Author: InvestingNook

How Behavioural Biasness Affects Investment Performance [Part 1]

We often believe that we know what is best for us and that we have the full control over our thoughts, our actions and our lives. That may still be true to a large extent but many decisions we make daily, big or small, are heavily influenced by subconscious factors. You might have unknowingly committed several behavioural biasness that have resulted in your poor investing performance. Yet, you probably attributed your failures to bad luck. The most successful value investors are unlike those Wall Street superstars depicted in the movies. They are humble, intelligent and most avoid the spotlight....

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TheEdge Mid-Year Investment Forum 2019 Q&A

I am extremely thankful to be once again invited to speak at TheEdge Mid-Year Investment Forum 2019. Once again, I thought it would be a good learning experience to share the Q&A with the public for learning purposes. If you are interested in reading the previous year’s Q&A, do click here. Question: How do you see the issuing of digital bank licenses affecting our local banks. This question is probably in reference to the latest article from the Singapore Government here, where the MAS is exploring to issue 5 new digital bank licences. This comprises of up to 2 digital...

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Summary of DBS Market Outlook 2H2019

Having attended the DBS Private Bank 2H2019 Market Outlook event, I thought I share a brief summary of what was being discussed and some of the more popular/relevant questions that were asked during the Q&A session. Brief Summary DBS shared on what they called a Barbell Strategy as seen in the diagram below. It essentially recommends splitting your portfolio into 2 portions – Growth and Income. On one hand, the Growth portion captures the upside potential from exposure to secular growth trends such as Cloud Computing, AI, Millennial Wave, etc. It is the bank’s view that in the age...

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Common Mistakes To Avoid When Investing

Before reading this article, it may help to know that most ‘seasoned’ investors still do make these rookie mistakes. These mistakes are simple but lethal to your portfolio. It may seem innocuous at first glance, but they steal your returns and expose you to huge risks. What exactly are these pitfalls that make them so petrifying? They mostly revolve around having a poor attitude by being ill-prepared. Now, we will introduce to you the following 3 common mistakes investors make in the financial markets! Returns, returns and more returns! Virtually almost every non-value investor is a culprit of this...

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When Investing in Stocks

What does holding a stock mean to you and why does this even matter? Many believe that in the sea of options available, they just have to pick a few lottery tickets to score it big. Why put in so much effort and time in your analysis when in the end, it all still comes down to pressing the ‘buy’ button? We desire immediate gratification without putting in the necessary hard work. We expect to see results by taking shortcuts. It is a universal fact that the financial market has made many investors extremely wealthy, but the fact is...

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Key Metric When Analysing Dividend Income Stocks

In our previous article on Creating Passive Income From Dividend Investing, we shared on how one is able to create passive income from collecting dividends from stocks. I have received quite a few emails from readers sharing how badly their dividend income portfolio performed on the whole after including dividends. In this article, I have decided to share a case study on Singapore Telcos, which would best explain what many Singaporeans have faced and an investment metric they could use to analyse such dividend income stocks in future. Singapore Telcos When I first started out investing in 2011, I...

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3 Reasons to Question Stock Analyst’s Recommendations

Why do analysts’ reports exist? Possibly like sheep, it is of innate human nature that we seek social proof and validation. When we fall in love with a stock we researched on, we actively seek out affirmation in the media. Often, you would be finding analysts’ reports and consensus that are in your favour. The more satisfied you get, the more you want to read up on them. Very soon, you will end up just listening to the analysts’ consensus. The reason why the industry is so lucrative is that it is able to exploit the human psychology. The...

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Why Invest in Real Estate, and Why Not?

The housing market offers a lot of opportunities for many investors as it can provide steady and strong passive income throughout the years. It is rather likely that you know of an individual who has a few properties that yield a tens of thousands a year. In this article, we share the reasons why people have the propensity to invest in real estate and some of the reasons why we tend to avoid investing in that asset class. Am I even eligible to invest in properties? Many investors believe that investing in properties is a rich man’s game. While...

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Creating Passive Income From Dividend Investing

Have you ever heard of stories where others are able to reap tens of thousands a month without working at all? The amount of cash flow they receive is sufficient for them to retire comfortably at a relatively young age. But if you are like most of us and do not possess a huge amount of capital, bringing in thousand-dollar passive income doesn’t seem like achievable in the near horizon. Don’t worry, by the time you’ve read finish this article, we assure you that you will have a clearer direction on your journey towards financial freedom from dividend investing....

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How To Read An Annual Report

In the previous article, we touched on what you should be looking out for in an annual report. We shared with our readers that many investors skim through the annual report and perhaps only go into detail in 1 or 2 sections of the annual report, namely the financial statements. However, we argued that they are not fully exploiting the utility of analysing annual reports. We believe that the annual report reveals much more than such numbers and figures. Hence, we highlighted three large segments that investors should be focusing on, in order. Letter to shareholders Comments and remarks...

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What Should You Look Out For In An Annual Report

Everyone in the financial market knows that if you want to understand about a company, most of the essential information you need are embedded in the annual report. It is very important to know the information you can get out of it and the information you can’t. Only then will you be able to know what you should be looking out for in an annual report. Many investors are very messy in the way they analyze. While this may work for some, having no structure in investing may suggest that the individual is lost. Having no structure also leads...

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Tweedy, Browne: 10 Ways to Beat an Index (Part 2)

This article is a continuation of the 10 ways to beat an index by Tweedy, Browne. If you have no idea what Tweedy, Browne is and what they do, we strongly advise you to refer to the previous article for a complete story. Before we proceed with the remaining 5 ways, we would like to provide you with a short summary of what we have shared with you in the previous article: Invest in companies with characteristics that have produced market-beating returns in the past Invest in both big- and small-cap stocks Statistics and Specifics – Each company has...

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Tweedy, Browne: 10 ways to beat an index (Part 1)

There are numerous studies that have shown that most equity investment managers fail to outperform the stock index over the long term. What this suggests is that most investors are actually better off buying an Exchange Traded Fund (ETF) tracking the index and let the magic happen by itself. Why bother picking stocks when there’s a better and stress-free alternative? There is always an upward bias by glorifying the outperformers by Wall Street. If there isn’t any allure in making your own trades, there are no fees for the industry to be made. Having the full picture hidden from...

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The Importance Of Having A Circle Of Competence

The circle of competence is an idea that is espoused by the legendary value investor, Warren Buffett. Essentially, he encourages investors to stick to what they are good in and stay within that circle. Know what you don’t know and be better at what you know. “You don’t have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital.” – Warren Buffett This doesn’t mean that you should narrow your lens...

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5 Key Traits of a Successful Investor

We believe that every successful value investor shares similar traits and characteristics that had played a pivotal role in their successes. There is a lack of comprehensive studies on the relationship between these traits and success, but common sense and early research have shown promising results. For instance, psychologists have discovered that the level of conscientiousness leads to an increased performance in the workplace, along with intellect and emotional intelligence. Of course, this is unsurprising. An individual who is hardworking and intelligent is more likely to do better in their role. This article will highlight 5 important traits that...

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