4 Things You Need To Know Before Entering The Stock Market

For those who have set aside a considerable sum of savings, what usually comes next is how to jump onboard the investing bandwagon and to further amplify their fortune.
Similar to drivers who had just passed their driving test, new investors are usually lost as to what is in store for them on the bumpy roads ahead.
We highlight 4 things you need to know before entering the stock market.
1. Don’t let emotions dictate your investments
History has proven time and again that new investors often make the common mistake of buying when the stock market is high and selling when the market is low, the exact opposite of what they actually want to do. You may think it won’t happen to you, but from our experiences, that is usually the case for a new investor.
A possible reason could be due to the following sequence of events below, which by the way, happens really often.
  1. Investors hop onto the investing arena after the cajoling of their close friends or relatives. They listen to stories about how their peers are making a quick killing in the stock market.
  2. If they are lucky, they start off by losing a little money and decide they need to relook their investment strategies. If they are unlucky, they start off by winning small bets, and are quickly convinced that they have a knack for trading, and can somehow outperform professional fund managers who have many more years of experience.
  3. When a meltdown in the market eventually happens, these investors are usually the last ones to exit, holding on to huge paper losses.
  4. When these retail investors finally see their portfolio wiped out badly, they throw in the towel, usually at the point when the stock is finally bottoming out.
One good example would be the recent plunge in the China’s stock markets: after rising 154% in 4 months, it proceeds to tank 26% in just 1 month, with no end in sight, yet.
2. An investment in knowledge pays the best return
This quote from Benjamin Franklin sums it up best: “An investment in knowledge pays the best return”. Investing in the stock market at the start may seem like a confusing and intimidating process, as you are going head-on with the big financial institutions and savvy veterans.
In today’s context however, interested investors can tap on the numerous online articles and seminars readily available at little or no cost to learn. All it takes is a little effort to understand some basic stock investing principles, which could potentially save you from making basic mistakes that could easily cost you thousands of dollars.
3. Justify your reasons for investing in the particular company
Before you purchase the stocks of a company, you need to ask yourself why you are interested in investing in that particular opportunity. It is dangerous to simply buy the stock due to hearsay or analyst reports about it being a hidden gem that will soar 100% by the next year.
Instead, make sure to scrutinise the underlying fundamentals of the company (e.g. net profit margins, good management, etc.) and focus on the very reason behind this investment you have selected.
This is a concept not to be undermined. One year down the road, the market may go through a rocky patch, or the company may experience some temporary bad news. But as long as you can recall the initial reasons behind your investment, you can remove your feelings from the equation and analyse for yourself rationally what the next steps should be.
4. Investing takes time
Active trading and long term investing are a fine line away from each other. If you aren’t willing to buy stocks in a company and hold them for the next ten years, you really have no business owning these stocks in the first place. The simple but painful truth of this is evident on Wall Street every day. Professional fund managers who jump in and out of markets hoping to beat the Dow Jones Industrial Average fail to do the very thing they set out to achieve.
More importantly, it is imperative to know that good stocks do not have to appreciate just because you bought them. In fact, a good company can sometimes go under the radar despite consistently good earning results. Thus, patience is required in order for our investments to pan out over time.
We hope that the 4 factors mentioned above can help serve as helpful guidelines in your search for many good future investments opportunities in the stock market.

Article was first published on Dollarsandsense.sg, a website aiming to keep personal finance simple.


Step by step walkthrough on Maybank Kim Eng's Monthly Investment Plan

Step-by-step guide to invest in Monthly Investment Plans

In our previous article on monthly investment plans, we compared the various services offered by banks and brokerage houses and how these plans could help retail investors enter into the stock market via dollar-cost averaging without paying high commission charges.

For today, we will take an example of one such monthly investment plan offered by Maybank Kim Eng and provide a step-by-step walkthrough of the platform to explain how you could use it.

Step-by-step guide to invest in Monthly Investment Plans

2. Log in to yourKE Trade Account.

3. Click on "e-Services" tab as shown below.

4. Select your prefunded account (completed previously in step 1), key in the amount to invest and key in the name of the counter you wish to purchase.

5. Alternatively, you may also click on the “List of Eligible Securities” (the 3rd tab on the top) to view or search for all counters available offered under their monthly investment plan.

6. You may search by markets, or search by counter code or counter name. You may also choose to display all eligible securities by clicking “ALL” markets and hit the “Search” button.
Maybank Kim Eng’s Monthly Investment Plandoes offerdistinctive features that we like.

Lots of companies to choose from
The platform allows users to select from 225 counters over 5 different markets (Singapore, US, Hong Kong, Malaysia, Thailand). From what we know, they offer by far the largest amount of stocks that you can select from.

Low commission charges
Even if you were to invest as little as $100 a month, the sales charges still stick at 1%.

Our Take On Monthly Investment Plan

Whether you choose to use Maybank Kim Eng’sMonthly Investment Plan or those offered by other financial institutions such as OCBC, POSB or POEMS, the same value proposition holds true and that is the fact that these plans allow retails investors to gain access to dollar-cost averaging when buying stocks. 

As long as the commission charges remain low and the selections of stock counters are adequate, this will be aneasy and affordable way to get started in stock investments.

Article was first published on K.I.S.S Investing, a website aiming to keep stock investing simple.


4 unassuming Jokes on Accountants

Accountants are often branded as boring people doing routine work day in day out. Now for a change during this relaxing weekend, we take a look at 4 jokes on accountants (no pun intended as I am one myself!).

Story #1
A lady goes to see her doctor. After examining her, he says, "I'm terribly sorry to tell you this, but you only have six months to live." The lady is very distraught, "Oh doctor, what should I do?" she asks. The doctor says, "I advise you to marry a CPA."
"Will that make me live longer?" she asks, hopefully. "No," says the doctor. "But it will SEEM longer."

Story #2
A businessman was interviewing job applications for the position of manager of a large division. He quickly devised a test for choosing the most suitable candidate. He simply asked each applicant this question, "What is two plus two?"
  • The first was a social worker. She said, "I don't know the answer but I'm very glad that we had the opportunity to discuss it."
  • Next came an attorney. He stated that "in the case of Jenkins vs. the Department of the Treasury, two plus two was proven to be four."
  • Finally, the businessman interviewed an accountant. When he asked him what two plus two was, the accountant got up from his chair, went over to the door, closed it, came back and sat down. Leaning across the desk, he said in a low voice, "How much do you want it to be?" He got the job.
Story #3
An accountant dies and goes to heaven. St. Peter, of course, is there, looking through the files and asking a few quick questions. "What sort of accountant were you?" "Oh, I was a CPA", was the reply. "Name?" asks St. Pete. The accountant gives his name and St. Peter finds his file. "Oh yes, we've been expecting you. 
You've reached your allotted time span." The accountant says, "But I'm only 48 years old." St. Peter looks again at the file and says, "Well, that's impossible." "Why do you say that?" asks the accountant.
"Well," says St. Peter, "we've been looking over your time sheets and, based on the hours you've charged your clients, you must be at least 117 years old!"

Story #4
Two accountants are in bank together when armed robbers burst in.
“Everyone empty your pockets! Give us your wallets!” They shout out as they begin collecting wallets, purses, and watches.
The first accountant turns and jams something into the hand of the second accountant.
The second accountant asks “What is this?”
“It’s the $50 I owe you,” responds the first accountant.


Invest In Stocks Using A Monthly Investment Plan

Utilize the dollar-cost averaging method while reducing your commission fee. What is there not to like?

Just a year ago, investing in blue chip stocks listed on the Singapore Exchange (SGX) seems like a rich man's game not meant for everyone. That was because board lot sizes were only available for purchase in multiples of 1,000. In those days, it was difficult for retail investors to invest in all companies, since some stocks such as OCBC would cost roughly S$10,000 per lot.

Since then, minimum lot size have been reduced significantly to 100 units allowingyour favourite blue chip counter to be within reach.

While the above mentioned is helpful for investors who would like to get started without a sizable capital, it poses yet another problem, and that is, the high commission cost that one incurs when buying stocks in small units. Frequently, retail investors still have to pay a minimum fee of about $25 per transaction regardless of the value of the stocks that they are purchasing.

Some stock brokerage houses have introduced monthly investment plansas a way to help offset the problem of incurring significant commission cost. As the name suggests, these investment plans allow you to invest a fixed amount of funds each month into buying the stocks of your choice.

They provide an affordable and hassle-free way for those who want a relatively easy way to invest. In addition, investors are also able to effectively take advantage of "dollar-cost averaging" thus benefitting thosewho do not have the time or the patience to be monitoring the stock market regularly and react accordingly to fluctuations.

Where to go for Monthly Investment Plans

There are currently 4 major players offering monthly investment plans namely: POSB Invest-Saver, OCBC Blue Chip Investment Plan, POEMS Share Builders Plan andMaybank Kim Eng Monthly Investment Plan. Since all of them allow investors to kickstart investing with as little as $100 a month, we will do a minor comparison of the other features with the chart below to understand the differences and similarities. 

Maybank Kim Eng
Share counters available
ABF Singapore Bond Index Fund & Nikko AM Singapore STI ETF
18 local share counters & Nikko AM STI ETF
19 local share counters
225 share counters across 5 markets (Singapore, USA, Hong Kong, Malaysia and Thailand)
0.5% sales charge per transaction for the ABF Singapore Bond Index Fund
0.30% of the total investment amount OR S$5 per counter, whichever is higher
≤ 2 share counters: $6 for inv. of $1,000 and below, the higher of 0.2% or $10 for inv. above $1,000
1% sales charge for inv. < S$1,000
1% sales charge per transaction for the Nikko AM Singapore STI ETF
 ≥ 3 share counters: $10 for inv. of $1,000 and below, the higher of 0.2% or $10 for inv. above $1,000
0.18% sales charge for inv. ≥ S$1,000; subject to min. of S$10
Cash credited to DBS/POSB debiting account
Cash dividends credited to OCBC account; Stock dividends or bonuses safe-kept with OCBC Securities
Dividends are being reinvested but charged 1% on net dividend capped at $50
Dividends are credited into the Maybank Kim Eng account directly.

At first glance, POSB and Maybank Kim Eng stood out from the rest in the "Share counters available" category. The former is able to put forward the opportunity to diversify into bonds while the latter has more than 10 times of the counters as compared to OCBC and POEMS. In fact, being a newcomer to this market, Maybank Kim Eng is now offering zero commission for the period from 1 March 2015 to 31 August 2015!

As for the fees, assuming we invest S$1,000 monthly in just the Singapore STI ETF, OCBC turns up as the winner for its fees of S$5, equivalent to only 0.5% charge. Then again, considering a quantum of S$200 monthly, POSB and Maybank Kim Eng turn out to be better options due to their standard 1% sales charge; which would translate into S$2 as compared to S$5 and S$6 for OCBC and Poems respectively.

Last but not least, the dividends are usually credited to each bank's own account except for POEMS, which would reinvest it back back with a 1% charge on the net dividends (after tax if any).


Monthly investment plans are a relatively new approach to investing which is suitable for people who would like to adopt a long-term view in investing due to the beauty behind dollar-cost averaging.

Do you think a monthly investment plan will help you better invest in stocks? Discuss it with us on Facebook.

DollarsAndSense.sg is a website that aims to provide interesting, bite-sized financial articles which is relevant to the average Singaporean.

Written By: James Yeo


5 things to look out for when opening a stock account

For most people who are interested in investing, deciding to open a stock brokerage account is typically the first step to take in the investment journey. However, with the numerous stock brokerage firms available out there, selecting one over another could prove a daunting task.

Here is a simple guide on what to take note of when opening a stock brokerage account and the questions you should be asking.

Opening a CDP account

Before you can start trading, you have to first open a Direct Securities Account with The Central Depository (CDP).

The CDP account is owned by the Singapore Exchange and basically acts like a central storage place where all the local shares that you have bought are ‘kept’. To open a CDP account, you must be at least 18 years old and not be an un-discharged bankrupt.

There are 2 ways to open an account. 
(i) One, when you open your first brokerage account, the brokerage firm will assist you in opening a CDP account and automatically linking it to the trading account. 
(ii) Another way is to open an account directly with CDP itself via their online platform. Any subsequent accounts that you start with other brokerage firms will be linked to the same CDP account.

5 Key things to look out for when choosing a stock brokerage account
This brings us to the next question: which stock brokerage firm should you consider? A brokerage account is an account through which you will do the buying and selling of shares. It is usually tagged with a brokerage firm (e.g. UOB Kay Hian, Maybank Kim Eng), which will transact trades on behalf of the instructions of its clients.

Here are some important considerations to take not of when opening a brokerage account.

1. Fund Transfers:

If there is a need to transfer funds to the brokerage company where you purchase shares, some readers might find it more convenient to open a brokerage account with a bank that they already have a saving account with. For example, if you have aDBS account, it may be more convenient for you to open a brokerage account with DBS Vickers.

2. Level of Support:

The level of support received is important. We think it is essential to have someone whom we can call to when we have queries, whether technical or otherwise. Most of the brokerage firmshould provide this service, though the level of service received depends very much on the trading representative that is assigned to you.

3. Starters Pack:

If you are new to trading, you will need to start from somewhere. Some of the brokerage firms have introduced starter packs for investors who are new. For example, OCBC Securities have the OCBC Young Investor Pack, which offers commission rebate for the first trade and other support services. The CIMB Securities Youth Engagement is another such service worth considering.

4. Risk of Default:

Your brokerage firm defaulting is definitely an issue you DO NOT WANT to be concerned about. We can safely say that the risks of brokerage houses defaulting are very slim due to stringent regulations that MAS imposes. Nonetheless,a low probability does not equate to zero chance of the incident happening, as seen from the failure of MF Global.
One suggestion is to choose local brokerages that are generally safer as their regulatory standards are typically more stringent.

5. Commission Fee:

When an investor purchase shares, they have to pay a commission fee for the brokerage company to transact on their behalf. Bear in mind that this is a two-way charge. A commission charge is payable during both the purchase and sale of shares. 

Because the industry is so competitive, most of the rates offered by brokerage companies are quite similar and you shouldcheck out the rates offered from the different brokerage house.

6. Other Services:

In recent years, it has become more common for brokerage firms to offer affordable investment plans that enable customers to choose and invest in stocks via a regular monthly investment plan that could be as little as $100 monthly. Most of these investment plans are only accessible to those who already have a brokerage account with the firm. 

Hence, if your intention is to tap on some of these features, it will be good to consider a brokerage firm that offers this service. Example includes the newly introduced Maybank Kim Eng Monthly Investment Plan, which allows users to select from up to 225 stocks across 5 different markets. 


Singapore O&G Balloting Results (Public Tranche 332 times OVER-Subscribed!)

As I have mentioned in my previous post, I said that SOG (Singapore O&G) is pretty much going to be a great hit. and how true it is; just take a look at the balloting results below:

A total of 730 million shares are applied for only 2.2 million shares, a whooping 332 times subscription rate!

On a side note, it seems the higher chances of getting a successful allocation goes to those who ballot for 1 lot. For those who do not know how to read the ratio; take for example for the 10 to 49 lots band, the chances of successful allocation is 7.07% (7/99).

Good luck to those who are successful in the application, the stock will definitely get a pop in the morning 9am.. As for me, I will be waiting by the side to await a chance to get in again through the open market then...


Is Singapore O&G (SOG) going to be another Healthcare IPO darling?

The new kid on the block to join the Booming healthcare fraternity is Singapore-based healthcare firm, Singapore O&G Ltd ("SOG" in short). You can find the IPO Prospectus here.

According to its propectus & factsheet, SOG is a niche player in the healthcare industry as it focuses on the women's healthcare, with middle-level professionals as its main target audience. Thus, their primary focus is skewed towards the following: pregnancy care and delivery, the female reproductive system, and gynaecological and breast cancer.

SOG's total of 8 clinics are situated in five different locations as highlight below:

  • 2 clinics in Parkway East Medical Centre, 
  • 3 clinics in Gleneagles Medical Centre, 
  • 1 clinic in Thomson Medical Centre, 
  • 1 clinic in Mount Elizabeth Novena Specialist Centre 
  • 1 clinic at Cassia Crescent.

In case some people are not sure, Gynaes often work by themselves but are stationed across different clinics for the usage of the equipment and stuff. I searched for one doctor (Dr Beh Suan Tiong) based in Thomson Medical and found out he got his own website -> http://drbeh.com.sg/.

The way i see it, this company is formed by several gynaes with the aim of doing an IPO and expanding beyond their individual medical practice (something like what Q&M Dental has done years back).

Details of IPO

From the picture seen on the left, its a rather tight timeline to subscribe for the public tranche of 2.2 million shares while 
41.4mil will be placement shares.

The shares are offered at 25 cents a piece and will be listed on the Catalist board.
If fully subscribed, the company will raise S$10.9 million through the public offering. The company will use the IPO proceeds for working capital, to enhance investments in healthcare professionals and synergistic businesses, and also to expand its business operations.

Financial Performance & Investment Merits

A picture is worth a thousand words so i shall let the 2 pictures do the talking below. The main gist is that the company's financials are in good shape, with a steady increase in profits. What amaze me is the 35+% net profit margins.. it just shows how profitable delivering a baby is (milking our monies everytime we go back for a 5min checkup!~).

My thoughts

People may think that by distributing 90% of the dividends, the company is becoming more like a cash cow and unlikely to grow in strength from here.

However, by doing a comparison to the time Q&M dental was listed (in yr 2009);
they actually started off the exact same way. Fast forward 6 years and their share price just skyrocketed >100%! over the past year on the back of a string of acquisitions being announced.

Personally, i feel that this IPO will garner lots of interest due to 3 main reasons:
  1. Just look at all the healthcare stocks in Singapore (Talkmed, Q&M Dental, Raffles Medical etc.) and how their share prices have shot up. SOG would do well to ride on the healthcare boom right now.
  2. Healthcare industry is one highly predictable industry, as we can easily visualise on how the private sector is serving the affluent market. In most cases, people want to give the best to their family members and would not scrimp on this.
  3. High net profit margins and huge free cash flow are 2 important metrics for a company to expand steadily without any burden of debt. 
  4. Lastly, a moderate P/E ratio of 12.82 (based on FY14 EPS) and potential 7.3% dividend yield are deeply enticing.
With that, i wish my readers all the best and Huat Ah!


What I Learnt from my World Cup 2014 Bets

Just a couple of weeks back, I was sharing on how to bet on world cup through Singapore pools at the convenience of your house. Maybe it was too convenient for me~

Unfortunately, I got wiped out even before the Semi-finals and Finals (just like the England and Spain!).

Nevertheless, while i was mildly affected, I would also like to share a few Random Thoughts and Lessons I believe would be beneficial to you or amusing perhaps (where you laugh at my losses :/)

#1 There is no such thing as a change in fate/fortune even after things have gone awry for some time. 

It is like what you often hear in casinos: "It will surely be Black (or Red) this time round!" even after the same color has appeared for more than 5 times. The same goes for both soccer betting and forex/stock investing etc.
In relation to stocks, I have this saying to share: What goes up can continue to go up and what goes down may stay there permanently too.

#2 Betting on the exact score is like speculating on a Penny Stock

Checking out the odds for every match can be exciting (and it has proven to be too much excitement). "What is the quickest way to earn big bucks!" -> through high risks of buying an exact score!
And failure is what I achieved. Pain is what people who "invested" in penny stocks like Blumont and Asiasons experienced when they fell almost 80% in 3 days.

Most often than not, even if you got the luck to strike it big once (e.g. earn big money on one penny stock), it will not work its charm all the time. What can go up can come down and the only thing that can differentiate this is by looking at its underlying fundamentals.

#3 Looking at the "Professional Opinions/Reviews" is like listening to the Stock Advisors

Look at Spain and England. Look back at what the "Experts" have said about them, some even say Spain can be in the top few teams. One key thing to take away from this is that sometimes they may be right too, but you have to do your own research as well.
The person promoting a pan will always say that the pan is fantastic and awesome! You are the only person who knows what is best for you~
Same for Investing - No one will take care of your $$ for you if you don't master the basics in stocks investing yourself!


I didn't know once that I can come out with a few theories that link back to investing through just a few simple bets. Even though soccer betting is tempting and the fact that it happens once in 4 years make many people want to place down huge bets to enjoy the Feeling (be part of it); it is advisable to advocate a limit on the bet amount.

Nevertheless, I hope that you have learnt something from my post and can "Like" my facebook page at www.facebook.com/kissinvesting. Lastly, Go forth and Enjoy the next few big matches coming up this week!!!


How to Bet on World Cup 2014

To many people, World Cup is not just watching 22 people kicking the ball around.. (like what the ladies always say)... it's time to fulfill our betting urges!

Nevertheless, just a word of advice, please curb your gambling bets to a sum you can control and only go for legal operator like Singapore Pools.

Singapore Pools
They even set up a World Cup website for people to sign up online and bet through making a phone call easily. Registration is here.

***Update*** I think that registration is a breeze! No need to queue up with many people all the time and just need to pay $1 for each top-up (in my case, I just play for fun with $500... :D)

Furthermore, they have these 4 places to allow people to watch the matches live there as well. I believe when it comes to quarter-finals onwards, people will all be gathering there and basking in the atmosphere together as well!


There is now even an App where you can look at the odds at one shot! & nope, its not created by me...
Just find it interesting to share with you all... Not bad i would say...

Lastly, just a video to keep your hormones under control...

Hope everyone (including me) win lots lots! HUAT AH!!!