Recently one of my colleagues casually asked my opinion about current stock market climate. According to him, he did not buy any stock. SO he asked out of curiosity. I replied that it is high uncertain now. Then he said that stock market is dangerous. And this is how I reply:
“Firstly, if you ask me whether you should learn about stock trading, then my answer is no. In fact, it will be wonderful if you never touch the stock market for this life. There are many other ways to invest or you can get a fund manager to do it for you. Notwithstanding my negative statement, the idea that stock market is dangerous is not totally correct. There are many successful investors (besides Warren Buffett) today and they don’t find stock investment in any way dangerous. Think about it. Driving a car is dangerous unless you got a license. While flying, if you get any passenger to take over the cockpit, that is dangerous. But if that passenger also happens to be a pilot, then the danger has dropped to zero! The truth is it is always the human beings that are dangerous. The tools itself is always innocent.”
You may wonder why I discourage that friend from learning about stock investment. Did I slap my own face? No I did no. I discourage him is because I had witnessed so many friends who turned greedy after they earned big bucks from the stock market. The stock market, like any gambling den, brings out greed in us. And when greed and fear took over, logic becomes malfunctioned.
Stock Recommendation
In Part I, I offered 3 options. In this part, I will share some tips if you love option 3. You choose option 3 because there isn’t any decent fixed deposit (or product of similar nature) that offers a rate that is higher than the inflation rate. In addition, you still hope that, with fingers crossed, US will resolve its economic problem and maintain its growth. Actually I hope you won’t choose option 3. But never mind about that. Firstly, to choose option 3, you must be bear the following characteristics:
1) Market may clash when US’s economic problem crystallized. You may have to wait longer than expected.
2) Stock prices may slide further but you are indifferent or you can accept that.
3) Your focus is more on securing reasonable yield rather than capital gain. Should there be any, it is a bonus.
Having said that, this will also mean that you avoid all tech stocks. Browsing through the SGX, many tech stocks are in bad shape now. This will be rule no.1. However, fortunately, there are still fundamental stocks providing reasonable returns. Personally, I recommend REITs. The reasons:
1) REITs have a mandate to distribute income.
2) The rental incomes are pre-secured, i.e. the tenants are unable to back off without paying for default. If a tenant defaulted and paid for damages, the landlord is still able to get another tenant. Price may be different but it is still secured.
The following are the performance of REITs, REITs related funds or funds announced lately...................................................................................
“Firstly, if you ask me whether you should learn about stock trading, then my answer is no. In fact, it will be wonderful if you never touch the stock market for this life. There are many other ways to invest or you can get a fund manager to do it for you. Notwithstanding my negative statement, the idea that stock market is dangerous is not totally correct. There are many successful investors (besides Warren Buffett) today and they don’t find stock investment in any way dangerous. Think about it. Driving a car is dangerous unless you got a license. While flying, if you get any passenger to take over the cockpit, that is dangerous. But if that passenger also happens to be a pilot, then the danger has dropped to zero! The truth is it is always the human beings that are dangerous. The tools itself is always innocent.”
You may wonder why I discourage that friend from learning about stock investment. Did I slap my own face? No I did no. I discourage him is because I had witnessed so many friends who turned greedy after they earned big bucks from the stock market. The stock market, like any gambling den, brings out greed in us. And when greed and fear took over, logic becomes malfunctioned.
Stock Recommendation
In Part I, I offered 3 options. In this part, I will share some tips if you love option 3. You choose option 3 because there isn’t any decent fixed deposit (or product of similar nature) that offers a rate that is higher than the inflation rate. In addition, you still hope that, with fingers crossed, US will resolve its economic problem and maintain its growth. Actually I hope you won’t choose option 3. But never mind about that. Firstly, to choose option 3, you must be bear the following characteristics:
1) Market may clash when US’s economic problem crystallized. You may have to wait longer than expected.
2) Stock prices may slide further but you are indifferent or you can accept that.
3) Your focus is more on securing reasonable yield rather than capital gain. Should there be any, it is a bonus.
Having said that, this will also mean that you avoid all tech stocks. Browsing through the SGX, many tech stocks are in bad shape now. This will be rule no.1. However, fortunately, there are still fundamental stocks providing reasonable returns. Personally, I recommend REITs. The reasons:
1) REITs have a mandate to distribute income.
2) The rental incomes are pre-secured, i.e. the tenants are unable to back off without paying for default. If a tenant defaulted and paid for damages, the landlord is still able to get another tenant. Price may be different but it is still secured.
The following are the performance of REITs, REITs related funds or funds announced lately...................................................................................
