Investment kick-start

This section will talk about what steps you can take to prepare yourself and eventually kick-start your investment journey.

Common excuses

Below are the common excuses people give to deter them from investing:

No money-This is the number 1 excuses people give when i approach them to talk about investing. Surely this is a serious problem and how can we overcome it? Try working out where have you spent majority of your money on? (Focus on cutting down expenses on Wants) Singapore tax heavily on smoking and drinking and therefore by cutting down or eventually quitting will greatly help you to save up at least a few hundreds every month. Also try limiting down other expenses such as having a Starbuck coffee everyday or dinning in a restaurant everyday to probably once or twice every week. The saving result might not be as great but it is a baby-step process to eventually building up your investment fund. If your monthly income barely cover your basic expenses, perhaps it is time to consider ways to increase monthly income instead of cutting expenses. 

No time-People often say they have no time to create a trading account. In fact opening a trading account only take an hour or so, it is done by just going down to any of the branch and fill up some application forms to get your trading account started! Furthermore creating a trading account is free and there is no maintenance or any other kind of fees after you open your account.

Not interested-Investment is considered unsought product (people usually would not think of it unless it is mentioned) Also there is a wrong perception, investment is often link as insurance but that is not the case. In insurance. part of your premium is used to pay for agent commission while in investment, there is no 3rd party cost involved. Also investment is crucial as mentioned earlier on to achieve financial freedom.  

Fear of losing money-There is no 'guaranteed returns' for investment and investment sometime might cause you to loss money and that it is understandable. However there are safer investment class such as CPF or even Singapore government securities (SGS), a kind of bond with near 0% of risk losing your investment value. These asset class provide a far more better returns than you having your savings in bank!

No knowledge-There is no point venturing into investment if you are unfamiliar with the risks you are dealing with and eventually put you to a worst off position. Financial knowledge is built over time. Try reading articles online and borrowing a few investment books to build up your financial knowledge first. Also it is crucial to spend at least few minutes everyday to read up on financial news to see how the financial market is performing.
Below are some of the useful links to build up your financial knowledge and keep track of financial news:

Financial knowledge

http://www.moneysense.gov.sg/

Financial news
https://sg.finance.yahoo.com/

http://www.reuters.com/

http://www.bloomberg.com/asia

Stock information
http://www.sgx.com/wps/portal/sgxweb/home/marketinfo/securities/stocks

http://singapore-ipos.blogspot.sg/

http://sgshareinvestor.blogspot.sg/

Stock news
http://www.sharejunction.com/sharejunction/index.html

http://forum.shareinvestor.com/forum/

http://www.nextinsight.net/

FOREX news
https://www.dailyfx.com/

Step by step process to kick-start your investment journey!

Step 1: Open a trading account! Head to any of the brokerage firms listed below and start a trading account (It's Free!). For first timer applicant, the brokerage firm will help you open a compulsory Central Depository account (CDP). CDP is an account that keep track of financial assets (E.g. stocks/bonds/etc) traded in Singapore market. The whole process will take around 2-3 weeks before your trading account is ready for trade. If you notice any trading opportunities arises, you can enter a position immediately. Therefore it is important to have a trading account ready. No fees or other charges involved even if you have opened a trading account but never trade.
(Do note that SAXO Capital Markets & Standard Chartered charge a lower brokerage fee as it hold the asset you have purchased under their custodial account and not deposited in your CDP account.)

Step 2: Open an internet banking account. Internet banking is used to make any payment for the asset you bought through your trading account. Thus it is a must to have internet banking opened. You can easily open an account online or through any of the bank branches.

Step 3: Read up everything on moneysense website. (link located above) MoneySENSE is the national financial education programme in Singapore to equip individuals with financial knowledge. I have basically read through the website once and find the information provided very useful. It is also phrased in simple context that can be understand easily by anyone. After reading the website, you should be equipped the basic knowledge needed to start your investment journey!

Step 4: Spent at least a few minutes daily catching up on financial news. (link located above) Notice how the financial market reacts to different set of news such as Brexit, US elections, etc. 

Step 5: Monitor the market and do paper trading. Paper trading is whereby you use 'virtual cash' to make trades. For E.g. you decided to buy 1000 units of stock A today at price of $1. (Record buy 1000 units of stock A at price of $1 on a paper) 1 week later, you notice stock A rise to $1.20 and you decided to sell all your holdings. (Record sell 1000 units of stock A at price of $1.20 on the same paper) From the paper, calculate the profit/loss for the trade. Try to make this as realistic as possible by recording the actual amount you would put into a real life investment. When you notice the win-loss ratio is high enough, you should be ready to go into actual investing the market.

Step 6: Hesitate no more and kick-start your investment journey! Make sure you have completed steps 1-3 and performed steps 4-5 for quite some time.

Last updated Jan 2017