Three tenets of successful investing

As a wealth builder, I constantly ask myself how I can improve my investing skills in order to make more money.  I view wealth as a journey, rather than a destination point. That is why I chose the name, “SG Wealth Builder” for this blog. Investing is important component of wealth building. So in this article, I will pen down my thoughts on the three tenets of successful investing.

Strategies

In investing, different people have different approaches and styles. Some people like to buy and hold blue chips while there are others who invest solely in Reits for dividend incomes. Then there are value investors who buy stocks at bargain price and sell them for capital appreciation. Growth investors look at companies with potential to grow and thus are willing to pay a premium for stocks that are trading at high price-to-earning ratio. At the end of the day, it does not matter which strategies you adopt as long as it yield positive results over time.

The worst thing in investing is not having a strategy and invest for the sake of investing. Without the clarity of thoughts and a proper framework in mind, the chance of winning the stock market is very slim. This is because having a system or strategy will help you to take the emotions out of investing and mitigate the potential of investment losses. Without a strategy in mind, you would probably be very lost and when you lose money, you feel angry. But thankfully, investment strategies can be learned and trained.

Discipline

Sometimes, the biggest investing mistake is not the lack of strategies but rather the lack of discipline. How often have you deviated from your investment principles in the heat of the moment? Have you bought into hot stocks recommended by financial bloggers or analysts only to regret much later because these stocks do not fall into the category of stocks under your investment framework?

Far too often, I have fell into this discipline trap. Thus, I have learned to give myself a “cooling period” before investing in any stocks. During this period, I will examine whether this stock fall into my investing criteria and check whether it is aligned to my philosophy.

If you lacked the investing discipline, then you may consider monthly investment plans like OCBC’s Blue Chip Investment Plan. For as little as $100 a month, retail investors can get to invest in local blue chips. OCBC has shortlisted 19 counters for investors to choose from. Most of them are government-linked companies with established track record of growth and dividend payment. You can buy smaller numbers of shares with your chosen monthly investment amount, so it works like a monthly investment plan.

The best thing is, you don’t need to set up a trading or CDP account. All you need is to have a OCBC account and log on to OCBC Online Banking and apply for BCIP. OCBC will execute your orders on the 22nd of each month if it is a business day. Over time, BCIP will accumulate blue chip shares for you.

Diversification

When I started my wealth building journey, I was very much into SGX stocks. My mentality back then was that stocks would offer the best route to financial freedom. Fast forward 16 years later, I still believe that stocks offer the best returns over time among all the assets but I realized that there is a need to diversify the risks.

With high risk, there would be high returns. So it makes sense to spread the risks through diversification across several asset classes like gold and silver bullion. It is not possible to beat the stock market consistently. But if we built our portfolios in different assets, it is possible to mitigate the risks.

In Singapore, BullionStar’s Bullion Savings Programs allow you to trade gold and silver online at any point of time. At very low price premium and spread, BullionStar allows you to convert grams in the Bullion Savings Programs (BSPs) to 100g PAMP Cast Bars and 15kg Heraeus Bars. Unlike other bullion savings programs (BSPs) are fully backed by physical precious metals.

gold bullion Singapore

Setting up an online account is pretty simple and you can choose to pay in different currencies, including Singapore dollar and Bitcoins. In addition, the price is very transparency as BullionStar’s website displays the price premium and spread for each bullion. This allows buyers to make price comparisons online before making the purchase.

BullionStar also offers customers their own minted gold and silver bars with zero spread. They have commissioned world-renowned LBMA-approved Swiss gold refiner Argor-Heraeus to produce these stylish and unique minted 100 gram 99.99 % purity gold bars.

Below are some gold bullion offered by BullionStar that are worth buying:

  1. PAMP Gold Bar – 1kg
  2. American Gold Buffalo Various Years
  3. BullionStar Mint Gold (No Spread)

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Magically yours,

SG Wealth Builder

Updated: August 4, 2017 — 2:44 pm

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