Tuesday, May 24, 2016

3 simple steps to start stock investing

I seldom have guest post in my blog. In fact, almost never. But since I'm using Investingnote as my preferred charting platform and Evan who is our guest writer below is from Investingnote, I don't mind sharing this space with him.

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In a previous article titled ‘5 reasons why stock investing is so difficult to start’, I’ve mentioned the reasons that often become excuses, serving as inhibitions to the journey of stock investing. Many people have asked me how to address these reasons and the answer is simple: confidence.

However, not many people notice that it is their lack of confidence that affects their first step to investing, as opposed to risk appetite.

These are the 3 simple steps to boost your confidence, which will help you make your first investment.



1.Acquire financial literacy

Financial knowledge and literacy is essential for anyone to start investing. The fundamentals of stock investing are best found in their original state: books. Learn financial terms, explanations, logic and theories traditionally at your own pace. Grab a coffee and start hitting the books like you’re a student again. 

The only drawback? There are many financial books out there that are similar but different. In that case, maybe just textbooks will suffice? 



Alternatively, you can also go for courses conducted by stock educators. Most courses require a fee to attend, but some are free. The SIAS and SGX Academy both provide some basic investing courses for free. You can check them out here www.sias.org.sg or www.sgxacademy.com. Otherwise, there are many organizations and stock educators out in the market that charge a substantial fee for advanced courses. 

Also, start reading business and financial news that often highlight the more important things. For example, what affects the distribution per unit (DPU) for Real Estate Investment Trusts (REITs)? How do companies restructure in recession to sustain equity value? How does economic data like purchasing managers’ index (PMI) and non-farm payroll affect markets and stocks? What stocks are most affected by currency and interest rates?

News will highlight the important things that every investor should know. While saving you a fair amount of time, it also lets you familiarize with the myriad of financial terms and jargons, and keeps you updated on market happenings. 


2.Practise through simulation

Regardless of whether you choose to get the basics via the traditional way of reading books or by attending some courses, the overall learning process is incomplete without practice. What better way to practice other than simulation? 

Simulation boosts your confidence by allowing you to mimic the actions you would take in reality, without having to bear the costs. 

Practising through simulation is also particularly useful to gauge your own investment decisions. If you’ve predicted the stock price to either go up or down, simulate the trade. This way, you can know how accurate your analysis is. 




3.Learn from experts

The last step for your journey in learning how to invest is to learn from professionals or experienced investors themselves. Start attending free talks, seminars and fairs. Invest Carnival, Invest Fairs and private seminars are often held by ShareInvestor, SGX and brokerage firms like PhillipCapital. Attending such talks and seminars given by experts will give you a better idea of the significant things that are relevant to beginners.

If you’re the keen learner who’s always asking questions, try leveraging on the experts found on social networks like Facebook discussion groups or the social trading network InvestingNote. Being within a social network not only allows you to see what experts are thinking when they post, but also includes you as a part of the stock investing community. Never be afraid to ask questions and interact with the experts and the experienced. Learning is at its best when transformed into a two-way interaction. Information becomes communication and it empowers personal learning. Also, keeping up to date with the latest financial news and trending insights will give you that edge which traditional textbooks won’t. 




It becomes a virtual classroom. It’s almost like you’re having a tutor at your fingertips, except that there isn’t only one but many. By tapping on social networks, it will expand your personal network and interaction with experts and the experienced who are otherwise remotely located. 

If you’re lucky, you just might find an expert whose investment style suits you the best and doubles as your mentor. Mentorship is equally as important when it comes to stock investing. 

After you’ve taken these 3 important steps, you will gain more confidence to start investing, and build good investing acumen.




At which step are you currently at now?  


Written by Ethan Ho 
From InvestingNote

The social network exclusively for stock investing, InvestingNote is a free, social network platform designed specifically for crowdsource investment ideas, news and interaction for the stock investing community. Besides having access to stock data, users can upload research reports, utilize technical charts and make stock price targets that will be visible to the entire community. Users can also gain reputation points when they have followers, likes and posts. 
www.investingnote.com

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I've been using investingnote for some time and I still think their online charting platform is still the best out there that is not tied to any brokerage. And of course it's free. Personally I'm using the charting services only and not so much about the social trading. But I must say, the community there is actually quite friendly. I'm sure there are people out there who will help you if you genuinely seek their help. Just do yourself a favour and don't just trade on the recommendations there. Trading ideas and talk are free, so do your own due diligence. If you can't make money, at least learn some lessons. 

9 comments :

Rolf Suey said...

Hi LP,

I cannot rem if this is the second the guest blog post I read. Do it for awareness ok! Do sponsored / guest blog just for money....ermm!

Anyway, good pieces of advices! By the way, there are some very aggressive quite annoying people just want you to publicise their financial webpage for them so that they can earn more money from the publicity. It is always only for them and them them only, and you are just their tools! A smart person always do it mutually for long term.

Maybe hard on income!

As direct as I am, sometimes I wondered if darn good investment people really want to teach investment for money, why dun they spend more time on themselves earning the money from the market. Why spend time on teaching others when you still need the money quite desperately for a living.

To be very frank, if you still need money quite desperately for a living, and you are merely teaching investment because of the income (or so call passion), I am quite sure you can never achieve breakthrough in your investment or in life.

So far, I have not encountered a great investment names historically that grows rich via teaching and invest at the same time. Normally it is after they become successful and do not need to work for money anymore, that they go into teaching.



la papillion said...

Hi Rolf,

haha, I agree on that :) This one I willingly do it for free (and I did) since I really think the site is good. I use it daily, so I put my money where my mouth is. I'm usually quite discerning regarding guest post lol

Hmm, let's just say that great investors are usually good at teaching, but those that are good at teaching might not be good investors themselves LOL

Singapore Man of Leisure said...

LP,

I can't let this opportunity go to waste when the opening is as wide as a Jumbo jet!

OK, its not the same since I'll be poking you vicariously ;)

You naughty. Holding hands with snake-oil.


Only point 1 - Acquire financial literacy - can't be faulted.

Points 2 and 3 pure snake-oil through and through. I help you; you help me. I herd sheep to your "free" seminars, "free" platforms, they do the rest.


But for those of us who can pick the "free" cheese without triggering the mouse trap, then its all good :)

la papillion said...

Hi SMOL,

Hahaha, I think for point 3 - learning from experts - I did that by reading. In fact, most things can be learnt thru youtube and reading these days, it's just whether pple wants to do it. Oh well, if they do, then maybe I won't have a job to do also haha

I used to use chartnexus, but these days, everything so mercenary. Even historical prices up to 2 yr or so. And can't even save my charts after I opened 5 of them. Ridiculous.

Singapore Man of Leisure said...

LP,

Exactly!

One should build up one's financial literacy - through self help or self study first!

When we can tell apart fresh fish from stale fish, then we can attend "free" seminars, fairs, carnivals; etc.

Somebody has to recover the costs for organising these events. Better the "bei kambings" than us ;)

"Free" can be very expensive...


temperament said...

Are seminars on investing really free?
Don't think so if you have not used their brokerage how come they invited you?
But once in a while seminar organisers do throw their net wide open for public trawling for newbies.
All seminars free or not have their own agendas.
Even reading from some internet websides may have their own agendas.
The best is to have your own real free "limitless seminar" at the NL.
Ha! Ha!

temperament said...

In fact i know a friend who was invited for a quite "luxurious dinner at RWS OR MBS for free.
After dinner he was pressurised to invest in a coy that invest in "land banking" in Canada or some foreign country.

Kudos to my friend, he managed to escape this reciprocity trap.
Me too have experienced this "reciprocity trap" by some Bank's RMs.
The first time you encounter such "trap" it's not so easy to escape.
Of course it's all a scam or guarantee you lose money investment.
i also know someone who has been scamed to the tune of 300K in investing in a land banking coy.
Gone case lah!
So!
Beware of reciprocity trap by Snake Oil Sale-Man.
Beware even more from some of the people "closest" to you.
If you expected the unexpected, the unexpected will expect you.
Don't play, play with you lah.

la papillion said...

Hi temperament,

Thanks for sharing :)

I know about reciprocity principle, hence I'm generally very reluctant to let strangers treat me. If we let our guard down, then it's easier to get convinced, so I try to reduce the chances of that happening. The problem is that we sometimes didn't think too much, and when we look back at how silly we are, it's because we've been manipulated to behave in a certain manner.

Good reminder for all of us.

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