[Building Blocks]: Understanding your FIRST step to financial freedom!

Hi all!! It’s been a while since I did a [Building Blocks] post. Haha if you were an avid reader of my blog, you will realise that I have been posting quite a bit in [Eye Candy], the segment where I do some analysis on stocks I am researching. Yup I have been rather busy digging through the stock market for gems that I could put my money into. As you can see from the title of the blog post, today I will be trying to help you understand your FIRST step to financial freedom. This FIRST step is essential as it lays a foundation for you to work your money. In other words, in order to INVEST your money you need to embark on this FIRST step.

So what is this FIRST step that is soooo important??

The answer is: SAVING!!

SAVING image

All of you might go “Duh” but how many of us are actually able to really save up your salary or money? We often have the goal to save up this amount but most of the time we give in to certain pleasures and decide to spend almost all our salary away. I know this because I myself is guilty as charged haha!

When I entered the army, its the first time whereby I was drawing a constant stream of income (unlike those adhoc jobs I did last time). With sudden inflow of money every month, I did not have a concrete saving plan and hence my expenses were very high at the start. In some months, I may be broke without the month coming to an end. I also know of friends who are like that too! I only started taking charge of my savings when I started investing as I  realise how meagre my savings are.

So I started reading up and created a system to force me to save, but before that let’s look at

1) The importance of saving

Saving is an important first step to your financial freedom because without savings, you will not be able to use that money to work for you. Imagine yourself spending every dime of your monthly salary, how will you be able to put any money into investing in stocks, property and so on. So if we ourselves do not understand the importance of saving it’s hard for us to grasp the power of investing and compounding!

2) Saving can be automatic!

Yes it can be. Nowadays with the advent of technology, most of us definitely have an ibanking account with any of the banks in Singapore. And it’s super easy to automate the entire process of saving. Let me show you how.

First, you will first need to set up 2 bank accounts

Bank accounts pic

Yes, create 2 separate bank accounts, one for purely savings, the other for expenses only.

Secondly, credit your salary into your savings account. After doing that, calculate a rough percentage of your monthly expenses. For me, I save about 75% of my salary and spend the other 25%.

Finally, set up an automatic transfer between the two accounts. Transfer the percentage for your expenses from your savings account to your expenses account.

Automate saving

Yes the end result should look something like the flow chart above.

3) Don’t touch your nest egg for fun!

Yes! You read it right! Don’t touch your nest egg (savings) for fun (entertainment). Put it another way, don’t spend your savings!! For me, I practise that by not bringing out the ATM card that belongs to my savings account. That way I will not be tempted to dip my hands into my savings.

Of course with that said, what if its an emergency and you need the money? If it’s an emergency, then I guess there will be no choice but to tap on your savings. However, if possible try to reduce your expenses in the subsequent months to repay the amount you took from your savings.

One point to note is that you should always ensure you plan a right amount to be set for your expenses. I tried to save 90% of my salary before, but it’s just too tight on me and I tend to keep tapping onto my savings because I ran out of money. So plan the amount carefully so that it does not give you ANY temptations to tap into your savings!!

In conclusion,

you might say that as a young person, saving is very insignificant to you since you probably can only save a few hundred a month. But take that few hundred and multiply it by 12 or 24 months you are looking at a few thousands already. Think BIG! And that’s not all, use your nest egg to work for you through INVESTING! Slowly but surely, this small amount will grow and compound.

saving final image.jpg

I really like the picture above. In the very first picture I showed you a hand dropping coins into a jar which signifies saving. And with your savings, it forms the soil and fertiliser to grow your money just like the above picture. Savings is a cliche topic and whatever I shared above may be shared by many others too. But, what I think is most important to you is TAKING ACTION to really start your saving plan because saving is the FIRST step to your financial freedom!

** Haha side note before I end. I have been toying with the idea of helping people who are keen to get into investing. I am still working out how should I deliver it. So do stay tuned for more update on this! 🙂 **

 

[Building Blocks]: 3 useful online resources to help with your investing journey

Living in a world connected by the internet means information are widely available just a few clicks away. No doubt, I myself have benefited immensely from the information I found online. Today, I want to share with you some of the useful online resources that will definitely be of help to your investing journey.

1) Investopedia

investopedia.png

Investopedia was the very first website that I visited to understand more about investing. It is like a huge encyclopedia on anything related to finance. I would say that it is easily one of the top few investing websites that are easy to understand and well organised. Not only are there information on investing, there are information on current affairs, insurance and many more. The only down side of this is that it mainly focuses on the US markets. However I would recommend this website for beginners wanting to invest because their beginners’ tutorials are very comprehensive and easy to understand.

investopedia 2

You can find tons of tutorials about investing at this website.

And if you are still clueless where to start from, I have compounded a list of tutorials from Investopedia that you should start with. Click on the link below for you to be teleported there haha.

  1. Investing Basics 101: A tutorial for beginner investors 
  2. Stock Basics Tutorial
  3. Bonds Basics Tutorial
  4. Mutual Funds Tutorial
  5. Introduction to Fundamental Analysis
  6. Basics of Technical Analysis

Here you go. Starting out with these few tutorials should allow you to understand investing clearer. If in doubt you can always drop a comment below and I will answer to them 🙂

2) InvestingNote

investingnote

Think of InvestingNote like a Facebook for investors. It boast a huge collection of users ranging from beginner investors to the very experienced ones. Interestingly, this platform is set up by Singaporeans and was only launched recently. The community in InvestingNote is fantastic as many are willing to share about their strategies and styles of investing. What’s more? You can also find out more about the stocks you are interested in, like the information of the company, what other investors are talking about that stock etc etc.

Investingnote 1

For instance, if you are trying to find out more about Japfa, you can get a summarised information on Japfa’s price actions, fundamentals and financials on the left and the chart of Japfa on the right. Personally, I find InvestingNote’s charting platform to be one of the best. It allows you to plot your own lines, overlay them with a myriad of indicators and you can even save your drawings on the chart.

investingnote 2

Scrolling down further, you can see what are some of the things other users are talking about and the upcoming events the company may have. It currently have information on companies in the SG, US and HK markets. But many of the users of InvestingNote mainly talk about SG stocks which are good for new investors looking to go into the local market.

What’s more important is that you can get these amazing features for FREE. All you have to do is to sign up with them. It seems like I am doing an advertisement for them haha. Rest assured I am not paid to do this. For me, this platform have really accelerated my learning on investing and hence I thought of promoting it to you guys.

3) Investment Blogs

Many investors do have their own blogs where they document their own investment experiences. Some of them are so influential that some investors buy whatever they preach. Personally, some of the blogs that I have came about have helped me in terms of understanding how different investors analyse a company, their investment strategies etc.

I think what’s really beneficial about learning from investment blogs is learning the way others analyse a company. By reading their investment thesis on certain companies, you can understand the way they think which you can apply when you are analysing the company you are planning to invest.

Here’s an article on 55 SG Financial Blogs that are useful.

For me I am a regular reader of TTI, thelittlesnowball, my15hourworkweek and TUBinvesting.

Do give them a visit! 🙂

In conclusion,

good resources are everywhere on the internet. Use it to propel your investment knowledge as much as possible. You will realise that you may not have to even pay a dime to attend courses which teach you about the basics of investing. Also, the best way to learn is from each other. Hence, I believe InvestingNote and reading of other investors’ blogs are two good ways to deepen your understanding of investing. Do note that everyone have their unique styles of investing, different upfront capital and different investment objectives. Thus, completely copying someone else’s method may not suit you. I would suggest adopting good practices and incorporate it into your own method of investing. Hopefully this post can help you realise some of the good investing resources online that will be beneficial to your investing journey!

[My Story]: How I managed to regain all my losses with one solid stock

Hi everyone, it’s been about 3 weeks since I last posted. Was away for a military exercise in Thailand. A lot have happened while I was in Thailand, the weather was crazily hot, GID outbreak in camp and I also sold one of my stock holding that gave me a 100 percent return on investment. The profits made from that investment was able to cover out all my losses incurred when I just started out investing. Today, I will be sharing more about the characteristics of that stock and the things I have learnt from this episode.

1) 100% return in just 3 months?!

Yup I was equally surprised! Some of you may have noticed that in most of my recent posts, I have been using AEM Holdings as an example. Yup this is the company that have became my very first multibagger (a stock that returns more than 100%). It all started out when I was screening for low PE stocks in the SGX. (Value approach). This company popped out in the screener which caught my eye. It has innovated a cutting edge product that no one in the world has been able to and back then its PE was less than 10 (relatively undervalued). The company have also just returned to making profits and are planning to ramp up the production of this product which means that further earnings growth is guaranteed.

Since it fulfills the basic principles I set out for a fundamentally sound company and I read an interesting piece of analysis by the guys over at thelittlesnowball.com which reaffirmed my beliefs, I vested into the company at $0.885 per share.

AEM stock chart.png

From the chart, I entered AEM at $0.885 per share, added more shares at $1.055, before selling them at $2. If you were wondering why did I decide to sell it instead of holding onto it longer, it was because this stock was about 60% of my portfolio. I have about $2000 invested in it. As this stock catches the attention of more people, it will become more volatile as big players come into the fray. Since I am just a small fish in this, I decided to take the money off the table and only enter again when there is a dip in prices.

Not all company can be like AEM, which gives a 100% return in just 3 months but there are certain characteristics that the company possessed.

  1. Growing earnings
  2. No debt
  3. Frequent share buybacks
  4. Undervalued

and most importantly it has major catalysts (in the form of their cutting edge products) coming its way.

2) Lesson learnt from this episode

I think the most important lesson I learnt from this episode is to be consistent in your approach. A lot of times, young investors like us tend to be swayed by our emotions. For instance, chasing the next hot stock etc etc. When we are swayed by our emotions, we tend to forget all the framework that we set in place for ourselves. Hence being consistent in our approach and calm minded are very important when we are investing.

This episode also shows that you do not need to be in many trades to profit from investing. Sometimes, all you need is that 1 stock to do the magic. Hence, when you are disappointed because you had to be force to exit a stock due to the stop loss in placed, remember that 1 win can easily make up for many small losses if you exit them early. Personally, I was down about $600 since I started investing and this was still when I didn’t learn to cut loss. In that $600 includes the 70% lost incurred from my Noble’s debacle. I am glad that my revised approach, have led me to recover from my losses and rake in a small profit.

In conclusion,

I would like to say that not all stocks can be like AEM. However, many stocks do have some resemblance to it. With enough due diligence, and a small leap of faith you may just stumble upon the next AEM. Most importantly, do not forget the framework you built for yourself while investing. Personally that has been the most important rule that led me to find this undervalued gem!

 

[Building Blocks]: Dissecting the Annual Report (Part 1)

Buying and selling stocks are easy, but the amount of research one puts into determines your profitability. One such place to find out more about a company current performance and future plans is through their annual reports. The sage of Omaha, Warren Buffett revealed that his success in investing comes from reading hundreds and hundreds of annual reports every year. If annual reports are this important, how do we go about understanding it and finding the information that we need. Today in part 1, I shall share a bit on how I dissect the annual report into digestible parts. In part 2, I will attempt to muster what little accounting knowledge I have to share with you how to look for specific measurements that indicates the health of the company through their financial statements.

warren-buffett-on-annual-report_finaacle.jpg

In my sharing, I will use the FY 2015 Annual Report of AEM Holdings. You can download it here to follow along as I dissect the annual report.

1) Where to find a company’s Annual Report?

Any public listed company will have to file their annual report with the stock exchange. This report can be found either from the website of the stock exchange it is listed on or in the investor relations segment in the company’s website. Here’s an example of where you can find the annual reports for AEM Holdings.

2) What to do with the 100+ pages monster?!

Yup, a company annual report tends to be 100 over pages long! (At least in the case of SG companies) Don’t worry, not every part of the annual report is equally important. Locating the parts that give you what you need is more essential.

annual-report-content-page

This is a typical contents page of a company’s annual report. It is almost a standard format of annual reports which is comparable to many other companies’.

3) What information is important to me?

When analysing a company’s annual report there are always some standard information that is important to a shareholder. This can range from their financial performance to who exactly is running the company. Below are some information which I always look out for when I read a company’s annual report.

  1. Present company’s performance
  2. Company’s outlook and future catalysts
  3. Management’s information

4) Where to find these information?

Present company’s performance

We want to understand how the company is doing for the past financial year and most importantly their financial statements for the FY. This information can usually be found in 1) The Chairman’s and CEO’s statement, 2) Business and Financial Review (some company may name it differently but it is basically just a summary of financial figures for the FY), 3) The full financial statement in corporate information

aem chairman statement 1.png

Here’s a snippet of the present performance by the Chairman. You can likewise find the same from the CEO in the next page.

Business review AEM.png

Under the business and financial review, the company tends to show a quick summary of financial performance for the FY. They can come in the form of informative illustrations comparing their performance over the past few FYs. I tend to read this part with a pinch of salt. This is because the company may tend to cherry-picked “nicer” numbers to put here to impress shareholders. A in depth analysis into their full financial statement in the corporate information segment is needed to determine the reliability of their performance.

If you are lost. You can find the above information from page 36, 40 and 37 respectively. A financial statement usually includes the Balance Sheet, Income Statement and Cash Flow statement. I will touch on these in part 2, but just know that these 3 pages are one of the most important part of any Annual Report. You will also notice one whole bulk of information which occupies majority of the annual report in Notes to Financial Statement. Basically this part give additional pointers to how each segment in the financial statement were derived.

Company’s outlook and future catalysts

You can usually find a company’s future plans and outlook from the Chairman’s and CEO statements. This is usually found at the last few paragraphs of their statements. They will address challenges and the strategies going forward. Any upcoming plans are also explained here.

aem-chairman-statement-2

During the FY 2016, you can stay tune to their announcements as they may announce some information about whatever plans they were set out to do in FY 2015. This can supplement your information about the company’s outlook and plans.

Management’s information

It is always important for me to know who are the people that are running the company. To find this information, you can look them up in the portion Board of Directors.

aem-board

They usually include a short write up about the achievements of the person and his previous experiences.

Knowing how much the management is earning is also important. This is because we want to ensure that the management have their interests aligned to ours’ and are not overpaying themselves. You can find out details about remuneration in Corporate Governance on page 23 of the annual report.

aem-remuneration

In a board of any company, it is made up of the Chairman, CEO, the independent directors and some other position depending on the company. The independent directors are just people who are not related to the company but sitting in the board. This ensures that the Board do not do things that are beneficial to themselves only and in turn harming the shareholders. It is a common sight to have independent directors in any listed company. You should pay close attention to the payslip of the Chairman and CEO. Make sure they do not give themselves too high a pay.

One simple way to see if the Chairman and CEO have interests aligned to the shareholders is to see if they hold the company’s shares. You can find that either from the variable bonus component in the remuneration package above or from page 92, Information on Shareholdings.

aem-shareholdings

The CEO is one of the top 20 shareholders of the company’s shares. If the insiders of the company have rather large stakes in the company they should act in the interests of the shareholders.

In conclusion,

these are usually the information that I look for when I read into any companies’ annual report. By categorising the annual report into 3 key areas, we can effectively understand the company. In the next part, I will mainly talk about how to break down the financial statement in the annual report to help you understand some accounting jargon. Ohh and on the side note, if you have been a regular reader of this site, please do subscribe so I know roughly how many active readers I have and you can also comment below if there are any queries. Hahaha! Thank you! 🙂

 

[Building Blocks]: 4 principles of a fundamentally sound company

Hi all, as promised I would like to share with you some of the criteria I have before I decide that the company is fundamentally sound and worth investing. These 4 simple principles can be applied irregardless of what style of investing you pursue. (Growth, value, income etc) Investing in a fundamentally sound company reduces your exposure to the risk that the company may fail. These principles also act as red flags when a company with good track records flouted any of these principles. Adhering in these 4 basic principles should put you in good stead when investing directly on the stock market.

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Without further ado, here are 4 principles I always apply when evaluating a company.

1) Earnings Record

A fundamentally sound company should have a stable or growing earnings record. If the company can show stable or growing earnings over the past few years, it is likely that the company’s product or service are well sought after and there is some form of economic moat around them.

The 2 most important components to determine the strength of their earnings are:

  1. Revenue
  2. Net Profit

** Revenue – (Cost of Sales + Expenses incurred) = Net Profit

Revenue reflects the amount of sales that the company have done for the products/services it provides. It is often referred to as the company’s top line. On the other hand, net profit shows the earnings after subtracting the costs involved in manufacturing the products or providing the service and the various expenses incurred. Net profit is often referred to as the company’s bottom line. Hence, when someone say a company has achieved top line growth, it is referring to increase in revenue and likewise for net profit.

aem 3q result.png

Companies with stable or growing revenue shows that their sales are increasing. Improving net profit also shows that the company have been able to manage their costs and preventing it from exceeding its revenue. Thus, these are good sign of a company that will be stable compared to a company with fluctuating revenues and net profit.

2) Low Debt

This goes without saying. Company that takes on huge debt are often at higher risk of failing. Imagine being chased by debtors for payment while trying to do business. Earnings will definitely be affected as earnings may have to be used to pay off debt. These are definitely not a good sign for a company. A classic example would be Noble Group which I shared before in [My Story] component.

Of course low debts are healthy as they aid a company to grow its business. So what’s a healthy amount of debt? I have 2 ways to evaluate if a company have over-leverage.

  1. Cash and Cash Equivalents > ST Debt + LT Debt
  2. Current Ratio > 1.5

This works in such a way that if both rules 1 & 2 don’t hold, you are probably looking at an over-leveraged company. The best case scenario would be that rule 1 holds which most of the time means rule 2 will hold.

3) Positive Cash Flow from Operations

Cash flow is important for a good company as some companies can have very strong earnings but those earnings may not be recognised in cash. If a company consistently register a negative cash flow from operations, it should set off some red flags. This is because most of the company’s debt and expenses are paid for in cash, if their earnings do not bring in cash this might be a problem in the future.

Take the case of Yuuzoo Corporation.

yuuzoo

Strong growth in revenue and net profit recorded. Indeed very impressive.

yuuzoo3

However, look at net cash from operating activities. It has been negative for 2 years. It is okay if the company at times record negative cash flow from operations as they may have use the money to pursue expansion etc. But if it has been happening for a few years, it is definitely not a good sign of things to come.

4) Insider Ownership

Insider ownership is often a good sign to tell whether the company’s management believes in the company. This will show whether the company’s management put their money where their mouth is. A good level of insider ownership should give you the confidence that the company is good because the interests of the management is at stake as well.

Hence events like management buying or selling their own company’s shares could be a pre-indicator of their outlook on the company.

shareholder-info-for-dutech

This is extracted from the annual report of Dutech Holdings. Dr Johnny Liu Jia Yan who is the Chairman and CEO owns about 42.76% of the shares. Hence this should reassure shareholders that he will act in the interest of the shareholders.

Bonus

If you can find a company that satisfies most of the above, at least 3 out of 4 and you realise that the company are buying back their own shares (share buyback) or the management have been buying more shares of the company. (Insider ownership) This could mean that something big is brewing within the company and it is likely an excellent opportunity to invest in the company.

Some of you may ask how should I go about finding these information regarding the company I am investing. Firstly you should always check out the investor relations segment in their website which should contain information regarding the company. Alternatively, you can head to SGX website to find them. You can find out about every companies announcement with regards to their financials, insider transactions, annual reports etc here.

In conclusion,

these are 4 principles that I look for in a fundamentally sound company. It may not be fool-proof as many factors can affect a company. But these principles should allow you to sieve out the better companies in the entire stock market which should provide a relatively safe and lower risk investment should you decide to enter the stock market directly.

[Building Blocks]: How should I get started?

Hello everyone! Hoped that all of you had a great CNY holiday. Haha since I am now on my CNY block leave I decided to write today. In my previous few “Building Blocks” blog posts, I have talked quite a bit about the different styles of investing and the all so important investment objectives that everyone should have before investing. Since we are all richer due to our red packets (for those singles out that :P), I thought it is timely that I should touch a bit about how to actually get started.

Off my head, I thought of a few questions that a new investor would have when he/she is starting out.

  1. How much should I invest?
  2. What to invest?
  3. How do I go about doing it?

(Do reach out to me in the comment box if you have any more questions about investing. :). I will do a separate blogpost to address those questions if any haha)

There are 2 investing instruments that I would recommend a young and new investor to consider that would answer the above questions.

1) Regular Saving Plans (RSP)

What to invest?

 RSP is a great way to get started on investing. Most of the banks in Singapore offer RSP, but since most people are account holders of DBS or OCBC. I will mainly touch on the RSP programme that the 2 big banks offer. For me, I would recommend against investing in mutual funds because they tend to do worse than the general market in the long term. I would prefer a RSP in an index fund or an Exchange Traded Fund (ETF). Both the index fund and ETF are created to match the performance of the broad market. For instance, the STI ETF is created in a way to match the movement of the STI (the top 30 companies in the SGX). So whatever happens in the market, will be reflected in the fund. Also, sales charges for these type of funds are generally cheaper than a mutual fund because there are lesser transactions (less actively managed) made by the fund manager.

So how does a RSP works? A RSP invest a fixed amount of money every month into the fund you are intending to invest in. For instance, you could do a $100/mth RSP in the STI ETF.

pros-and-cons-of-rsp

RSP is mainly for those who want to invest for the long term and may not have a huge upfront capital to invest at one go. Think of this like putting your money into a piggy bank that yield higher interest rates than your normal banks’ interest rate.

STI ETF returns.png
If you hold this STI ETF for 5 years you will get a pretty decent 4.66% return compared to the bank’s non-existent interest rate

How much to invest?

This question will really depend on yourself. How much will you be able to take out from your monthly income to ensure that your living expenses etc are not affected. Since the RSP will only see fruition in the long term, cancelling the plan midway is not very beneficial to you. Hence, it is really up to you to decide the amount. In SG, the minimum amount to put in an RSP is $100/mth.

How do I go about doing it?

DBS and OCBC both have different types of RSP. You can only get an RSP with them if you are an account holder of the bank. For both banks they offer investing in RSP in unit trust. Do note that unit trusts are usually investment in mutual funds which I do not really recommend. (But of course if the funds have a good track record of returns then by all means). What I would recommend is their RSP in ETF and equities.

For DBS, their RSP allow you to choose between the NIKKO AM  SG STI ETF (the one shown above) and ABF SG BOND INDEX FUND (which invest in the bonds of SG)

For more info on DBS RSP, click here

For OCBC, their RSP is different from DBS, OCBC allows you to invest in blue chip companies in the SGX. The plan is called Blue Chip Investment Plan. Basically, the same concept of RSP applies but they invest your money into a blue chip counter you choose monthly. Of course the charges are a bit different for this plan.

For more info on OCBC Blue Chip Investment Plan, click here

Summary

The RSP is a very powerful tool and forms a relatively risk free investment vehicle for starters, but it must be held for the long term in order to realise the gains. For young investors who may not have a monthly pay now, this could be a bit of a problem as you may need to scramble enough cash in your bank account before the investment date every month. Ultimately, you need to carefully plan your expenses before you embark on this plan.

2) Investing directly in the stock market

What to invest?

The other way to invest is to invest directly through the stock market. Imagine the stock market as a big supermart and in the supermart there are a myriad of products on the shelves. Some may be more expensive but of better quality, some may be cheaper but of poor quality, some may be a new product that has just arrived etc etc. The trick here is to pick the right product that suit your personal taste and preference. And all this can be answered by your investment objectives. The stock market can be categories into 3 groups in terms of risk level.

risk-table-for-investing-in-stocks

If you are new to the market, you can consider your first stock to be something relatively of lower risk like an index ETF or a blue chip (Do note that there are many other ETFs too which have different objectives.) Slowly, as you learn more about how to evaluate a company fundamentally and technically based on their chart (which I will also share with you in future posts) you can invest in normal equities while minimizing your risk.

How much to invest?

This is again a subjective question. But I will share with you some pointers I learn while investing in the stock market with little upfront capital. Firstly, the commission for most brokerage houses in SG is at least 40 SGD for a two way trade (Buy and Sell). So the lesser the amount of money you invest in a stock, the larger the percentage that the commission will stand in your profit. Ultimately, you want to make a profitable trade so taking into account the commission is very important. Secondly, with lesser amount of money, the multiplier effect of your stock is much lesser. For instance, someone with 1000 shares will make more money than someone with 100 shares given the same percentage increase.

All in all, the commission cost is the first hurdle to cross before you can be profitable in any trade. And using the multiplier effect will greatly increase your chance of beating that first hurdle. So how much to invest depends on whether you can understand the risk reward ratio of the stock you are planning to invest and giving it sufficient amount of money to beat the first hurdle. For me, I always try to purchase at least 1000 shares in the stock that I plan to invest as it set a nice $100 return for every $0.10 increase in stock price.

How do I go about doing it?

First and foremost, in order to start investing in the stock market, you need to have a brokerage account that is connected to the Central Depository (CDP) which stores all the shares you buy in the SGX. There are several brokerage houses in Singapore, I will list out a few.

  • DBS Vickers
  • OCBC Securities
  • Philip Securities
  • CIMB Securities

Majority of the brokerage houses in SG charge about the same commission fees. A minimum of $25. Some brokerage houses have special programme to differentiate themselves. For instance, DBS Vickers Cash Upfront Account only charge a commission of $18 for buying. For brokerage houses that are owned by banks like DBS and OCBC, they would usually require you to have a savings account with them. 3rd party brokerage houses like Philip Securities doesn’t require you to do so. For me, I chose DBS Vickers because I am already using their savings account which save me the hassle to open another savings account with another bank. You do have to be at least 18 in order to open a brokerage account with some of the brokerage houses. Some require you to be at least 21. Hence it is important to research each brokerage houses first before signing up with them and you can have several brokerage accounts with different houses.

Here’s a good article to help you in choosing a brokerage house.

In conclusion,

these are the 2 ways I put forth for new investors to go into investing. Do always remember to do your due diligence before plunging into any decision and allocate your money well. That’s all from me today. If you have any questions, I would really love to hear them. Simply comment below and I will do utmost best to answer each one of them. Adios! 🙂