Tag Archive | "investment"

Singapore residential property snapped up by mainland Chinese buyers

Singapore residential property snapped up by mainland Chinese buyers

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Mainland Chinese made up 7.6 percent of total sales in Singapore in a three-month period this year.

The latest figures released shows that mainland Chinese buyers formed the biggest group of foreigners to purchase property in Singapore.

In the second quarter of this year between April and June, Chinese buyers bought 640 properties, which is 100 more units compared to the previous quarter.

This amounted to 26 percent of all purchases made by foreigners, or 7.6 percent of total property sales in Singapore in three months.

The mainland Chinese are attracted to property here as the market is less voilatile.

A majority of them would buy more than one unit: A three to four-room apartment to live in and perhaps another one or two- room apartment for investment purposes.

However, the overall picture shows that foreigners in general are driving up the demand for high-end residential properties locally.

Foreign buyers purchased 43 percent of all properties that were sold for S$1.5 million or more.

In comparison, Singaporeans are entering into the lower end of the property market: They bought 75 percent of all properties that cost S$500,000 or less in the same period.

Read the original article here.

Is HDB a good investment?

Is HDB a good investment?

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A cautionary tale

A cautionary tale

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With a bigger appetite for risk comes a higher possibility of failure.

By Alex Lew

Photo credit: reason.com

THE banking and investment careers are the aspirations of numerous young adults. Why so? I suspect it has to do with the promise of wealth and the opportunity to learn about investments.

Regardless of one’s personality, lifestyle, background or interests, investing is certainly an intriguing topic. Let’s start by discussing the dictionary definition of the root word “Invest”.

It says, “To put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.”

To invest, one needs to commit time and money into an instrument that will either appreciate in value or return an amount to the investor.

An investor should expect to sacrifice current consumption for a greater amount of return in time. The longer the period of time, the greater the sacrifice and therefore, the greater the expected return. All investors should be entitled to such expectations.

This opposes the claim by speculators and gamblers that they are able to generate a return without reasonable sacrifice of time or capital.

Often, we see “get-rich-quick” schemes on newspapers and on the Internet. They seem to suggest that there are ways for an individual to generate super returns within a short time with little capital committed.

However, only 4% of diversified US stock mutual funds have beaten the performance of the S&P500 index over the past 10 years.

If professionals cannot beat the market consistently over a significant period of time, why would young investors think they realistically can?

Let’s return to the basics of prudent investing. It all starts with savings and watching out for one’s consumption pattern. If one saves a significant amount of the gross income and invest into a diversified fund or a low cost exchange traded fund, the returns over one’s entire adulthood can be amazing.

If one saves $500 per month over 30 years and commit the money into a market replicating fund which generates 6% over 30 years, the individual would have close to $3 million!

Am I discouraging investing in single stock? Definitely not! My intention was to show the importance of investing consistently with a reasonable basis.

Photo credit: perculaclown.net

What is reasonable basis? Let me explain. Returns are unpredictable. All we know is that the market grows at a certain rate and the rate becomes more consistent the longer the time period. What we can control is the cost/expense of our investment and the level of diversification of our portfolio.

So, there is absolutely nothing wrong if you trade with a low cost broker and diversify your risks prudently – globally and across sectors and instruments.

A tip: young adults should be slow to action, patient in understanding and quick to listen and read.

Finally, the concept to investing may be applied not only to money, but to education, emotional stability and relationships. If you commit time and effort to studying and maintaining healthy friendships, the returns will likely be greater satisfaction!

Alex Lew is not a professional financial advisor. Readers should take advice from a qualified F.A before purchasing any instruments.


We all need to make more money – get real and stop whining

We all need to make more money – get real and stop whining

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Investing in stocks and shares is a sensible option, so long as you do your research.

By Ow Zhaohui

LET’S FACE it. Singapore is country dictated by money. That’s what drives the nation, the economy, and the infamous kiasu work ethic. From the expensive foliage dotting our well-maintained roads, to the public transport that does not break down often, one only needs to look around the region to see how truly we live above the Southeast Asian norm.

Yet this transition to a first world economy has paved way for the rise of self-proclaimed moralists that champion loudly: ‘chase your dreams!’ (seldom thinking about the consequences of getting burnt), ‘follow your passion!’ (instead of economic prerogatives) and the crowd favourite: ‘don’t do it for the money!’.

Please. We live for our dreams, but we also live in a world where we can’t do without material needs.

If you’re, like me, between the 26-30 age bracket, you’re probably wondering why your income isn’t rising nearly as quickly as the cost of living. You probably are skilled in some area and have the ability to bring home some cash at the end of the month to sustain the next month in the mill.

Faced with this scenario, you would probably be looking hard for avenues to make those numbers in your bank account go up so you can make your dreams happen.

Or you could knock your head against the wall demanding that the government makes things affordable for everyone out of ‘fairness’ and ‘equality’. Better still, you may even demand that the government do more to curb speculation (aka what most people do in the above paragraph), making it difficult for people to win big or lose big.

The 2008 recession together with the minibonds fiasco has brought a blanket of pessimism over all investments in general, as kindly espoused by a certain Mr Landon Leo:

This article IMO is already attempting to bring execution onto the table right from the start, which is extremely risky for any young investor. The phrase ‘Ways to make money’ by itself has a very strong draw on the internet (just do a google search and you will know). Yet 90% of investors/traders lose money regularly.

He’s not entirely wrong. Most people on average are more likely to fail than succeed in the stock market. But is this any reason to believe that one should therefore never take risks? Think about it – by investing, one at least has a shot with an income multiplier. By not doing anything, you are in fact, losing out in the long run.

Investment also comes in many forms, with different levels of risk mitigation. You are not entirely at the mercy of casino capital.

Besides high-risk stocks, there are bi-weekly lottery draws, the weekly turf club races, two round-the-clock casinos and the back alley dens where many can double or triple the capital amount pronto.

These options are high risk with very little way increasing one’s chances for success – not such a smart idea to place your hopes and dreams in them. Mr Landon Leo would probably be better off addressing his accusations at these gambling addicts.

A more sensible option for income multiplication would still be stocks, the foreign exchange, real estate, commodities etc. The more knowledge you have, trawled from the library, online or elsewhere, the better you can predict the behaviour of your stocks and the higher your chances of finding a winning stock option. It’s as simple as that!

Undeniably there is still a high chance that one could make losses but hey, it is measured risk. The onus is on the investor to make the best choice possible, according to his or her risk appetite.

2010 saw increases in housing prices, car prices, inflation of 3.5% and if you out there reading this have started to feel the heat, you are not alone. The cost of living is increasing and we’re fighting an uphill battle to keep our incomes multiplying as quickly as our expenditure.

I’m not trying to paint a rosy picture of the stock market but in my opinion, it surely makes much more sense taking some risk and trying to multiply one’s own income than whining about how expensive everything is when nothing much can be done!

Ways to make money with stocks

Ways to make money with stocks

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Part one of the series “How to start investing in stocks and shares”.

Investment speak

Sound like a pro in no time

Stocks and shares: These two words are often used interchangeably to denote certificates indicating you own a portion of a company. Stocks are a kind of equity instrument.

Equity instrument: Documents indicating that you own the rights of ownership to a firm.

SGX: Short for Singapore Exchange, a holding company which owns outstanding stocks from other companies. Outstanding stocks are those issued to outside investors.

Mainboard: In the SGX, Mainboard is a market catering to established companies.

Catalist: Also in the SGX, the Catalist market caters to fast-growing companies.

Volume: The amount of trading activity associated with a stock during a period of time.

IPO: Short for Initial Public Offering, it is an event where a company offers stocks to the public for the first time.

Blue chip stocks: Stocks from well-established, well-known, and financially sound companies.

Capital gains: The profit resulting from investment in stocks and shares.

IN THE stock market, stocks are often referred to as equity instruments. After investors purchase stocks or shares, they become shareholders or owners of a company.

Once the shares of the company are listed on the stock exchange, the shareholders can sell their shares in the market at any time.

There are about 774 listed companies (Mainboard and Catalist) on the Singapore Exchange whereby you can buy shares from. The volume and price are determined by the supply and demand for those shares.

There are different types of shares, including: ordinary shares, preference shares, loan stocks, and so on.

When a company issues an equity instrument like stocks, it is done through a process called an initial public offering (IPO). In this case, public investors are invited to buy “ownership” or subscribe to pre-determined prices of a company.

Two ways to make money

Dividend Payments: Investors can make money from yearly payout dividends from the invested company. Generally, bigger and established, listed companies are popular with investors because of their track record of consistently churning out profits. They are considered blue chip companies.

The company’s board of directors will reserve the right to declare dividends. Regardless of the company’s performance, the board of directors have the option to either pay out dividends for shareholders, or reinvest the profits back into the company.

At the company’s annual general meeting, shareholders also have a “voice” in major decisions like issuing dividends. However, voting rights are proportionate to the number of shares held by shareholders.

Note that the dividends received by shareholders are taxable as part of their taxable income. However, capital gains from shares are not taxable, and losses cannot be deducted as expenses from your personal income tax.

Capital Appreciation: When you buy a share at a low price and sell at a high price, you can make money through capital appreciation. The movement of share prices are dependent on a variety of different macroeconomic and microeconomic factors.

In terms of the macroeconomic factors, the stock market is dependent on how well the global and local economy performs. Good profits from companies tend to translate into good share prices. Stock markets tend to move ahead of the economy and therefore investors should pay particular attention.

Another factor that will affect stock prices might be rising inflation as it eats into companies’ earnings by raising costs. Inflationary pressures also signal an overheating economy that will prompt authorities to raise interest rates to cool the economy down.

The stock market usually moves in the opposite direction of interest rates movements. Falling interest rates make shares look attractive as other traditional investments like bonds, or fixed deposits offer low returns.

Microeconomic factors deals with the actual performance of the company, hence the importance of finding promising companies through the process of fundamental analysis. The criteria for analysing a company’s performance include financial ratios, nature of business, quality of management, and growth areas.

Got any queries about investment and financial planning? Do email us or comment below to tell us your concerns.