Investment Pointers To Myself 3

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You can read my other past investment pointers on the left column of my blog titled investment pointers.

1) Ignore macro and sensational news: Don't get caught up in short-term noise or hype. Stay focused on the big picture and make investment decisions based on sound fundamentals rather than short-term trends. Market is a pricing in machine, so bad news can mean a good entry and good news can mean a good exit. Dwelling too much into macro and sensational news that bombards you on a daily basis will confuse you. Stay rooted to the fundamentals of the company and always reanalyze its moat.

2) Consider tax implications: Taxes can have a significant impact on your investment returns, so it's important to consider the tax implications of your investments. In Singapore context, in terms of world or S&P index, best to choose those that are domiciled in Ireland or the UK to save 15% tax on dividend. A good example is CSPX. HKSE although volatile does contain alot of hidden gems and has zero taxation on dividend similar to SGX.

3) Be honest with yourself. Learn from your mistakes: No investor is perfect, and it's likely that you'll make mistakes along the way. Don't get discouraged by your missteps - instead, use them as an opportunity to learn and grow as an investor. Reflect on your mistakes and use what you've learned to inform your future investment decisions. More important, don't live in denial and compound your mistakes by doubling down on it, that would be devastating.

4) Use a stock screener: Its good to have a powerful stock screener for all exchanges. As you can use it to your advantage. For example, you can screen for all net net stocks in hkse(stocks trading below ncav), that has a high dividend yield, low payout ratio and yet earns an even higher fcf yield. You can manipulate the metrics to your advantage to uncover obscure companies that you would have never known about. 

5) Have patience: Successful investing takes time and patience. Don't get discouraged by short-term fluctuations or the occasional setback. Stay focused on your long-term goals and be patient as your investments grow over time. If you find yourself keep looking at the stock prices every minute, means something is wrong. Not good for your mental health, because the stock market in its essence is irrational feedback loops from retailers and traders pushing up and down the prices in the short term. Those movement shouldn't mean anything.

6) Take advantage of compound interest: Compound interest is a powerful force that can help your investments grow over time. Consider reinvesting your dividends or interest to take advantage of this powerful concept. But usually its hard because the reinvestment amount maybe small and you would be complacent. Need to correct this misconception, because if you annualized your compounded interest, it would likely be substantial.

7) Rebalance your portfolio regularly: Over time, your portfolio may become unbalanced as some investments perform better than others. To keep your portfolio aligned with your goals and risk tolerance, it's important to rebalance your portfolio regularly by selling some of the investments that have performed well and reinvesting in other areas. Who wouldn't want to hold on to compounders, but sadly most markets doesn't act like that. Only the US market and that could also likely be due to QE and money printing. If you are cognizant with the valuation of your investments, you will know when you are overpaying, maybe that is the time to take profit. In HKSE that are large swings even for medium to long term holdings(1-5 years). It tends to have extreme bull and bust cycles so rebalancing is key for such markets.

8) Keep emotions in check: Investing can be an emotional experience, but it's important to avoid making investment decisions based on fear, greed, or other emotions. Stick to your financial plan, avoid knee-jerk reactions, and stay focused on your long-term goals.

9) Stay informed: Keep up-to-date on market news and developments, but don't get caught up in short-term noise or hype. Stay focused on the big picture and make investment decisions based on sound fundamentals rather than short-term trends. Certain metric like high inflation/rising interest rates can directly impact your medium term investment performance. Inflation can erode the value of your investments over time, so it's important to consider how your investments may be impacted by rising prices. Some investors adopt inflation hedging techniques, but some just buys the dip. In either case, you have to stay informed and take action you think is appropriate. 

10) Don't overlook international markets: Remove the home bias and look globally. Investing in international markets can help to diversify your portfolio and give you exposure to new opportunities. However, do be cognizant of the risk involve, ie the currency, taxation, regulation and other non systematic risk.