Investment 2011: A Volatile Year for the Stock Market

On the last trading day of the year, the local stock market, STI, ended with a drop of 1%(-26pts). Volume was low,with 437 million shares traded. The anemic action showed that investors were staying on the sidelines on what was typically the lowest volume sessions of the year. This could be because many brokers were still away for the Christmas and New Year holidays. It could also be due to the fact that most investors are trading cautiously nowadays and adopted wait-and-see investment positions for the coming year. After all, 2011 had been such a incredibly volatile year and most investors can’t wait for it to be over.

Due to the relative small market size, STI’s performance has always been affected by global stock market’s condition. As a result, there were much volatlity this year caused by the Europe debt crisis, upheaval in the Middle East (Arab Spring), a devastating Japanese earthquake and a struggling United States economy (high unemployment). Stock markets throughout the world were battered by negative news weeks after weeks and investors were made to seek safety in other forms od investments such as dividend stocks, blue chips, gold and Treasuries.

As we look back 2011, most of the problems seemed to be contained or resolved.

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Investment article: What you may not know about stocks?

Below is an investment article by Jeff Augen, extracted from my favorite blog “CreateWealth8888″, dated 4 Feb 2011. I like the blog because many of the articles are sensible, informative and educational. Hope readers can benefit from the article:

” Most investors who buy a stock believe that they are investing in a company. That view, while technically correct, is also misleading. A stock investment is really nothing more than a bet on the direction that money will take as it flows through the financial markets. A stock can rise only if market forces align to aggressively drive up the bid price causing new money to flow into the stock.

Many different factors are involved including economic news, announcements from other companies in the same industry, political events, the actions of large institutional investors, analysts’ forecast, and a variety of global economic forces such as changes to currency exchange rates and interest rates. the long-term performance of a stock represents nothing more than the compound effect of these forces over time.

It is important to recognize that the financial markets are zero sum game with competition at all levels. the stock market competes for money against the bond and currency markets; industries compete for money with each other; and money flows between stocks within a particular industry.

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Starting up a business in Singapore

Being an entrepreneur is not easy and not everyone can be a successful founder. However, the process of starting up a business in Singapore has been made less painful with the various business-friendly policies in this city state. Each type of structure comes with different structure. It may be useful to check out ACRA website.

To help aspiring entrepreneurs up to speed on Singapore laws, regulations, taxes and government assistance schemes, Enterprise One (a government agency tasked to promote local enterprise) has prepared a simple checklist:

1) Sign up for EnterpriseOne Digest, a monthly newsletter tracking the latest updates on the laws and regulations. You can log on to Enterprise One website to sign up.

2) Ensure your business premises (office, shop, factory) can be used to carry out your business. For example, applicants who wish to use their HDB residential flats for home office are required to seek prior approval from HDB.

Singapore Finance Blogger
3) Apply for all licenses and permits needed.

4) Familiarize yourself with various tax incentives and Government assistance schemes.

5) Register your business with Central Provident Fund (CPF) before hiring your first worker.

6) Register your business with Accounting and Corporate Regulatory Authority (ACRA) and comply with post-registration requirements.

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Business Proposals for Funding

One of the major obstacles faced by entrepreneurs is the lack of available funding in Singapore to help them kick-start or sustain their business ideas. Even if there are government schemes to provide grants or funds to assist business owners, many of them are clueless on how to obtain these grants.

In many cases, investors and entrepreneurs found themselves having to navigate through layers of bureaucratic red tapes and micromanagement when seeking grants. That is probably why entrepreneurs are more attracted to venture capitalists and angel investors for business opportunities.

In the early stage of a business, funding is needed to nurture the seed into viable business model. But beyond cash, founders should ask themselves serious questions whether they are willing to cede control in exchange for the money. But assuming they are willing to do so, then he should know how to pitch to investors and position his business in a strategic manner.


To obtain that all-important pot of gold, there are several fundamentals that business owners need to highlight or observe in their business proposals:

1) Financial factors: Track records speak a lot and obviously no one likes to invest in a sinking ship. In your plan, you have to be honest and state the financial health of your company.

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Online Karang Guni

In Singapore, “Karang Guni” is a Malay phrase for gunny sack, which was used in the past to hold stacks of newspaper. It is often used to refer to those who work in the rag-and-bone trade, visiting residents door-to-door to collect old newspapers and clothing to sell.

Karang Guni can be a lucrative and highly profitable business in Singapore, with reported stories of Karang Guni men becoming millionaires from their rag-and-bone businesses. Yet most Singaporeans shunned this trade because they considered it unglamorous.

Karang Guni

However, not many realized that Karang Guni is [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Funding opportunites for start-up enterprises

Innovative and small-medium enterprises (SMEs) have a key role in spurring Singapore’s economic growth. Many of them are developing capabilities to create a competitive edge but very often, they lack funding to sustain. SPRING Singapore, a government agency set up to cater to the growth of local companies, has various funding schemes to help them grow faster.

1) Angel Investors Tax Deduction Scheme is a tax incentive for business angles to invest in local start-ups

2) Business Angel Funds co-invests with business angels in local early-stage companies with innovative products/or services for up to $1.5million

3) Incubator Development Fund co-funds incubators and venture accelerators to mentor and develop local start-ups.

4) Spring Start-up Enterprise Development Scheme co-invests with third party investors in local innovative start-ups for up to $1.5million.

5) Technology Enterprise Commercialization Scheme co-funds early stage companies to develop and commercialize innovative technology ideas.

6) Young Entrepreneurs Scheme for Start-ups co-funds youths under 26 to set up their first businesses for up to $50,000.

There are several factors that enterprises should highlight in their business proposals to Spring Singapore, namely financial factors, strategic factors, economic factors, risks factors and management factors. I would further elaborate the details in my next posting.

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2011 In Review

The year 2011 is coming to an end. On reflection, I realized that I had deviated a lot from my resolution set earlier in the year and found that my savings is depleting fast. This is in part due to the fact that I got married, bought my 1st resale HDB flat, bought my 1st pre-owned car, sold my car and then bought my 2nd pre-owned car. All of these took a toll on my savings and affects my financial planning. My only consolation now is I am still holding on to my job. Not sure what 2012 may bring.

Magically Yours

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Investment Resolutions

It is the start of the new year and I have made some investment resolutions. Through the years, I realized that failures are part and parcel in our wealth building journey. In life, you will encounter obstacles and you will make mistakes. How you emerge from these experiences will define your financial destiny.
Generally, the successful investors are those who are resilient and learn from their mistakes. To start off the year, I decided to lay down a few markers to achieve this year:

Firstly, I have decided to set aside a small amount of cash every month to invest in stocks. My objective is to beat the inflation that has been eroding the cash value in my bank account. In order to reduce the costs, I have decided to purchase stock through POEMS online rather than call up my broker.

Secondly, I have decided to shift my focus from value stocks to defensive stocks that pay dividends regularly. Defensive companies are those whose future earnings are able to withstand and economic downturn. Typically, they would have relatively low business and financial risks. Examples are Suntec Reit and Singtel.

I believe 2011 would be a boom year for Singapore’s stock market.

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