Beware of making these money mistakes by Mr Scott Thoma, investment strategist for Edward Jones:
1) Mistake No.1: Not tracking spending. ( no problem for most investors.)
2) Mistake.2: Carrying too much debt. (Invest on borrow money or on margin)
3) Mistake No.3: Everyone likes to think they're savvy investors, but most of us are too emotionally involved to be effective investors.
Mr Thoma says: "Whenever the market is up, they feel good, and whenever risk rises, they want to get out."
He advises people to avoid reacting to every market gyration.
"You can't let the outside environment dictate every single change you make," he says.
(What we need is wisdom, patience & self-control to overcome greed & fear in addition to understand the company business, company value, company growth potential etc and been able to manage risks. Scoop up the steady earners. If they're pricy, simply wait till they reach attractive level. Never chase stocks.)
I find it really tough to find counters i like nowsaday.
When sound global and golden agri took a beating, I took a closer preliminary look, was really tempted to invested, look further, then super sianz... then i look at second chance, again there are issues...
With so many uncertainties in the world environment, falling gold price, low interest rate & on the local front Government property control; Smart money had found its way to REIT. With the exception of Ascendas Reit which just report a poor set of result many of the Reit have torch all time high.
Invest in conservative stocks that grow their dividends every year.
By purchasing and hanging on to stocks that is call “Perpetual Dividend Raisers”
Perpetual Dividend Raisers are stocks that grow their dividends every year, which gives you an annual raise as the dividends increase. Those dividends help you ride out a bear market as your dividends make up for some declines in stock price - plus, dividend stocks tend to fall less during bear markets.
By investing in stocks that raise their dividends every year, over time your yield increases, and what starts out as a 4% or 5% yield eventually becomes a 10% to 11% yield base on your purchase price.
Those kinds of yields alone will be enough to beat the market in most years, regardless of how much the stock price climbs. It's a business that sees constant demand, generates enormous cash flow in good times and bad times.
These are some of the stocks increased in dividend paid out & share prices increased over the year are:
Vicom, Star Hub, M1, Comfort DelGro, Fragrance & Kingsmen Creatives. Most of these stocks may have already fully price in.
How do you go about finding investing opportunities? Are you, for example, a top-down investor who starts with a “big picture” of the world economy and gradually work your way down to see how specific companies may be affected at the micro level?
Alternatively, you might be a bottom-up investor who believes that economic factors and market cycles are irrelevant when looking for investing opportunities. Instead, valuations are more important. So, depending on your particular style of investing, you might focus on yield, growth, value or some combination of each.
Then again you might be a chartist, who believes that the only thing that matters is what a share-price graph is telling you.
What’s interesting about investing is that that there is no right way or wrong way to invest – only what works for you.
Peering down a microscope
But if you want an edge in investing, you may need to look for numbers that are different to the figures that other investors are focussing on. After all, thousands of people are running discounted cash flows and operating various filters, albeit with slightly different assumptions. Consequently, your Excel spreadsheet may not reveal anything significantly different from other investors who are peering through the same lens of the microscope.
That’s not to say that spreadsheets aren’t useful. I use them regularly. However, they may not tell you everything you need to know about a business.
For instance spreadsheets won’t tell you anything about the culture of an organisation. Neither will it reveal customer approval, employee satisfaction or staff commitment.
In my view these non-financial factors can tell you as much (if not more) about a business as its revenues, overheads, gross margins and return on capital can. After all, every business has a human dimension too.
Consider staff turnover rates. It’s not something that you are likely to find in a set of company accounts. However, the rate at which staff join and leave an organisation can provide useful clues about the way that the business is run.
Taking on the giants
Just recently, my colleague Chong Ser Jing and I were invited to visit Singapore’s flagship biotechnology company, Biosensors International (SGX: B20). If I had been invited a couple of decades ago, I would probably have been satisfied with marvelling at the company’s high-tech stent manufacturing capabilities. I probably would have asked some pertinent questions about projected growth rates and the progress of the research pipeline.
But not anymore.
Today, I am interested in finding out how a Singapore-listed biotechnology company can complete with the giant US stent-makers. How could a small local biotech develop a drug-eluting stent that has proved challenging for other scientist?
Looking for the North Star
The company attributes its success to luck. But as Sam Goldwyn once said: “The harder I work, the luckier I get”. In the case of Biosensors International, the hard work is reflected in its ultra-low staff turnover rate, which is no mean feat in Singapore’s low-unemployment economy. The Republic’s unemployment rate is an envious 1.8%.
Tom Gardner, the co-founder of The Motley Fool, once told me that a healthy culture is a wonderful North-star guide point for investors to find the organisations that they also should invest in for the long term.
Thomas Watson Jr., a former president of IBM, said something similar: “To be successful, you have to have your heart in your business, and your business in your heart“, which is appropriate for a company whose business is making life-saving stents.