Buying stocks is like buying a used car. You have to spend time and attention to make sure that you buy the right stock and pay the right price. Read this article. Do not listen to tips from friends or ask for their advice.
My observation
If you are not sure which stock to buy, buy the STI ETF. It is invested in the shares of the 30 largest companies listed in the SGX. It has low transaction and annual management fee. You can mitigate the risks of investing in this ETF by following the principles explained in Practical Guide on Financial Planning.
Another alternative is to invest in a life insurance policy, provided that you are able to find a product that offers a low "effect of deduction" as explained in that book.
Buying individual stock is a losers' game.
ReplyDeleteWhat tools you have to pick the winners?.. You have better chances at the casino or at the race course.
Problem with the STI ETF is that there is little liquidity since not enough people understand the product.
ReplyDeleteCompare that with the TRACKER Fund which tracks the Hang Seng.
Is it worth my time,money and effort to buy US stocks via a broker here or go online and buy through a online facility with a local brokerage house?
ReplyDeleteAny tax issues with USA / Singapore?
Beware of Tracking Error Risk when investing in the STI ETF?
ReplyDeletehttp://createwealth8888.blogspot.com/2010/03/5-myths-about-etfs-part-3.html
Perhaps because the STI-ETF is an indexed fund with low expense ratio, it is probably a good investment instrument over the longer term -- 5 years or even more.
ReplyDeleteI agree that in the short term, it could be fairly volatile.
Liquidity is also not a big problem for the longer term investor. This usually takes the form of a sometimes significant spread between the asked-for buying and selling price.
Stock punting is not necessarily a loser's game. But one needs to do a good amount of research before buying. Selling is in fact even trickier.
ReplyDeleteThe ideal stock is when one buys to keep and does not desire to sell because it just performs extremely well. So far, I am fairly pleased with the Noble Group.
But I guess nothing is forever.