Monday, 22 December 2014

What Does Investors Have To Say About This?

Today, I received a short email. Upon reading, I was again struck with the realisation that I am not always the best person to come to for advice. Therefore, I'm putting this out there so that financial bloggers and readers of my blog may give their advice based on their own experience.

We shall refer to him as FR to protect his identity.

Hi there teenage investor. I guess we are on about the same age. I currently doing my final year and currently met with an accident. I really don't know where to start can you help me out cause I'm like having no savings except that I also put aside money through insurance whereby at the age 45 then I can take out the money, which mean for 25 years each month I have to pay a sum. Right now I really want to know what I can do to start investing. Thank you.

Dear FR, I'm very sorry to hear about your accident. Is there any reason why you have no savings yet? For your insurance, I have no idea of the benefits/cons of having that insurance plan for now. But you should start saving a regular portion of your allowance/pay, e.g. maybe 10-20% / month?

You can't invest without any capital after all. Maybe this will help:

Additionally, some posts on my blog as well as fellow bloggers will help you a lot. But all these can't be done without any capital.

All the best FR.

Till next time,
Teenage Investor

Sunday, 21 December 2014

The Main Reason Why Things Are So Expensive in Singapore?

Recently, I came across a post on The Real Singapore. This post is written by a local writer/blogger named Low Kay Hwa. Read on.

In Singapore, I do stop my car at the road, leave the car and engine running, walk out and buy my food. If anyone wants to steal it, it takes just one step and one second: get in and drive off.

In Singapore, when I’m tired in school, I do leave my handphone and wallet around me and drop my head on the table for a nap. You just need to walk past me and you’ll own my handphone and wallet.

Think about it: Why am I so daring? Well, not really.

When I’m in Malaysia, I lock my car even when I’m driving. I don’t even bring my main wallet in. 99% of the time, my handphone is in my pocket.

See the difference?

I’ve a friend who told me that in the Philippines, he won’t take out his handphone and message on the go. “People would just snatch it,” he explained. I thought he was referring to the sub-urban area. “No,” he said. He was referring to the city, Manila—a developed city much like Singapore.

While we can complain about the high living expenses and the lack of opportunities, we cannot dismiss the fact that we’re in one of the safest countries in the world with the least corruption. Do I dare to eat anything being sold in Singapore? Yes, because I know AVA and HSA have them covered. Do I dare to do that in other countries? No, I don’t.

I don’t know about you, but I’ve always thought of the high living expenses are justified because of this efficiency. You pay for what you get. But have we taken things for granted? Despite such a safe environment and a system to prevent corruption, people still want more. Car prices increase and people want COE to drop (though not all). ERP is built and people complain. MRT breaks down and for some reason, we bring it to the top.

As we complain, have we even thought of why we do that—is it because Singapore has become too good that we’re not used to a little mistake like flooding? Have we become so complacent that we can’t tolerate small mistakes and expect drastic improvement?

Have we become so used to such a quiet environment that a wind gushing is considered noise?

I don’t speak for anyone, so I don’t know. But what I know is that when I lock my car, I’ve just appreciated Singapore a little bit more.

Low Kay Hwa

After reading through, I would like to know what does readers think? Do you agree?

Let's take a look at some of the commenters of this post on Facebook.

The writer justifies the high expenses in Singapore and feels it is reasonable for the high efficiency. Then I would like to ask this writer, has he seen for himself how the less fortunate in Singapore are doing? Is it fair for them to pay higher costs in return for the security and efficiency in Singapore?

"I don’t know about you, but I’ve always thought of the high living expenses are justified because of this efficiency. You pay for what you get. But have we taken things for granted? Despite such a safe environment and a system to prevent corruption, people still want more. Car prices increase and people want COE to drop (though not all). ERP is built and people complain. MRT breaks down and for some reason, we bring it to the top.

As we complain, have we even thought of why we do that—is it because Singapore has become too good that we’re not used to a little mistake like flooding? Have we become so complacent that we can’t tolerate small mistakes and expect drastic improvement?

Have we become so used to such a quiet environment that a wind gushing is considered noise?"

I ask readers, are we truly complacent that we can't tolerate small mistakes? Are the things that have been happening in Singapore all small mistakes? I don't know, it may be a marketing ploy for readers to find out more about him. But, personally I just lost whatever respect I used to have for this writer and his books.

Till next time,
Teenage Investor

How to Invest in the Stock Market with just $100 every Month?

As passive investors, many of us including myself invest regularly on a monthly basis. Additionally, some of us are investing for long term goals that includes retirement.

However, how much can most of us afford to invest every month? The numbers may differ when it comes to different financial backgrounds. Some of us can afford to invest thousands of dollars every month.

But what about us teenagers? Some of us are still schooling, some of us are serving the nation. $100 could be the bare minimum we can scrounge up every month for investing.

But what can $100 buy? If you're looking for ETFs that track the Straits Times Index, even the cheapest would be $300++ to purchase 1 lot.

Some may turn to Regular Savings Plan or use POSB/OCBC to invest. How they work is every month, your $100 buys shares with Dollar Cost Averaging (DCA). When shares are cheaper, your $100 buys more. When shares are more expensive, your $100 buys lesser.

Do I use a Regular Savings Plan? I used to, but not anymore. I opted out for a DIY strategy.

An RSP is ideal for beginner investors without much knowledge and doesn't have time to monitor on a regular basis. A RSP works in the background, every month a set amount is deducted from your bank account.

What if you're purchasing stocks 1 lot at a time individually? How could $100/month purchase anything? Well, I'd suggest perhaps consider purchasing US Shares? Their share prices are significantly more affordable because of the board lot size.

Alternatively, you could save every month until you have enough to purchase 1 lot.

Every person will have his/her preferred strategy and it is not up to any of us to judge or comment.

What are YOUR ways of investing? Do you use any Regular Savings Plan? Do comment below, and share with everyone!

Till next time,
Teenage Investor

Friday, 19 December 2014

Taking the E-motions out of Investments

Taking the (E)motions out of Investments?

Easier said than done. When you invest your money, I'm assuming you're investing after a thorough thought process. One does not simply invest his/her money based on the "TOP 20 SHARES TO INVEST IN 2015" or "BEST STOCK TO INVEST 2014" that you see on Google or financial magazines.

So when the market is going through a rough patch, should you sell to minimise your loss, or hold onto your investments hoping for the best?

The emotions that guide you through every decision has been there since Day 1. But if you're in this for the long term, is the best decision to sell now and wait for the price to increase before buying again really the "best" decision?

There will always be emotions attached to money making decisions.

Fourteen Emotional Stages An Investor Goes Through

Much like the boom-slump cycle that is common to all markets, investors’ emotions play out with a similar rise to a peak before declining to a trough, followed by a recovery, where they typically go through 14 emotional stages.

  • Optimism normally characterises the start of the cycle as investors buy their stocks, naturally with a positive outlook for the future and anticipation of potential gains.
  • Excitement is quick to follow after some initial success, as we begin looking for new ways to accomplish more based on what we already achieved.
  • Thrill comes after yet more success, as investors begin to delight in their wins and congratulate themselves for their smart decisions.
  • Euphoria sets in as wins come quick and fast, bringing in a stream of easy profits and pushing investor sentiment to dizzying heights.
  • Anxiety inevitably interrupts the climb, as the market surprises us by moving downwards. Faced with their first potential loss, investors reassure themselves that their well-calculated strategy will deliver in the long term.
  • Denial takes this to the next level, when markets still show no signs of a rebound. At this stage, the investor begins to deny that he made a poor choice, clinging on to the belief that things are set to improve.
  • Fear finally takes hold when the market realities set in. Amidst the confusion of getting things wrong, it is easy for sentiment to drop drastically, and for doubt to set in as fears that the market will never move in our favour escalate.
  • Desperation sees a frantic attempt to salvage the situation with any idea that might have a chance of helping us break even.
  • Panic follows when all options are exhausted and the road downhill is imminent.
  • Capitulation sees the tormented investor admitting defeat and giving up hope of things turning around, shifting his focus from recovery to damage control, and exiting in order to avoid making further losses.
  • Despondency is the lowest point of the emotional roller coaster. Investors cash out whatever remaining stocks they have, having given up hope of the markets ever recovering. With the wounds still raw and stinging, they vow never to buy stocks again to avoid getting burnt a second time.
  • Depression sinks in as the fallen investors ruminate on their failure and the regrettable decisions that contributed to their predicament.
  • Hope returns slowly after investors notice that the markets are picking up, realizing that movements are cyclical. This is when they cautiously begin to look out for the next opportunity.
  • Relief is when faith is renewed after their next buy has turned profitable, setting the stage for sentiment to turn optimistic once more.
Assuming that you don't have the time, hiring someone to manage your funds for you doesn't take the responsibility of doing research away. 

When in stocks, losing money will always have a bigger impact than earning the same amount.

What are some popular tips?

1. Don't try to Time the Market.
2. Dollar Cost Averaging- Investing through all kinds of weather conditions.

Till next time!

Signing off,
Teenage Investor

Posts you might be interested in:

Wednesday, 17 December 2014

Someone to Accompany you on your Investment Journey

Today, I was texting a friend of mine. Turns out he has been investing with POSB Invest Saver for 8 months already. Seems like we were on the same journey of figuring out the confusing world of Stocks, Bonds and Shares but we didn't know it then.

It's always better to have someone that you can discuss with on the pros and cons on various matters. It feels good to have someone to talk to personally and have someone that you can share all these new experiences and exchange knowledge.

I myself, prefer a more DIY approach. POSB Invest Saver may be beneficial in some ways and automated but it's just me.

I like to feel more in control of each transaction I make.

That said, what does everyone else feel?

A DIY Approach VS Automated Approach to Investing?

Signing off,
Teenage Investor

Tuesday, 16 December 2014

Investing without your Parent's knowledge?

I received another email from a reader named Peishi. It goes as follows.

Hey there! :)
I am turning 17 in 2015.
Would you advise starters like me to save up for 1 lot of Nikko AM, or STI ETF for passive investment?
Also, I read off from your blog that you invested without your parent's knowledge, how did you do it?

Hi Peishi! 17 is a very young age, but I'm happy that you are already ahead of your peers in terms of mental maturity.

Nikko AM and STI ETF both track the Straits Times Index and aim to track it with minimal error.


While both may be similar in many ways, what makes them different is the total purchase price you would pay to purchase 1 lot. As of today, 1 board lot of SPDR contains 1000 shares while 1 board lot of Nikko AM contains 100 shares. This would mean a vast price difference.

Assuming 1 share of each ETF costs $3,

1 lot of SPDR would cost $3,000 while 1 lot Nikko AM would cost $300.

SPDR has a lower tracking error and expense ratio and has been around longer than Nikko AM has. But because of the price, you may want to consider purchasing Nikko AM first.

Since you're 17, you're not yet of legal age to open a brokerage account which I believe requires at least 21 years of age.

So since you have 3-4 years to start saving, when you reach 21 you may already have enough money to purchase 1 lot :)

Moving onto investing without my Parent's knowledge, I simply didn't mention it. When you're of legal age, opening a brokerage account does not require parental consent.

Of course, if your parents approve and some parents do of course. Many experienced financial bloggers are parents who are knowledgeable about the subject and will probably impart their knowledge to their children in the future.

If not, some may choose simply not to mention it now but do so in the future.

Let me know how it goes. :)

Signing off,
Teenage Investor

Monday, 15 December 2014

Life goes on in the World's Most Expensive Country

Hello everyone, it's been quite some time since my last post.

Have been catching up with my studies, going for army check-ups and everything else that goes on in a life of a polytechnic student.

I recently received an email from Hady, who found my blog via a search on Google.

And the email went like this,


I came across your blog after googling about investing in blue chips and I've gotta say, it has helped me begin to save up/invest or at the least, be motivated to. 

 I had one of 'those days' last week or so and just began to think about life and my future, and how I'd want to live it. 

Hence the sudden realization that something has to be done. I'm currently serving NS right now (enlisted back in June) and I just wanted your advice on some things. Given that my monthly pay is around ~600. I've decided to allocate 100 to my emergency fund, 100 to investments and another 100 to my insurances, with the remainder for expenditure. 

 As for the investments, am I right to say that it's more feasible for me to go for POSB's Invest Saver as it has a lower fee compared to OCBC's BCIP? I'm leaning closer towards POSB at the moment but something else pops to mind. 

 I understand that these 2 options are non-diy and for someone like me who only has his precious weekends to look forward to, it's a godsend. However, is it truly a better option? POSB doesn't allow transfers to our cdp account (not that I have one.. yet) but OCBC does. Is this significant for someone in my position? And how about the diy method? Opening an account through scb and buying stocks through there seems like an idea though I have no clue how to do that. 

 Let me just put across that I have no experience whatsoever in investments but I am willing to learn and make changes to my life haha. 

Need your 2cents!

Hope you can help, thanks! 


I will attempt with my limited knowledge to answer your questions to the best of my ability. I have posted this online, so that other senior bloggers can help in answering any questions with their experience.

I'm happy that my blog has motivated you in some ways to begin saving and investing your money for the future, especially with the increasing political uncertainty in Singapore and our "Under-Happy" population. 

Everyone has their 'one of those days' when they are struct by a certain awakening and realisation of the uncertainty of his/her future and begins to find ways to begin planning.

Since I have not yet enlisted, I do not yet possess the knowledge of insurance that are obtainable in the army. $100 each to your Emergency Fund and Investment Fund sounds good. That leaves you with approximately $300 or so to fund your other expenses. Might I suggest, that you also put aside some money for your Savings? Emergency Funds and Savings should be kept in separate savings account.

For example, I use Maybank for my Emergency Savings, OCBC for my Savings, StanChart for my investments and POSB as my main expenses account.

Personally, I feel that POSB Invest Saver is decent, with a lower fee that OCBC BCIP. It's ideal if you are only planning to invest small sum of money each month. OCBC BCIP may be ideal for higher monthly sums.

Not allowing you to transfer to CDP account isn't really a big deal for me as Custodian accounts work fine. When you're older, you can always use CDP to store shares that you can purchase with CPF money. 

CDP Account is very easy to open. I myself have opened an account but I currently don't use it. Buona Vista :)

Signing off,
Teenage Investor