Sunday, 31 August 2014

Comex 2014 ; The Wealth of Singaporeans & The Ugly Side of Some Singaporeans

SO, I have just completed Day 3 of the longest 4 days of my life.

Hours and hours of standing on your feet, talking for half an hour straight to customers who ask merely for the sake of asking without any intention to purchase whatsoever. It's frustrating.

However, many people are still continuing to spend on electronic products. From this show alone, it's hard to tell that many Singaporeans are still suffering behind the scenes. It gives a warped impression of Singaporeans wealth.

Because of the background of Comex 2014, mostly educated and tech-savvy adults fill the place with many staying in landed properties, condominiums and purchasing security surveillance cameras to monitor the safety of their homes. Even bosses of various companies make a trip down to purchase cameras in bulk.

Just today, I have sold more than $SGD 30,000 worth of electronic products. Of course, many foreigners also visit this place to snap up items at bargain deals.

However, just a friendly tip. If you're truly looking to purchase a product and want to know the truth and honest capabilities of these products try not to ask a junior looking staff (usually teenagers like us) hahaha. Basically, we want to help you to get the product you want, but at times our product knowledge are severely limited because we are not provided with in-depth product knowledge. We learn as we go.

If you do decide to purchase from us, please be patient and serious in purchasing. We don't exactly enjoy having to talk and explain so many details, wasting precious time that could have been spent informing customers who wished to purchase but left because we were busy with people who simply want to waste our time because they enjoy doing this. (Yes, there are many people like this, mostly Singaporeans too!)

All the same, it was a good experience. Like the saying goes, fake it till you make it. We survive on mostly common sense and gaining knowledge from failed sales. It's not easy, but it's interesting.

Signing off,
Teenage Investor

Friday, 29 August 2014

Earning Money Is Never Easy, I've Truly Understood That Now; COMEX 2014

Day 2 of Comex 2014.  It has been quite some time since I ended my Internship, experiencing the life of a full time working employee. As such, I was completely unprepared for Comex to be honest.

The commission of selling $100+ items works about to roughly $0.50-$1/ item. I had to talk and talk until my mouth was parched and my throat was unbearably painful just to close a few sales.

The life of a salesman is simply not easy.

Having the ability to talk fluently to customers and being able to have full product knowledge with one day of training that lasted 3 hours is vastly impossible. As such, promoters mostly pick up knowledge during the job itself, and many times we give wrong information to our customers either knowingly or unknowingly in an effort to make more sales.

Such is human nature, because we all see $ as king. You will truly understand this when you experience it for yourself.

I urge everyone to try a sales job at least once for the experience. You need to be good to persuade your customers. If you keep silent and stand at a corner you'll lose out :) This applies to life as well. Especially if you're in the customer service line.


Signing off,
Teenage Investor

Thursday, 28 August 2014

Don't Expect Money To Fall In To Your Lap From Investing

Just a short post today, going to work at the Comex 2014 :)

Lots of tech stuff, come down and have a look if you're interested!

But the main point is though we all hope to receive a steady stream of dividends from our investments, that is for the long term.

Money doesn't fall out from the sky, to receive a decent stream of dividends we first have to pump in capital. Where does this capital come from? By working of course!

I plan to use 1/4 of the money to supplement my monthly investments, 1/4 for savings, 1/4 for short term expenditures and the last 1/4 for my upcoming holiday trip.

All work and no play makes Jack a dull boy!

Signing off,
Teenage Investor

Wednesday, 27 August 2014

When Taking The Easy Way Out Isn't Always Wrong.

So, I've come to a conclusion that after only helping 2 people who expressed interest in obtaining a copy of the book I recommended in my previous blogpost is that people simply don't want to spend their time reading through a hundred plus pages contained amongst several chapters.

They want the easy way out. They want to know the main points and then customise that to fit their existing strategy or devise a new one. typical of human nature. Guilty as charged, including me. We all simply want the easy way out.

But who said the easy way was wrong? Even Warren Buffet took the easy way whenever he could!

Let me share some tips with you. They may or may not help you or even enlighten you in your quest to financial freedom and learning more about the world of investments but they MIGHT. And that's enough for me.

1. Know Your Level of Market Exposure

When you choose an index fund, you're essentially exposing yourself to different companies in different industries. However, if that is unappealing to you, you can also decide to track and purchase specific kinds of stock. Maybe you wanna buy shares from Telcos, like Singtel, Starhub or M1. Or maybe you wanna purchase something more technology related like Apple, Microsoft or even Facebook! In general, know what type of exposure you want. Choosing an index fund may be diverse and lessen your risk but it also lessens your dividends. Choose wisely.

2. Selecting what is best for YOU.

This is very important. Why? You are the one in charge of your own future. It's like would you purchase a milkshake when you're lactose intolerant? Same concept. Know what's suitable for you and go for it! Maybe you're in the oil industry, or the shipping industry. Owning a couple of REITs (Real Estate Investment Trusts) could be beneficial for exposure. However, say your good friend is working in the real estate industry or quite possibly has much of his portfolio connected to several purchases in the industry. Would it make sense to purchase REITs too? Maybe yes, maybe no. Ultimately, only you know what's best for you.

3. Don't believe everything you read or hear!


You must see it all the time. The latest financial magazine or a random website telling you the hottest stocks to buy! BEST FUNDS OF 2013/2014/2015! TOP 30 STOCKS YOU MUST BUY!

Deep down, maybe you know that advice, when given out to thousands and possibly millions of people will have little value. But most of us still follow, why? The dreaded "Get Rich Quick" Syndrome. The thing is, these are all marketing strategies to increase sales of their magazines and increase subscriptions.

4. You're highly emotional, too emotional. You let your heart, your feelings sway your judgement.

Major recipe for disaster. Say you still believe that you can pick stocks choose the best. And maybe you do! You purchase a stock at a price of say $4. It rises to $10 soon enough. You sell to lock in the profit! All's good. You see it rise to $20. You kick yourself for not waiting. At least you made a profit!

Now, say you purchased 1 stock at a share price at $4. It decreases to $2. You hopefully believe it will go up in the near future. Meanwhile, you just keep losing money...and waiting...and losing...

You waiting for the price to go up...still waiting..

5. Approach any investment decisions with caution.

Why is this important? Because you don't want to make investments on the spur of the moment. Remember emotional? Don't invest on a mere whim & regret your impulsive actions later. Read up on the stock, know what you're buying into. Buy with caution and stick to your decisions once done.

6. Monitor your portfolio closely but don't play with it too much.

Buying and holding is good for the long run. Tweak it once a year or so to adjust to you needs. But try not to modify , buy or sell every damn day. The costs from trading pile up sooner or later. *shudders*

Do I advice going for international stocks? Why not? Singapore is a small country, you can always invest both locally and internationally. Let me know what you think.

Signing off,
Teenage Investor

Tuesday, 26 August 2014

Index Investing, what it's all about.

Index Investing, what is it all about exactly?

I've been taking time out of my busy schedule amidst working part time, and other commitments that I have to read up on books about Finance and Investments.

And, I highly recommend you do the same.

Recently, I've been reading on this book called Index Investing for Dummies. Don't let the title fool you, it's extremely informative and containing many useful information that can help you in understanding all about index funds and how it works.

Description: A recommended, proven way to broaden portfolios and profitsRecommended by finance experts and used extensively by institutional investors, index funds and exchange-traded funds (ETFs) provide unmanaged, diversified exposure to a variety of asset classes. Index Investing For Dummies shows active investors how to add index investments to their portfolios and make the most of their money, while protecting their assets. It features plain-English information on the different types of index funds and their advantage over other funds, getting started in index investing, using index funds for asset allocation, understanding returns and risk, diversifying among fund holdings, and applying winning strategies for maximum profit

About the author: Russell Wild, MBA, an expert on index investing, is a fee-only financial planner and investment advisor and the principal of Global Portfolios. He is the author or coauthor of nearly two dozen nonfiction books.

Do consider purchasing the book :) You can purchase it here in hardcopy at Amazon

Alternatively, you can also email me for more enquiries on obtaining a copy of this book. I will do my best to respond to your needs. Happy reading, learning is a lifelong journey after all.

Leave your comments if you had read this book and have anything to share? Would love to receive some feedback.

Signing off,
Teenage Investor

Calculating Your Dividends From Your Investments and Earning Better Interest on Your Savings?

So, I was at the gym today and suddenly something occurred to me.

Yeah, I get weird random thoughts all the time, so sue me.

Anyway, I was wondering when would my dividends pay off, so I did a little research.

Well, I won't go into too much details, so basically I went to SGX website. I found the following information.

In my previous blogpost, , I recommended that the average investor's portfolio should include a mixture of stocks and bonds. So naturally, I wouldn't recommend something that I wouldn't do myself.

As such, I had previously purchased 1 lot of ABF SINGAPORE BOND INDEX FUND ETF (A35) which is 1000 shares exactly. I have not yet received my dividends as you can see that they have not yet paid out the dividends.

If I should take last year dividend of SGD 0.023/share, I would roughly receive $23 in dividends this year if I'm lucky. (Senior Investors please correct me if I am wrong...) That's a whopping $23 in "interest". Could you earn $23 in interest if you place $1165 in the bank for a year? Even if I should take a dividend payout of 0.01, I would still receive $10 in that year.

For argument sake, let's take POSB Savings at their revised interest rate per annum from the previous 0.100% to the current 0.050%..........

At $1165/ year you would receive an interest of $0.5825.... that's barely $0.60.

The point I'm trying to make here is I don't expect to get rich by investments. If i do, I'm lucky. I believe that what I'm doing now, is merely preparing for the future. I want my money to work harder for me. $10 is significantly more attractive than $0.60. But the $0.60 is safe. It's guaranteed interest. But there's no guarantee that the interest rate will not fall somemore. Ten years down the road, it may even be 0.030, or 0.025% p.a? That's $0.25 interest in a year.

Would I take that $23 or even $10 to spend? I doubt so. I would much rather take my dividends, combine it with my monthly fresh funds, and re-invest it. Why not use the power of compounding to our advantage?

By the way, Fun Fact. The Singapore Government has given us a free $100 to use at public gyms and swimming pools. Simply sign up for an ActiveSG membership. I got my $100 and signed up for one year worth of off peak gym membership at $80 leaving me with $20 worth to use for peak hour gym sessions. If the government hands out free stuff, use it. Why not?

One thing's for sure, money is never enough. Everyone wants money. But money comes and go, your health is your own. As the saying by Jim Rohn goes, "Take care of your body, it's the only place you have to live."

See y'all soon. Take care.

Signing off,
Teenage Investor

Sunday, 24 August 2014

Index Investing in the Singapore Stock Market, What Do I Buy?

Passive Investment Strategy to Index Investing

When it comes to investing, most people are searching the web or mindlessly reading through blogpost after blogpost on a hundred different blogs in an attempt to search for the 1 Valuable Thing.

The Best Secret Classified Hi - Tech Powerful Technique Formula Strategy to Invest.

Ok I'm kidding. But, most people out there want the best, they want the fool proof strategy to investing, they want to learn the best technique and they want all the best "weapons" possible that they can carry in their "Arsenal".

Well I don't know if there's any fool proof strategy or the best technique to passively invest but I can share with you how I do it.

Let's take for example you want to begin with the Singapore Stock Market. As I mentioned before, Investing in the Index, effectively diversifies your portfolio to begin with. While not necessary to invest in individual companies, you can if you wish.

So, do you want to invest in just stocks alone? You can of course. But it would be safer to have bonds in your portfolio as well.

Think of it this way, you're in a war. Stocks are your machine guns, rocket launchers, bazookas whatever. Bonds are kind of like your knives, pistols, revolvers and maybe a few grenades.

Why is this relevant? Well, say you are fighting a battle with the Enemy Forces. You start off well, your machine guns and rocket launchers are effectively destroying 99.9% of their soldiers. Suddenly you run out of ammo. And you see maybe 1 or 2 soldiers left. Without your knives/grenades you'd be killed. But with them, you have a chance of saving yourself, and not losing the whole battle.

Same concept. If you invest fully in stocks, chances are you would stand to gain relatively high returns. But one stock market crash, and you're gone for good.

Thus, the all-important Asset Allocation.


Another thing, by investing passively you need only purchase a few ETFs and add to them every month. Once a year, rebalance it.

There's no point having a huge range of ETFs and maybe owning 1 or 2 lots. Doesn't make sense and not an economical way of spending your resources. Save up, purchase 1 lot of Nikko AM, or STI ETF. Restart. Save. Purchase.

It's the Mother of all Basics. Since you're young, you can start off with stocks. Save $300++ or $3000++ and buy your first lot. Done? Congrats you're a proud owner of your first stock. Now, restart the whole process. Save. Save. Buy 1 lot of ABF SG Bond ETF. Congrats! You now have 1 stock and 1 bond!

Rebalance once every year or 6 months it's up to you. You don't want your stocks overshadowing your bonds.

My plan? To invest more in stocks and lesser in bonds while I'm young and can afford a little more risk. 30-40 Years down the road, you would see that my portfolio has significantly more bonds than stocks as my risk appetite decreases. I simply cannot afford that much risk with my retirement funds as time is no longer on my side.

Fun Fact: Did you know that you can use your CPF to invest? Invest wisely, or you can leave it to earn guaranteed interest. It's your choice :) You're probably never going to see half of that $ anyway with the government being so weird about it.

Signing off,
Teenage Investor

5 Reasons Why You Shouldn't Be Investing

How weird, why am I posting about this when I'm into investments myself? Read on :)

So, I've been at work, trying to introduce Investing techniques to my friends without being too obvious. I am trying to keep my identity as private as possible after all.

Why do I want to keep my identity private? It's not like as if I'm a famous celebrity or a VVIP. The fact is, I have relatives that may or may not come across this blog. And, my parents don't exactly approve of me investing. Why?

Simple. They, like many other parents out there grew up during an era where they either witnessed or heard of people losing all their savings in the stock market when it crashed. Not only that, there must be hundreds of Television Dramas out there that depict the cases of husbands or wives playing with the stock market and eventually losing all their savings. Worse still, they brought their families / friends down with them.

Anyway, I digress.

The thing is, by trying to help my friends with tips on how to invest, I learned that Investing is not for everyone. Why do I say that? Simple. We are all born different, and our mindsets will eventually shape the way we do things. That includes investing.

Let me elaborate.

1. You're afraid of losing money.

This is the most important reason why you shouldn't be investing if you cannot take that risk. We are investing for the long run. And in the long run, the movement in the stock market should not affect us. In the long run, the market always go up. This has been shown repeatedly throughout history. If you're afraid of losing money, simply watching your investments lose even by a dollar will bring you into a panic and lead you on a selling spree in an effort to minimise your losses. In that case, why even begin investing? Saving the money in a bank would be a better alternative.

Solution: Before you begin investing, you must be prepared that your investments take a certain level of risk. Furthermore, any money you set aside for investments should be after you have allocated a proper amount to your savings, emergency fund etc. In short, money that you won't be needing in the short - medium term.

2. You don't have the money.

I believe this is pretty self explanatory. If you don't have the money to invest, don't. If you want to, save up. NEVER use your short / long term savings or your emergency fund. Save aside some cash each month and you will have the necessary funds to invest to your heart's content. What if you are living from pay cheque to pay cheque? Is that fair that you can't invest because you're in a critical financial condition? My advice would be, to get out of that condition. By any means possible. At this point, investing for retirement should not be anywhere near your top priorities now. Your top priority is to review your financial condition and see what expenses you can cut down on so that you are not relying solely on your pay cheque.

3. You don't have the slightest clue what's going on.

Speaking from experience, I would say that the information on the Internet while useful can be pretty confusing. Take me from example, when I first started out, I read numerous financial blogs. I read government websites. And what did I end up with? A mixture of information and a HUMONGOUS headache. Many times, I considered giving up. I told myself I would figure this out later. I told myself it wasn't worth it. But there was always this nagging feeling instinctively telling me that I should never give up. But I digress again. What I'm trying to say is, if you don't have the slightest clue what's going on and you hope to gain your knowledge just from reading blogs and forums you're going to have an infinitely hard time. And you're going to make a lot of mistakes and end up cursing the stock market and everyone else.

4. You have no patience.

Again, if you don't have the patience you're going to sell your stocks when the price increases just a little, hoping to lock in however small or big that profit is going to be. Sure, you can do that. But that's not passive investing. If you plan to invest by timing the market like professional traders by all means. But most of us simply don't have the time for that! How would you like to tell your grandkids someday, oh I spent most of my teenage life watching and monitoring charts. Life is short, enjoy it. Don't spend your life doing things that while could bring you lots of money, it is solely at the expense of quality time that could be spent with family and friends.

5. You're not prepared to leave your money locked up for long periods of time.

You're investing for the long run. That in turn, means that when you invest, your money will naturally be tied up with your shares/bonds. Agree? However if you plan to invest and then only to withdraw your money to say, purchase the latest iPhone 6 or iPhone 7, 8, 9 10 whatever. Then maybe it would be better to deposit your money in Time Deposits where it's relatively risk free. For example, I have $1k deposited for a 1 Year Period and another $1k deposited for a 2 Year Period. Why? I would be enlisting for National Service and this naturally would state that I would not need to use these funds for the next two years. Why not let it earn interest for me? That would be a better alternative to investments for you if so.

That's it! That's the basic reasons. There may be other reasons but these are the main factors in my opinion.

Signing off,
Teenage Investor

Friday, 22 August 2014

Why are Singaporeans getting the least amount of sleep ; What I really think about Roy Ngerng

I refer to this link, and the rising cases I see of Insomnia on my Twitter feed and personal experience. While I may not know what other teenagers may be losing sleep over, whether it's their love life or schoolwork issues etc I believe the common cause of Insomnia and the lack of sleep is the increasing amount of stress Young Singaporeans are facing.

Hostility towards the People's Action Party (PAP) of Singapore is increasing day by day. Go to social media sites like Facebook and I guarantee at least one post on your news feed is about what various PRCs that are imported into Singapore are doing or else it's about what our Prime Minister has said during his rally and about his CPF policies and what the people feel.

With the future so uncertain, who knows what the increasing hostility towards the Ruling Party may bring? We're a country that used to be peaceful and happy until several changes in recent years have led to more and more Singaporeans being unsatisfied.

Again, we fail to see that all these are things affect us "Indirectly". What do I mean by that? Yes, some may argue that the CPF policies affect our retirement and PRCs affect our country's cleanliness, they are just plain annoying etc. However, even if we stay up late at night worrying about all this, will anything change? I highly doubt so.

Moving on to Roy Ngerng. I respect him a lot as a fellow blogger who has posted many relevant details about what the Government is doing. However, to be honest to the point of being blunt, I feel that there is little probability of the PAP changing anything. 

Yes, there are protests being held and talks being done but the fact remains that the PAP and LSL have a very strong theory backing their claims of increasing the minimum sum.

What is that theory? Simply put IF we hit the minimum sum, there will be a monthly amount paid out for our retirement. However due to inflation, $1k + now will not have the same value down the road. Therefore the Minimum Sum is increased so that the payout will be more when we hit retirement age.

Whether or not Singaporeans can hit the Minimum Sum is another thing but the theory backing up the increase in minimum sum is solid. The increase in Transport Fares however is ANOTHER THING totally. Makes no sense that we are paying higher fares for constant breakdowns and incidents happening.. Public Transport should be made affordable for the public as it's a public transport....

As a Singaporean, I truly hope that our government will think of ways to appease the people once more. They have made mistakes, many mistakes at that. But 2016 is still some time away. By that time I will be eligible to vote too. 

Here's to a peaceful sleep and less worrying for now. Stop worrying about the things we can't change. Worry about the things we CAN change.

Signing off,
Teenage Investor

Tuesday, 19 August 2014

The Beginning of YOUR Investment Journey [ Part 2 ]

In Part 1 of The Beginning of YOUR Investment Journey,

I mentioned that the cheapest fund tracking the STI (Straits Times Index) was Nikko AM which would have cost you $339 ++ instead of SPDR $3340+.

That's a huge difference I must say. The Singapore Government has dictated that stocks will be sold in 100 or 1000 shares / lot. That's not giving much choice to us young investors. No wonder everyone thinks that the stock market or buying shares is only for the rich and wealthy.

Why SHOULD they be the only one allowed? What about the rest of us? Don't WE get a choice to take control of our own future?

So today, I'm about to show you how you can take the first step into beginning your journey.

Firstly, you know the basic ETFs you're going to buy. Let's presume you have an monthly allowance of say, between $300 - 400. Let's also presume that you can afford at least $100 a month for your investment.

Good so far? Note: If you cannot afford $100/month, get a part time job that supplements your allowance. Remember, it's your future. What you do now in preparation, dictates what you future will be like. Most part time jobs pay between $7-9/hour.

Say you work 6 hours a day during weekends, with a pay of $7 / hour for at LEAST one day.
That's an extra $42/week. In a month, you'd get $168.

Ok moving on.

Now you want to begin your investing, as I said previously you can't just buy stocks off the shelves like you do in Supermarkets. You need to select your brokerage. What's a brokerage?

In short, a brokerage brings buyers and sellers together.

There are several brokerages in Singapore that you can purchase shares from.


But, I'm going to make a bet here that you WILL NOT buy your shares from any of them. Because the fees that they charge for your investments change accordingly to your investment value. We're talking at least $50,000 - $100,000. For a monthly investment of $100, you'd see your money getting eaten up by fees so fast you don't even have the chance to say "What?".

No, instead we want to invest a small sum of money every month without worrying too much about fees and charges.

Well, there are 2 Banks in Singapore that offer the most well known options to invest in blue chip shares without the hassle of opening security trading accounts and all that other stuff.

Remember, we want simplicity. The following options are good IF you'd rather not DIY.


Let's begin with OCBC, where you can begin investing with $100 (minimum amount) monthly.

They offer you the OCBC Blue Chip Investment Plan (BCIP).

In short, they offer you the opportunity to accumulate odd lots of shares over time instead of having to purchase 100 - 1000 at a time.

What are some of the blue chips does OCBC BCIP offer?

CapitaLand Limited
CapitaMall Trust
CapitaMalls Asia Limited
ComfortDelGro Corporation Limited
DBS Group Holdings Limited
Global Logistic Properties Limited
Singapore Airlines Limited
Nikko AM Singapore STI ETF

Notice the Nikko AM STI ETF? Yes there you go. You're welcome. Hahahaha.
Now, I'm aware of the existing fee of minimum $5 transaction fees that has many people afraid to invest because it is simply not worth it. That's almost a 5% transaction fee with $100. However, the current promotion of only 0.3% and $5 transaction fee waived will give many newbie investors an opportunity to take the first step and purchase a few counters. There's always a chance that OCBC will extend the promotion. It has done so before.

However, these information are only partial and may not be complete. I would advise anyone who is planning to try the OCBC BCIP plan to always do their own research and call the bank itself to check on the existing costs.

All that said and done, I have used the OCBC BCIP personally to gain a little experience. In short, OCBC allows you to invest in the Nikko AM STI ETF, or invest in individual blue chip companies. It's entirely up to you.

What about POSB/DBS?

Well, POSB Invest Saver also allows you exposure to blue chips. However, while similar they also have extreme differences. Why do I say that? POSB Invest Saver only allows you to purchase the STI ETF ONLY. They do not offer any individual companies. Therefore do consider the difference according to your personal preference.

It also allows a $100 monthly investment with a 1% sales charge which is about $1.

I hope that this has helped you. Some people may ask why I have not included the Philip Sharebuilders Plan. Simply put, the management fees and other fees will kill you. Similarly, it is not for when you want to invest $100 monthly.

With this 2 plans, $100 will be deducted automatically every month on the dot. This helps if you do not want to log in every month, and make a transaction. You are paying for the automated services they provide. Best of all, you do not need a certain age unlike DIY strategies which usually require you to be 21 and above.

With the current promotion, OCBC fees of 0.3% IS cheaper than POSB 1%. However, when the promotion ends and the $5 minimum fee / transaction kicks in it would be better to invest a larger amount to even it out. At the end of the day, both options offer you the chance to invest in blue chip shares without having to spend $300++ to $3000 at a go.

Do check out these 2 links. They are filled with various information and questions. When I first began, I studied these two websites too :)

Investing over a long period of time through the market fluctuations will eventually bring you decent returns as the stock market always go up in the long run.

Hope the information helps you! What should I post about next? Any ideas? Feel free to email me :)

Signing off,
Teenage Investor
Twitter: Teenageinvestor

Monday, 18 August 2014

The Beginning of YOUR Teenage Investing Journey

I was planning for my next post to be about the CPF, especially as the increase in Minimum Sum has now been increased. I am not particularly worried about it, because as far as knowledge brings me, if I take the necessary steps, CPF will work out just fine for me.

What I am posting about today however, is going to be a summary of how I began my journey into Investing and how you can begin yours too.

Why did I invest? Because I'm interested in planning early for my future. And I'd rather give a chance for my money to grow for me with the risk than letting it sit in the bank and earn 0.05% interest. As time passes and inflation increases, the same 5k you may have in the bank is going to be worth less. What do I mean? Maybe with this 5k, you can buy 1000 $5 meals. When inflation hits again, the meal now costs $6. Similarly, you still have 5k. But this time it can only buy you 833 meals. That's 167 meals lost by inflation.

Now, before you plunge into the world of Investments and Stock Markets, know this. It requires a necessary amount of financial knowledge. I'm not saying you have to be taking a Diploma in Finance or studying Finance related courses. Heck, I'm from a Hospitality and Tourism Management Course and Accounting has always been my worse subject. What I'm saying is, you need to be comfortable with simple calculations and numbers.

Let me ask you this, when you're learning a new skill (E.g Cycling, Rollerblading or Skiing), do you take your time to learn the basics and hone your techniques slowly or do you simply hurl yourself down the icy slope and hope for the best?

See? He's not rushing. Neither should you.

Investing is the same. You don't simply purchase a few stocks and try to imitate the "Buy Low, Sell High" concept because I can tell you unless you're incredibly lucky, you're only going to look like a fool, or worse hurt yourself in the process.

When I first began my journey into Investing, I was totally lost. It took time. I browsed hundreds of websites and each website encouraged a different thing. Heck, even the government websites was chock full of information that didn't make sense to a potential investor.

Imagine a Business student given several Engineering books to study and then ask him to sit for a Business exam.

He may get lucky the first few questions, but chances are he would fail the exam.

To be honest, the financial education in Singapore is largely limited to those who plan to choose Finance as their major or interest of study.

What about the rest of us? We have to seek the information ourselves and make an effort to sieve through the countless information until you find the ones that make sense. Or make SOME sense at least. If you truly want to learn how, be prepared to invest first and foremost; TIME.

Now, after reading up till here, how do you feel? You have 2 steps from here.

1. Close this page, exit this blog. You'll figure this out another time. Or maybe never.

2. You made the decision and now you want to know how to begin your own journey.

From here onwards, what I will be talking about is based on my own experiences and my own knowledge gained from doing research.

Firstly, know what kind of Investor you're going to be. What do I mean by that?

1. Know the amount of risk you're willing to take. This depends largely on your age. If you're young, you can afford to take slightly higher risks as you have time to ride out the fluctuations in your investments. If you're older, chances are you won't want to lose your entire retirement savings if something goes wrong.

2. Your Investment Horizon
What are you investing for and how long are you planning to invest? Again, if you're 21 and you're investing for retirement it means you have a long horizon. Otherwise, if you're planning to invest for only the next few years, pick less risky assets.

3. What do you plan to invest in?
Do you plan to invest all your money in a single stock? Or do you plan to invest in several? As you sift through the various financial blogs one thing always appear. Diversification. Diversify. To cut a long story short, your portfolio should contain a mixture of assets. Example would be to have both stocks AND bonds. Should your stocks do badly, your bonds will help to stabilise. Even among your stocks, you need to diversify. There are so many companies out there and so many different type of shares.

4. Your Investment style
Do you
1) Plan to invest a fixed sum of money every month on every year? Or
2) Plan to buy your stocks at a price, and sell it for a profit when the market becomes favourable?

That's called 1) Dollar Cost Averaging & 2) Market Timing.

There are many styles and strategies that financial analysts use to time the market. Chances are, you won't be that free. Neither would I. We are teenagers, young adults at the most. We have our studies, our social life, our families and friends to tend to. Worse still guys, WE HAVE NS.

We simply won't have the time to sit by a computer and monitor the stock market every single day. Heck I'll go crazy first before I ever make a sale.

The thing is, you're here because you want to learn how to invest and prepare for your future WITHOUT sacrificing your time with your loved ones. How do you do that?

Welcome to the world of Index Investing. Quite honestly, nobody taught me about what this is. I stumbled upon this word one day, and did further research to figure out what it was. I'm not saying it does not have risks, I'm saying it's a hell lot better than sitting in front of the monitor day in day out.

Ain't nobody got the time for that!

By Index Investing, we are doing "Passive Investing". It means we invest maybe once a month, or if you prefer once every 4 months, 6 months, once a year if you wish.

The best way to diversify your portfolio is to invest in a fund that consists of different stocks. And in Singapore, the most common fund to invest in would be the STI ETF (Straits Times Index). It tracks the top 30 companies in Singapore, including several major banks, Singapore Airlines, Singapore Press Holdings, Starhub and many more.

What is an ETF (Exchange Traded Fund) ?

Exchange traded funds (ETFs) are open-ended investment funds listed and traded on a stock exchange. Your money is pooled with money from other investors and invested according to the ETF’s stated investment objective.

An ETF’s objective is to produce a return that tracks or replicates a specific index such as a stock or commodity index. ETFs are passively managed by ETF managers and do not try to outperform the underlying index. Hence, ETFs have fees and charges that are usually lower than those of actively managed investment funds.

ETFs may have complex structures. They may be structured as cash-based ETFs or as synthetic ETFs, which involve the use of derivatives. 

Now, WHY Invest in ETF?

Or the question should be why invest in an index fund? The reason is an index fund offers a good diversification of stocks. For example, the STI (Straits Times Index) is comprised of the 30 largest companies listed in the Singapore stock market. If you invest in an index fund, you do not have to pick stocks individually. The best thing is component stocks in an index are changed periodically. Bad companies are removed and replaced with another company. Indices all over the world have been rising for the past 50 years. An exceptional case is Japan which has seen its Nikkei index fall in the past 10 years. Japan has been in a deflationary economy which is a reason for its sluggish economy and stock market. Elsewhere in the world, we’re still seeing growth in the past 10 years.

So, by investing in an index fund, you'd essentially be investing into 30 different companies. How's that for diversification? *smirks*

Hold your horses, I'm not done yet. Believe me, I was as eager as some of you may be, and ready to immediately break my piggy bank and begin my investments. Oh how sadly mistaken I was...

Knowing which fund you will invest in is not the end. How are you going to buy it? It's not as simple as going to NTUC Fairprice or Giant Hypermarket and simply picking the stocks off the shelves. No it's a little more complicated than that.

And when you know how to buy it, then what? Did you know that there are 2 ETFs tracking the same Straits Times Index?

Yes! They are *drum rolls*
1) SPDR Straits Times Index ETF (SGX:ES3)
2) Nikko AM Singapore STI ETF (SGX:G3B)

What are the current prices of the shares? Well at the moment of this blogpost, SPDR costs $3.34/share and Nikko AM costs $3.39/share.

WOOHOO LET'S GO SHOPPING NOW. HERE'S A $100 GET 25 shares for me please!

Sorry, can't do that..

What? Why? Well, Singapore has this nasty little inconvenient law that dictates that shares must be sold in a board lot. That means the shares are sold in a set of 1000. Or 100. It depends on invididual ETFs. SPDR is sold in 1000 shares and Nikko AM is sold in 100 shares/lot. That means your SPDR would cost $3340 at the very least to purchase and Nikko AM would cost you $339.

Yeah, it's absolutely annoying. But there are ways of purchasing stocks nevertheless, but that will be another blogpost where I will share the ways you can purchase your first stock with just $100/month. Meanwhile, start saving. The best estimate to begin would be to have a fund of AT LEAST SGD$1000. All the best.

Got a question? Or perhaps you feel my information is incorrect? Email me :) Always willing to learn more.

Signing off,
Teenage Investor

Twitter: Teenageinvestor