What is your view towards investing in stock market?

Hi Busky, if they are investors with a few years of financial education or a few years working in finance sector, I would say that investing in stock market is not difficult or risky to them. Once I remembered my teacher, a retired economist (very famous economist, invited by the central banks of many countries for speaking engagement), talking about forex trading. He said that his colleagues, all very experienced forex traders, dare not continue trading in forex after their retirements. Without timing reportings, those traders do not have the courage to engage in forex trading. Whereas "those fools" (his exact words) dare to trade in forex, with 20x margin, without any training or background in forex trading.

I don't want to trade on the forex trading too.I think they are gambling.I want to be the share holder of the good companies such as Tamasek too.

You mean Temasek holdings? Well, you can't. Temasek holdings belongs to Ministry of Finance. However, you can invest in companies are part of Temasek holdings. Keppel Corp, Keppel Land, Singapore Press Holdings, Sembcorp, SembMarine, and my favorite, ST Engrg. Those companies are the pillars of Singapore's economy. There is no way the government is letting them sink.

Hi Grace, I wonder if you have taken up the CFA course? I know that China has the greatest number of candidates for CFA examination. They are taking the right path to learn investment. Knowledge and timing are very important in investing. Your English is good enough to study for CFA. If you are in the finance and investment sector, having CFA qualification is good for you. Even if you are not, at least you are learning about investment and know what you are doing. All the richest investors have at least tertiary education in finance.

scheng1...yeah I agree to what u r saying...I m quite impressed to see that u have already carried out the introspection and have taken the right steps to avoid such mistakes in the future..yeah in India there are many service providers in the sector of on line trading..lots of people actively participate in the online trading ..being very convinient method of accessing the stock market without the botheration og physically moving out...have a nice day ahead..keep in touch ..bye

Hi Ishavasyam, I have sort of using the knowledge to do an investor analysis on myself, and know my risk appetite, as well as investing style. I rather go for long term investment, as long as five years in mind. As long as I do not need the money within five years, I will use the money to invest. And the shares I buy must make money in future. Having say that, when the price shoots up, I will sell and pray that the price will come down, and then I will buy again.

Hi Ishavasyam, actually when I studied for CFA level 1 exam towards the end of 2007, there were many indications that a big crash was coming. I knew about that, and when I studied about those mortgage backed securities, I could see the reason why the big crash was coming. And yet, stubborn me still refused to pull out of the stock market, hard to pull out when the market was rising every day. Anyway, I lost quite heavily too. Later I cut loss and quit from stock market for a year, while consolidating my knowledge, and researched on a few stocks to buy. On hindsight, it was my fault, shouldn't be greedy, and shouldn't be emotional. Instead of saying luck plays a big part, I would say timing is everything. Do you have online trading in India? Over in Singapore, many of us use online trading.

I don't rely on the brokers for any tips.I just go with my own analysis and intuitions.I am in the stock market for nearly a month but have survived to earn something.In fact,I do trading online and is so easy to assess the market trends.The experience is wonderful.Cheers!

Hi Srganesh, I hope you have some advice from your remister. Some of the reports they send out are based on years of research and overview of the economic factors. I do not always agree with the reports (especially the buy or strong buy opinion), but i do enjoy the analysis and the research they have done. Sometimes I would call my trading rep to get a feel of the market, especially when the sudden increase in volume or drastic fall comes out of nowhere. I think you should ask your trading rep to send all those reports to you, after all he's making a commission out of every transaction you make.

Hi Srganesh, that's good for you. You must be good at feeling the pulse of the market. As long as you do not make use of margin, I think the risk is very minimal. Most people manage to pick good stocks, but they are using margin, and do not have holding power. Since you are using your money, and have holding power, you will make a lot in the long run. Even then, I still advise to ask the broker to put you in the mailing list. In that case, you can choose to scan the daily reports or market pulse that your broker forward to you every day.

Hi Canellita, most people do treat the stock market as a form of gambling. They are unwilling to put in efforts to study. The very basis courses at tertiary levels are Economics and Accounting, after that they have to take up Corporate Finance, International Economics, maybe Managerial Economics (to understand the Agency theory), and Financial Accounting. Most investors have at least a basic tertiary education in this area before sinking their money into the stock market. They are able to understand the intrinsic value of the company they are buying, and understand any change in strategy that could impact on the bottom line of the company. I wonder why those people who do not know a single thing about investment dare to put in their life savings into stock market.

Hi Canellita, people here are the same. The older generation, mostly uneducated, since that time Singapore was a poor third world country, and most people did not have a chance to learn to read and write. Even then, the older generation is so eager to sink money into stock market. That's why our teachers said, when you see "uncles and aunts" start to invest in stock market, you know the market crash is near. The younger generation is highly educated, yet lazy to study more. They think that investing is easy, just reading Rich Dad Poor Dad or whatever investment books will do. Actually those investment books provide a broad outline, not in detail about what and how to invest. I think many people who read Rich Dad Poor Dad, and went ahead to buy properties are facing financial disasters now. It's true that buying real estate is the way to become rich, but they forget that timing is everything. And they forget to take in the economy as a whole. Real estate always follows stock market. And Bond market has negative co-relation with stock market. So when stock market is high, do not invest in stock market and real estate, should sink money into bond market. Sometimes a little knowledge is more dangerous than no knowledge at all. After this recession, see whether people will learn a lesson, and really study into investment.

Very few people here invest any time in financial education and even fewer in the lengthy and formal manner you described. Most are hoping to get a hot tip and invest in a stock when the price is really low and then sell when it soars. Here you have to find someone to invest for you and no one is ever willing to explain anything; they just want to take your money and play with it.

Hi Divkris, I do invest in stock market. However I am not a gambler, or use a nicer word, a speculator. I have poured in a few hundred hours and a few hundred dollars to study finance course, even then I have made some paper losses on some of my investments. I am still holding them. Those companies are strong companies, with government backing. I think those who dare to speculate on stock market are really asking for trouble, sooner or later they will learn a painful lesson.

Hi Karen, so sad to hear that. Actually you are better off with index fund, not mutual fund. You will still make a loss when stock market crashes, but the loss is minimized, since index fund has very low fee compared to mutual funds. I hope you can polish up your knowledge of stock market, if you can get hold of Warren Buffet's writings on the annual report of his company, please read. Another book I recommend is Common Stocks and Uncommon Profits by Philip A Fisher. This is one of the investment classics, and being used as textbooks in reputable university for many years.

Thank you for the recommendations, my friend.

Hi Ruby, there is no way to have "gift" in investing. Even if you take a look at Warren Buffet and all other rich investors, you can see that they have at least tertiary education in finance, and they have spent many years in investment sector. Education is the foundation. Without formal education in investment related subjects, such as Economics, Accounting, Corporate Finance etc, investors must read a whole lot of investment books to understand the terminology in investment. Those who do not know and dare to sink their money into the stock market are really asking for trouble.

Hi Tundeemma, agree that stock market is a long term investment. The only thing I do not agree is in the usage of the word "feel", as in feel the price value of shares has gone up or down. I try not to use emotion in investing, "think" is harder to do, and I have to look into the long term perspective of the company that I'm buying into. Recently in the stock market of Singapore, there is a company, Genting, whose shares have climbed very high, double what I want to pay for. This Genting is in casino and entertainment business, the casino in Singapore is still under construction, and the casino business in UK is making losses this year, yet people jack up the price from 40 cents to 80 cents. That is madness. It will take a long time for the company to break even, and longer time for the shareholders to see return in investment. If the price comes down to 40 cents or below, I will consider buying as long term investment.

Hi Faisai, yes, you are right. Yesterday after the stock market in Hong Kong opened, the local stock market followed the trend set by Hong Kong stock market, and we experienced a huge surge in volume and price. While there is reason for the increase for the stock market in Hong Kong, there is really no good reason for the local stock market to increase at this rate. I think the investors or speculators are just emotional, and not acting with logic

Stock market is not rational by nature. Otherwise, there are no people gaining so much while most others are losing their life savings a night. Thus, when we are in the market, we really need to stay calm and know what we are looking for and what our limits are.

Hi Rosyevening, it's true that many people treat stock market as a gamble. They dont even know a single thing about investment. Investment requires technical knowledge and years of study, much like other engineering subjects. All those investors who make money from investment have at least basic tertiary education in finance and accounting. The most basic courses to take up are Accouting, and Economics, after that Corporate Finance, Financial Accounting and International Economics. Without this foundation, I wonder why anyone dares to sink their money into stock market.

Hi Dex1007, if you are willing to put in effort to study, you do not need a mentor or guide, you need information, and many analyst reports. All investors, I mean real investors, have many years of study behind them. The most basic subjects are Economics, Accounting, Corporate Finance, Financial Accounting, International Economics. For those who wants to know indepth and broader, CFA level 1 is the logical step to finanical studies. It's not difficult once you can get the mindset of investors. It's hard in the beginning, because we tend to see things from our points of views, and cannot grasp the big picture of world economy.

Hi Ravirai, it's good to think of growing your money so early in life. Since you are a student, you can check out the CFA level 1 course. The level 1 course is opened to everyone, and will provide necessary knowledge to anyone interested in investment, whether it's stock market, real estate or other form of investment. The course is very tough, but you get to learn so many things that cannot be found in any get rich kind of books.

Hi Ravirai, I'm not familiar with India stock market, and not thinking of investing in India stock market anytime soon. I have been following the performance of certain stocks in Singapore stock market, and reading the financial reports, and analyst reports, as well as getting the market pulses on overall market situation. Busy enough without venturing into unknown territory. Actually I do not recommend playing virtual stocks as a mean to learn about investment, I recommend taking up courses to understand Economics, and Accounting to know how the economy works, and to read the balance sheet.

Hi Dragon54u, I dont use mutual fund anymore, after I put in a few years of effort to learn about investment. I prefer to select my own stock, according to my knowledge of the company. There are some stocks which I have been eyeing on for a long time, hope the price comes down even more. Actually there is a inverse relationship between stock market and bond market. When the stock market recovers, and reaching a high, that is the time to liquidate all your investments in stock market, and buy bonds. Bond price is the lowest when stock market is at highest. Right now in a recession, the bond price is too high, and stock market is near bottom. Last Nov was the worst month in stock market

Haha Nzalheart, "tactics" is not the right word in investing! I can tell you how you gain the fundamentals in stock market investment, however, that means you have to sign up for extra courses in university, and study harder for a longer period. The basic tertiary courses are: Economics, Accounting, then move on to Corporate Finance, International Economics, and Financial Accouting. The next step is to sign up for CFA course. It doesn't matter you pass or not if you do not intend to work in finance and banking sector. The knowledge is comprehensive enough to help you select stock properly.

Hi Basil2004, actually starting from the fundamental is better. Like what Robert Kiyosaki has been saying, reading the balance sheet is fundamental to investment. Instinct will come later, when the fundamental is right. Anyway you are not making actual loss if you are able to hold the stock till market recover. Most people do not even know that once money sinks into stock market, they must prepare to hold for five years. Most people will not make losses if they can hold on to the paper losses.

Hi Machizmo, actually now is the best time to invest. Timing is everything in the investment. Most people invest only when market is going up, to the stage of over-heating. They dont even know how to read the financial reports, and analyze the fair value of the stock. If they could at least read the EPS (earnings per share), they wont invest when the stock market is doing too well. Many people are actually gamblers, pour in money without knowing anything about the company they are buying.