My post today is inspired by someone I bumped into in my neighbourhood a couple of days back; prior to that day, I have not seen him for at least a couple of years.

Knowing very well that during this circuit breaker period, we should minimise our conversation with others outside, I said a quick hi, and briefly shared what we have been up to recently. Upon telling him that I am now a retail investor, his question to me was:

‘Is investing risky?’

‘Definitely not, if you know what you are doing, and if you are invested in fundamentally sound companies,’ was my reply.

While I did not further elaborate with him on the above reply (because we both know that we can’t stick around and communicate for longer), I thought this was a good question for me to write about today.

Personally, I feel that investing is just like riding a bike (try riding a two-wheeler bike without first learning how to ride a three-wheeler), or swimming (try jumping into a two-metre deep pool and attempt to swim if you don’t know how to swim in the first place), if you just blindly put your money into a company based on “hearsay”, you’ll likely end up “burning a big hole” in your pocket (for this group of people, they’ll tell you that investing is VERY risky!)

As such, before you put your hard-earned money into any company, you need to make sure you are equipped with the knowledge necessary – there are lots of resources out there where you can learn about how to invest for free – including the huge catalogue of books available in the National Library, numerous videos on YouTube, investment forums like InvestingNote (which is free to join, and there are many experienced investors in there who will be more than happy to share their knowledge with you), and the list goes on.

Besides education, another very important point to note, especially if you are just getting started, is to invest in companies in businesses that you know (and interact with it) – think DBS (Singapore’s biggest bank), Sheng Siong (affordable grocery shopping), shopping malls you frequent (which are managed by some of the Singapore-listed REITs, for instance, Plaza Singapura is a property under CapitaLand Mall Trust, Northpoint is under Frasers Centrepoint Trust, VivoCity is under Mapletree Commercial Trust), hospitals like Mount Elizabeth (which is a property under Parkway Life REIT), etc.

Simply identifying companies is just part of the process – the next thing you need to do (before you invest in the company) is to study the individual company’s performances over the years (I tend to invest in companies that have at least five years worth of historical results to study.) You can learn about the company’s performances through its annual reports, which can be found under the company’s ‘investor relations’ section (just Google the company’s name, along with the words ‘investor relations’, without the inverted commas.) Besides the company’s performances, another thing you want to take note of its its dividend payout to shareholders (my preference is towards companies that declare a dividend payout to shareholders on a quarterly basis, and that their dividend payouts have been increasing steadily over the years.) You can learn about a company’s dividend payouts in its annual reports as well.

One last thing you need – patience. Just like how we have matured over the years, a company also need time to grow its businesses. As it grows (and record improving results over the years), its share price will also go up (allowing you to enjoy capital appreciation on your initial investment), and its dividend payouts will also increase over time (allowing you to receive even more “pocket money” over the years.)

With that, I’ve come to the end of my post today – Especially for those who are looking to get started with investing (and have this question in your mind), I hope you’ll find today’s share useful, and that it addresses the concerns you may have.

If you have additional questions, do feel free to either post your comments in the comment box below (available for those who are viewing this post using desktop), or you can send your questions via email to me here – I’d do my best to answer all the questions and concerns you may have…

Disclaimer: At the time of writing, I hold shares to some of the companies mentioned in the post above, including DBS Group Holdings, CapitaLand Mall Trust, Frasers Centrepoint Trust, and Mapletree Commercial Trust.

Launch Event for My First Book: building your REIT-irement portfolio

After months of hard work, my first book, 'Building Your REIT-irement portfolio' is finally ready! In this easy-to-follow 178-page guide, you'll learn everything you need to know about building a REIT portfolio that can provide for you in your retirement years. You can check out a preview of the book here.

I'm extremely thankful to the team at InvestingNote and ShareInvestor for their help to organise a book launch event for me on Tuesday, 26th September 2023, from 6:00pm to 8:00pm at their office in New Tech Park.

For more details and to RSVP (seats are extremely limited), click on the link below:

Click here for more details on the book launch event and RSVP here...