Monday 22 January 2018

SGX - First sell transaction of 2018

So the first stock I bought when I started trading last year was SGX at a price of $7.22 per share. Recently, the price of SGX has gone up and I took the chance to increase my cash holdings. The amount of shares I have for SGX was not a big one so profits were not much but I just wanted to try selling something because I haven’t made a sell transaction yet and since SGX price went up, I decided to take profits.

I took profits when the price went till $7.82 which I greatly regretted as the price went up to a high of $7.98 which is a huge difference and I could have really maximized my profits. Oh well, what’s done is done so I’m just glad to have profits and to slowly increase my cash holdings.

SGX price gone up pretty fast and I think it is due to the dividend payout that is expected to be soon. I bought it at $7.22 at around May 2017 when an expected dividend payout was expected during April but it didn’t happen so I guess the price dropped and I was lucky to get in at that time. I do notice that stocks tend to increase when dividends are going to be given out and do slightly drop after dividends have been given.

With the increase in cash holdings, I hope to get a bigger share of shares the next time I do my next purchase because I realized that with a small amount purchased, the profits earned tend to be lower too.

*Update: Today, 22nd January 2018, SGX has hit a price of $8.25 creating a new 52 weeks high. I am really sad that I sold too early but what's done is done. The price has went up further due to its announcement of its latest earnings where revenue has gone up and free cash flow has increased from previous years. A dividend payout of five cents per share has been announced too. Well, I sure learned a few things from my first sell transaction and will be hoping to maximise every other sell transaction from now on if I can. A good learning experience. 

Saturday 20 January 2018

Having a watch list of stocks

Having a watch list of stocks is good for you and your portfolio. My watch list consists of stocks which I have done sufficient research on. For example, on the model of their business, do I think it will be sustainable, dividends payout, price to book ratio and P/E ratio. There are a few good points to having a watch list as explained below and also on how a watch list can be maintained.

1. Ever ready

The first good point of having a watch list prepared is that you are ready with your entry point and what you are aiming for. So you have a group of company/business that you are interested in and will not deviate too far from it. This is especially so when you get the urge/itchy fingers to purchase stocks and having a watch list will allow you to know what you are actually heading towards and not recklessly do your purchases.

2. Adequate research

Another point of having a watch list is that you would have had time to do prior and adequate research. This means that you are not being easily swayed by the prices you see and news that you read. And this is because you have done adequate research and know that the stocks in your watch list are sticks that are worth the wait and the price.

Maintaining your watch list

Maintaining your watch list is important which means to check on it and update regularly. You don't have to update it everyday but at least every one to two weeks would be a good gauge so you are able to know if the stock is on a up or down trend. This will allow you to know when your entry prices is hit and you can start purchasing.

Set a maximum number of stocks for your list

Never have too many stocks in your watch list, it is tedious to have to keep up with so many prices. A good gauge will be around 10-20 stocks depending on how active you would like to be. So to make sure you keep to the number of stocks, every time you want to add a stock in, remove one so you don't keep adding to a ridiculous number. Another suggestion is to have two list if your watch list is growing too fast, a buy list and a radar list. The buy list can consists of stocks in the potential buy zones meaning that they are near the entry price that you have set. The radar list on the other hand, would not yet have their prices in the potential buy zone yet.

All in all, you will need to devote some time to it and to update your watch list. An action plan would also be good in that what entry price, how many shares are you going to get and if the yearly reports do show anything.

Sunday 7 January 2018

How to retire and still survive

Recently I came across this YouTube channel BeatTheBush who describes himself as being an engineer and together with frugality, side incomes and investments he managed to quit his job and have much more time to do what he wants at a relatively young age!

Here are some of his videos firstly about how he tracks his net worth and the spreadsheets are available in the description box. The video explains thoroughly on the spreadsheet and what values should be input into where. 

I chanced upon his channel one day while surfing YouTube and realized that some of his video are quite informative and he was willing to share about his experiences on how he saved money. He also has a few videos on how he prepares $1 meals or a low budget seafood meal. Its interesting because his journey towards him being able to quit his job and not needing to find another interest me to know how he did it.

On some videos, he tries applying for credit cards just for the rewards and then to cancel them when he gets the rewards. He also touches on Bitcoin and how he profit from it. Overall, even though its a rather new channel, I believe that he can help provides tips on how he manages to achieve his current lifestyle with his side incomes which includes the YouTube channel and Amazon where he sells his stuff.

I like to read up on financial articles or blog post but once in awhile, a video can make things look more visually appealing hence I would get on YouTube and search for financial videos to look through at times. Just some thing I would like to share and hope that you guys would enjoy it too!

Saturday 6 January 2018

Investing with a peace of mind

Understand your risk tolerance

It’s important to know your risk tolerance like low risk, mid risk and high risk. People who have low risk tolerance would generally prefer investments that protect their principal amount and most investment that can protect the principal amount usually provide lesser interest. Mid risk is where you are okay with acceptable interest and have a certain amount of risks involved. High risk investments usually means that your capital/principal amount is not protected and you can lose a substantial amount of your investment.

Your age can also determine your risk tolerance, for example someone in their 20s would have a different risk tolerance than someone in their 60s. This is because in your 20s, you know that you can still earn back even if you have lost a huge amount of money as time is in your favor. On the other hand, in your 60s you most likely would be retired and know that you will not be earning that well.

It is important to figure out your risk tolerance to know what sort of investment products fits you so that you are able to sleep soundly at night and not worry about your money invested.

Get yourself prepared for market volatility

When you get yourself invested, it’s common for fluctuations due to bad news, good news or even no news. You have to make sure that you are not too affected by the fluctuations. Becoming paranoid and fearful is definitely not why you invested, you have to prepare yourself by doing sufficient research and know that it is going to be a long term investment.

Getting yourself prepared can also be by using money that have been put aside and is not your emergency fund.When investing, there is always a form of risk in it. It is really important to prep yourself for what you are about to face so that you can have a peace of mind. To be honest, when you first start investing you will get so excited about checking the price fluctuations. But after awhile, you will slowly get used to it.

Diversify your portfolio 
This is most commonly heard of when people want to reduce the risks that they will have when investing. This can be explained simply by comparing 2 person, one with purely equity/stock holdings and one person with equity holdings, bond holdings and gold. When a market crash happens, the person with just an equity portfolio would suffer much more compared to the one with an equity, bond and gold portfolio. Best saying to describe this is "Don't put all your eggs into one basket".

This is also especially true in terms of income, for example, I hope to be able to create multiple streams of income in future so as to reduce the load on my main full-time income. Traditionally, we depend on one main source of income and when that is removed, most people would worry same as the person who has only equity holdings in his portfolio and the market crashes. So I hope to also diversify my income just as I will diversify my portfolio.

Create and monitor a financial plan

It is good to have a financial plan to be able to know your goals and whether you are achieving them. So let's say you have started investing for awhile now and you check back and realize that you are not achieving what you have set up to. You can then check and analyze and find out what are the reasons causing you not to reach your goal and if changes can be made, you can tweak and improve your strategies.

A financial plan is also important as investing is a long term journey, it is not going to end after one or two years hence you will need a rough guide of what you hope to have and how you are going to achieve them. This can help you have a peace of mind if you can achieve the milestones set up from the beginning and know that you are on the right track!

As 2018 unfolds, we all hope to have a good year and changing our attitude and behaviour can go a long way😀 Let's work hard and do our best!