How to start your investment journey

Hi SG Wealth Builder,

I am Ryan and I am currently still schooling. I have read your articles on your blog and I am very inspired by your investment journey. I would like to get advice from you on how to make my first step. I want to create an income source and at the same time, learn and gain experience in investing. As I don’t come from a very well to do family, I always face struggle when it comes to money issues, for instance school fees. I have saved up to about 1k plus dollars and would like to know how can I start learning and make my first move. Please give me advice.Thank you,
I received the email from one of my readers a couple of weeks ago and made some editorial amendments to the original content. It took me quite a while to craft out this article due to my recent massive pay cut in my day job. I was in a really distraught mode and was not quite in the right frame of mind to blog.
Investment journey
Nevertheless, I felt obliged to response to this young man because I can relate to his motivation to invest.
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More PMETs retrenched in Singapore

Recently, I saw an article in The Straits Times which reported the increasing trend of local PMETs being laid off in Singapore. It brought home the hard reality that professionals and skilled workers are no longer safe from being made redundant in their jobs. From the perspective of a wealth builder, it also reinforced the belief that in order to sustain in this dynamic economy, it is very important to build a solid personal finance foundation and master niche skill sets.

I always encourage young people who just entered the workforce to build up their own emergency funds as soon as possible. Life is always unpredictable. You never know when you will lose your job or encounter personal crisis. Having an emergency fund can help to provide short term security against market uncertainties. It allows you and your family to carry on life as per normal whilst you embark on the recovery journey. Without this sum of money as interim support, you have no choice but to borrow from friends and relatives. Personally, I don’t like to, and have yet, to borrow from my friends and relatives.

Of course, having this emergency fund is only one of the key elements of the personal finance framework.

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Money Wisdom from Li Ka Shing

Many Singaporeans want to be rich and retire early in Singapore. But not many of them are keen to invest the time and energy to gain the knowledge required to be a millionaire. I came across a recent article by well-known Hong Kong billionaire, Li Ka Shing who shared some tips on how to become rich. Li Ka Shing’s story is one of rag-to-riches, so his success is particularly inspiring.

Like many of you, I share the same aspiration to achieve financial freedom. While I have not achieved Li Ka Shing’s wealth status, his strategy resonates with my philosophy of having a growth mindset. This means that one should put in the extra effort to develop new skills and knowledge. Take note that none of his pointers below encourages you to hoard money like a scrooge.

In that article, he outlined a unique plan that can help to improve one’s financial destiny. His approach is refreshing to me because so far I have not come across anyone with a similar approach. Basically, the gist is to split your income into five portions.

Li Ka Shing

1st portion (Expenditure)
The first set of fund is to cover your living expenses. He elaborated that one should take hardship when young and eat simple.

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When it comes to personal finance, budgeting is an important element. Yet I observed that many young Singaporean working adults fail to understand the importance of budgeting and how to practice it in an effective manner.

This is not surprising as most students were not taught about how to manage money in schools and at home, most parents also seldom discuss household budgets with their children. As Asian, we also find it taboo to talk about money issues during social meetings. All these factors reinforce the notion that budgeting is not relevant to successful personal finance, which is totally untrue.

Many people thought that budgeting is all about counting beans and tracking your daily expenses. But I beg to differ. Sure, there are means and various mobile apps designed to track your daily expenses but I find that managing personal finance at such micro-level would take the kick out of living a meaningful life.


Just imaging this: having to think twice about buying or treating your good pal that cuppa of Starbuck coffee. Or how about skipping a close colleague just to save that ang pow money? Money is important but we should not let it rules our lives and stresses us out.

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When to Use a Credit Card and Not Cash

Many people still pay for goods and services with cash and this is perfectly fine. Cash transactions are quick especially when you’re only buying a few items at the grocery store or convenience store. Using cash also lets buyers and merchants avoid fees associated with using a credit card. However, credit card issuersoffer their customers many benefits that could make it wiser to swipe your card the next time you pay for something.

Rewards, Rewards, and More Rewards

Rewards and bonuses are one of the main features of credit cards. Retailers that offer their own credit cards have a lot of promos for their customers as a way to gain loyal customers. Retailers such as gas stations and specialty stores promise their customers rebates and special discounts when customers use the store’s special credit cards. Some petrol stations in Malaysia for example, give 8% rebate on gas purchases with store-branded credit cards. It’s best to study your expenses and see whether your favourite store offers their own credit card. You could be saving a lot by using their credit card or at least earn more reward points. This is especially true for frequent flyers who want to earn more air miles by swiping their credit cards.
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New credit card rules in Singapore

In recent years, there were various articles on increasing trend of Singaporeans defaulting on their credit card payments. I think this is a worrying sign in Singapore. Below is a press release on a new government policy to curb lending practices by local banks.

11 September 2013
The Monetary Authority of Singapore (MAS) has finalised changes to credit card and unsecured credit rules aimed at improving lending practices by financial institutions and enabling individuals to make better borrowing decisions.

2. The policy changes follow a public consultation, in which respondents generally supported the proposals. MAS has taken the public feedback into consideration and adjusted the proposals where appropriate. Details are set out in the responses to feedback received on the consultation paper.

3. The key policy changes are as follows:
(a) Financial institutions will be required to review a borrower’s total debt and credit limits before granting a new credit card or unsecured credit facility, or increasing the credit limit on such facilities. This is to enable a more realistic assessment of an individual’s borrowing capacity.

(b) Financial institutions will be required to disclose to individuals who roll over their credit card debts and revolving credit facilities the potential cost of doing so and how the debt will accumulate.

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Preparing for the worst through CPF nominations

Life is fragile and unpredictable. Many Singaporeans are so focused in making more money but they often fail to realize the importance of planning for the worst. If you think that preparing for the worst is all about buying expensive life insurance policies from your financial advisers, then you are wrong.

My dad passed away earlier this year. It was unexpected and my family was totally unprepared for his demise. Like many Singaporeans, my father did not plan his estate distribution and left without a Will. So we had some problems trying to close his bank saving accounts.

Personal finance
We were also initially unsure how to claim his CPF monies. Thankfully CPF Board wrote to us and informed that he had made a CPF nomination many years ago, so we were able to withdraw his CPF monies within weeks. The lesson learned out of this episode is to have a proper planning for financial matters while you are still around. It is important that you set clear directions on how you want the money which you worked hard for in your life to be distributed according to your wishes after you passed on.

Intestate Succession Act
In the absence of a will, your assets will be distributed according to the Intestate Succession law.

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Pay yourself first

In recent years, there were various articles on increasing trend of Singaporeans defaulting on their credit card payments. This is a worrying sign in Singapore. In fact, one of my readers commented that he belongs to the group of credit card payment defaulters and is struggling to settle his mounting bills. I hope he managed to dig his way out of the hole he created for himself, but I suspect it is going to be a long and tough road for him. I believe this is also the case for many young Singaporean adults who just entered the workforce and spend lavishly. In this article, I will share my thoughts on how to pay yourself first.

Financial Discipline
When I just started out working, I always thought that credit card gives consumers a false sense of purchasing power. It was only until when my brother, who works in the credit department of an international bank, pointed out that the key to managing credit card spending is financial discipline. It was then that I corrected my thinking. Having many credit lines or credit cards is not a bad thing in itself. After all, we can make use of the various point rewards, rebates or discounts that credit cards offer.

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Filing of Personal Income Tax

It is that time of the year for Singapore taxpayers to file income tax again!

Recently, the government announced several Budget inititatives that aim to improve the lives of Singapore citizens. Most of the Budget goodies are targeted at the lower income group and I suppose most of the less well-off households in Singapore will benefit from the 2013 Budget. As I fell into the middle-income bracket, the only Budget goodies that I may be entitled would be the GST Vouchers and the 30% personal tax rebate.personal finance

Difference between Income Tax Relief and Income Tax Rebate
In Singapore, citizens are eligible for various applicable tax relief and rebate. It is important that tax payers understand the difference between tax relief and rebate because it can help tax payers to save thousand of dollars. Essentially, reliefs are deductibles which you can claim on your total income taxable while rebates are offsets on your tax payable.

Obviously given the tier system for Singapore’s personal income tax, the latter would have larger effect on your income tax payable. For example, if a tax payer is claiming the $4500 relief for taking care of his/her parents in 2012, he can only offset $4500 from his total taxable income.
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Unconditional love

In my previous article, I chronicled the life of Dad and wrote about his demise two weeks ago. In this post, I would like to share with my readers on a few reflections of mine. No doubt many of us are busy making money, but I think it is important that sometimes we pause down and reflect on events in our lives.

Importance of protection
I am not an insurance agent and I don’t work in the finance industry. But you might be aware that in my previous articles, I have always encouraged my readers to insure themselves adequately. It is also important to educate yourselves on the type of insurance that best suit your needs. In my father’s case, when he was healthy, he ignored the importance of buying insurance. It was only after he suffered from stroke, then he regretted and realised his mistake. By then, no insurers would offer to protect him because he was considered a high-risk personnel to insure. Even Great Eastern rejected his Dependent Protection Scheme and returned his pro-rated premiums. So do make sure you are protected adequately and purchase insurance policies when you are healthy. My view is that term insurance policies offers the best protection value because for a low amount of premium, you can be insured for a large amount of money.

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Importance of Emergency and Opportunity Funds

Today is the last day of year 2012. I am happy to note that I managed to build up my personal Emergency Fund that allows me and my family to survive without my income for six months.
It took me more than two years to save up this amount of money. This is because I had used up all my personal savings for my wedding last year. In addition, I am also the sole-breadwinner, had a baby girl and owns a car. Therefore, it took me quite some time to save up this amount of money. My partner and myself decided that we would only dip into fund when I lost my job or faced a personal finance crisis. Henceforth, we put the fund into a fixed deposit.
SG Wealth Builder
SG Wealth Builder

I always encourage young people who just entered the workforce to build up their Emergency Fund as soon as possible. Life is always unpredictable. You never know when you will lose your job or encounter personal finance crisis.

Having an emergency fund can help to provide short term security against market uncertainties. It allows you and your family to carry on life as per normal whilst you embark on the recovery journey.
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Lending money to friends

Recently, one of my army acquaintances texted me to borrow money from me. He is one of my reservist army bunkmates and I got to know him only a few years back (both of us were from different units during active times).
When I received his message for help, I was a bit apprehensive to lend him the money. This is because my father was hospitalized recently and my wife is a full-time homemaker. And I have a baby daughter. So I thought to myself if I had any spare cash, my priority would go to my immediate family first.
After some thinking, I texted him back and explained my financial situation to him. I also suggested to lend him $50 instead. He understood my plight and politely turned down my suggestion.
Gold and Silver Bullion
Gold and Silver Bullion

I suppose most of us would face financial difficulties at certain points in our lives. Sometimes we really need a helping hand from close friends to tide us over obstacles. I believe in this case, my friend genuinely needed my help but unfortunately, I could not support his request due to my family circumstances. I wish him all the best and hope things would turn out well for him.

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Singapore government revamped Medishield

On 10 Oct 2012, I wrote an article on “The state of healthcare in Singapore” and criticized the limitations of 3M (Medisave, Medishield and Medifund). Two days after my blog posting was published, the Singapore government immediately announced changes in the Medishield, our national healthcare insurance. Among the changes included the coverage and claim limits for policyholders.

Readers might call it pure coincidence. After all, the changes would take effect only in March next year, even though it was announced two days after my blog posting. I would like to think so but more importantly, the response validates my concerns of the state of healthcare in Singapore. In my previous posting, I had criticized Medishield’s fine print of “SGD50,000 maximum claim per policy year”. The government noted that and stated that they would increase the cap to SGD70,000 next year.

SG Wealth Builder

Some readers may argue that enhancement is incremental only but I feel that at least the government is moving in the right direction. In fact, the announced changes in the Medishield only served to reinforce my argument that it is time for our national insurance policy to be enhanced. Going forward, I feel that the next step should be to relax the ruling on the use of Medisave and also to review the eligibility requirements of Medifund.

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My thoughts on “Letter about leaving Singapore”

Recently, I came across an article featuring “Letter about leaving Singapore”. I felt compelled to blog down my feelings as the letter struck a chord with me.

Like the author, I feel very jaded living in Singapore. In fact, last year, my wife and me were seriously contemplating leaving Singapore for Australia. In the end, we aborted our plan because of our aged parents. We love them too much and thought that we should not be so selfish and left them behind in Singapore.

Leaving Singapore

The rich get richer, the poor get poorer
Friends and colleagues often tell me that Singapore has become a playground for the rich people. To a large extent, I agreed with them. Very often, there were articles of rich tycoons snapping up landed properties in prime district area or making big profits from stocks and shares. The rich get richer.

On the other hand, many middle-income and low-income earners hardly get by in Singapore with their incomes. Many of them are in debts, have hefty hospital bills to settle or just not earning enough to survive. How can you be happy and live a fulfilling life if you are constantly worried about bills, loans and debts? How can you remain motivated if you are hungry and desperate?

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Personal Finance Expert, Dennis Ng, passed away

I was shocked to learn that Dennis Ng has died suddenly of heart attack on 26th July. Dennis was well-known in Singapore to be a personal finance guru. He was the author of bestsellers, Mastering Your Personal Finance and What Your School Never Taught You About Money.

He was also the co-founder of, an independent mortgage consultancy portal. This article is dedicated specially to the man who have contributed greatly to personal finance literacy in Singapore.

I read from fellow bloggers in the investment community that he was someone who was willing to share his financial expertise and knowledge to novice investors. There are not many financial gurus, especially in Singapore’s context, who are willing to do so. Therefore, his demise is indeed a great loss to the investment community.

He is a role model of whom I aspire to be in the next 10 years. I don’t fancy myself as a guru, but it is my intention to share with my readers, my experience and lessons learned from investment mistakes. I hope that in the long run, I can reach the same level as Dennis Ng.

Thank you so much, Dennis Ng.Y

You shall be missed.

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Special appeal to all Singaporeans to support Adelyn

Many times, we took our health for granted. It is only when we lost our health, then we truly appreciate the beauty of life. I chanced upon this blog by a Singaporean girl called Adelyn Xinhui. She is born with cornea defect. I think many Singaporeans would recognise her face as she appeared in several Mediacorp charity shows before.

Xinhui has just released a music album, hoping to raise money for a cornea transplant operation. The operation cost more than $40k for each eye. Please read her story in ( In a gesture of support, my wife and me had bought one copy from her mom. Please help to spread the words around.

This operation may offer the girl a chance to lead a new lease of life and she genuinely needs help from fellow Singaporeans. I believe most of us can spare $20 to do a good cause.

Below is an extract from Adelyn’s blog:

My name is Adelyn. I am 10 years old. I was born with cornea defect called “Peter Anomaly”. I was sent for 4 times of cornea transplant when I was between 8 to 12 month old. However, all the cornea was rejected. Today, I can only visual lights, shadows and colors.

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Dangerous Investment Advice

One of my readers, Createweath8888, commented in my previous post that in this era of low saving rate, it is wiser to “invest well with most of our saving” instead of putting our money in the bank. Whilst I respect his view, I consider that a reckless financial advice. Simply because investment is never risk free. There is always a risk that you could lose a portion or all of your monies.

All of us must have a certain level of saving, then can we think or talk about investing. Depending on your comfort level, the amount of savings you accumulated can provide crucial safety net in times of crisis. Nowadays, with shorter financial cycles, you never know when retrenchment will strike. If that occurs, how prepared are you? Bear in mind that when you have no job, money will stop flowing into your pocket, but expenses will never stop. In such situation, I bet you would have appreciated that “Cash is King”.

It’s not that I disencourage investing. In fact, I agreed that we must all learn to invest in order to beat the high inflation rate. But before we jump the gun and pour our hard-earned savings into investment products, we must first build our fundamentals and learn to walk before we try to run.

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The magic of compounded savings

Many people underestimate the magic of compounded savings. Two years ago, when I was wooing my wife, I gave her a plastic piggy bank as an anniversary gift. I noted back then that she had difficulty saving regularly because she needed to repay her student loan and supported her family.

So I gave her a piggy bank hoping that she developed the good habit of saving. She was pleasantly surprised to receive the gift and made a commitment to deposit only one dollar coins in it. Subsequently, I also bought one for myself and after we got married, we challenged ourselves who can save more.


Recently, both of us decided to count the number of one dollar coins in our piggy banks as my wife’s piggy bank was filled to the brink. Before counting, it was obvious that I had lost as mine was only about one-sixth filled. Nevertheless, we were very excited to know how much she had saved over the last two years. In the end, we counted 2000 one-dollar coins for my wife and for me, its less than $200. Both of us marveled how much she had saved considering that she is now a full-time housewife with no income.

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The $100,000 Question

Singaporeans who are contemplating a new car must be wondering if it is worthwhile to buy now. This is especially so considering the sky-high Certificate of Entitlement (COE). Despite the recent drop in the prices of COE, the entitlement to drive a new car on Singapore roads still remain very expensive. Buyers need to fork out at least around $100,000 for a new car. This is by no means a small sum, even for a big-ticket item. So let’s examine what are the factors we should consider before damaging our pockets.

Buy for the right reason
Most Singaporeans, especially those conservative and thrifty ones, consider cars as sheer liabilities, at least in Singapore context. They argued that public transport is excellent in Singapore and hence there is no need for a car. But I beg to differ. For some people, having a car can be an asset to their job or business.

For example if you are a housing agent, you definitely need a car to meet clients at different time and places. In addition, some jobs, especially those sales and marketing ones, also require candidates to possess private transport so as to meet clients.


On the other hand, some Singaporeans buy car because of family needs.

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How to find a good financial advisor

Most experts recommend novice investors to engage financial advisor to help them achieve their financial goals. Yet how do we find someone whom we can trust? Over the years, I have met many financial consultants, some good, some down right bad. I would like to share with my readers some of my experience dealing with these jokers.

Title Inflation
Many of the financial advisers I met carried with them big titles like Associate Director, Vice President, Sales Director, etc. A lot of them were also quite young. I think many of them suffered from the mistaken belief that if they carry big titles, customers will respect them more and will be more inclined to buy from them. Actually I don’t care about titles when I look for a financial consultant. To me, titles are just job designation. But normally I would look out for someone who is a Certified Financial Planner. I would give the fellow slightly more face-time.


Know your needs
Before you even sat down with the financial advisor, make sure you know what you need. Not all planners offer comprehensive advice tailored to your needs. Decide what you want and expect from the adviser. For example, last month, I was shopping around for a medical shield plan for my baby girl and invited a financial consultant to my home for a discussion.

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Baby bonus

In my previous post, “Sentiments of a Singaporean”, one of my readers pointed out whether it is fair to burden taxpayers who are single and do not have children with heavy costs of baby bonus.

It is human nature to feel sour grape seeing others who have babies receiving monies from the government while you are ineligible. Henceforth, it is perfectly natural that they might feel jealous having to give monies to citizen who are entitled to baby bonus. After all, they themselves don’t benefit from it, while should they support such proposal?

However, if we are able to cast aside our narrow-mindedness and place national interest before us, I feel that spending the extra $4-5 billions dollars is totally justifiable. At least from the perspective of a Singaporean. After all, if we don’t implement any drastic measures to increase birth rate soon, we are going to end up paying even much more 10 – 15 years down the road.

baby bonus

People are our only resources. If we are unable to produce enough babies, there could be implications on our economy and defense. This is because in future, there may not be enough young adults to support ageing Singaporeans. We may also lack enough young males for national defense.

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Who will work for the rich?

In my previous post, I advocated the teachings of financial, professional and general knowledge to our kids. One of my readers then questioned “who will work for the rich?”

I suppose there is a mistaken belief among Singaporeans that if we exposed our child to the financial world or encouraged them to be entrepreneurs when they are young, they will all become or aspire to become businessmen when they grew up. The truth is, not all of us have the attributes and aptitudes to be a successful entrepreneurs. Out of ten players, possibly only one will emerge as winner and went on to become successful entrepreneur. Its a cruel reality but then again this is the rule of the game. We have to accept the fact that entrepreneurship is a no-sure win venture and if you messed up royally, you could be financially defeated.

So the question now is whether is it right for us to instill financial, entrepreneurship and investment values in children when they are still kids. My answer is still yes. Why? Because financial ignorance is NOT bliss, it is a disaster. As Asian, when we were children, we were told we should not be involved in discussions about money and saving money is the most important thing you can do.

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The one million dollar question

If you were given a choice between having one million dollar and gaining the ability to make multi-millions, which one would you choose? I suppose most of us would dream of getting rich quick.

Many people, including me, would normally choose having one million dollar. After all, its human nature to dream of being rich, not having to work and to indulge ourselves. But look, how long can the million dollar lasts? Especially in Singapore, where the cost of living is so high. With a million dollar, you can probably pay off your car loan, housing loan and afford not to work for about 5 years. The million dollar probably would not be able to last you a lifetime. At least not in Singapore.

Many years ago, when I was studying in NUS, one of my school mate confided in me how much hated his father, who had struck the lottery big time TWICE. I wondered why and he told me that his father quitted his job, spent all his prize money within a couple of years and became a drunkard. His mother, who used to be a housewife, ironically has to look for a job to support the family. This lesson made me realized that even if you are blessed with a lot of money, if you don’t have the financial discipline and knowledge, you will still be financially defeated at the end of the day.

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Investment Principles

For the past few days I have been doing spring cleaning and happened to flip through my investment notebook. I went through some of the interesting lessons learnt during the period 2007-2009.

The collapse of the Lehman Brothers really change the investment world forever and the old strategy of holding stocks for the long-term for capital appreciation may no longer works.

In view of this, we need to equip ourselves with well-planned strategies to protect and grow our wealth. In 2009, I had made three guiding principles for investment.

Invest in myself
Many people, myself included, tends to chase the money and invest in everything under sun (stocks, ETF, property,gold, unit trust, etc). Everything, except themselves. We may not realize that our knowledge, ability and skills are the most precious assets that enable us to make critical judgement calls to generate income through jobs, sales, investment and business activities.

Henceforth, most of us tend to neglect investments on acquiring new knowledge or skills. I had told myself that I must acquire or gain new mastery of knowledge in niche areas like precious metals and real estate investment trusts.

Gold and Silver Bullion

Invest in health
As cliche as it might sound, health is really wealth, this is especially so in an expensive society like Singapore.

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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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