Singapore Watch

Market swings are like roller-coaster rides. The more twists and turns, highs and lows, the happier market speculators are. They don’t make money of buying and holding for long periods of times, but rather they play on the difference in market price within the day or week.

I’ve been on the look out for Singtel. Someone has been selling bulks of it on two separate occasions, bringing the buy price lower than normal. On both occasions, I’ve bought said shares, and resold them a day or two later.

Just today, I sold some shares for a 2.57% profit! More than what one would earn in a year if one had left the money in the CPF account. In fact, I sold off to early, as I wasn’t sure how high the market would go. But I’m reminding myself that a bird in hand is worth two in a bush. Realized profit is better than potential profit.

Of course stock markets are not without it’s risk. If prices had gone southwards, I was prepared to hold and wait for prices to recover, and in the meantime, collect the dividends every quarter (which btw, is still more than interest CPF would earn you).

Current dividend yield = 5.123% (approx)

Ikea @ 5:39pm on a Sunday:

It was packed at the restaurant, and likewise, the carpark. No coffee and tea for us.

Recession? What recession?

(via i can has cheezburger)

I’m still learning the best ways to grow my money. As of now, I only invest in stocks that gives me dividends, and I’m saving towards getting real estate. I didn’t always invest that way though.

In March 2007, I ‘purchased’ 2 investment plans via AIA. One was a lump sum payment, while the other was a regular savings plan of $150/mth. The lump sum investment was made, because I didn’t want my money to be locked up in CPF once the ‘no investment on first $20k CPF rule‘ kicked in, while the $150/mth plan was because financial advisors have always been preaching about dollar-averaging over the long term. Here’s how it has fared as of today:

AIA IGP Plus (lumpsum) is in the red: -38.6%
AIA Achiver (RSP) is also in the red: -32.9%

So I guess it is true that dollar-averaging fare better than lump sum investments.

A year later, in March 2008, somehow I got involved with another fund, this time with Prudential SuperSaver Account. While markets had soften then, nobody knew that there would be a market crash in October 2008. As of today, that too is in the red at a -36.7% loss.

Now note that these are all paper loss. I haven’t really loss anything unless I sell it now. In 10 years time, I’m sure all these will no longer be in the red, but I’m skeptical about what the actual annual returns would really look like. Would it beat CPF’s interest rate of 2.5%?

From April 2008, I slowly started entering the stock market. This time round, my focus was on purchasing stocks that would give me cash, no matter whether it’s market value was up or down. This is known as ‘dividends’. Basically, companies share some of their profits with their shareholders.

Has the economic crisis affected the value of my stocks? Yes of course. As of today, I’m actually sitting on a paper loss of -41.8%. However, that really doesn’t concern me anymore. I acquired these stocks mainly because of the passive income they can give me year after year. Currently, my stocks pay out a combined dividend payment of 18.98% per annum.

Essentially what this means is that in slightly over 5 years, I would have gotten back my capital purely through dividend payouts alone. And I would continue getting dividend payouts as long as I hold on to those shares. Any dividends received after that is essentially ‘free money’, since my capital is already back in my pocket, and should I sell my shares after, the amount I get back is pure profit.

In 5 years time, if the market has recovered, and I decide to sell my AIA and Prudential funds, maybe I would have just broken even (though in reality it’s really a loss as I could have earned 2.5% pa if I had left my money in CPF).

I hope to go one step up and leverage on real estate in 2-3 years time, with the same concept of getting positive passive cash flow each month.

It’s the year of the cow, and this year, I’m planning to find more ‘milk cows’ for continuous supply of milk!

Happy 牛 year!

So Obama won a landslide victory.
Most consider it a watershed moment:
The first (half)black President of America!

I’m glad for the US Presidential Election.
It’s what spark off the short-term stock ‘emotional’ rally.
I don’t expect it to continue for long.

And of course it pays to listen to your stock broker.
Sold off some shares today.
Bought them for $4.1k, made $600+ …
Essentially, I made 15% in less than a month!

The market will fall more.
It’s really a great time for a new investor!
I’m slowly buying stocks at levels I find reasonable.
Holding out for it to tank some more before I go in again.

“Be fearful when others are greedy,
and be greedy when others are fearful.”
– Warren Buffet