New year, new resolutions.
If you are just beginning out as an investor, here are three resolutions to help you navigate the stock market in 2019.
Learn more about investing
Warren Buffett, one of the world’s best investors, mentioned in an interview with Forbes that the best investment you can make is one that “you can’t beat”, and that is investing in yourself. Even taxes and inflation can’t do anything to destroy it.
“Ultimately, there’s one investment that supersedes all others: Invest in yourself. Nobody can take away what you’ve got in yourself, and everybody has potential they haven’t used yet.”
By investing in yourselves first, you would have the proper knowledge to pick the right stocks. There are many investing books and websites like The Motley Fool Singapore to help you gain the right knowledge. We have a special investment guide prepared here just for new investors like you.
Without amassing proper knowledge in the stock market, you might lose money from your investments without you knowing why.
Look through an annual report
Now that you have learnt the basics of investing, you can venture into other aspects of investing.
The next thing to learn about is how to read an annual report. The annual report is to a company just like what a report card is to a student.
Pick your favourite company listed on the Singapore stock market and download its latest annual report from the company’s investor relations website. Or you can simply do an internet search for “<company name> annual report <year>” (where you have to insert the exact name of the company and the year of the annual report you wish to look at).
By choosing a company you are familiar with, you would be able to grasp the investing knowledge faster.
To learn more about the things to look out for in an annual report, you can check out the article here. The annual report will contain financial statements, and you can learn how to read company financial statements in our special investment guide.
Buy the right stocks
After learning about basic accounting and all the other aspects of investing such as valuing shares through our guide, you should be ready to put what you have learnt into action.
As a start, you can consider buying the exchange-traded funds (ETFs) that track the Singapore stock market benchmark, the Straits Times Index (SGX: ^STI). This index contains 30 large-cap companies in Singapore. There are two such ETFs offered here, and they are SPDR STI ETF (SGX: ES3) and Nikko AM STI ETF (SGX: G3B).
Only by taking action and putting our hard-earned money into the stock market, can we overcome the emotions when the stock market takes a hit periodically. The trick here, though, is to stay vested in great companies for the long-term.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn't own shares in any companies mentioned.