In December 2021 I was invited to an interview with The Financial Coconut, where I discussed various topics such as How to avoid Common Investment Mistakes, How I personally choose stocks to invest and How to allocate your investment portfolio depending on the stage of life you are in.
A summary of content is below, timestamps provided.
3 Stages of Losing Money: Common Investment Mistakes that I made (1:10)
- Ignorance: Simply listening to word of mouth in what to invest. Investing in something despite not knowing anything about the stock itself.
- Not enough experience: Investing without the required experience in the market or sector (2:16)
- Putting all your eggs into one basket: A very common mistake. One of the companies that I invested in was discovered to have commited fraud after an audit, resulting in the suspension of the stock. (4:16) Diversifying your portfolio is very important.
Why Diversification is so important (and why I do so for my clients) (7:53)
Behavioural Coaching, focusing on your primary objective when you invest (8:44)
What makes a Diversified Portfolio? (10:04)
Don’t chase stocks that are going up. Stocks are usually cyclical. (9:43)
How and why do different asset classes rotate? (12:32)
Smart Money and 2 main groups of retail investors: (15:00)
- Momentum investors (chasers)
- Value investors: Those that look at financial ratios and pick the right stocks
Differentiating “noise” and business facts (16:35)
- Is a business is not doing well because of poor financial ratios;
- or because of “noise”? (One time events like the pandemic)
How I personally choose stocks to invest, how I enter the market and how much do I choose to allocate (16:35)
How do I diversify my Portfolio, at my stage of life? (21:10)
- Unit Trusts are a good way to diversify your portfolio with a small amount of funds.
- Fresh grads: Build a more aggressive portfolio to maximise growth over the long-term. Better to use a Monthly Saving Plan for Dollar-Cost Averaging (DCA) (21:31)
- Late 20s-30s, preparing for marriage, BTO etc: A little more defensive portfolio, while ensuring your investments are mainly liquid (in case you need to pay for mortgage, etc). A mix-and-match of asset classes like REITs, Bonds, Equities etc. (24:13)
- 40s-50s: Midlife crisis may mean losing your job is a possibility. A more defensive portfolio, more dividend-based stocks (e.g. REITs). To be able to rely on dividends in case you lose your job. A larger focus on growth stocks may be desired to further grow your wealth as you head into retirement. (25:49)
- Close to Retiring/Retirees: Focus on building a passive income portfolio. The main focus at this stage is to protect your wealth. (29:56)
Confessions of a Full-Time Trader: Why it (probably) isn’t for you (28:27)
Different Ways of Diversifying your Portfolio (34:29)
- Asset Classes (Commodities, Bonds, REITs, Equities, Alternative Investments, Cryptocurrencies etc.)
- Geographical (Different Countries)
- Sectors (Different Sectors in each Asset Classes, e.g. Technological Stocks, Commodity Stocks etc)
An overview on S-REITs in 2022 (38:59)
