SG market update

2015 – The Empower Advisory 6 Golden Rules for Beginner Investors/Traders

Posted on January 6th, 2015 in SG market update, US market update

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As expected, the profit taking phenomenon at year end and start of the year has ensured that the US and SG stock markets did not enter 2015 with a firework bang.

Year to date, the Nasdaq 100 and Dow Jones index dipped 1.8% while the STI lost 1.1%. The drop is mostly true for major stock indices. One of the few bright spots is the Shanghai SE Composite index which is up 2.7%.

The continual oil price collapse has claimed quite a few victims.  Once popular Singapore oil play counters like Ezion and Ezra have seen their share value drop by 37% and 30% respectively in the most recent 3 months.  Of course Empower Advisory members who have learnt how to cut their losses assuming they held a long position would have escaped with minimal scratches. Some could have escaped with a healthy profit. For those more seasoned traders who took a short position, you would have made your Chinese New Year Ang Bao. But my advice again. Not to nag, but don’t be complacent. Arrogance and ignorance is the reason why unsavvy, stubborn investors/traders get wiped out of the game forever.

I have cashed out of my Facebook, Yahoo and Apple holdings. Empower advisory members should have done the same since they have been very attentive in our small class hands on investment coaching.

2015 is going to be a very exciting year once again, as there will be lots of great stocks to go long and short.

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Just remember Empower Advisory 6 Golden Rules of investing/trading. Always.

Empower Rule 1)   Don’t think you can control the market. You cannot. You can only control how you react to the market. Unless you’re the mastermind behind scam stocks such as Blumont, Liongold etc. Be prepared for jail though.

Empower Rule 2)   Don’t have too many stocks in your portfolio. 10 is really the max for a regular investor holding a full time job. You have a life out there besides staring at daily tickers and watch your blood pressure rise too

Empower Rule 3)   Don’t believe in a so-called balanced, diverse portfolio to even out your risk. Would you rather have 10 good stocks, or 5 good and 5 bad stocks?

Empwoer Rule 4)   Cut losses early (whether you short or go long) and ride your winners, remembering to pull out some profits when the ride is a little too hot.

Empower Rule 5)   It’s ok to cut losses aka “go-stan”. Why do you think your car has a reverse gear? You may not use your reverse gear very often but it’s there when you need it so you can live to charge successfully another day in 7th gear.

Empower Rule 6)   Know how to use information in a systematic way to increase your probability of a rewarding trade

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I wish you my best and see you at our regular free investment outreach!

To reserve your seat, you can click the icon below.

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Do continue to stay connected with Empower Advisory via our Facebook Page, for enriching updates.

My Best, Always

Douglas Chow

Founder / Empower Advisory

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Get READY! SGX to cut lot size from 19 Jan – 26 Aug 2014

Posted on August 26th, 2014 in SG market update, SG stocks

 

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Finally, the chequered flag is waved and it’s all systems go.  After what seemed like an eternity since mid -last year when SGX rolled out its public consultation, retail investors can soon buy just 100 units of any company shares, REIT, business trust, company warrants, structured warrants and extended settlement contracts traded in Singapore from 19 Jan (Mon) 2015. Yes, mark this date on your calander!

You no longer have to find yourself priced out of more expensive blue chip stocks like Keppel Corp, DBS and UOB. 

No need to shell out $11,000 just to own a piece of Keppel Corp. You will soon be able to have a tiny-weeny piece of this marine, property and infrastructure company at $1,100.

From 19 Jan 15, the trading volume of blue chips will shoot up many, many folds, shaking the sleepiness from some of these blue chip stiocks.  With more trading activity, the greater the opportunity of profiteering, but only if you know how.  What would you do now?

If you’re not well-versed in stock investment yet, get up to speed and equip yourself with REAL investment kung fu.  Empower Advisory’s bi-monthly intensive stock investment course specifically prepares you for it. Just 2 more dates for Sep and Nov 14.

No nonsense, no games, no time wasting, no rah-rah. Because at Empower Advisory we teach, not trick.

To check out SPECIAL pricing for our September course (7th intake), scroll all the way to the bottom at this link.

Our Best, Always

Empower Advisory Team

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How New SGX Regulations Will Affect You – 4 Aug 2014

Posted on August 4th, 2014 in SG market update, SG stocks

 

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We have distilled the latest SGX Regulations announced on 1 Aug 14 and highlight the salient ones that will affect you, the retail investor

Upcoming Changes in Singapore Stock Market Regulations that will affect you.

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1)   Minimum price as a continuing listing requirement for company shares listed ONLY on the SGX Mainboard

A minimum trading price of S$0.20 as a continuing listing requirement for company shares listed on the SGX Mainboard – While this tries to address risks of low-priced securities being susceptible to speculation and manipulation, it doesn’t mean that you can assume it will no longer happen.  Most affected companies are likely to consolidate their shares so that their share price is well and above S$0.20 unless they can boost their share price organically through good financial performance.

Expected date of implementation: Mar 2015.  Companies will have up to 4 years from Mar 2015 to comply.  Companies that don’t comply may be forced to delist.

2) More cash outlay required

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Securities intermediaries like your brokerages houses will have to collect at least 5% of collateral from you for trading of listed company shares. Exempted from this rule are institutional investors (Big boys, not you and us), trades settled through delivery-versus-payment mode, and funds from the Central Provident Fund and Supplementary Retirement Schemes.

For those affected, you will have to keep  cash collateral in trust accounts with licensed banks in Singapore at all times, except for cash collateral collected in relation to trades on overseas securities exchanges such as NASDAQ.

Expected date of implementation: Mid 2016

 

3)   Expensive stocks become “cheaper” to buy

SGX will reduce the board lot size for securities listed on SGX from the existing 1,000 shares to 100 shares.

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Expected date of implementation: Jan 2015.  More details will be provided by end August 2014.

Our Best, Always!

 

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Sell in May, Go away? S’pore & US stock market – 10 Jun 2014

Posted on June 10th, 2014 in SG market update, US market update

 

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Ever heard of Sell in “May, Go away”? Often heard and read in the media and the investment circle, it is a theory that the period from November to April inclusive has stronger growth than the other months. Hence investors are advised to sell their stocks in May since stocks generally take a tumble and pick them back at a lower price a month later or more.

What is the theory behind this phenomenon?  A lot of research has been done to understand this stock market behavior. Indeed, a study published in the American Economic Review in 2002 showed that returns on stock markets in 36 out of 37 countries studied from 1970 to 1998 were higher from November to April than in the May to October period.  A more recent research found that the phenomenon did indeed exist for 1998 to 2012 for major stock markets.

What could be the reason? Fund managers and individuals liquidating their positions so that they can go for their summer holidays uninterrupted? More adverse major economic and political events that seem to take place between May to October period?

In the United States, individuals get their annual capital gains distributions of mutual funds in November, and a month later, Christmas and year-end bonuses.  So perhaps there is some palatable reasons why the stock market experience stronger growth between November to April.  As for Singapore, maybe it takes its cue from the major stock markets and fall in line too.

But did it happen in 2014?

Major indices as at 10 Jun 14

A quick look at the Dow Jones, Nasdaq and Straits Times index tell us that the “Sell in May, Go Away” effect did not happen, at least not for 2014.  All 3 indices ended higher at the end of May than the start of the month. Some of our favourite stocks like Apple, Goodpack and Silverlake Axis continued their onward march.  The takeaway is that you need to know what you are doing.  Looking away just because you think everyone is dumping stocks in May means you have just missed making an early bonus for yourself.

 

Our Best, Always!

 

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A tale of 2 Stock Markets (US vs SG) – 11 Jan 2014

Posted on January 11th, 2014 in SG market update, US market update

 

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2014 will be yet another exciting year for stock investments and good profits.  No doubt the markets will be volatile and choppy and once again fraught with uncertainty with the certain tempered winding down of the US stimulus programme and the most likely scenario of a global rise in interest rate.

Sounds scary?  But wasn’t 2013 also a wild yet profitable ride too?  It also depends on which markets you are looking at.  Let’s take a trip down memory lane and compare how the general Singapore stock market (represented by the STI) performed vis-a-vas the general US stock market for the whole year of 2013.

The Straits Times Index (STI) is regarded as the benchmark index for the Singapore stock market. It tracks the performance of the top 30 companies such as Starhub and DBS Group Holdings listed on the Singapore Exchange

The Dow Jones Industrial Average consists of 30 major American companies such as Coca Cola, MacDonalds, IBM and Intel. These companies come from a variety of industries. Do not misunderstand that this index only covers heavy industrial companies

 

The NASDAQ Composite is a stock market index of over 3000 common stocks and similar securities listed on the NASDAQ stock market. Some of the composite stocks are Apple and Facebook. This index is taken to largely represent the stock performance of technology companies and growth companies

 

What do you see and interpret?

While it doesn’t mean that you can simply make money by blindly choosing any stock in the US market and comfort yourself by saying a rising tide lifts all ships, it means that markets in different countries perform differently and give you different rewards.  In this light, it is also useful to consider buying a simple exchange traded fund that track the general performance of the various stock market indicators.  Yes, very boring but profitable.

We have said it before and we’ll say it again.  If you have been always looking at the Singapore market and are somewhat disappointed, do consider the US stock market which has great companies and tremendous trading volume.

Recently, we took a position in Tesla after doing our homework and applying the principles we teach at our course.  If you recall, we covered Tesla in our superblog posting.

We look forward to welcome our 3rd batch of Empower Advisory members this 18 January and teach a life-skill worth many, many times the course fee!

 

Our Best, Always!

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Where is the Singapore Stock Market headed? – 20 Jul 2013

Posted on July 19th, 2013 in SG market update

 

STI as at 18 Jul 2013

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As you can tell from the chart above, the Straits Times Index is struggling, having plummeted more than 400 points from its high this year and is currently testing the 50 days Moving Average resistance level. Whether it can break through is anyone’s guess and will depend on our corporates’ earnings report card for 2Q2013, to be released sometime in Aug/Sep.

As an investor, which sector would you focus on to pick up value buys? Would it be the traditional favorite oil and gas sector? Or would you go for the penny stocks? At this juncture, do your homework and buy into companies that have concrete growth plans and sustainable order books to tide them over the year. With the US market taking a breather after a record all time Dow Jones high of 15,542 and doing a double take on its corporates’ earnings to determine if the run up is built upon solid fundamentals or optimism, our market appears to be cautiously tracking back. It is not entirely rosy in the US. Once the very symbol of American industrial might, Detroit became the biggest U.S. city to file for bankruptcy two days ago. Although not serious enough to bring down the US economy, it suggest that US is still grappling with its economic restructuring, one that has moved jobs away from cities such as Detroit and left them with more expenses than their tax collection can cover. The US economy is not out of the woods yet. And neither is the global economy.

Our Best, Always!

 
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