Enlightenment on Investment..

Having gone thr the Financial Crisis that the whole world is going thr, I can't help thinking how foolish I was to have put all my investment into a single Basket (Aka Prudential) who not only disappoint me mainly because their investment are so slow and I wasn't enlighted on how to maximise my return except the Agent know how to maximise their return...(Agent always ask u to invest with them forever and ever....True only if the charges are reasonable and dividend are given out)

I failed to realise that they Charges me a 5% Admin Charges + an Annual Fee for investing with them which amount to 1.5%, add in a bid spread of 5% and ZERO Dividends given out.. Do the math on a large sum of investment and you know how much I am lossing out especially when all prices now are so low...I lost almost 30% of my Capital.(1.5% x 4 year is alot and the funds are not performing)

The Good news is that I discover a whole new world of investment tools that are way way better than Prudential. With a friend enlightenment and doing my own research, I realise that I could actually make my money work for me...

The Answer is in Stocks and share, Unit Trust. The Latter is an basket of share investment tools while the former is an investment into a company.

The Investment Cost is minimum,with brokeage fee amount to $25 or 0.28% and no Annual Charges and Dividend Distributions...Yield Can be as high as 10%. It a win-win situation for both investor and broker.

Will start a blog entry series on invesment and my thoughts...probably to share more of mistakes I made in the past as well...

So what Enlightenment Have I gain over this Crisis Saga?

1. Warren Buffett Famous quote " Never Loss money" and Never Forgot this rule

2. Build a diversify Portfolio.

3. Invest for the long Term (3-4 year i Meant, not forever and ever)

4. Set a Target prices to realise your profits (U have to gain something and this is not paper gain I am talking about)

5. Learn the trend, property and bank stock usually ride up rally first...

6. Do Dollor Cost Averaging

7. Invest in Blue Chip stocks and of course company with potential and good capital

8. Investment must have liquidity. Never invest in something that lock u up for years and cause u to loss money. e.g. Structure products, Insurance Endownment

9. Cost of investment. (Remember insurance ILP - Investment link policy charges mortality charges, Insurance Charge + 1.5% Annual Fee + 5% Bid Spread....)

10. Save as much as possible to build opportunity funds and stay invested always

What a painful way to learn all this...but lucky fact is that I still have time to remedy this.....lol

A Course on Forex!! - Plan Toward Financial Freedom

Not been studying for a long long time....But recent days (or months) has been on how I can make my money grow for me....To achieve the financial Freedom where ones does not need to just depend on their jobs....Following the footstep of the World Richest Man --- Warren Buffett.

I Took up a course on Forex Trading....(Don ask me how much it cost....it is the cheapest around though) - Not exactly Warren Buffett Style though

Hopefully I make a correct choice.....reaping the performance here to invest into Equity....But initial Testing of their stragedy seem hard to locate and involve lot of time.....

We shall see, as most of collegues are doing quite ok...learning the trade...

Share Builder Plan

lol, I must be desperate to get rich after losing some 40% of my CPF on pru-links funds. Guess my ignorance and "boh chap" altitude plays apart in this loss and now I'm in a mess of trying to remedy the situation....

Been reading up and finding ways to boost my returns once the bull-run return, but face with an issue....my opportunity fund is not enough...

Came to know about this plan...when surfing some blogs on Financial Freedom. I realise that I can actually do "Dollar Cost Averaging" by investing a minimum sum in the stock market just like the Pru-link Fund, but better as I get to enjoy Dividends and the charges to do it monthly is also lower than that of the PRU-Link funds. (I was thinking to myself who would want to invest in PRU-Link with this Share-Builder plan make available, but note that SBP does not have insurance benefits attached though)

Anyway, I'm committed to this plan. Right now, since I am low on opportunity funds, so the plan is to start off low, on SPH first.

Chosen to go with Singapore Press Holdings, is largely due to the fact that is gives out relative high and stable dividends,~9% plus the PE Ratio is about 10.93, thus is still consider to be marginally under-valued. Since I am doing Dollar Cost Averaging, I'm minmising my risk of prices fluctuation.

" quote from a blog" as a guide....
http://market-uncle.blogspot.com/2008/03/i-bought-sti-etf-on-5th-march-2008.html

• P/E less than 10 implies chances of undervaluation
  
• P/E between 10 and 20 indicates possible fair valuation
• P/B more than 20 probably indicates over valuation, anything above 50 possibly means grossly overvalued

Let's hope that my research is correct. Though market conditions for SPH could be tough giving the recession curbing people from spending...

REITs - Ascott - Low Debt and Capital Land Supported

Been looking at a couple of REITs in the recent months. The Slowdown in the world Economy have create a GREAT opportunity in terms of buying in low....Stock Prices are at some of their lowest pricing now.

Increasing my Passive income is a priority now....For What I define this kind of income as...income that are generate without me doing anything....simple rule is just put your money and get the returns...i.e Dividends...

Gone are days where passive incomes come from banks...aka interest...nowadays, with Bank interest rate so low and...I would be losing money just by putting it there...or worst...gone forever...(lucky Gov Guarantee all saving till 2010)

Took Notice that REITs give good dividend Vs Price Ratio....the only bad thing about REITs is their huge Debts they have and the re-financing issue...

Ascott REITs
First pan-Asian serviced residence REITs
12 strategically located properties in seven pan-Asian cities
Service Residence requires minimum Staff and maintenance cost - Attractive
Not Affected much by Season - More stable occupancy Rate
Longer Lease - More Stable Income.
Successful Refinancing - with most loan due only in 2010, however about 18% is still due in 2009...A factor for concern....?
Subsidary of Capitalland - a "+" factor
Cost of Debt - 3.5%
Dividend Yield ~ 17.4%
NAV ~ $1.47 as of Dec'08
613 Million in Bank Loan

1 pt to note is they out-do their 2007 performance by 37% (Gross Profit). Current Prices as of 20-Mar is $0.41. Been on a Down-Trend since Jan 30....but STI have been trending down as well 1596

My Decision:
To be honest, I'm expecting the STI to fall when Singapore's 1st Qtr Result is announce..sometime next month. Thus, I am not too keen to go into the market to grab the Reits yet.I am Targeting a price of about $0.35, which is most likely a price I would try to queue it for...(Greedy right)...but it current prices look too good....and cheap...

Waiting....

Miss out on Singpost....it now at $0.80...

Been looking at this share....since last year...but didn't go into buying it cos thinking it will go down further...but I was wrong....It shot to 0.80 just this year....been hovering there since...

Market fell this fews days fail to put it down...still maintain...show how "steady" this defensive share is...

It gives good dividends as well...though the latest one is the lowest...but it still worth 2.5cent per share...works out to around $25

Was told they give out dividend on a quarterly basis...that make about a yield of about 9 to 10% interest .......this look interesting....will be monitoring this stock closely...

Target...buy-in price....between $0.69 to $0.71.
Profit sell price .... $1.03 to $1.07...if it ever reach this level :-(

"Bear" period is always a good time to buy in on Blue Chips...their prices are at an all time low...

Looking also at the following stocks but need to do some research before putting my money

• SPH, (High of $4+, but now at $2.73, dividends just issued)
• SPC, Oil Business, (High of $6, now at only $2.28...likely due to the dropping oil prices?)
• Genting (Currently @ $0.46...hold it till IR and beyond...high of $0.57 (30% increase)
• SMRT ($1.69, high of $1.98)
• Reits (Suntec, Ascott, First)

It is the Right time??

Been to 2 of such talks...recently....seems like "short-term investment" is the "in" things nowadays...

What I learn from these talks...
- Learn to look at Facts and Figures...(Didn't know this is a knowledge by itself)
- Never to be greedy (you never learn if you do....Temptation....I see)
- Know what is your target and do your research (Else you would be gambling...and that's a sin)
- Learn to grow your wealth (I like this.....)


Kinda thinking of diverse out my investment options...since All my investment now is always been with insurance company....(AIG rings a bell....real bad mistakes..!!!)

I realise there is a new term to what we usually call "Contra", meaning...trading without cash upfront...and gaining the profits....it known more as "Shorting" ....such a "Sophisticated" name
and the new "slogan" --> Buy Low Sell high....(easy say than done..)

Forex...though consider as a high risk investment seems like an interest options....whereas Stocks and Share are more of like Asset (provide u choose good stocks)....to keep and invest-in.

I am thinking hard now.....it about the lowest point to enter the stock market...soon...as so to speak...(colleagues and friends...)