Tag Archives: Stocks

Starting 2018 positively

Despite closing the year 2017 with an 18% upside in the Straits Times Index (STI), we saw another 90 points increase in the STI to end at 3489.45 in the first week of 2018. For myself, I am happy to have seen many days of advances last year. In the week that just passed us, like many investors out there, I have enjoyed a 5-digit figures climb a day in the three out of the four trading days. In a market like this, it is probably difficult to lose money. Maybe everybody has become an expert in their own rights. But going forward, it is unlikely that things would be repeating at this rate. Complacency may have already started to build in the minds of investors. The advances in the Dow Jones Industrial Index (DJII) has become such a norm that any retreat is seen as an abnormality. Given that DJII has some bearing on the STI, the advance in STI is also becoming more and more of an expectation.

While I am personally enjoying the ride on this wave, I beg to be now more on guard than I had been last year. From the past experience, market crashes came when we were least expected of them. The global financial crisis struck when many Americans were chasing the American Dream. The Nikkei-225 fell when property prices in Tokyo had to be paid by three generations. The Asian financial crisis hit when property prices were around their highest level in the 90s. The DOT-COM bubble burst when there was extensive euphoric belief that any company registered as a DOT-COM was a pot of gold in the making. The list goes on.

In line with the rapid advancement of the STI, many would have agreed that it is getting more and more difficult to find gems that would potentially bring 30%-40% upside to their stock portfolio. On the whole, Mr Market has been quite generous in rewarding the true blue investors due to the extremely low interest rates after the global financial crisis. Going forward, the low-lying apples are no longer there for cherry-picking. In fact, the climb in the recent months has been quite confined to the banks, perhaps manufacturing and possibly some REIT counters that generally offer higher yield. Many of the STI constituents in transports, properties and conglomerates did not really move the STI very much, further weighed down by their lower weightage compare to the banks.


As a matter of opinion, the STI should still remain buoyant due to the spill-over effect of last year and playing catch-up with other financial markets, and very importantly, the economic performance of the local economy. But, whether this year is going to be as good as that of last year remains to be seen, particularly in the second half.

Happy investing!

Brennen has been investing in the stock market for 28 years. He trains occasionally and is a managing partner for BP Wealth Learning Centre. He is the instructor for two online courses on InvestingNote – Value Investing: The Essential Guide and Value Investing: The Ultimate Guide. He is also the author of the book – “Building Wealth Together Through Stocks” which is available in both soft and hardcopy.


Five reasons why I do not want to convert my stocks to an investment property

A close friend of mine threw me a question – why don’t you divest all your stocks and buy a property instead. That was a few years ago, and the rental market was still relatively vibrant. That led to me ponder for a while. Certainly a few things crossed my mind to kill the idea:

(1) Tenancy
Without doubt, both stocks and properties are good hedge instruments, but they can differ very much in their usefulness. If they are applied inappropriately, one may even suffer as a result of holding them. Property, for one, is a high-ticket item. In all likelihood, we need to take a loan to own a property. In order to service that loan, we likely have it rented out to at least cover the monthly mortgage payment. Certainly, it is a question of the bigger the loan, the greater the pressure. Even if there is no need to service the loan, we still have to find a tenant so that we can derive an income (hopefully a passive one). Otherwise, the property is only a dead asset, just like holding an art painting or hoarding gold bars. The only way to gain from it is a huge appreciation in price some years down the road, which may or may not happen.

(2) Liquidity
Then there is a question of liquidity. It refers to the ease of converting the asset to cash especially during times of need. Unlike holding a portfolio of stocks, we can simply liquidate some stocks while leaving the other stocks un-touch. In other words, we can down-size our stocks portfolio to remain relatively liquid. In the case of a property, can we simply sell off a toilet or a bed-room? It is a question of either a whole property or no property, and not somewhere in between. Furthermore the time needed to liquidate a property during times of need may force us into selling a property at a not-too-ideal price. While we can also end-up in a fire-sale for stocks in times of need, we can at least time the sales such that all the stocks need not be sold out in a single go.

(3) Government curbs
Authorities around the world tend to be more decisive on clamping down property speculations and the Singapore government is no exception. Frenzy properties speculation usually end up miserably, just like what we have seen in the sub-prime situations leading to the global financial crisis, sky high properties that it takes three generations to fully pay for a property in Japan prior to the crash of Nikkei during the late 80s. Until today, the situations in Japan have still not fully recovered, and Japan had already suffered two ‘lost decades’. Whether in Europe, in China or in Hong Kong, the story is always the same. What about shares? Until today, I have not heard about curbs on shares trading, except for those on the watch-list imposed by the broking houses. They are not real government curbs so far. In fact, many governments would want to maintain their stock market as vibrant as possible. After all, the penetration rate is still very low, and to be seen as a real financial centre, it should be free from government intervention. Whether in China, in Japan, in Hong Kong or in US, we do not hear of government curbing stocking investing activities. In fact, they are the ones who help to prop up during a huge meltdown, just like what we seen during the global financial crises in 2008/2009.

(4) The exit
One of the considerations of a good investment, which a lot of people have overlooked, is that it can be exit as easy as we enter. (That’s why in the last two years, those held corporate bonds were not able to dispose their investments even at a loss because there were simply no buyers due to illiquidity! It was easy to enter by throwing in an enticing coupon rate, but to get out of it requires some form of cross matching between a seller and a buyer.) By the same token, it is also more difficult to get out of a property than on shares. It probably takes about 3-6 months to decently sell off a property at hand. In this period, there are a lot of advertising and selling activities such as bringing prospects to see the property, putting advertisements on the newspaper, talking to potential buyers and agents. It is only after all these ground-works that we are likely to find a prospective buyer to sell off the property decently. I admit that I have no patience for all these, and therefore getting a property for investment is out of question.

(5) Other considerations
Of course, there are other considerations as well. Leaked pipes, over-flow toilet bowls, electrical short circuits are teething issues that can make our tenants call us right in the middle of the night. Every night, we have to be on our toes and, every evening, we have to pray that nothing of that sort happens in the night.

After all these thoughts, I still want stick to stock investing. Unless, of course, I already have $2 million dollars cash sitting in the bank and is doing nothing for me at the moment. In that circumstance, sure, I may get a property without a loan.

Brennen has been investing in the stock market for 27 years. He trains occasionally and is a managing partner for BP Wealth Learning Centre. He is also the author of the book – “Building Wealth Together Through Stocks” which is available in both soft and hardcopy.

Cash is not always the king

It is quite common to hear people mentioning that “Cash is king” especially during bad times such during a recession or a market crash. This is only half truth. Yes, during times of uncertainties, cash is king, but it is good only for that short time window. If it is not duly deployed, cash remains as cash and there is nothing that we can get out of it except for a paltry bank interest if we continue to put it in the bank. Therefore, cash is only a king when it is able to find its way in picking good-value investments that present themselves during those trying times.

Personally, I have met people on several occasions who told me that they were “heng” (lucky) because they did not invest in anything and therefore did not suffer any financial loss during a crisis or a stock meltdown. Their ‘investments’ did not go beyond some insurances that they have been paying. Frankly, I am not sure if they are really that “heng” if they have not been investing in anything at all. This means that all this while, they have not been making money work hard for them. In fact, it even occur to me that a person who rides through his investments without selling out during a major stock crises may be better off than another who rides through it holding cash alone. Of course, that is very dependent on the quality of the investments as some of them do not regain their previous shine after a crisis. However that is not the critical success factor. It is likely that a person who rides on his investments during a meltdown actively sniff for good investments that have been battered down as a result of the general pessimism than the one holding cash during those fearful times.

Here, the best lesson is to learn from the billionaires both locally and abroad. Most of these people know that they are unable to time the market as they have more important day-to-day things to do. During times when there were major meltdowns, they continued to hold their company shares. When a crisis was brewing for some time, they accumulated either their own company shares or bought into investments that had never been on discounts. Yes, for a short period of time, their wealth may be hit and it is not uncommon to read reports that their wealth has been decimated by 30-40%. However, once the crisis period is over, they become richer than they were before the crisis. Of course, one may argue that a billionaire would become a lot richer if he were to sell out everything just ahead of the crisis, and then bought back everything when the crisis happened. But that was hindsight. We only knew when events have gone passed us. There are always possibilities that a small setback would not turn into a major crisis. Furthermore, he cannot be seen to be jumping in and out of the market trading his own company shares, and this will not be positively viewed by the minority shareholders. A good example was the fall of Bear Stearns in March 2008. When it fell, nobody thought that it was a precursor to a global crisis six months later. Everyone probably thought it was an isolated bank crisis, and businesses were going on as usual. Otherwise, many people would have sold out everything and come back six to twelve months’ time to buy them all back. It was only when Lehman Brothers Bank fell exactly six months later during mid-September 2008 in a perfect storm leading to the downfall of a series of banks and financial institutions that everyone discovered that a crisis was already underway.

So, bringing ourselves back to the original topic, cash is king is only half correct and it is only true when the cash is deployed into good opportunities. In extreme cases, there may be some people who have been accumulated too much cash, but only to discover that the cash is not working hard enough for them. So they start looking around for so called ‘value investments’.  Short of the necessary financial knowledge, they end up looking for the highest possible yield as that is the only evaluation criterion on their mind. Consequently, they may end up shortchanging themselves by buying into investments with mouth-watering offers that they simply could not possibly refuse. There were no short of examples. Over the last few years, people were buying into gold trading businesses, into land banking businesses, structured deposit products, mini-bonds and corporate bonds. The promise of these investments was very attractive, but the end point remains the same.  The value of these investments end up shrinking to 20% to 30% of their original investment. Worse still, they are also caught in the middle of legal tussles and court cases. Even that, there is no guarantee that they can even claw back the residue value of their investments. This further undermines their trust in financial products. While ignorance is main culprit of their losses, the necessary condition that set them into such a plight is they have cash.

While mentioning all this, I am not saying that we should immediately convert our cash into investments whenever we get our hands on it. What I advocate is that we should arm ourselves with sufficient financial knowledge and appropriately allocating the cash into the investments while leaving sufficient cash holding to tap on opportunities that may present themselves from time to time.

Happy investing!

Disclaimer – The above write-up is purely the opinion of the author, and it does not constitute an advice to buy or sell the mentioned stocks or the sector. Readers, who buy or sell stocks, if any mentioned on this article, are fully responsible for their own action.

Brennen will be conducting a one-day stock review for the past students of BPWLC on 11 March. A 2-day new course on Wealth Building in stocks investments will be conducted on 22 and 23 April 2017. Enquiries can be made via info@bpwlc.com.sg

Brennen has been investing in the stock market for 26 years. He trains occasionally and is a managing partner for BP Wealth Learning Centre. He is also the author of the book – “Building Wealth Together Through Stocks” which is available in both soft and hardcopy.

Some notes about Investingnote

About two years ago when my stock-broker friend introduced InvestingNote to me, I was not exactly keen initially. The reason was that I have a business to develop and a family to take care. All these will draw away all my awake hours. Where can I find the time to socialize and get into it? Nevertheless, I still register my name, perhaps, to keep myself current with new developments as well as to know some investors and traders out there. It was a good decision. Today, I have met several distinguished investors and traders via this platform and had even met them personally.

In the meantime, InvestingNote has grown by leaps and bounds, and now with members in tens of thousands. All these came about because more and more features have been incorporated in the platform to have everything that we need to know about local stocks within the platform. Not only can we find the price chart featuring real time price, we can also discuss about the potential of each stock on the SGX with fellow investors and traders. Apart from that, one can also horn his trading skills making estimate about the share price of each stock for a particular time-frame. This can help one sharpen his investing/trading skills before taking the plunge using real money to buy or sell stocks. Frankly, I have not come across another platform that offers this feature.    

With all these said, there is no cost. You need not pay anything to be a member of InvestingNote. Registration only requires an email and a password, and is extremely easy. Just register by clicking this link.

Register me at www.investingnote.com now!

It’s an additional tool for your stock investing.

Brennen has been investing in the stock market for 26 years. He trains occasionally and is a managing partner for BP Wealth Learning Centre. He is also the author of the book – “Building Wealth Together Through Stocks” which is available in both soft and hardcopy.

What can we expect from the American election?

Now that the American election is over, and Donald Trump has been announced to be the president-elect. The inauguration is scheduled to be on 20 January 2017. As a biggest economy in the world, we can expect big event changes to have a bearing on the many smaller economies. Certainly, the promises made by Donald Trump during his campaigns would be closely followed, as they may become the new government policies during the term of the new president. Of course, one may argue that these may be promises, and they may not be fulfilled or at most partially fulfilled after looking at the cost-benefits of all these promises. After all, until the fate was sealed on last Thursday, Donald Trump had been an underdog in this neck-to-neck race with Hillary Clinton. To change the odds of winning this election, he might have to resort to populist promises to win votes.


However, as investors, we tend to make anticipations of the future to guide us in our buy or sell decisions. So the closest or best clues would be to go along the lines of his background as well as to rely on his promises during the campaigns. As it is, he has been a real estate magnate businessman with zero political back-ground, many would have expected that he would be especially focused on infrastructure developments. These constructions would likely to bring about inflation resulting in FED hiking up interest rates more aggressively. So in all likelihood, our bank interest rates would also perk up in time to come. As it is in the last few days, the local bank stocks such as DBS, OCBC and UOB were holding up relatively well while many local stocks were on a down-trend. In particular, DBS advanced $1.20 or about 8% in the last two days on Thursday and Friday. Conversely, the interest rates sensitive stocks such as bonds, REITs, property counters as well as many debt-laden companies were hit quite badly. Many emerging market currencies are also affected as funds are expected to repatriate back to US in search of higher interest rates. Thus many Asian currencies have also been on the downward trend. In fact, companies, especially the debt-laden ones that borrowed or purchased goods in US dollar are likely to be hardest hit. Consequently, many Indonesian company stock prices fell very hard. They purchased goods in US dollars and sold locally in rupiahs. Stocks like Jardine C&C, which held 50% of Astra shares, had already retreated about 10%. This situation is likely to continue as long as the spectre of interest rate hikes remains in the mind of investors.


The other significant factor mentioned in his presidential campaign was pro-American, pro-white policies that point toward protectionism. This means that many economies depending on US for trade will be also affected. These countries include Indonesia, China, Taiwan, Malaysia, South Korea, Philippines, Vietnam and even Singapore. Furthermore, with their respective currencies retreating against the US dollars, it is likely to make things very expensive for these countries. Certainly the respective stock markets are not going to be spared as well. The fear factor should likely continue to weigh on the Asian stock markets in the short term.


While the situation looks grim, it is only based on anticipation. The reality may not turn out to be this way after more detailed review of those promises. It could even be that the President may decide to soften his stance on free trades after his inauguration.


So, end of the day, it is still important to continue to stick to our long term-plan in building our stock portfolio. The fear factor may even present interesting opportunities for us to buy stocks that are beyond our reach during euphoria.      

Good luck!

Brennen has been investing in the stock market for 26 years. He trains occasionally and is a managing partner for BP Wealth Learning Centre. He is also the author of the book – “Building Wealth Together Through Stocks” which is available in both soft and hardcopy.

3 simple steps to start stock investing

Ethan Ho is a guest writer for our blog. He is part of the investing & financial literacy team that helps build the investingnote community. We thank you for his invaluable contribution. 

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.


There are many websites that allow you to simulate trades, like Marketwatch.com and Investopedia.com. Start trading with virtual money based on real stocks. Other than simulation, you can also make projections on a stock, on platforms like InvestingNote. Rather than just fluctuations ups or down, you can estimate a stock’s final price based on your own time frame and target. A notification will be made if it’s a hit or a miss within stipulated time, for you to gage your own judgment. Simulating and estimating trades based on stocks in real-time will definitely speed up the learning process and build confidence.

  1. 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. 





Banks may be cheap now, but…

Cash is king. Yes, during financial turmoil like this when stock markets all over the world are sinking, having cash is the key. According to The Straits Times on 20 January 2016, just last year alone, about US$735 billion left emerging market. China accounted for $676 billion which formed the bulk of the outflow. Similarly, the fund inflow last year was about US$231 billion against US$1.2 billion per year from 2010 to 2014.

On the corporate front, banks are natural victims during times of liquidity crunch too. Most bank share prices have sunk more than 30% from their recent high when the ST index hit 3500. Right now, banks are trading near or below their book value (BV). Exactly, five months ago, I had written in my blog that there was always a possibility that banks might start to raise funds through rights issue if the turmoil persists. So far, none of the banks have raised alarm, but still it is possible if banks deem it fit to do so. After all, there were past precedence of fund raising activities during financial crises. For example, DBS raised S$4.2b in end 2008 through 1-2 rights issue. Similarly, OCBC and UOB raised $1 billion each through preference shares issue. In a similar way, during Asian financial crisis in 1998, DBS acquired the POSB. Looking ahead, it is still a possibility especially during such times when other banks or companies may fall into bad times. Such huge fund raising activities can come in handy for future acquisitions.

Brennen has been investing in the stock market for 26 years. He trains occasionally and is a managing partner for BP Wealth Learning Centre. He is also the author of the book – “Building Wealth Together Through Stocks” which is available in both soft and hardcopy.

Market movement (这星期股市迈动)


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[写者拥有26年买卖股票经验,他最近也写了一本书,书名为<Making Money Together Through Stock>。读者可以上网站 www.bpwlc.com.sg 购纸字本或上网站 www.investingnote.com 购买电子本。]

Remember that money is made when we buy during pessimism

In the last few months, the stocks markets in many regions were reeling down from their highs around April. Several months have passed and many investors seemed to have distanced themselves from the stock market. Some even vowed not to come back again. Just a few days ago, the STI hit below 2800. it had fallen more than 20% from its recent high, putting it in a bear regime. But, then the question is why so downbeat when these may be  opportunities that we can buy back stocks that we had sold off during the highs. If the stock prices did not drop and remains high, it would be impossible to pick up the stocks again. Yes psychologically, we tend to be more pessimistic when the market goes down and less optimistic when the market goes up. But isn’t it that we have often been told and be reminded that stocks can go up and down. It’s only that we accept that there is volatility and willing to embrace this volatility that we will become more emotionally detached when dealing with stocks. Frankly, it’s not easy in the beginning of my investing journey, but over the many years of investing, after going through many cycles of ups and downs, I start to detach emotionally from the stock market volatility as I know I have no control over it. I just continue to focus on my long-term goals irrespective of the market conditions. Instead of crying over the losses, we should focus our attention on things that we can control, such as doing our day jobs, completing our projects and working on something productive and enlightening. That’s essentially why I am never in trading and, very embarrassingly, I have never had the first-hand news of the stock market. And, very certainly, I admit that I can never be a good trader.

To me, stock investing should not be a standalone activity. It should be  part of personal finance that also embraces money management. We should ensure that we have sufficient liquidity such that we are not be put into a forced-sale situation or be missing buying opportunities simply because we do not have sufficient funds. Just 2 day ago, it was reported on The Straits Times that $40b have been pulled out fom the emerging market. Certainly Singapore is one of the discarded victims as well. As mentioned in my earlier post, due to the relatively small size of our stock market (and in fact regionally), just taking away a few billions dollars off the stock market could bring down our stock index drastically. Yes, there is going to be a technical recesson ahead. Yes, the China economy is not performing well. Yes, the currencies of our neighbours are hitting historical lows, Yes, the writing is on the wall that US is going to hike the interest rate. But then, aren’t these yesterday’s news that have already been priced in the stock index. So while some funds might have left us, opportunities may present themselves such that by the time when funds do come back again, we can ride on the rising tide. Of course, I have to qualify that I do not mean that we should buy aggressively starting today. What I mean is that after all these brawls, isn’t it time to open up our eyes to look at the stock market again? Frankly, I am not expecting that the stock market is going to turn sharply in the next 3 months or so, or perhaps not even two years down the road, given so many issues that we have no control of. Neither do I dare say that this is the lowest point and that the stock market cannot go further down. What I am saying is that to make significant money, we have to buy during times when there is extensive pessimism when everybody is looking away from the stock market, and sell during euphoria when even those who have never been in the stock market are in it by herds and droves, not the other round. Perhaps, look back into your stock portfolio now and try to recall when you had bought and sold those stocks that you had made big money (at least percentage wise). Very likely, those that you had made big money were bought during bad times and sold during euphoria, unless you are a big-time speculator trading $100k each time without a blink of your eyes.

Also read:

  1. Market psychology – Are we at the market bottom? – 19 Aug 2015
  2. STI – Is it better to be on selling mode now? – 9 June 2015

(Brennen Pak has been a stock investor for more than 26 years. He is the Principal Trainer of BP Wealth Learning Centre LLP. He is the author of the book “Building Wealth Together Through Stocks.”) – The ebook version may be purchased via www.investingnote.com.