Two weeks ago, you asked Golden Equator Wealth’s Director of Investment, Joe, your burning investing questions – and he answered with some awesome investor tips! Here’s a quick roundup of Keep It Simple episode 5, with some of Joe’s best points conflated into this summary.
Is Now a Good Time to Start Investing? (2:25)
- Test the waters with small amounts, with bigger and more secure names.
- The market seems to be on a path to an overly optimistic recovery since the crash in March 2020.
- But so many uncertainties remain. COVID-19 infections, Brexit in Europe, US-China tensions, and civil rights protests in the US.
- Still a vulnerable environment as of right now, but it’s good to get started with your homework and research to get up to speed.
- Always put on the table what you’re comfortable losing, partially.
Advice For Those Just Starting Out (5:50)
- Start with equity: stocks and indices pertaining to the US, Singapore and Hong Kong
- Start with names you’re already familiar with: Apple, Google, Alibaba, Goldman Sachs, McDonald’s, Coca Cola, DBS, OCBC, UOB, Keppel Corp.
- Explore indices like the S&P 500, the Straits Times Index via Exchange-Traded Funds (ETFs).
Passive Index Investing: Yay or Nay? (7:30)
- You’ll achieve great diversification for cheap management fees this way.
- It’s convenient. You don’t have to bother when to buy low, sell high.
Passive index investing can be the base layer for people’s portfolios.
- Volatility is relatively low using this investing method.
- This can serve as a safety net for your investments, but if that’s all you’re doing, you won’t learn much as an investor beyond a certain point.
Robo Advisors: Yay or Nay? (9:45)
- Gives you a fuss-free experience.
- Great for market updates and forecasts.
- Useful when it comes to educating yourself and gaining insights into more specialised industries/markets.
- But doing it yourself is still recommended so you can get the hang of these processes and get a sense for fees and service charges, after which you can jump into robo advisors.
How to Scrutinise Stocks (14:25)
- Whichever stock or company is being evaluated, start with the mentality of a skeptic. Why wouldn’t you touch this company? Question it, but not overbearingly so.
- Look at the premise of the company: is it over- or under-valued?
How healthy is its balance sheet?
- How well-managed is the company? If a company is managed poorly or there’s fraudulent activity, the stock and the company will fail.
Want to hear more? Head on over to Episode 5 of Keep It Simple to hear the rest, including our audience Q&A segment at the end. Until next time!