10 Tips For Singaporeans Of Any Level of experience To Start Managing And Investing Their Money Better
When I was 18, I made my first purchase of the stock market. My uncle had opened a brokerage take into account me and smirked, “Go ahead and take part in the market, this will be the best present you can now give you.” “Ha,” I thought to myself, “We are the future – we know what companies to buy. I can be quick, nimble and disciplined. It can't be that hard.”
#1 Start Your Investing Journey Early
Get your feet wet in the stock market. The earlier the better.
It was September of 2007. I was in my first year at the University of Pennsylvania at that time. There were free newspapers throughout campus, as the Financial Times and Wall Street Journal tried to attract the eyeballs from the next generation of Wall Street worker-bees. I had been religiously reading the newspaper and watching Yahoo Finance's top movers every single day.
Finally, the day to make my move arrived. Amazon was at the worst-performing stocks, dropping by over 5% in a single day. With sweaty palms, I then got online to buy my first stock. After Three days, Amazon went up by 7% and I sold. I sat back in my chair a bit light-headed. It felt best to be right. I thought to myself, “If I can keep this up for a year, it would equate to an 800x return!”
Emboldened, I started speculating with the same strategy. I started off with a few quick wins, bringing my one-month return to over 30%. I was trading in everything from big tech, to Chinese insurance, to rising renewable energy.
It is early October 2007. The markets hit an all-time high but cracks were beginning to appear. The subprime mortgage crisis was bubbling and also the stock market started swinging up and down violently. I am still placing my bets. Moving my portfolio interior and exterior stocks that looked primed for a rebound. I kept returning to a very volatile and high-profile solar company called Suntech Power. When i first bought it when it at $45 and sold at $55. Then at $65 and sold at $80. Then bought again at $80.
I went home for that Christmas holiday and told my parents about my stock market successes. My mom, volunteering at a climate change NGO at the time, was so impressed that they too went to buy Suntech Power.
#2 Experience Reduction in Investments
The pain is real, but experiencing it early would be the best thing that can happen to you.
Within the very first week of January, the stock had moved from $80 to $60. I believed I would just ride this out for any bit. Markets were getting really choppy at this time. When Bear Sterns was bailed out and sold to JP Morgan in March 2008, the stock had moved further down to $30. Markets were in freefall and my small-minded strategy was over. I ended up holding on to Suntech Power for some more years. The company ended up filing for bankruptcy and I sold the stock for around $0.80 in 2012.
My loss was not only in my investment value but additionally in missing a great recovery. In only over a year from its bottom of March 2009, the worldwide stock market doubled.
If you are invested at this time, during the fastest correction on record catalyzed by COVID-19, don't let yourself be disheartened and turn away from investing forever. This is an excellent correction for all of us, while your human capital (earning potential) continues to be strong and with a long way to visit. Take the opportunity to reflect on neglect the strategy and understand the difference between investing to grow wealth and gambling.
#3 Start Reading And Understanding About Investing
“Investing isn't nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes.” This is a quote from