element of investments. It is time that actually gives us the exponential growth of the compounding effect. As you would have already read about the compounding effect in the first article, you can see how making profitable investments as early in life can result in a large fortune 30-40 years down the road.
When most people talk about time in investments, they usually look at the time horizon. This basically means, how long are you able to hold the investments for. This doesn't mean how long are you going to hold the investment for. It just means, given that all the conditions for that particular investment is correction, will you continue holding it for 1 year, 5 years, 10 years? An investor with a long time horizon might decide to get out of the investment after 1 month, because he decided that the conditions present when he first made the investments is now gone. An example could be investing in the middle east could have been a good investment for the long term, but suddenly when there is a war, then it would probably be prudent to get out of there.
Just looking at this, it can generally be said that younger people would have a longer time horizon than older folks. A person can't just base his time horizon on that though. Perhaps, you are 25 years of age, and you are looking to get married in 5 years time, have 2 kids, and planning to buy a condominium. Then in fact, for a large part of your capital, your time horizon is only about 5 years at most.
On another aspect, time is also a factor in deciding your investing style. That is, your trade time span. Here would be where you determine if you are a day trader (who is someone who buys and sells within the day), or a buy-and-hold investor (someone who buys and hold till he dies). Of course, you can be anywhere in between, from the scalpers to the swing traders, to the sector players, to the cycle traders. Lets look at some of them.
A day trader is basically a person who does not hold any position overnight. The idea of this is that you are not able to quantify the external risk caused by the overnight movements. So the day trader might buy a stock in the morning, and sell it buy lunchtime, or maybe before market closing.
A scalper, is a specialised typed of day trader. The idea behind that of a scalper is to catch small movements that happen regularly in the day, by taking huge positions. For example, a scalper might buy a stock at 50cents, and sell it at 50.5cents. Though, he would probably buy a huge amount to justify his time and effort in that trade.
A swing trader, is a person who believes prices have some form of momentum behind it. Thus, he might buy a stock, and hold it for a couple of days, to a week or 2 at most. He would exit the position when he feels that the momentum behind it has waned or reversed.
A cycle trader/sector player, believes that the market moves in cycles or waves. As such, he would try to position himself at the beginning of a cycle/sector and ride it all the way to the top. Most of the time, the holding period could be days, weeks, or sometimes months.
A value investor, could be a person that seeks for companies that seem to have its value mispriced to the market. As such, he tries to position himself into such stocks, and would sell of when the stock becomes fairly priced. These kind of plays, are usually weeks to months usually.
A buy-and-hold investor, someone like Warren Buffet, is someone who believes that only companies with future growth potential should be bought, and that companies currently in vogue should not be bought just because its the new hot stories. To someone like him, its basically companies that will survive the economy for many years to come. Such investors, generally buy good companies, and plan to hold it forever, while collecting any dividend payouts and capital growth.
While the descriptions above seem to be fairly rigid, traders and investors actually fall into many categories at the same time.
Above information extracted from
http://finance.kampungtalk.net/2008/01/investment-styles-i-time
Learn more about investment style II on Risk
http://finance.kampungtalk.net/2008/01/investment-styles-ii-risk
So what kind of investor are you? Are you a typical 25 year old with not much spare cash, some debts, willing to take lots of risk, and will put in money every month? Or are you a 50 year old, semi retired, got $500k in the bank, and looking for stable but not necessarily high returns.
Those are some of the questions you've gotta ask yourself before you start to invest. Questions pertaining to: Time horizon, Risk portfolio, Active/Passive investing, types of research, amount of capital, etc..
While I won't go into all those topics on personal finance (for now), lets just look at how all these factors do affect your investment styles.
Time
Time is a very important element of investments. It is time that actually gives us the exponential growth of the compounding effect. As you would have already read about the compounding effect in the first article, you can see how making profitable investments as early in life can result in a large fortune 30-40 years down the road.
When most people talk about time in investments, they usually look at the time horizon. This basically means, how long are you able to hold the investments for. This doesn't mean how long are you going to hold the investment for. It just means, given that all the conditions for that particular investment is correction, will you continue holding it for 1 year, 5 years, 10 years? An investor with a long time horizon might decide to get out of the investment after 1 month, because he decided that the conditions present when he first made the investments is now gone. An example could be investing in the middle east could have been a good investment for the long term, but suddenly when there is a war, then it would probably be prudent to get out of there.
Just looking at this, it can generally be said that younger people would have a longer time horizon than older folks. A person can't just base his time horizon on that though. Perhaps, you are 25 years of age, and you are looking to get married in 5 years time, have 2 kids, and planning to buy a condominium. Then in fact, for a large part of your capital, your time horizon is only about 5 years at most.
On another aspect, time is also a factor in deciding your investing style. That is, your trade time span. Here would be where you determine if you are a day trader (who is someone who buys and sells within the day), or a buy-and-hold investor (someone who buys and hold till he dies). Of course, you can be anywhere in between, from the scalpers to the swing traders, to the sector players, to the cycle traders. Lets look at some of them.
A day trader is basically a person who does not hold any position overnight. The idea of this is that you are not able to quantify the external risk caused by the overnight movements. So the day trader might buy a stock in the morning, and sell it buy lunchtime, or maybe before market closing.
A scalper, is a specialised typed of day trader. The idea behind that of a scalper is to catch small movements that happen regularly in the day, by taking huge positions. For example, a scalper might buy a stock at 50cents, and sell it at 50.5cents. Though, he would probably buy a huge amount to justify his time and effort in that trade.
A swing trader, is a person who believes prices have some form of momentum behind it. Thus, he might buy a stock, and hold it for a couple of days, to a week or 2 at most. He would exit the position when he feels that the momentum behind it has waned or reversed.
A cycle trader/sector player, believes that the market moves in cycles or waves. As such, he would try to position himself at the beginning of a cycle/sector and ride it all the way to the top. Most of the time, the holding period could be days, weeks, or sometimes months.
A value investor, could be a person that seeks for companies that seem to have its value mispriced to the market. As such, he tries to position himself into such stocks, and would sell of when the stock becomes fairly priced. These kind of plays, are usually weeks to months usually.
A buy-and-hold investor, someone like Warren Buffet, is someone who believes that only companies with future growth potential should be bought, and that companies currently in vogue should not be bought just because its the new hot stories. To someone like him, its basically companies that will survive the economy for many years to come. Such investors, generally buy good companies, and plan to hold it forever, while collecting any dividend payouts and capital growth.
While the descriptions above seem to be fairly rigid, traders and investors actually fall into many categories at the same time.
Above information extracted from
http://finance.kampungtalk.net/2008/01/investment-styles-i-time
Learn more about investment style II on Risk
http://finance.kampungtalk.net/2008/01/investment-styles-ii-risk
Making the actual trade
http://finance.kampungtalk.net/2008/01/making-actual-trade
Now that you have decided that you want to invest, and you have considered what is the investment style you would like to try, it is time to make the actual trade.
In Singapore, the stock market is open every weekday from 9am to 5pm, with lunch breaks at 12.30pm to 2.00pm. Before the market opens there is this session called pre-open from 8.30am to 8.59am. During this pre-open period, no trades are done, but people are allowed to submit their orders to queue, such that all these orders will then get done simultaneously at 8.59am before the market officially opens.
There is also pre-open session from 12.30pm to 1.59pm where people can queue in orders before they get executed at 1.59pm, where the afternoon session will commence. Finally, there is a pre-close session at 5.01pm to 5.05pm. These orders will then be matched at 5.06pm to close the day's trading activities. Depending on your brokerage firm, you would be able to queue for the next days session from 5.30pm or 6.00pm onwards.
Without going into too many advanced topics, how the pre-open, pre-close, the matching sessions and how to jump queue will be separated into another post. Watch out for it!
Executing a trade (a.k.a what do all those numbers on the screen mean?)
When you have decided which stock you would like to buy, the first thing you would do is to find the details of its current price.
In this example, the stock we are looking at is Singtel. Some numbers to note are, Last (3.86), BVol(289K), Buy(3.86), Sell(3.87), SVol(17K), Vol(28,715K)
Last basically means the last done price, or the most recent price that Singtel shares were transacted. Vol basically shows the total amount of stocks that has been executed today.
As you would notice, the volume numbers have a K behind it. The reason for this is that shares are traded in 'lot sizes'. In short, 'a lot' of Singtel shares is 1000 shares, thus, the smallest quantity of Singtel shares you can buy or sell at 1 time is 1 lot, or 1000 shares. That would mean 28,715K translates into 28,715 lots, or 28,715,000 shares, of Singtel has been transacted today,
Remember our fruits market example about queuing? In this case, there are 289 orders (or people) queueing to buy Singtel at 3.86, and 17 orders (or people) queueing to sell Singtel at 3.87. It is not displayed here, but in fact, there are people queueing to buy Singtel at 3.85, 3.84, 3.83, etc, and there are people queueing to sell Singtel at 3.88, 3.89, 3.90 and so on. This is called market depth.
Lets say now you have decided you want to buy Singtel. You have 2 options really.
1) You can choose to buy it immediately. What this means is that you go to the guy at the queue selling at 3.87, and offer to buy their shares from them. If you decide to buy 10,000 (or 10 lots) of it, the SVol(K) will decrease by 10. Resulting in a final number of 7. the Vol(K) column will correspondingly increase by 10, because that is the total volume of Singtel shares transacted for the day.
2) You think that you can get it at a better price. In this scenario, you will decide what is the price you are willing to pay for it, and stand in that queue for buyers. Assuming that 3.86 is a fair price you decide to pay, and you want to buy 10,000 (or 10 lots) of Singtel shares, what happens is tha the BVol(K) will increase by 10 to 299. As with all queues, you are now at the back of the queue. What this means is that there must be enough people who wants to sell Singtel shares at 3.86 until it reaches your queue position.
Now assuming you want to buy 20,000 (or 20 lots) of Singtel instead. You decide 3.87 is a fair price to pay, however, there are only 17 lots available for sale at 3.87. What happens?
The same mechanism comes into play. You walk up to the 17 sellers at 3.87, buy all the 17 lots. When that happens, you have 3 more lots you would like to buy. Now, you become the buyer at 3.87. Remember there are ready sellers at 3.88, 3.89, 3.90 and beyond? What happens now is, the number 3.86 would disappear from the Buy column, and it would be replaced with 3.87. The BVol(K), would now become 3, since that is the total number of lots willing to buy at 3.87. The Sell column would then be replaced with 3.88, and the SVol would be the number of sellers willing to sell at 3.88.
Really, its all just like a fruits market.
http://finance.kampungtalk.net/2008/01/making-actual-trade
Now that you have decided that you want to invest, and you have considered what is the investment style you would like to try, it is time to make the actual trade.
In Singapore, the stock market is open every weekday from 9am to 5pm, with lunch breaks at 12.30pm to 2.00pm. Before the market opens there is this session called pre-open from 8.30am to 8.59am. During this pre-open period, no trades are done, but people are allowed to submit their orders to queue, such that all these orders will then get done simultaneously at 8.59am before the market officially opens.
There is also pre-open session from 12.30pm to 1.59pm where people can queue in orders before they get executed at 1.59pm, where the afternoon session will commence. Finally, there is a pre-close session at 5.01pm to 5.05pm. These orders will then be matched at 5.06pm to close the day's trading activities. Depending on your brokerage firm, you would be able to queue for the next days session from 5.30pm or 6.00pm onwards.
Without going into too many advanced topics, how the pre-open, pre-close, the matching sessions and how to jump queue will be separated into another post. Watch out for it!
Executing a trade (a.k.a what do all those numbers on the screen mean?)
When you have decided which stock you would like to buy, the first thing you would do is to find the details of its current price.
In this example, the stock we are looking at is Singtel. Some numbers to note are, Last (3.86), BVol(289K), Buy(3.86), Sell(3.87), SVol(17K), Vol(28,715K)
Last basically means the last done price, or the most recent price that Singtel shares were transacted. Vol basically shows the total amount of stocks that has been executed today.
As you would notice, the volume numbers have a K behind it. The reason for this is that shares are traded in 'lot sizes'. In short, 'a lot' of Singtel shares is 1000 shares, thus, the smallest quantity of Singtel shares you can buy or sell at 1 time is 1 lot, or 1000 shares. That would mean 28,715K translates into 28,715 lots, or 28,715,000 shares, of Singtel has been transacted today,
Remember our fruits market example about queuing? In this case, there are 289 orders (or people) queueing to buy Singtel at 3.86, and 17 orders (or people) queueing to sell Singtel at 3.87. It is not displayed here, but in fact, there are people queueing to buy Singtel at 3.85, 3.84, 3.83, etc, and there are people queueing to sell Singtel at 3.88, 3.89, 3.90 and so on. This is called market depth.
Lets say now you have decided you want to buy Singtel. You have 2 options really.
1) You can choose to buy it immediately. What this means is that you go to the guy at the queue selling at 3.87, and offer to buy their shares from them. If you decide to buy 10,000 (or 10 lots) of it, the SVol(K) will decrease by 10. Resulting in a final number of 7. the Vol(K) column will correspondingly increase by 10, because that is the total volume of Singtel shares transacted for the day.
2) You think that you can get it at a better price. In this scenario, you will decide what is the price you are willing to pay for it, and stand in that queue for buyers. Assuming that 3.86 is a fair price you decide to pay, and you want to buy 10,000 (or 10 lots) of Singtel shares, what happens is tha the BVol(K) will increase by 10 to 299. As with all queues, you are now at the back of the queue. What this means is that there must be enough people who wants to sell Singtel shares at 3.86 until it reaches your queue position.
Now assuming you want to buy 20,000 (or 20 lots) of Singtel instead. You decide 3.87 is a fair price to pay, however, there are only 17 lots available for sale at 3.87. What happens?
The same mechanism comes into play. You walk up to the 17 sellers at 3.87, buy all the 17 lots. When that happens, you have 3 more lots you would like to buy. Now, you become the buyer at 3.87. Remember there are ready sellers at 3.88, 3.89, 3.90 and beyond? What happens now is, the number 3.86 would disappear from the Buy column, and it would be replaced with 3.87. The BVol(K), would now become 3, since that is the total number of lots willing to buy at 3.87. The Sell column would then be replaced with 3.88, and the SVol would be the number of sellers willing to sell at 3.88.
Really, its all just like a fruits market.
http://finance.kampungtalk.net/2008/01/making-actual-trade
What is stock?
http://finance.kampungtalk.net/2008/01/what-stock-market
Visit above link to learn more information.
What is the stock market? To some people, it is a gold mine. To others, it might be a strange place that does not belong in their 'world' and thus, something that should not be explored. And to the rest, its basically a legal casino.
Stocks, in a very general concept, represent ownership in a company. A stock market is not unlike a wet market where you bought your groceries from. The only difference, is that the people wear suits and they don't smell like fish.
Buying stocks in a stock market is very much like buying apples. Everyday, when the stock market opens, people who want to buy apples or sell apples will then gather in a large open field. Everybody's very civilised here, so they will queue up. At the front of the queue, it will be a big signboard saying how much this particular queue of people are willing to buy or sell apples at.
Lets say that today apples are currently worth 50cents. At the side where people want to buy apples, there are people lining up in the 49cents queue, the 48cents queue, the 47cents queue, and so on. On the side where people want to sell apples, there are people lining up at the 51cents queue, the 52cents queue and so on.
When a buyer who is queuing up decides he's really hungry and he wants an apple now, he will then go to the 51cents seller and buy the apples from him. Likewise, if a seller really wants to sell an apple, maybe because he ate apples for the past 20 years of his life, he goes to the buyers at 49cents, and sells to them his apples. When that happens, the price transacted at will be known as the last done price.
And that would only be for apples, which is liken to just a single company on the stock market. Thus, the stock market on the whole, is just like a really really huge wet market, with tons of different kinds of fruits, and thousands of buyers and sellers everyday.
Jump to the rest of the articles here:
Why invest
What is the stock market
How to invest and trade
Choosing a brokerage house
Investment styles I (Time)
Investment styles II (Risk)
Investment styles II (Research)
Making the actual trade
Recommended books
Similar posts
•What is bid, ask? And why can't I buy a stock for 0.5cent and sell it for 1cent immediately for profit?
•Making the actual trade
•Who decides the opening price of a stock? (How does pre-opening work?)
•What is the difference between IPO offer shares and placement shares?
•Why Invest?
•Investment styles I (Time)
•How to trade on the Singapore stock market?
http://finance.kampungtalk.net/2008/01/what-stock-market
Visit above link to learn more information.
What is the stock market? To some people, it is a gold mine. To others, it might be a strange place that does not belong in their 'world' and thus, something that should not be explored. And to the rest, its basically a legal casino.
Stocks, in a very general concept, represent ownership in a company. A stock market is not unlike a wet market where you bought your groceries from. The only difference, is that the people wear suits and they don't smell like fish.
Buying stocks in a stock market is very much like buying apples. Everyday, when the stock market opens, people who want to buy apples or sell apples will then gather in a large open field. Everybody's very civilised here, so they will queue up. At the front of the queue, it will be a big signboard saying how much this particular queue of people are willing to buy or sell apples at.
Lets say that today apples are currently worth 50cents. At the side where people want to buy apples, there are people lining up in the 49cents queue, the 48cents queue, the 47cents queue, and so on. On the side where people want to sell apples, there are people lining up at the 51cents queue, the 52cents queue and so on.
When a buyer who is queuing up decides he's really hungry and he wants an apple now, he will then go to the 51cents seller and buy the apples from him. Likewise, if a seller really wants to sell an apple, maybe because he ate apples for the past 20 years of his life, he goes to the buyers at 49cents, and sells to them his apples. When that happens, the price transacted at will be known as the last done price.
And that would only be for apples, which is liken to just a single company on the stock market. Thus, the stock market on the whole, is just like a really really huge wet market, with tons of different kinds of fruits, and thousands of buyers and sellers everyday.
Jump to the rest of the articles here:
Why invest
What is the stock market
How to invest and trade
Choosing a brokerage house
Investment styles I (Time)
Investment styles II (Risk)
Investment styles II (Research)
Making the actual trade
Recommended books
Similar posts
•What is bid, ask? And why can't I buy a stock for 0.5cent and sell it for 1cent immediately for profit?
•Making the actual trade
•Who decides the opening price of a stock? (How does pre-opening work?)
•What is the difference between IPO offer shares and placement shares?
•Why Invest?
•Investment styles I (Time)
•How to trade on the Singapore stock market?
http://finance.kampungtalk.net/2008/01/what-stock-market
Can I trade full time?
A good series and explanation about what you need to prepare for yourself to trade full time
Undercapitalized causes
Overtrading
Forcing trades. Lower your standard criteria to trade.
Excessive risk
Feeling behind. Pscychology.
Refuses to lose (snowball losses)
Averaging down trade to exit.
Attempt to nail turning points. Trying to catch top or bottom of market
Underestimating the difficulty of trading. Trading is against the brightest people.
Too much importance on one trade to bail you out of slump. Don't use one trade to make or break your trading
Blowing out. lose it all.
Get married to an opinion
- Major losses, feel the need to "make it up" of the losses.
- Loss of confidence. replace capital is easy, but not easy to replace confidence.
Protect your confidence, don't married to an opinion.
Capital tied up. missed opportunity.
Risk
Comfort with risk. Willing to take some risk, to lose money.
Able to accept winning / losing
Maintain a level head. Regardless of facing tremendous opportunity or facing adversary
Support network. Family member, or spouse supporting you to trade
Needs
Monthly cashflow. Know what is your one year expenditure.Amount set aside.
Desire for stability? Trading involve losing, you may have down days, down weeks, down months. Compound your emotion
Discipline
- willing to put in the work
- Stick to your plan
- Avoid danger/ excitement. Trading can be boring.
PLAN
- A trading strategy that's working
- Understand risk per trade and sizing
- An exit strategy for every trade
- Willing to adapt to change
- What will you trade?
- When will you trade?
- Know when you will NOT trade! outline the boundary not to trade.
Video
Part 1 http://www.i3investor.com/servlets/fdblog/21956.jsp
Part 2 http://www.i3investor.com/servlets/fdblog/22287.jsp
Part 3 http://www.i3investor.com/servlets/fdblog/22807.jsp
Part 4 http://www.i3investor.com/servlets/fdblog/23104.jsp
Undercapitalized causes
Overtrading
Forcing trades. Lower your standard criteria to trade.
Excessive risk
Feeling behind. Pscychology.
Refuses to lose (snowball losses)
Averaging down trade to exit.
Attempt to nail turning points. Trying to catch top or bottom of market
Underestimating the difficulty of trading. Trading is against the brightest people.
Too much importance on one trade to bail you out of slump. Don't use one trade to make or break your trading
Blowing out. lose it all.
Get married to an opinion
- Major losses, feel the need to "make it up" of the losses.
- Loss of confidence. replace capital is easy, but not easy to replace confidence.
Protect your confidence, don't married to an opinion.
Capital tied up. missed opportunity.
Risk
Comfort with risk. Willing to take some risk, to lose money.
Able to accept winning / losing
Maintain a level head. Regardless of facing tremendous opportunity or facing adversary
Support network. Family member, or spouse supporting you to trade
Needs
Monthly cashflow. Know what is your one year expenditure.Amount set aside.
Desire for stability? Trading involve losing, you may have down days, down weeks, down months. Compound your emotion
Discipline
- willing to put in the work
- Stick to your plan
- Avoid danger/ excitement. Trading can be boring.
PLAN
- A trading strategy that's working
- Understand risk per trade and sizing
- An exit strategy for every trade
- Willing to adapt to change
- What will you trade?
- When will you trade?
- Know when you will NOT trade! outline the boundary not to trade.
Video
Part 1 http://www.i3investor.com/servlets/fdblog/21956.jsp
Part 2 http://www.i3investor.com/servlets/fdblog/22287.jsp
Part 3 http://www.i3investor.com/servlets/fdblog/22807.jsp
Part 4 http://www.i3investor.com/servlets/fdblog/23104.jsp
Tuesday, 11 October 2011
Thursday, 6 October 2011
Seminar
Seminar payment for a few hundred is acceptable, but payment for a few thousand is not acceptable.
The seminar content is what more important that the cost.
If the seminar content is going to help you gain an insight and help you in your investment, then you can go ahead.
Attend forex seminar. What do you want to achieve?
some forex seminar offer autotrading. You are basically buying the software and paying monthly subscription fee
Some forex seminar offer textbook information. You can easily obtain such information in textbook.
Some forex seminar offer the trader's trading experience. information about trader's experience.
What do you really want to learn about forex trading?
Below SGX website for seminars
www.sgx.com/academy
Before you attend the seminar, ask yourself "what in it for me?"
The seminar content is what more important that the cost.
If the seminar content is going to help you gain an insight and help you in your investment, then you can go ahead.
Attend forex seminar. What do you want to achieve?
some forex seminar offer autotrading. You are basically buying the software and paying monthly subscription fee
Some forex seminar offer textbook information. You can easily obtain such information in textbook.
Some forex seminar offer the trader's trading experience. information about trader's experience.
What do you really want to learn about forex trading?
Below SGX website for seminars
www.sgx.com/academy
Before you attend the seminar, ask yourself "what in it for me?"
Wednesday, 5 October 2011
Fundamental or Technical analysis? No, Sentiment most important
Fundamental or Technical analysis? No, Sentiment most important
Good stock based on fundamental analysis means you might want to consider buying
Technical analysis indicate a good level to buy.
Fundamental Analysis and Technical Analysis are not going to make guarantee profit.
Market sentiment MUST be in placed.
Note recent market downward move is due to Europe zone debt crisis and US weak economy.
Good stocks or bad stocks move downward.
This is because bad stocks downward and drag good stocks down.
People panic and sell all stocks.
Good stocks will be sold as people portfolio with bad stocks will have to pay their losses. In order to pay their losses, people will need to sell away their good stocks to pay for their losses.
Right now, even though stocks which are fundamentally good is a stock to buy, you cannot buy it now. The reason is simple, the market sentiment is still very weak.
You never know whether the good stocks will be affected by their domino effects financial crisis.
Don't buy when the market sentiment is weak.
Buy good stock when market sentiment is strong.
Good stock based on fundamental analysis means you might want to consider buying
Technical analysis indicate a good level to buy.
Fundamental Analysis and Technical Analysis are not going to make guarantee profit.
Market sentiment MUST be in placed.
Note recent market downward move is due to Europe zone debt crisis and US weak economy.
Good stocks or bad stocks move downward.
This is because bad stocks downward and drag good stocks down.
People panic and sell all stocks.
Good stocks will be sold as people portfolio with bad stocks will have to pay their losses. In order to pay their losses, people will need to sell away their good stocks to pay for their losses.
Right now, even though stocks which are fundamentally good is a stock to buy, you cannot buy it now. The reason is simple, the market sentiment is still very weak.
You never know whether the good stocks will be affected by their domino effects financial crisis.
Don't buy when the market sentiment is weak.
Buy good stock when market sentiment is strong.
CPF investment account
If you would like to use your CPF ordinary account to invest in Stock, you will need to open a CPF investment account.
You can
You can
Supplementary Retirement Scheme (SRS)
Supplementary Retirement Scheme (SRS)
Supplementary Retirement Scheme (SRS) is a voluntary scheme to encourage individuals to save for retirement, over and above their CPF savings.
The SRS offers attractive tax benefits. Contributions to SRS are eligible for tax relief. Investment returns will also be tax-free before withdrawal and only 50% of the withdrawals from SRS are taxable at retirement.
SRS Contribution
You and your employer (see note 1 below) are allowed to make SRS contributions in the current year if you are:
Supplementary Retirement Scheme (SRS) is a voluntary scheme to encourage individuals to save for retirement, over and above their CPF savings.
The SRS offers attractive tax benefits. Contributions to SRS are eligible for tax relief. Investment returns will also be tax-free before withdrawal and only 50% of the withdrawals from SRS are taxable at retirement.
SRS Contribution
You and your employer (see note 1 below) are allowed to make SRS contributions in the current year if you are:
- A Singaporean, Singapore permanent resident (SPR) or foreigner who earns any form of income (eg employment income including directors' fees, trade income, rental income);
- At least 21 years of age;
- Not an undischarged bankrupt; AND
- Not mentally disordered and incapable of managing yourself or your affairs.
How to open SRS account
You can open an SRS account at the participating branches of any of the three SRS operators:- DBS Group Holdings Ltd
- Overseas-Chinese Banking Corporation (OCBC) Ltd
- United Overseas Bank (UOB) Ltd
Tuesday, 4 October 2011
Government debt likely to collapse the global economy
http://www.youtube.com/watch?v=rG1DUn8mMwk&feature=related
What is government bond?
What is the cause of financial economic collapse?
Why stagflation is scary?
All the answers are in the video
What is government bond?
What is the cause of financial economic collapse?
Why stagflation is scary?
All the answers are in the video
Global Financial Crisis Explained
http://www.youtube.com/watch?v=Q-zp5Mb7FV0&feature=related
What is leverage?
What is CDO?
What cause the downfall and global financial crisis?
All are explained in the video
What is leverage?
What is CDO?
What cause the downfall and global financial crisis?
All are explained in the video
Things news investor must know and do.
What you need to equip yourself .
1) Knowledge of financial products. Stock, bond, money market, options, futures, forex, CFD, ETF, dual currency, etc.
2) Observe market movement for at least 3-5 years.
3) To identify profitable opportunity. Timing is very important. Have a trading plan.
4) Willingness to risk for return. Cashflow 101 game. Learn about your purpose of investment.
5) Ability to withstand market move against you. Your psychology fitness. Open a demo Forex Trading account. Spend at least 1 hour to trade. Pick up one trading strategies. Learn one Technical Analysis.
6) Constant reading of financial market to keep abreast of latest information and market movement.
7) Learning about fundamental analysis, technical analysis and market sentiment to make timely and right decision investment.
1) Knowledge of financial products. Stock, bond, money market, options, futures, forex, CFD, ETF, dual currency, etc.
2) Observe market movement for at least 3-5 years.
3) To identify profitable opportunity. Timing is very important. Have a trading plan.
4) Willingness to risk for return. Cashflow 101 game. Learn about your purpose of investment.
5) Ability to withstand market move against you. Your psychology fitness. Open a demo Forex Trading account. Spend at least 1 hour to trade. Pick up one trading strategies. Learn one Technical Analysis.
6) Constant reading of financial market to keep abreast of latest information and market movement.
7) Learning about fundamental analysis, technical analysis and market sentiment to make timely and right decision investment.
Tuesday, 20 September 2011
Investment
Open trading account. Click below link to learn more
http://learnaboutstockinvestment.blogspot.com/2011/09/getting-started-to-buy-stock.html
Learn about risk appetite from CPF moneysense.
https://www.cpf.gov.sg/cpf_info/ie/IE_Risk.asp
Trading and investment. How much time and effort you are willing to invest?
Learn basic information from http://www.sgx.com/
Fundamental analysis - company background, earning, corporate action, etc.
Technical analysis - charting, indicator,
Market sentiment - macro economy, interest rate, etc.
Have a plan that meet your financial goals.
Click below to learn more.
http://learnaboutstockinvestment.blogspot.com/2011/09/7-common-investor-mistakes.html
http://learnaboutstockinvestment.blogspot.com/2011/09/getting-started-to-buy-stock.html
Learn about risk appetite from CPF moneysense.
https://www.cpf.gov.sg/cpf_info/ie/IE_Risk.asp
Trading and investment. How much time and effort you are willing to invest?
Learn basic information from http://www.sgx.com/
Fundamental analysis - company background, earning, corporate action, etc.
Technical analysis - charting, indicator,
Market sentiment - macro economy, interest rate, etc.
Have a plan that meet your financial goals.
Click below to learn more.
http://learnaboutstockinvestment.blogspot.com/2011/09/7-common-investor-mistakes.html
Monday, 19 September 2011
7 Controversial Investing Theories
7 Controversial Investing Theories
When it comes to investing, there is no shortage of theories on what makes the markets tick or what a particular market move means. The two largest factions on Wall Street are split along theoretical lines into adherents to an efficient market theory and those who believe the market can be beat. Although this is a fundamental split, there are many other theories that attempt to explain and influence the market - and the actions of investors in the markets. In this article, we will look at some common (and uncommon) financial theories.
Efficient Market HypothesisVery few people are neutral on efficient market hypothesis (EMH). You either believe in it and adhere to passive, broad market investing strategies, or you detest it and focus on picking stocks based on growth potential, undervalued assets and so on. The EMH states that the market price for shares incorporates all the known information about that stock. This means that the stock is accurately valued until a future event changes that valuation. Because the future is uncertain, an adherent to EMH is far better off owning a wide swath of stocks and profiting from the general rise of the market.
Opponents of EMH point to Warren Buffett and other investors who have consistently beat the market by finding irrational prices within the overall market.
Fifty Percent PrincipleThe fifty percent principle predicts that, before continuing, an observed trend will undergo a price correction of one-half to two-thirds of the change in price. This means that if a stock has been on an upward trend and gained 20%, it will fall back 10% before continuing its rise. This is an extreme example, as most times this rule is applied to the short-term trends that technical analysts and traders buy and sell on.
This correction is thought to be a natural part of the trend as it's usually caused by skittish investors taking profits early to avoid getting caught in a true reversal of the trend later on. If the correction exceeds 50% of the change in price, it's considered a sign that the trend has failed and the reversal has come prematurely.
Greater Fool TheoryThe greater fool theory proposes that you can profit from investing as long as there is a greater fool than yourself to buy the investment at a higher price. This means that you could make money from an overpriced stock as long as someone else is willing to pay more to buy it from you.
Eventually you run out of fools as the market for any investment overheats. Investing according to the greater fool theory means ignoring valuations, earning reports and all the other data. Ignoring data is as risky as paying too much attention to it; so people ascribing to the greater fool theory could be left holding the short end of the stick after a market correction.
Odd Lot TheoryThe odd lot theory uses the sale of odd lots – small blocks of stocks held by individual investors – as an indicator of when to buy into a stock. Investors following the odd lot theory buy in when small investors sell out. The main assumption is that small investors are usually wrong.
The odd lot theory is contrarian strategy based off a very simple form of technical analysis – measuring odd lot sales. How successful an investor or trader following the theory is depends heavily on whether or not he checks the fundamentals of companies that the theory points toward or simply buys blindly. Small investors aren't going to be right or wrong all the time, so it's important to distinguish odd lot sales that are occurring from a low-risk tolerance from odd lot sales that are due to bigger problems. Individual investors are more mobile than the big funds and thus can react to severe news faster, so odd lot sales can actually be a precursor to a wider sell-off in a failing stock instead of just a mistake on the part of small time investors.
Prospect Theory (Loss-Aversion Theory)Prospect theory states that people's perceptions of gain and loss are skewed. That is, people are more afraid of a loss than they are encouraged by a gain. If a person is given a choice of two different prospects, they will pick the one that they think has less of chance of ending in a loss, rather than the one that offers the most gains. For example, if you offer a person two investments, one that has returned 5% each year and one that has returned 12%, lost 2.5%, and returned 6% in the same years, the person will pick the 5% investment because he puts an irrational amount of importance on the single loss, while ignoring the gains that are of a greater magnitude. In the above example, both alternatives produce the net total return after three years.
Prospect theory is important for financial professionals and investors. Although the risk/reward trade-off gives a clear picture of the amount of risk an investor has to take on to achieve the desired returns, prospect theory tells us that very few people understand emotionally what they realize intellectually. For financial professionals, the challenge is in suiting a portfolio to the client's risk profile, rather than reward desires. For the investor, the challenge is to overcome the disappointing predictions of prospect theory and become brave enough to get the returns you want.
Rational Expectations TheoryRational expectations theory states that the players in an economy will act in a way that conforms to what can logically be expected in the future. That is, a person will invest, spend, etc. according to what he or she rationally believes will happen in the future. By doing so, that person creates a self-fulfilling prophecy that helps bring about the future event.
Although this theory has become quite important to economics, its utility is doubtful. For example, an investor thinks a stock is going to go up, and by buying it, this act actually causes the stock to go up. This same transaction can be framed outside of rational expectations theory. An investor notices that a stock is undervalued, buys it, and watches as other investors notice the same thing, thus pushing the price up to its proper market value. This highlights the main problem with rational expectations theory: it can be changed to explain everything, but it tells us nothing.
Short Interest TheoryShort interest theory posits that a high short interest is the precursor to a rise in the stock's price and, at first glance, appears to be unfounded. Common sense suggests that a stock with a high short interest – that is, a stock that many investors are short selling – is due for a correction. The reasoning goes that all those traders, thousands of professionals and individuals scrutinizing every scrap of market data, surely can't be wrong. They may be right to an extent, but the stock price may actually rise by virtue of being heavily shorted. Short sellers have to eventually cover their positions by buying the stock they've shorted. Consequently, the buying pressure created by the short sellers covering their positions will push the share price upwards.
The Bottom Line
We have covered a pretty wide range of theories, from technical trading theories like short interest and odd lot theory to economic theories like rational expectations and prospect theory. Every theory is an attempt to impose some type of consistency or some type of frame to the millions of buy and sell decisions that make the market swell and ebb on a daily basis. While it is useful to know these theories, it is also important to remember that there is no unified theory that can explain the financial world. During certain time periods, one theory seems to hold sway only to be toppled the next instant. In the financial world, change is the only true constant.
Extract from Yahoo Finance Singapore
http://sg.finance.yahoo.com/news/7-Controversial-Investing-investopedia-1764269146.html?x=0
When it comes to investing, there is no shortage of theories on what makes the markets tick or what a particular market move means. The two largest factions on Wall Street are split along theoretical lines into adherents to an efficient market theory and those who believe the market can be beat. Although this is a fundamental split, there are many other theories that attempt to explain and influence the market - and the actions of investors in the markets. In this article, we will look at some common (and uncommon) financial theories.
Efficient Market HypothesisVery few people are neutral on efficient market hypothesis (EMH). You either believe in it and adhere to passive, broad market investing strategies, or you detest it and focus on picking stocks based on growth potential, undervalued assets and so on. The EMH states that the market price for shares incorporates all the known information about that stock. This means that the stock is accurately valued until a future event changes that valuation. Because the future is uncertain, an adherent to EMH is far better off owning a wide swath of stocks and profiting from the general rise of the market.
Opponents of EMH point to Warren Buffett and other investors who have consistently beat the market by finding irrational prices within the overall market.
Fifty Percent PrincipleThe fifty percent principle predicts that, before continuing, an observed trend will undergo a price correction of one-half to two-thirds of the change in price. This means that if a stock has been on an upward trend and gained 20%, it will fall back 10% before continuing its rise. This is an extreme example, as most times this rule is applied to the short-term trends that technical analysts and traders buy and sell on.
This correction is thought to be a natural part of the trend as it's usually caused by skittish investors taking profits early to avoid getting caught in a true reversal of the trend later on. If the correction exceeds 50% of the change in price, it's considered a sign that the trend has failed and the reversal has come prematurely.
Greater Fool TheoryThe greater fool theory proposes that you can profit from investing as long as there is a greater fool than yourself to buy the investment at a higher price. This means that you could make money from an overpriced stock as long as someone else is willing to pay more to buy it from you.
Eventually you run out of fools as the market for any investment overheats. Investing according to the greater fool theory means ignoring valuations, earning reports and all the other data. Ignoring data is as risky as paying too much attention to it; so people ascribing to the greater fool theory could be left holding the short end of the stick after a market correction.
Odd Lot TheoryThe odd lot theory uses the sale of odd lots – small blocks of stocks held by individual investors – as an indicator of when to buy into a stock. Investors following the odd lot theory buy in when small investors sell out. The main assumption is that small investors are usually wrong.
The odd lot theory is contrarian strategy based off a very simple form of technical analysis – measuring odd lot sales. How successful an investor or trader following the theory is depends heavily on whether or not he checks the fundamentals of companies that the theory points toward or simply buys blindly. Small investors aren't going to be right or wrong all the time, so it's important to distinguish odd lot sales that are occurring from a low-risk tolerance from odd lot sales that are due to bigger problems. Individual investors are more mobile than the big funds and thus can react to severe news faster, so odd lot sales can actually be a precursor to a wider sell-off in a failing stock instead of just a mistake on the part of small time investors.
Prospect Theory (Loss-Aversion Theory)Prospect theory states that people's perceptions of gain and loss are skewed. That is, people are more afraid of a loss than they are encouraged by a gain. If a person is given a choice of two different prospects, they will pick the one that they think has less of chance of ending in a loss, rather than the one that offers the most gains. For example, if you offer a person two investments, one that has returned 5% each year and one that has returned 12%, lost 2.5%, and returned 6% in the same years, the person will pick the 5% investment because he puts an irrational amount of importance on the single loss, while ignoring the gains that are of a greater magnitude. In the above example, both alternatives produce the net total return after three years.
Prospect theory is important for financial professionals and investors. Although the risk/reward trade-off gives a clear picture of the amount of risk an investor has to take on to achieve the desired returns, prospect theory tells us that very few people understand emotionally what they realize intellectually. For financial professionals, the challenge is in suiting a portfolio to the client's risk profile, rather than reward desires. For the investor, the challenge is to overcome the disappointing predictions of prospect theory and become brave enough to get the returns you want.
Rational Expectations TheoryRational expectations theory states that the players in an economy will act in a way that conforms to what can logically be expected in the future. That is, a person will invest, spend, etc. according to what he or she rationally believes will happen in the future. By doing so, that person creates a self-fulfilling prophecy that helps bring about the future event.
Although this theory has become quite important to economics, its utility is doubtful. For example, an investor thinks a stock is going to go up, and by buying it, this act actually causes the stock to go up. This same transaction can be framed outside of rational expectations theory. An investor notices that a stock is undervalued, buys it, and watches as other investors notice the same thing, thus pushing the price up to its proper market value. This highlights the main problem with rational expectations theory: it can be changed to explain everything, but it tells us nothing.
Short Interest TheoryShort interest theory posits that a high short interest is the precursor to a rise in the stock's price and, at first glance, appears to be unfounded. Common sense suggests that a stock with a high short interest – that is, a stock that many investors are short selling – is due for a correction. The reasoning goes that all those traders, thousands of professionals and individuals scrutinizing every scrap of market data, surely can't be wrong. They may be right to an extent, but the stock price may actually rise by virtue of being heavily shorted. Short sellers have to eventually cover their positions by buying the stock they've shorted. Consequently, the buying pressure created by the short sellers covering their positions will push the share price upwards.
The Bottom Line
We have covered a pretty wide range of theories, from technical trading theories like short interest and odd lot theory to economic theories like rational expectations and prospect theory. Every theory is an attempt to impose some type of consistency or some type of frame to the millions of buy and sell decisions that make the market swell and ebb on a daily basis. While it is useful to know these theories, it is also important to remember that there is no unified theory that can explain the financial world. During certain time periods, one theory seems to hold sway only to be toppled the next instant. In the financial world, change is the only true constant.
Extract from Yahoo Finance Singapore
http://sg.finance.yahoo.com/news/7-Controversial-Investing-investopedia-1764269146.html?x=0
7 Common Investor Mistakes
, On Friday 5 August 2011, 0:33 SGT
Of the mistakes made by investors, seven of them are repeat offenses. In fact, investors have been making these same mistakes since the dawn of modern markets, and will likely be repeating them for years to come. You can significantly boost your chances of investment success by becoming aware of these typical errors and taking steps to avoid them.
1. No PlanAs the old saying goes, if you don't know where you're going, any road will take you there. Solution?
Have a personal investment plan or policy that addresses the following:
- Goals and objectives - Find out what you're trying to accomplish. Accumulating $100,000 for a child's college education or $2 million for retirement at age 60 are appropriate goals. Beating the market is not a goal.
- Risks - What risks are relevant to you or your portfolio? If you are a 30-year-old saving for retirement, volatility isn't (or shouldn't be) a meaningful risk. On the other hand, inflation - which erodes any long-term portfolio - is a significant risk.
- Appropriate benchmarks - How will you measure the success of your portfolio, its asset classes and individual funds or managers?
- Asset allocation - What percentage of your total portfolio will you allocate to U.S. equities, international stocks, U.S. bonds, high-yield bonds, etc. Your asset allocation should accomplish your goals while addressing relevant risks.
- Diversification - Allocating to different asset classes is the initial layer of diversification. You then need to diversify within each asset class. In U.S. stocks, for example, this means exposure to large-, mid- and small-cap stocks.
2. Too Short of a Time Horizon
If you are saving for retirement 30 years hence, what the stock market does this year or next shouldn't be the biggest concern. Even if you are just entering retirement at age 70, your life expectancy is likely 15 to 20 years. If you expect to leave some assets to your heirs, then your
3. Too Much Attention Given to Financial MediaThere is almost nothing on financial news shows that can help you achieve your goals. Turn them off. There are few newsletters that can provide you with anything of value. Even if there were, how do you identify them in advance?
Think about it - if anyone really had profitable stock tips, trading advice or a secret formula to make big bucks, would they blab it on TV or sell it to you for $49 per month? No - they'd keep their mouth shut, make their millions and not have to sell a newsletter to make a living.
Solution? Spend less time watching financial shows on TV and reading newsletters. Spend more time creating - and sticking to - your investment plan.
4. Not Rebalancing Rebalancing is the process of returning your portfolio to its target asset allocation as outlined in your investment plan. Rebalancing is difficult because it forces you to sell the asset class that is performing well and buy more of your worst performing asset classes. This contrarian action is very difficult for many investors.
In addition, rebalancing is unprofitable right up to that point where it pays off spectacularly (think U.S. equities in the late 1990s), and the underperforming assets start to take off.
However, a portfolio allowed to drift with market returns guarantees that asset classes will be overweighted at market peaks and underweighted at market lows - a formula for poor performance. The solution? Rebalance religiously and reap the long-term rewards.
5. Overconfidence in the Ability of ManagersFrom numerous studies, including Burton Malkiel's 1995 study entitled, "Returns From Investing In Equity Mutual Funds", we know that most managers will underperform their benchmarks. We also know that there's no consistent way to select - in advance - those managers that will outperform. We also know that very, very few individuals can profitably time the market over the long term. So why are so many investors confident of their abilities to time the market and select outperforming managers?
Fidelity guru Peter Lynch once observed, "There are no market timers in the 'Forbes' 400'." Investors' misplaced overconfidence in their ability to market-time and select outperforming managers leads directly to our next common investment mistake.
6. Not Enough Indexing
There is not enough time to recite many of the studies that prove that most managers and mutual funds underperform their benchmarks. Over the long-term, low-cost index funds are typically upper second-quartile performers, or better than 65-75% of actively managed funds.
Despite all the evidence in favor of indexing, the desire to invest with active managers remains strong. John Bogle, the founder of Vanguard, says it's because, "Hope springs eternal. Indexing is sort of dull. It flies in the face of the American way [that] 'I can do better.'"
Index all or a large portion (70-80%) of all your traditional asset classes. If you can't resist the excitement of pursuing the next great performer, set aside a portion (20-30%) of each asset class to allocate to active managers. This may satisfy your desire to pursue outperformance without devastating your portfolio.
7. Chasing PerformanceMany investors select asset classes, strategies, managers and funds based on recent strong performance. The feeling that "I'm missing out on great returns" has probably led to more bad investment decisions than any other single factor. If a particular asset class, strategy or fund has done extremely well for three or four years, we know one thing with certainty: We should have invested three or four years ago. Now, however, the particular cycle that led to this great performance may be nearing its end. The smart money is moving out, and the dumb money is pouring in. Stick with your investment plan and rebalance, which is the polar opposite of chasing performance.
ConclusionInvestors who recognize and avoid these seven common mistakes give themselves a great advantage in meeting their investment goals. Most of the solutions above are not exciting, and they don't make great cocktail party conversation. However, they are likely to be profitable. And isn't that why we really invest?
Extracted from Yahoo Finance Singapore
http://sg.finance.yahoo.com/news/7-Common-Investor-Mistakes-investopedia-2095697490.html?x=0
Sunday, 18 September 2011
SIAS beginner guide to investment
Click below link to access SIAS beginner guide to investment.
http://www.sias.org.sg/beginnerguide/index.php
Understanding yourself
Know the products
Tools & Strategies
Investment Resources
Getting Started.
A useful guide for newbie
http://www.sias.org.sg/beginnerguide/index.php
Understanding yourself
Know the products
Tools & Strategies
Investment Resources
Getting Started.
A useful guide for newbie
Saturday, 17 September 2011
What is stock? What is Bond? What is CDP?
Below are my answers to your queries.
>
> 1) Good time to buy or sell shares. If you have not sold any shares,
> you might as well sell it before it go further downward.
>
> Good time to buy shares. No. Definitely not now. The market sentiment
> remain weak. Based on fundamental or the earning report of the
> individual stock, the current stock price is very attractive. Example
> Metro Holding stock. Value of company is worth $1.29 per share and
> stock price is 0.66 per shares. This is more than 40% discount.
> However, globalisation has made the financial situation more difficult
> to manage than in the past. The current focus is on Euro debt and US
> economy facing high unemployment. These will drag down further market
> weakness. Stock price may continue to go down despite current stock
> price is very attractive.
> Unless there is clear sign of positive news and action coming. Stock
> market likely to continue going down further.
>
> 2) Stock vs bond. Stock is buying a share of the business profit. If
> the business is doing well, the stock price may go up and company may
> give dividend to shareholder.
> If the business is not doing well or collapse which is possible for
> small businesses especially economy bad, and business not earning
> profit and business close down, then all your investment will be gone.
> That is why, buying big and well established company or known as blue
> chip stock is important. Example are OCBC, UOB, DBS,(bank sector
> stocks) Singtel, Starhub, M1(teleco stocks), Capitaland, Mapletree ,
> (property stocks) , SMRT, Comfort Delgro (transportation), etc.
> One simple guide is Straits Times Index (STI) which represent the
> Singapore stock performance. STI is made up of 30 Singapore stocks
> that represent Singapore stock. SGX choose good stock to represent
> Singapore stock market performance.
> Check which are the 30 stock in STI at SGX website. www.sgx.com
>
> Bond is like a bank fixed deposit where it will state the interest
> rate you will earn and the period you place your money. Example 5%
> interest rate for 8 years.
> Fixed deposit is promise by bank to pay you interest and the principal amount.
> Bond is promise by Company or Government. They basically borrow money
> from you and promise to pay you interest yearly or half yearly and pay
> all the borrowed money at end of maturity date. Recent news example is
> HDB bond http://www.todayonline.com/Business/Businessinbrief/EDC110915-0000387/HDB-to-issue-10-year-S$400m-bond
> Past bond issue are F&N bond issue.
> http://www.martinlee.sg/fn-bonds-to-be-issued/
>
> Bond issued by company. The risk of buying bond is there is a
> possibility that the company collapse, then you will not have your
> money back. Just like bank. If the bank collapse your Fixed Deposit
> money may be gone. However, bank have FDIC insurance, which protect
> your money in the bank for up to $20,000. Any amount above will not be
> claimable, should bank collapse. Therefore, it is adviseable to have
> more money in different banks. $20,000 in DBS, $20,000 in OCBC, and
> etc,
>
> Bond issued by government. You can buy Singapore government bond.
> Visit www.sgs.gov.sg to learn more. Minimum investment $1000. Every
> week there is new government bond issue for 3 months. There are 1 year
> bond issue, 2 year bond issue.
> 20 year government bond. See this year new bond issue dates
> http://www.sgs.gov.sg/issuance_calendar/issuance_2011.html/
>
> Stock vs Bond. Stock can give you dividend yield of 5% while bond gives you 2%.
> Stock price if go up, you may earn money and plus dividend. stock
> price if go down, you lose money in term of your stock value drop, but
> you earn dividend. Bond price go up or down, there is not difference
> to you. You earn only the 3% bond interest rate which is called coupon
> rate. You received your interest and principal amount at end of
> maturity date.
>
> Risk on buy bond or bank fixed deposit is the interest rate is too low
> 2% or 0.3% to beat inflation rate which is currently at 5%. This means
> your money is depreciating. Your money value is going down every day.
>
> To learn about investment in stock or bond, you can visit www.sgx.com/academy.
> Upcoming seminar event is Investing in Fixed Income Securities on 01
> October 2011. Fixed Income is also known as Bond. This is free seminar
> talk. Click below link to register.
> http://www.sgxacademy.com/index.php?option=com_sgx&task=eDetail&id=116
>
>
> 3) How much money needed to buy stock? You need to know the stock price
>
> Example recent Sheng Siong IPO stock price is 0.33. Minimum you must
> buy 1000 shares, so you must have $330 (0.33x 1000) to buy Sheng Siong
> new share. IPO is Initial Public Offering which is known as new stock
> going to be listing into SGX.
>
> Therefore, how much money you need depend on stock price.
> Example SIA stock price is $10.50. To buy 1000 shares, mean you have
> to pay $10,500.
> Example SMRT stock price is $3.60. to buy 1000 shares, mean you have
> to pay $3,600
>
> When buy IPO stock, there is no charges.
> When you buy stocks listed in Singapore Stock Exchange, you have to
> pay charges like brokerage commission, SGX clearing fee, SGX access
> fee and GST.
> Visit my video to learn about profit and loss calculator to learn
> about the charges.
> http://www.youtube.com/watch?v=zTBIhXGL7K0
>
> 4) Open CDP account is free. Visit CDP customer service to open CDP
> account. CDP located at 4 Shenton Way SGX Centre 2 Level 2. You must
> bring your IC or passport(for foreigner) and bank account number.
> Visit CDP website at www.sgx.com/cdp
>
> You need a CDP account when you buy stock or bond. CDP account is to
> deposit your securities. Stock and bond are known as securities. Money
> is deposited in Bank account. Securities are deposited in CDP
> account.Therefore, you need a CDP account to deposit your securities.
> When you buy securities, you deposit securities into your CDP account.
> When you sell securities, you take out securities from your CDP account.
> When you buy securities, you take out money from your bank account, to
> pay your securities.
> When you sell securities, you deposit money into your bank account
> which is the proceed received from sale of securities.
>
> To buy new stock or new bond, you don't need a broker. You can buy via
> bank ATM machine.
> To sell your securities, you need a broker to open trading account.
>
> To buy stocks or bond listed in SGX (or Singapore Stock Exchange) you
> need a broker to to open a trading account.
>
> A trading account allows you to buy and sell your securities. You can
> call your broker to buy or sell securities or you buy or sell
> securities via online broker trading platform. To learn more
> information, Visit my blog at
> http://learnaboutstockinvestment.blogspot.com/2011/09/getting-started-to-buy-stock.html
>
>
> 1) Good time to buy or sell shares. If you have not sold any shares,
> you might as well sell it before it go further downward.
>
> Good time to buy shares. No. Definitely not now. The market sentiment
> remain weak. Based on fundamental or the earning report of the
> individual stock, the current stock price is very attractive. Example
> Metro Holding stock. Value of company is worth $1.29 per share and
> stock price is 0.66 per shares. This is more than 40% discount.
> However, globalisation has made the financial situation more difficult
> to manage than in the past. The current focus is on Euro debt and US
> economy facing high unemployment. These will drag down further market
> weakness. Stock price may continue to go down despite current stock
> price is very attractive.
> Unless there is clear sign of positive news and action coming. Stock
> market likely to continue going down further.
>
> 2) Stock vs bond. Stock is buying a share of the business profit. If
> the business is doing well, the stock price may go up and company may
> give dividend to shareholder.
> If the business is not doing well or collapse which is possible for
> small businesses especially economy bad, and business not earning
> profit and business close down, then all your investment will be gone.
> That is why, buying big and well established company or known as blue
> chip stock is important. Example are OCBC, UOB, DBS,(bank sector
> stocks) Singtel, Starhub, M1(teleco stocks), Capitaland, Mapletree ,
> (property stocks) , SMRT, Comfort Delgro (transportation), etc.
> One simple guide is Straits Times Index (STI) which represent the
> Singapore stock performance. STI is made up of 30 Singapore stocks
> that represent Singapore stock. SGX choose good stock to represent
> Singapore stock market performance.
> Check which are the 30 stock in STI at SGX website. www.sgx.com
>
> Bond is like a bank fixed deposit where it will state the interest
> rate you will earn and the period you place your money. Example 5%
> interest rate for 8 years.
> Fixed deposit is promise by bank to pay you interest and the principal amount.
> Bond is promise by Company or Government. They basically borrow money
> from you and promise to pay you interest yearly or half yearly and pay
> all the borrowed money at end of maturity date. Recent news example is
> HDB bond http://www.todayonline.com/Business/Businessinbrief/EDC110915-0000387/HDB-to-issue-10-year-S$400m-bond
> Past bond issue are F&N bond issue.
> http://www.martinlee.sg/fn-bonds-to-be-issued/
>
> Bond issued by company. The risk of buying bond is there is a
> possibility that the company collapse, then you will not have your
> money back. Just like bank. If the bank collapse your Fixed Deposit
> money may be gone. However, bank have FDIC insurance, which protect
> your money in the bank for up to $20,000. Any amount above will not be
> claimable, should bank collapse. Therefore, it is adviseable to have
> more money in different banks. $20,000 in DBS, $20,000 in OCBC, and
> etc,
>
> Bond issued by government. You can buy Singapore government bond.
> Visit www.sgs.gov.sg to learn more. Minimum investment $1000. Every
> week there is new government bond issue for 3 months. There are 1 year
> bond issue, 2 year bond issue.
> 20 year government bond. See this year new bond issue dates
> http://www.sgs.gov.sg/issuance_calendar/issuance_2011.html/
>
> Stock vs Bond. Stock can give you dividend yield of 5% while bond gives you 2%.
> Stock price if go up, you may earn money and plus dividend. stock
> price if go down, you lose money in term of your stock value drop, but
> you earn dividend. Bond price go up or down, there is not difference
> to you. You earn only the 3% bond interest rate which is called coupon
> rate. You received your interest and principal amount at end of
> maturity date.
>
> Risk on buy bond or bank fixed deposit is the interest rate is too low
> 2% or 0.3% to beat inflation rate which is currently at 5%. This means
> your money is depreciating. Your money value is going down every day.
>
> To learn about investment in stock or bond, you can visit www.sgx.com/academy.
> Upcoming seminar event is Investing in Fixed Income Securities on 01
> October 2011. Fixed Income is also known as Bond. This is free seminar
> talk. Click below link to register.
> http://www.sgxacademy.com/index.php?option=com_sgx&task=eDetail&id=116
>
>
> 3) How much money needed to buy stock? You need to know the stock price
>
> Example recent Sheng Siong IPO stock price is 0.33. Minimum you must
> buy 1000 shares, so you must have $330 (0.33x 1000) to buy Sheng Siong
> new share. IPO is Initial Public Offering which is known as new stock
> going to be listing into SGX.
>
> Therefore, how much money you need depend on stock price.
> Example SIA stock price is $10.50. To buy 1000 shares, mean you have
> to pay $10,500.
> Example SMRT stock price is $3.60. to buy 1000 shares, mean you have
> to pay $3,600
>
> When buy IPO stock, there is no charges.
> When you buy stocks listed in Singapore Stock Exchange, you have to
> pay charges like brokerage commission, SGX clearing fee, SGX access
> fee and GST.
> Visit my video to learn about profit and loss calculator to learn
> about the charges.
> http://www.youtube.com/watch?v=zTBIhXGL7K0
>
> 4) Open CDP account is free. Visit CDP customer service to open CDP
> account. CDP located at 4 Shenton Way SGX Centre 2 Level 2. You must
> bring your IC or passport(for foreigner) and bank account number.
> Visit CDP website at www.sgx.com/cdp
>
> You need a CDP account when you buy stock or bond. CDP account is to
> deposit your securities. Stock and bond are known as securities. Money
> is deposited in Bank account. Securities are deposited in CDP
> account.Therefore, you need a CDP account to deposit your securities.
> When you buy securities, you deposit securities into your CDP account.
> When you sell securities, you take out securities from your CDP account.
> When you buy securities, you take out money from your bank account, to
> pay your securities.
> When you sell securities, you deposit money into your bank account
> which is the proceed received from sale of securities.
>
> To buy new stock or new bond, you don't need a broker. You can buy via
> bank ATM machine.
> To sell your securities, you need a broker to open trading account.
>
> To buy stocks or bond listed in SGX (or Singapore Stock Exchange) you
> need a broker to to open a trading account.
>
> A trading account allows you to buy and sell your securities. You can
> call your broker to buy or sell securities or you buy or sell
> securities via online broker trading platform. To learn more
> information, Visit my blog at
> http://learnaboutstockinvestment.blogspot.com/2011/09/getting-started-to-buy-stock.html
>
Wednesday, 7 September 2011
Goldman Sachs Saga
Investment bank selling products. Is the product beneficial to seller or buyer?
If the buyer has more knowledge than the seller on the product, buyer wins
If the seller has more knowledge than the buyer on the product, seller wins.
See the video at below link.
http://www.youtube.com/watch?v=uMc6KyM_CrE&feature=autoplay&list=PLD9601780A802027E&lf=results_video&playnext=2
If the buyer has more knowledge than the seller on the product, buyer wins
If the seller has more knowledge than the buyer on the product, seller wins.
See the video at below link.
http://www.youtube.com/watch?v=uMc6KyM_CrE&feature=autoplay&list=PLD9601780A802027E&lf=results_video&playnext=2
Tuesday, 6 September 2011
Contract for Difference (CFD)
IG market CFD guide
http://www.igmarkets.com.sg/cfd/get-started.html
Demo account. Learn first using virtual account on CFD
http://www.plus500.sg/StartTrading.aspx
History and more information about CFD
http://en.wikipedia.org/wiki/Contract_for_difference#CFDs_compared_to_other_products
Top 10 CFD Singapore stock
http://www.phillipcfd.com/researchcorner/
http://www.igmarkets.com.sg/cfd/get-started.html
Demo account. Learn first using virtual account on CFD
http://www.plus500.sg/StartTrading.aspx
History and more information about CFD
http://en.wikipedia.org/wiki/Contract_for_difference#CFDs_compared_to_other_products
Top 10 CFD Singapore stock
http://www.phillipcfd.com/researchcorner/
Monday, 5 September 2011
Commission rate comparsion
DBS Vickers charge 0.18% or $18 minimum commission
UOB Kay Hian charge 0.275% with $25 minimum for less $50K, 0.22% less $100K, neg >$100K
US market charge 0.3% flat minimum US$20
OCBC instant recycle limit. if you buy and sell , make $1000 contra profit, immediately you can have your limit increase $1000.
Commission rate 0.275% with minimum $25 for less than $50K, 0.275% for less than $100K and 0.20% for more than $100K
Lim and Tan
charge 0.28% for less than $50K with minimum $25, 0.22% for less than $100K and 0.18% for more than $100K
Offer for foreigner 50% collateral. Example deposit $1000, given $2000 limit.
CIMB, Amfraser, DMG are charge 0.275% with minimum $25 for less than $50K, 0.22% for less than $100K and 0.18% for more than $100K
Amfraser give foreigner 1 for 1 limit. Example deposit $1000, given trading limit $1000.
UOB Kay Hian charge 0.275% with $25 minimum for less $50K, 0.22% less $100K, neg >$100K
US market charge 0.3% flat minimum US$20
OCBC instant recycle limit. if you buy and sell , make $1000 contra profit, immediately you can have your limit increase $1000.
Commission rate 0.275% with minimum $25 for less than $50K, 0.275% for less than $100K and 0.20% for more than $100K
Lim and Tan
charge 0.28% for less than $50K with minimum $25, 0.22% for less than $100K and 0.18% for more than $100K
Offer for foreigner 50% collateral. Example deposit $1000, given $2000 limit.
CIMB, Amfraser, DMG are charge 0.275% with minimum $25 for less than $50K, 0.22% for less than $100K and 0.18% for more than $100K
Amfraser give foreigner 1 for 1 limit. Example deposit $1000, given trading limit $1000.
Friday, 2 September 2011
3 pillars of knowledge in stock investment
3 pillars of knowledge in stock investment
1) System. How the trade is done.
2) Products. What to buy under different market condition
3) Market Knowledge. Stock markets are moved by Buyers and Sellers.
1) SYSTEM
Without knowledge of the system, you will not be able to know how to invest in stock.
To begin, you need to have CDP account and trading account.
Why? CDP account is required to keep shares you bought
Trading account is required to buy and sell shares . You may opt for online trading, still you need a securities firm to allow you to buy and sell shares. You need to open CDP account and trading account.
How ?
Visit CDP at SGX Centre 2 Level 2 , address is 4 Shenton Way. This is beside Lau Pa Sat. Visit CDP webiste at www.SGX.com/CDP to learn more details.
Request to open CDP account. Best to provide Bank account number. In future, should there is stock that give cash dividend, CDP will credit direct into your Bank account instead of you receive cheque.
After CDP account open, you may visit any of the securities firm to open trading account. CDP will provide you with a list of securities firm.You may find broker you like to open trading account. Broker, Remisier, dealer, Trading Representative as title given to them. You are allow to open more than one trading account.
To find List of securities firm members
They will advise you and provide the service to buy or sell stock. If you prefer to use online trading, you may register and buy and sell share on your own. Commission charge for brokerage service is 0.5% or minimum $40. Online trading commission is 0.275% or minimum $25.00
After CDP account and trading account are ready, you may deposit fund to buy stock or sell stock.
If you are Singaporean, you are entitled to Credit Limit. Securities firm will give you credit limit according to your background based on the account opening application form.
You will be able to buy stock even before you deposit fund into the trading account. The amount you can buy depend on the credit limit given to you. Example if you are given $20,000 credit limit, you can buy stock value worth $20,000.00 but not more than $20,000.00
The settlement date for buying a stock T+3. This means you are given 3 days grace to make payment.
Example , if you buy stock on Monday, you can make payment on Thursday.
Various mode to deposit fund
1) Cash / cheque. You can mail your cheque to pay the purchase of stock.
2) ATM 's other service , EPS, You can do fund transfer using your ATM card.
3) Internet banking Bill payment. You can do online fund transfer to pay.
Note the affiliated banks available are DBS, OCBC, UOB, Citibank,
CONTRA
if you buy stock and sell stock before settlement date , you need not pay the buy stock amount, the securities firm will contra the trade.
You will either have contra profit or contra loss.
You are required to pay on the settlement date for contra loss.
For contra profit, you will receive money the next day after settlement date into your bank account.
If you do not provide bank account number, a cheque will issue to you.
Bank account is not necessary but is more convenience.
Another service is GIRO. on the settlement date, will deduct money from your bank account automatically.
Contra trade is very lucrative as you need not put up any capital and market move in favour of your trade, you actually make money without capital. You return on stock investment is infinite.
However, there is a risk that the stock market may move against you, you will face contra loss.
This is especially so when people has $50,000 credit limit for their trading account.
3 days grace to make payment is attractive to many people who want to make money with no money.
Buying stock with no money to pay is considered failed settlement of trade. Forced sell is done. You will have to face penalty and higher commission charge.
Error trade to sell more than you have. Oversold the number of shares. You will be penalised. Buy-in is done. SGX will charge you short selling.
2) Products
Visit SGX website under Market Information to learn about various products.
Some common products are Stock, Fixed income, Reits, ETF, Structured warrant
Stocks are the share of company to buy and sell with introduction of warrants to allow you to protect your shares.
Fixed Income are Bond, Preference shares, SGS (Singapore Government bond)
REITs is Real Estate Investment Trust where investors can invest in property with minimum amount.
Structured warrants are more sophiscated as there are more flexiblility.
Specified Investment Products from http://www.sgx.com/wps/wcm/connect/73978e8047c07fa3b496bf4ccca6d8ff/20110728_SGX_Online+Edu+Flyer+HR.pdf?MOD=AJPERES
Specified Investment Products. Investors are required to attend online module to buy sophisticated products.
Click below to register.
https://onlineeducation.sgx.com/specifiedinvestmentproducts/user_register.asp
3) Market knowledge.
US stock market.
US central bank : Federal Reserve Bank (Fed)
Interest rate movement
Stock, bond, oil, gold, all are inter related.
Visit financial website to learn about current news
http://www.finance.yahoo.com/
http://www.money.cnn.com/
http://www.bloomberg.com/
Market History is important as market are formed by human being greed and fear.
History repeats.
The most important of the 3 knowledge is market knowledge.
Knowing and understand how and what move market is important.
After knowing the market and understand it movement, you will be able to identify profitable opportunity. The product knowledge and system knowledge helps to enhance your stock investment.
1) System. How the trade is done.
2) Products. What to buy under different market condition
3) Market Knowledge. Stock markets are moved by Buyers and Sellers.
1) SYSTEM
Without knowledge of the system, you will not be able to know how to invest in stock.
To begin, you need to have CDP account and trading account.
Why? CDP account is required to keep shares you bought
Trading account is required to buy and sell shares . You may opt for online trading, still you need a securities firm to allow you to buy and sell shares. You need to open CDP account and trading account.
How ?
Visit CDP at SGX Centre 2 Level 2 , address is 4 Shenton Way. This is beside Lau Pa Sat. Visit CDP webiste at www.SGX.com/CDP to learn more details.
Request to open CDP account. Best to provide Bank account number. In future, should there is stock that give cash dividend, CDP will credit direct into your Bank account instead of you receive cheque.
After CDP account open, you may visit any of the securities firm to open trading account. CDP will provide you with a list of securities firm.You may find broker you like to open trading account. Broker, Remisier, dealer, Trading Representative as title given to them. You are allow to open more than one trading account.
To find List of securities firm members
They will advise you and provide the service to buy or sell stock. If you prefer to use online trading, you may register and buy and sell share on your own. Commission charge for brokerage service is 0.5% or minimum $40. Online trading commission is 0.275% or minimum $25.00
After CDP account and trading account are ready, you may deposit fund to buy stock or sell stock.
If you are Singaporean, you are entitled to Credit Limit. Securities firm will give you credit limit according to your background based on the account opening application form.
You will be able to buy stock even before you deposit fund into the trading account. The amount you can buy depend on the credit limit given to you. Example if you are given $20,000 credit limit, you can buy stock value worth $20,000.00 but not more than $20,000.00
The settlement date for buying a stock T+3. This means you are given 3 days grace to make payment.
Example , if you buy stock on Monday, you can make payment on Thursday.
Various mode to deposit fund
1) Cash / cheque. You can mail your cheque to pay the purchase of stock.
2) ATM 's other service , EPS, You can do fund transfer using your ATM card.
3) Internet banking Bill payment. You can do online fund transfer to pay.
Note the affiliated banks available are DBS, OCBC, UOB, Citibank,
CONTRA
if you buy stock and sell stock before settlement date , you need not pay the buy stock amount, the securities firm will contra the trade.
You will either have contra profit or contra loss.
You are required to pay on the settlement date for contra loss.
For contra profit, you will receive money the next day after settlement date into your bank account.
If you do not provide bank account number, a cheque will issue to you.
Bank account is not necessary but is more convenience.
Another service is GIRO. on the settlement date, will deduct money from your bank account automatically.
Contra trade is very lucrative as you need not put up any capital and market move in favour of your trade, you actually make money without capital. You return on stock investment is infinite.
However, there is a risk that the stock market may move against you, you will face contra loss.
This is especially so when people has $50,000 credit limit for their trading account.
3 days grace to make payment is attractive to many people who want to make money with no money.
Buying stock with no money to pay is considered failed settlement of trade. Forced sell is done. You will have to face penalty and higher commission charge.
Error trade to sell more than you have. Oversold the number of shares. You will be penalised. Buy-in is done. SGX will charge you short selling.
2) Products
Visit SGX website under Market Information to learn about various products.
Some common products are Stock, Fixed income, Reits, ETF, Structured warrant
Stocks are the share of company to buy and sell with introduction of warrants to allow you to protect your shares.
Fixed Income are Bond, Preference shares, SGS (Singapore Government bond)
REITs is Real Estate Investment Trust where investors can invest in property with minimum amount.
Structured warrants are more sophiscated as there are more flexiblility.
Specified Investment Products from http://www.sgx.com/wps/wcm/connect/73978e8047c07fa3b496bf4ccca6d8ff/20110728_SGX_Online+Edu+Flyer+HR.pdf?MOD=AJPERES
Specified Investment Products. Investors are required to attend online module to buy sophisticated products.
Click below to register.
https://onlineeducation.sgx.com/specifiedinvestmentproducts/user_register.asp
3) Market knowledge.
US stock market.
US central bank : Federal Reserve Bank (Fed)
Interest rate movement
Stock, bond, oil, gold, all are inter related.
Visit financial website to learn about current news
http://www.finance.yahoo.com/
http://www.money.cnn.com/
http://www.bloomberg.com/
Market History is important as market are formed by human being greed and fear.
History repeats.
The most important of the 3 knowledge is market knowledge.
Knowing and understand how and what move market is important.
After knowing the market and understand it movement, you will be able to identify profitable opportunity. The product knowledge and system knowledge helps to enhance your stock investment.
Thursday, 1 September 2011
Buy stock and monitor Corporate Action
Corporate Action is activity like dividend payout, right issue, bonus issue, stock split, etc.
Corporate Action may or may not affect your number of shares.
You need to need exactly when the corporate action will take effect. The date is very important.
You don't want to face situation when you sold your shares only to realised you have received 10 bonus shares.
You don't want to face situation when you have reverse stock split, you thought you have 10,000 shares, but after reverse stock split, you only have 2000 shares.
If you sold 10,000 shares without knowing that there is a reverse stock split, you will have oversold the number of shares.
Visit SGX website under Company Disclosure ---> Corporate Action , to learn about latest activities.
http://www.sgx.com/
See my youtube video to learn where to access the corporate action in SGX website
http://www.youtube.com/watch?v=m_X0VNAREVY&feature=mfu_in_order&list=UL
Corporate Action may or may not affect your number of shares.
You need to need exactly when the corporate action will take effect. The date is very important.
You don't want to face situation when you sold your shares only to realised you have received 10 bonus shares.
You don't want to face situation when you have reverse stock split, you thought you have 10,000 shares, but after reverse stock split, you only have 2000 shares.
If you sold 10,000 shares without knowing that there is a reverse stock split, you will have oversold the number of shares.
Visit SGX website under Company Disclosure ---> Corporate Action , to learn about latest activities.
http://www.sgx.com/
See my youtube video to learn where to access the corporate action in SGX website
http://www.youtube.com/watch?v=m_X0VNAREVY&feature=mfu_in_order&list=UL
Getting Started to Buy Stock
To beat high inflation, and get higher return than bank saving rate of 0.1%, stock is one of the option to park your money. Stock dividend yield may achieve more than 5% return.
Where to start and how to start to buy Stock.
SUMMARY
First : You need to have Identification card (IC) for Singaporean and Malaysian or passport for foreigner.
Second : You have bank account. Especially internet banking facility for foreigner. Banks affiliated are DBS bank, UOB Bank, OCBC bank, Citibank,
Third : Open CDP account. Visit 4 Shenton Way SGX Centre 2 Level 2 to open account.
Fourth: Open a trading account with a broker.
Fifth : Fund Deposit. Deposit money into trading account to start buying stock.
Sixth : Buy Stock
Seventh : Sell Stock
START
First :
I.C or passport is the first thing required.
BANK ACCOUNT
Second : Open Bank account.
Bank account number prefer.Open bank account which provide cheque book, ATM card and internet banking facility especially for foreigner.
Visit any banks in Singapore , DBS Bank / POSB or UOB Bank, or OCBC Bank or Citibank
http://www.dbs.com.sg/
http://www.uob.com.sg/
http://www.ocbc.com.sg/
http://www.citibank.com.sg/
CDP ACCOUNT
Third. Open CDP account. CDP = Central Depository (Pte) Ltd
You need to have CDP account to keep your shares, just like you need a bank account to keep your money.
Visit SGX Centre 2 level 2 (beside Lau Pat Sat) to open CDP account.
Get online access to CDP statement, Direct Crediting Service, Corporate Action required Singapore Address. if not, foreigner may check corporate action of share from SGX website.
If you have existing CDP account which you did not use for very long time, you may wish to update signature and address and apply for online access and direct crediting service before you start to trade again.
Visit CDP website to learn more information, www.sgx.com/cdp
TRADING ACCOUNT
Fourth . Open a trading account with a broker.
You need to open trading account. Trading account allows you to buy stock or sell stock.
A list of securities firm will be provided to you from CDP when you open CDP account. You can choose and may open as many trading account with different securities firms.
It takes about one week to get trading account ready.
Procedure to open trading account :
1) Check your information data
2) Get approve account opening
3) Link trading account with CDP account. Once CDP linkage done, you can start to buy shares / sell share.
4) Link trading account wth Bank (may takes 2 weeks) Linkage either EPS or GIRO. if you sold shares before bank linkage done, you receive cheque.
Once the trading account is ready, you will receive a trading account number. Quote your trading account number and Name to your broker when you call to buy stock and sell stock.
ONLINE TRADING
Alternatively, you can do your buying or selling of stock online.
Register for online trading to enjoy lower commission rate. http://www.amfraser.com.sg/ , eServices, eform, registration.
Broker service charges for commission is 0.5% with miniumum $40.00
Online trading charges for commission is 0.275% with minimum $25.00
Beside commission charges, there are clearing fee 0.04%, access fee 0.0075% and GST 7%.
Visit SGX website . http://www.sgx.com/ under individual investor, investor tools, Profit & Loss calculator to learn more about the calculation.
Click here for the link http://www.sgx.com/wps/portal/sgxweb/home/investor_tools/profit_and_loss_calculator
See below example using SGX profit and loss calculator.
DEPOSIT FUND
Fifth. Fund Deposit.
There are a few mode to fund the trading account.
1)Cash,
2)Cheque,
3)ATM bank transfer
4)Internet Bill Payment transfer
5)Swift but there will be transaction fee.
You can visit securities firm to deposit fund paying Cash
You can post your cheque . Behind the cheque write your trading account number and name. You may request for return envelope from your securities firm. Return envelope is only for mailing within Singapore.
You can visit any ATM machine to transfer fund . ATM, under Other service, EPS and Amfraser. There is no limit to the fund you can transfer.Your reference number is your trading account number. 6 digit. if you have 5 digit for your trading account, add "0" infront. Example trading account 89123. You should key 089123.
You can go online, ibanking to transfer fund. You can login into your ibanking, under Bill Payment, search Amfraser, Transfer fund. Reference number will be prompted. Key your trading account number, ensure 6 digit number.
If you transfer fund before 7 pm, Amfraser will receive your fund the next day. if after 7 pm, Amfraser will receive the day after next. 2 days
Notification of Incoming fund
After you transfer fund especially using internet transfer, email or call or visit Amfraser website to notify incoming fund. This is to ensure smooth transfer of fund into your trading account.
Visit Amfraser website Under eServices ---> eform ---> services to https://www.amfraser.com.sg/gcsg/web/FundNotification.jsp
Email or call your broker.
CREDIT LIMIT
Credit limit is entitled to Singaporean. This means Singaporean allow to buy share without fund deposit into trading account. They need to pay their share before the settlement date of purchase share.
Credit department will review based on individual background to give how much credit limit. $10,000 credit limit or more.
BUY STOCK
Sixth : Buy share.
After you deposit fund into your trading account or you get credit limit given to you, you can buy stock.
Either you call the broker to buy stock or you login online trading platform.
The next day, you will get the settlement amount and settlement date.
Settlement date is T+3. Trade date is the day you bought the shares and add 3 days . For example, you bought share on Monday, the settlement date will be on Thursday.
A contract note will be mailed to you on the next business day after you transacted.
Contract note provide all the information of the transaction.
Gross amount is price multiply the number of shares. Charges include Brokerage commission, Clearing fee, access fee and GST 7% on commission, clearing fee and access fee. Note the minimum commission charge is $40 for broker service or minimum $25 for online trading.
Minimum buy is 1000 shares. 1 lot is 1000 shares. To buy less than 1000 shares, you must call broker. Odd lots shares quotation. This is for buying and selling shares less than 1000 shares. No online service for odd lots shares. Only use broker service for odd lots shares.
Settled trade on settlement date.
Successful settlement of trade, you will have money paid for your purchase of stock. You will receive shares which is credited into CDP account. Note if you have applied for online access CDP statement, you should be able to check the securities you have bought.
Failure settlement of trade, no payment of fund. After the settlement date, there is no payment received, there will be a force sell. Penalty imposed. Commission charged higher. You will have to bear all the charges and possible losses.
Force Sell If buyer fails to pay the purchase consideration by T+3 market days, Amfraser shall close off the purchase position by force selling the shares in the market.
The buyer will be liable for all the charges and expenses incurred in the purchase contracts as well as the force sold contracts, including any loss, if any.
SELL STOCK.
Seventh : Sell stock
You may call broker to sell stock or go online to sell stock. Only you know the number of shares you have in your CDP account. You can go online access CDP to check your statement.
Visit SGX website to ensure there is no upcoming Corporate Action that may influence your number of shares.
After you sold the stock, the next day you will receive the net amount and settlement date with breakdown with the charges. Settlement date is T+3. Example if you sold share on Monday, you will have settlement date on Thursday.
Settled trade on settlement date.
Successful settlement of selling stock trade means you give your shares and receive money. Money will be credited to you the next day after the settlement date. If no bank account, you will receive cheque.
Failure to settle trade means you do not have shares. You will be forced to do a Buy-in. This is a serious penalty to sell stock when you do not have stock.
Buy in
CONTRA
You bought stock and sold stock before the purchase stock settled.
A contra trade.
You either have contra profit or contra loss and settle on the settlement date.
You need to pay contra loss before the settlement date.
You will receive money credited into your bank account the next day after settlement date.If there is no bank account, you will receive cheque.
To learn more about SGX stock, visit SGX website at the bottom of the website there is directory. Visit the SGX Academy and Online Education Programme.
SGX Website at http://www.sgx.com/
Click here to SGX Academy http://www.sgxacademy.com/
Where to start and how to start to buy Stock.
SUMMARY
First : You need to have Identification card (IC) for Singaporean and Malaysian or passport for foreigner.
Second : You have bank account. Especially internet banking facility for foreigner. Banks affiliated are DBS bank, UOB Bank, OCBC bank, Citibank,
Third : Open CDP account. Visit 4 Shenton Way SGX Centre 2 Level 2 to open account.
Fourth: Open a trading account with a broker.
Fifth : Fund Deposit. Deposit money into trading account to start buying stock.
Sixth : Buy Stock
Seventh : Sell Stock
START
First :
I.C or passport is the first thing required.
BANK ACCOUNT
Second : Open Bank account.
Bank account number prefer.Open bank account which provide cheque book, ATM card and internet banking facility especially for foreigner.
Visit any banks in Singapore , DBS Bank / POSB or UOB Bank, or OCBC Bank or Citibank
http://www.dbs.com.sg/
http://www.uob.com.sg/
http://www.ocbc.com.sg/
http://www.citibank.com.sg/
CDP ACCOUNT
Third. Open CDP account. CDP = Central Depository (Pte) Ltd
You need to have CDP account to keep your shares, just like you need a bank account to keep your money.
Visit SGX Centre 2 level 2 (beside Lau Pat Sat) to open CDP account.
Get online access to CDP statement, Direct Crediting Service, Corporate Action required Singapore Address. if not, foreigner may check corporate action of share from SGX website.
If you have existing CDP account which you did not use for very long time, you may wish to update signature and address and apply for online access and direct crediting service before you start to trade again.
Visit CDP website to learn more information, www.sgx.com/cdp
TRADING ACCOUNT
Fourth . Open a trading account with a broker.
You need to open trading account. Trading account allows you to buy stock or sell stock.
A list of securities firm will be provided to you from CDP when you open CDP account. You can choose and may open as many trading account with different securities firms.
It takes about one week to get trading account ready.
Procedure to open trading account :
1) Check your information data
2) Get approve account opening
3) Link trading account with CDP account. Once CDP linkage done, you can start to buy shares / sell share.
4) Link trading account wth Bank (may takes 2 weeks) Linkage either EPS or GIRO. if you sold shares before bank linkage done, you receive cheque.
Once the trading account is ready, you will receive a trading account number. Quote your trading account number and Name to your broker when you call to buy stock and sell stock.
ONLINE TRADING
Alternatively, you can do your buying or selling of stock online.
Register for online trading to enjoy lower commission rate. http://www.amfraser.com.sg/ , eServices, eform, registration.
Broker service charges for commission is 0.5% with miniumum $40.00
Online trading charges for commission is 0.275% with minimum $25.00
Beside commission charges, there are clearing fee 0.04%, access fee 0.0075% and GST 7%.
Visit SGX website . http://www.sgx.com/ under individual investor, investor tools, Profit & Loss calculator to learn more about the calculation.
Click here for the link http://www.sgx.com/wps/portal/sgxweb/home/investor_tools/profit_and_loss_calculator
See below example using SGX profit and loss calculator.
DEPOSIT FUND
Fifth. Fund Deposit.
There are a few mode to fund the trading account.
1)Cash,
2)Cheque,
3)ATM bank transfer
4)Internet Bill Payment transfer
5)Swift but there will be transaction fee.
You can visit securities firm to deposit fund paying Cash
You can post your cheque . Behind the cheque write your trading account number and name. You may request for return envelope from your securities firm. Return envelope is only for mailing within Singapore.
You can visit any ATM machine to transfer fund . ATM, under Other service, EPS and Amfraser. There is no limit to the fund you can transfer.Your reference number is your trading account number. 6 digit. if you have 5 digit for your trading account, add "0" infront. Example trading account 89123. You should key 089123.
You can go online, ibanking to transfer fund. You can login into your ibanking, under Bill Payment, search Amfraser, Transfer fund. Reference number will be prompted. Key your trading account number, ensure 6 digit number.
If you transfer fund before 7 pm, Amfraser will receive your fund the next day. if after 7 pm, Amfraser will receive the day after next. 2 days
Notification of Incoming fund
After you transfer fund especially using internet transfer, email or call or visit Amfraser website to notify incoming fund. This is to ensure smooth transfer of fund into your trading account.
Visit Amfraser website Under eServices ---> eform ---> services to https://www.amfraser.com.sg/gcsg/web/FundNotification.jsp
Email or call your broker.
CREDIT LIMIT
Credit limit is entitled to Singaporean. This means Singaporean allow to buy share without fund deposit into trading account. They need to pay their share before the settlement date of purchase share.
Credit department will review based on individual background to give how much credit limit. $10,000 credit limit or more.
BUY STOCK
Sixth : Buy share.
After you deposit fund into your trading account or you get credit limit given to you, you can buy stock.
Either you call the broker to buy stock or you login online trading platform.
The next day, you will get the settlement amount and settlement date.
Settlement date is T+3. Trade date is the day you bought the shares and add 3 days . For example, you bought share on Monday, the settlement date will be on Thursday.
A contract note will be mailed to you on the next business day after you transacted.
Contract note provide all the information of the transaction.
Gross amount is price multiply the number of shares. Charges include Brokerage commission, Clearing fee, access fee and GST 7% on commission, clearing fee and access fee. Note the minimum commission charge is $40 for broker service or minimum $25 for online trading.
Minimum buy is 1000 shares. 1 lot is 1000 shares. To buy less than 1000 shares, you must call broker. Odd lots shares quotation. This is for buying and selling shares less than 1000 shares. No online service for odd lots shares. Only use broker service for odd lots shares.
Settled trade on settlement date.
Successful settlement of trade, you will have money paid for your purchase of stock. You will receive shares which is credited into CDP account. Note if you have applied for online access CDP statement, you should be able to check the securities you have bought.
Failure settlement of trade, no payment of fund. After the settlement date, there is no payment received, there will be a force sell. Penalty imposed. Commission charged higher. You will have to bear all the charges and possible losses.
Force Sell If buyer fails to pay the purchase consideration by T+3 market days, Amfraser shall close off the purchase position by force selling the shares in the market.
The buyer will be liable for all the charges and expenses incurred in the purchase contracts as well as the force sold contracts, including any loss, if any.
SELL STOCK.
Seventh : Sell stock
You may call broker to sell stock or go online to sell stock. Only you know the number of shares you have in your CDP account. You can go online access CDP to check your statement.
Visit SGX website to ensure there is no upcoming Corporate Action that may influence your number of shares.
After you sold the stock, the next day you will receive the net amount and settlement date with breakdown with the charges. Settlement date is T+3. Example if you sold share on Monday, you will have settlement date on Thursday.
Settled trade on settlement date.
Successful settlement of selling stock trade means you give your shares and receive money. Money will be credited to you the next day after the settlement date. If no bank account, you will receive cheque.
Failure to settle trade means you do not have shares. You will be forced to do a Buy-in. This is a serious penalty to sell stock when you do not have stock.
Buy in
For non delivery of shares on T+3 market days, SGX-ST will institue buy-in of shares on the market day following the due date (ie T+4). The selling client will be liable for all charges and expenses incurred in the sale contract as well as the buying-in contract, including losses, if any.
It is more serious to sell trade when you don't have shares.
Buy-in costs levied by SGX-ST
1)Brokerage payable to SGX-ST is 0.75% on gross proceeds
2)SGX Trading Fee 0.0075% on gross proceeds
3a) Clearing fee in SGD denominated securities is 0.04% on gross proceeds subject to max S$600.00
3b) Clearing fee in SGD denominated warrants is 0.05% on gross proceeds subject to max S$200.00
4) Buy-in fee imposed by SGX-ST is $75+GST7% for each failed sale contract.
5) Buy-in penalty fee levied by SGX-ST on failed delivery of shares is 5% of value of failed trade subject to a minimum of S$1000.00
6) Penalty of S$5000.00 for each day a sell contract is overdue.
SGX-ST may with consultation with its Disciplinary Commitee impose a penalty of not less than S$20,000, if found culpable, for failure to procure and deliver securities by T+1 (for securities sold to buy-in board) or T+7 (for ready market)
8) Goods & Service Tax (GST) 7% on brokerage, clearing fee, buy-in fee and SGX trading fee.
CONTRA
You bought stock and sold stock before the purchase stock settled.
A contra trade.
You either have contra profit or contra loss and settle on the settlement date.
You need to pay contra loss before the settlement date.
You will receive money credited into your bank account the next day after settlement date.If there is no bank account, you will receive cheque.
To learn more about SGX stock, visit SGX website at the bottom of the website there is directory. Visit the SGX Academy and Online Education Programme.
SGX Website at http://www.sgx.com/
Click here to SGX Academy http://www.sgxacademy.com/
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