It is an honour for me to be invited as a speaker in InvestFair, the largest investment conference in Singapore, yearly since 2014. In the recent InvestFair 2017, I share my views of opportunities for every audience in the current bullish stock market, provided one knows how to align the strategies based on own unique personalities.
The best way to learn investment is through direct Q&A from audience. I have compiled some of the questions asked in the recent 2 talks in InvestFair 2017. Let’s learn together:
Q: Are we in a bull market for stocks?
A: Yes, technically it is still a bull market for stocks. However, due to high optimism of global stock markets, the upside opportunity is mainly for traders, not for investors. For traders, one could follow momentum trading, riding the bullish stocks with uptrend but when the market signal is reversed, one has to exit firmly as a trader as well, not ending up as a long-term investor. For investors, the opportunity is in future because there is usually a global financial crisis behind each bullish market. However, this golden opportunity of buying truly low requires preparation from now, knowing how to form a strong stock portfolio, the timing of entry and able to take actions with personalized strategies, eg either Buy Low Sell High for capital gains or Buy & Hold for passive incomes. Actions taking is crucial to convert knowledge into fortune, not limited to just Buy or Sell stocks. For those who have stocks, actions include how to do spring cleaning. For those without any stock, actions include preparation of future capital and also formation of a dream investment team of 10 players for giant stocks.
Q: What are the sectors worth consideration for stocks?
A: When we invest in stocks, besides the individual business (Level 1), we need to consider the sector / industry (Level 2), countries (Level 3) and global economy (Level 4). It is important to know the mega trends of the market, it is hard for individual stocks to go against the higher level forces. At Level 2, it is important for an investor to support rising sectors, not to pursue sunset industries, even the stock prices could be much cheaper. These are the sectors with upside potentials in longer term: healthcare, property & construction, REITs, banking & finance, Telco, etc. However, an investor also has to align with higher level trends, especially to take note of possible global financial crisis (Level 4) or country recession (Level 3).
Q: How to position for local Telco stocks?
A: Telco is a defensive sector, traditionally Telco stocks are for dividend investing. The no 4 player, TPG, has affected the share prices of M1 and Starhub, down by over 50% because of the concern of smaller market shares and earning in Singapore. Singtel is relatively more stable because the revenue is from regional Telco, not just limited to local Telco as Starhub and M1. Similar to REITs and business trust, an investor who is interested in Telco stocks for dividend investing, the ideal time to enter these defensive sectors are during the global financial crisis to maximize the dividend yield while the businesses are relatively stable. Current local Telco stocks are more suitable for crisis investing for capital gains. However, the short to mid-term trends of local Telco stock prices are still bearish, falling knives are still sharp, may not be suitable for those with weak control of emotions as it may end up buy low and get lower.
The key of stock trading and investing is to match our goals with our personalities, there are at least 10 different strategies to choose.
