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Old 15-03-2012, 12:16 AM   #1
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FAQ: Having $X amount of money to invest?

It had came to my attention that there are multiple threads created to seek for financial advice in this forums.

Table of Contents

(1) Introduction
(2) Quotes from Forumers in HWZ-Moneymind
(3) List of investments types you should consider
(4) How you should start?
(5.1) Investment - Stocks

//********** SECTION 1 Introduction **********//

Having $X amount of money to invest sounds really good but first, there are a few questions you have to ask yourself.

Firstly, have you bought insurance? Insurance is a product that can safeguard your interest. I ranked this before any types of investment, because an accident or illness can wiped out your savings + investment. If you have not get any insurance yet, speak to an agent to help you.

Secondly, are you some one financial savvy? Investing requires quite a substantial of knowledge and experience to maintain good profits (In general). I know some people don't want to waste time learning how to invest, because time is money to them, and they are pretty occupied with their work (i.e. Lawyers). You need to ask yourself, do you want to invest with you as your personal "fund manager" or you need someone to advice you? Good advices don't come cheap.

Lastly, having insured with insurance, and if you had decided to invest on your own, go get some financial knowledge/information via:

1) Books, borrow from the library, it is Free-of-Charge
2) Internet, webs like investopedia is some good stuff
3) Blogs that post about financial stuff
4) Listen to talks, seminars,most of the time i don't find it very useful, but nevertheless it is in the list
5) etc etc


//********** SECTION 2 Quotes from Forumers **********//

matchy: have u settle ur protection insurance already?

Carnesir : only invest in money u can afford to lose. pls note that im not talking about gambling here, im merely talking abt the ability to hold your money in the event of a bear run.

lzydata : It's not about how much you have, it's about (1) when you want to use it, and (2) how much risk can you tolerate.

Dividends Warrior: DIY is the best. Dun let the financial planners earn commissions. For me, I am doing dividend investing. I am getting around $700 per month in dividends.

Darkzi0n : even if u engage a financial planner, due to a lack of time or just plain laziness, you should read up on the basics to intermediate of investing to understand what your financial planner is doing for u and whether whatever he is doing suits ur risk appetite or is he jus out there to earn ur commission.

kebinu : Basic financial planning model. Emergency fund, protection, accumulation, enhance, speculation.

lowem : My absolute best returns are those I buy and hold and didn't try to trade, over 14% on annualized basis. On the other hand, my worst returns are those where I try to trade in and out. So choose an investment you believe in for fundamental reasons and stick with it.

MikeDirnt78 : you need to put in some effort to learn some basics of investing. if you dont, then you wont be able to make good decisions out of the suggestions that the advisors gave you. you will probably know you have made bad choices after you lose money. do you want that to happen in the future?

Shiny Things : Pick a stock and invest regular dollar amounts in it - that way you buy more stock when the price is low, and less when it's high. I recommend starting with the STI ETF (stock code ES3), because it gives you the entire STI in one stock - so you get instant diversification. It's $3,000 per lot, though, so you'll want to save up for a few months and ship in 1,000 shares every six months or so.

//********** SECTION 3 List of Investment types **********//

(1) Unit Trust
(2) Stocks (SGX, NYSE)
(3) Bonds
(4) Preferred shares
(5) Insurance policy (e.g. Endowment)
(6) Property (SG,MY,etc)
(7) etc etc

//********** SECTION 4 How you should start? **********//

My first question to you is,
(1) Do you want to invest on your own?
(2) Or are you going to get someone to help you? A Financial Planner? IFA? Friends?

Nobody will be more concerned about your money other then yourself.

If you are choosing (1), then you should get yourself equip with some financial skills and knowledge. At a certain point of time, if anybody throws you a question, you should be able to answer.

For example, "I am getting married in 3 years, I have 60k cash in my bank, i do not want to leave it to rot, what can i do? The inflation rate is approx 5%, and i want to have similar returns of 5%. "

I will leave it to you to answer this question. But most of the time, you need to clarify. Do it need to be capital guaranteed? If 3 years meaning you don't need to touch this money for 3 years or? etc etc.

For a mid 20's , depends on you should be risking more of your money in equities because historically it is proven profitable. Based on the longer time frame a mid 20's have, potentially you could generate more returns.

Start by reading some financial books, even a simple book is fine, "rich dad poor dad", a simple book that teach you some financial stuff. If you want to invest in stocks, then go read about it, what are the "indicators" people uses, how people perceived if a stock is over/under valued, or what kind of potential does it have.

It is very difficult for people to follow what are the ways you can learn. But some common stuff would be books, internet (Investopedia,etc), financial news, understand economics, etc.


//********** SECTION 5.1 Investment - Stocks **********//

So what is Stocks?
The capital stock (or simply stock) of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors. Stock is different from the property and the assets of a business which may fluctuate in quantity and value (Source: Wiki)

More information on what is stocks: What Is Stock? A Beginner's Guide to Investing in Stock

I would recommend this investment tool as my first priority. I had personally done Unit Trust and got over with it. This may be my bias opinion, but how many people who are investing in Unit Trust really earn? I know this is really bias, but i really prefer Stocks over UT because over the maintenance charge and also the growth for Stock is often better (Of course this varies upon what stocks you choose).

Picking a stock you can use some methods to "measure" if the stock is "worth" buying. Some of them are:

1. Fundamental Analysis (FA)
2. Technical Analysis (TA)
3. Qualitative Analysis (QA)
4. Value Investing
5. Growth Investing
6. GARP (value and growth investing)
7. Income Investing

These are the few methods people usually use. Of course there are more. Ultimately, we must always look at your goals and objective of your investment before you look into which stock.

For example, Dua Kang, a 25 years old, just started working and have $20k in his bank. He do not have a girlfriend, and he earn $3k/mth. He is able to save $1.5k a month (CASH). His investment objective is to beat inflation and have a fairly stable stock price, looking at about 3-5 years.

Usually we will always advice people to check on his insurance policies before doing any investment, because protecting one's interest is ranked first priority before investment. After that Dua Kang can look at stocks that suits his appetite, assuming he want fairly stable returns, he can look at REITs, or Dividends paying stock that price are fairly stable with stable returns of at least 3~5%.

Last updated: 01 May 2012
-Added in Section 5.1
//********** END**********//

Sorry guys, I will update this post again... Need to source more information and present it in a nice way, so that people can refer to this page for info. Please contribute by commenting below.
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Last edited by iCuteCube; 02-05-2012 at 12:08 AM..
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Old 15-03-2012, 12:19 AM   #2
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Old 15-03-2012, 12:22 AM   #3
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Old 15-03-2012, 02:22 AM   #4
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sarpoork!
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Old 15-03-2012, 09:01 AM   #5
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It had came to my attention that there are multiple threads created to seek for financial advice in this forums.

Having $X amount of money to invest sounds really good but first, there are a few questions you have to ask yourself.

1) Have you bought insurance? Insurance is a product that can safeguard your interest.

Let me go by quoting some of the forumers in moneymind-HWZ.


matchy: have u settle ur protection insurance already?

Carnesir : only invest in money u can afford to lose. pls note that im not talking about gambling here, im merely talking abt the ability to hold your money in the event of a bear run.

lzydata : It's not about how much you have, it's about (1) when you want to use it, and (2) how much risk can you tolerate.

Dividends Warrior: DIY is the best. Dun let the financial planners earn commissions. For me, I am doing dividend investing. I am getting around $700 per month in dividends.

Darkzi0n : even if u engage a financial planner, due to a lack of time or just plain laziness, you should read up on the basics to intermediate of investing to understand what your financial planner is doing for u and whether whatever he is doing suits ur risk appetite or is he jus out there to earn ur commission.

kebinu : Basic financial planning model. Emergency fund, protection, accumulation, enhance, speculation.

lowem : My absolute best returns are those I buy and hold and didn't try to trade, over 14% on annualized basis. On the other hand, my worst returns are those where I try to trade in and out. So choose an investment you believe in for fundamental reasons and stick with it.

MikeDirnt78 : you need to put in some effort to learn some basics of investing. if you dont, then you wont be able to make good decisions out of the suggestions that the advisors gave you. you will probably know you have made bad choices after you lose money. do you want that to happen in the future?

Shiny Things : Pick a stock and invest regular dollar amounts in it - that way you buy more stock when the price is low, and less when it's high. I recommend starting with the STI ETF (stock code ES3), because it gives you the entire STI in one stock - so you get instant diversification. It's $3,000 per lot, though, so you'll want to save up for a few months and ship in 1,000 shares every six months or so.


Sorry guys, I will update this post again... Need to source more information and present it in a nice way, so that people can refer to this page for info. Please contribute by commenting below.
To add on what I said previously, what you invest in depends on many other factors too.

- Risk tolerance level (high? medium? low?)
- Amount of money you have (spare cash, not your emergency funds)
- Salary (high income? middle income? low income?)
- Investment period (months? years? decades?)
- Investment goal (retirement? early retirement? semi-retirement? Get-rich-quick? Earn a quick buck? Wedding/Marriage? Children's education?)

I will continue to describe the above factors in detail when I have more time.
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Old 15-03-2012, 08:27 PM   #6
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One thing with all these people having $X to invest is that all of them are hoping to get some holy grail investment which is risk-free. None of them are willing to take any form of risk whatsoever or even considered the possibility of their $X having a drawdown.

These guys will get all the various advice and suggestions from the forumers who have good intentions and will be keen at first but once they realise that there is (and always will be) a chance that their $X might be at risk of drawdown they will back off and be hesitant.

One just has to view all the similar 'has $X to invest' threads to see the trend. These threads start strong with threadstarter being very inquisitive before dying abruptly as if the threadstarter has lost interest or taken in all the information. The threadstarter would probably go to other forums or seek advice from his friends who will probably tell him the same thing.

I am sorry if these comments may sound harsh but it is the truth. Since starting to post regularly on this forum, I have yet to see one such threadstarter being active in the thread he started and actually follow some of the advice given by the regulars who so patiently and kindly offer it.

Not to mention those who expect to get spoonfed every single bit of information and would not bother to even do a simple search on ‘google’ for it.
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Old 15-03-2012, 08:27 PM   #7
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BTW this thread should be made sticky.
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Old 15-03-2012, 09:32 PM   #8
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there's something called RSP to save up a small amount each month if you have no amount to invest.
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Old 15-03-2012, 10:23 PM   #9
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there's something called RSP to save up a small amount each month if you have no amount to invest.
Yup, gonna include that in later.

Gonna update this thread again
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Old 17-03-2012, 03:55 PM   #10
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Good read. Will be staying tuned.
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Old 27-03-2012, 02:12 PM   #11
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lol, updated section 4.

It seems to be missing something, anybody got recommendation what to add?
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Old 01-05-2012, 02:09 PM   #12
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Bumping up for awareness. This really should be a sticky thread.
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Old 01-05-2012, 03:14 PM   #13
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+1 for FAQ and this serves really good purpose for newbies like me =)
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Old 07-01-2013, 11:14 PM   #14
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Bump up for the newbies to post questions.
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Old 10-01-2013, 08:21 AM   #15
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hi.

I'm currently 25 yo working full time.

Have a
-Medishield,
-DPS (46k) ,
-Early critical illness (100k),
-TPD (100k),
-Term life insurance policies (100k 'death',TPD and 100k 'CI'), and
-Whole life policy -20yrs (100k 'death', or 100k 'CI', depending on which occurs 1st) - most expensive, 2.1k/annum -1.4k able to get back once breakeven, while $700 is for the CI so not able to get back.

Paying about 3.5k/annum solely for these purposes.

I might be studying full time in 1 yr time for my degree - 3 yrs.
I am very new to investing. Have been trying to read more about investing now.
Able to invest around 10k for now and $500/mth, risk tolerance of 10%-25%.

Objective is to just beat inflation and not aiming for the sky.

What will be the best form of investing?
Have been comtemplating on blue chips but just haven get it going.
And read that STI ETF is not for beginners.
There are various type of bonds, which makes it complicated for beginners like me

Is my insurance too costly for this range of protection?

And to reconfirm, we need a CDP account to start investing right?
and whats the recommended stockbroking firm? hmm hmm

im checking out this now- http://forums.hardwarezone.com.sg/st...3628498-9.html

Sorry very noob.

Last edited by boodog; 10-01-2013 at 08:37 AM..
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