About Investments
-
Hi there! I'm new to the world of investments and business which I am getting interested in. I'm in my early twenties and my savings in bank is not too much. The thing is how do I start?
Buying of stocks? I have read a bit and there a lot of terms and jargons I don't really quite understand. Mutual funds, fund managers, options and all those nonsense. What is the difference? What is good and what is not? What is advisable and what is not? How do I know which to buy or invest in? How do one choose a stock or fund to invest in? Land banking? Property investments?
Business? F&B business? How easy or who difficult can having a F&B business be? Is it worth it?
It would be good to hear replies cos I would certainly want to be enlightened. Hope to hear from you guys soon.. =) -
If you are really passionate then you shud join an F&B business to find out for yourself. There you can learn the ropes abt everything there is to learn abt F&B more than anybody or any book can ever teach you then later on when you gained enuf "reality experience" decide if you want to invest in such a business or do it on your own.
-
Hmm...lets see, I would recommend that you go attend seminars and speak to a financial planner to learn about the basics. Or you can borrow some books in the library on Finance to learn the financial terms.Originally posted by dinky1409:Hi there! I'm new to the world of investments and business which I am getting interested in. I'm in my early twenties and my savings in bank is not too much. The thing is how do I start?
Buying of stocks? I have read a bit and there a lot of terms and jargons I don't really quite understand. Mutual funds, fund managers, options and all those nonsense. What is the difference? What is good and what is not? What is advisable and what is not? How do I know which to buy or invest in? How do one choose a stock or fund to invest in? Land banking? Property investments?
Business? F&B business? How easy or who difficult can having a F&B business be? Is it worth it?
It would be good to hear replies cos I would certainly want to be enlightened. Hope to hear from you guys soon.. =)
You might also like to obtain annual reports of companies and read them. That was how I learn my financial stuff. -
or you can always engage my services
i will be glad to give a Risk Profile Analysis for you....
for a fee of course -
Depends what kind of investor you want to be...
You want to be active....or you want to just find someone/ some institution/ fund manager to let them make the decisions for you.
Because it depends...not everybody is interested in the nitty gritty details of investing, they are more interested in their own jobs or activities. And they can be happy just by knowing although they dont understand much on investments, they have experts who manage their money. They are happy, not worried by this at all.
BUT seeing your post and your age, I bet you are not this kind of personality, right? You want action, right? hehe.....
OK you want the fastest game in town? Trade derivatives. Options and futures. It will suit your personality the best. Exciting. Im sure you will love it.
Firstly if you want to be active that means you invest short term. If you invest short term you need to know technical analysis. Basically reading charts.
After that, you can learn the derivatives, options and futures.
So for now I recommend to start studying technical analysis. You can start from the web, books, join online forums, etc.
Approx.....uhhh...I dont know, maybe 1 year. 2 years or more is better. Then study derivatives for further 1 or 2 years. After 3 or 4 years you will get the grasp.
Don't worry as long as you keep studying it, you will definitely get good. Don't let the time put you off. But Im just saying patience is required.
-
I'm currently working part-time in a cafe to actually experience how a F&B business actually runs. Not sure if this is a good idea to gain 'experience'.Originally posted by KumSioJui:If you are really passionate then you shud join an F&B business to find out for yourself. There you can learn the ropes abt everything there is to learn abt F&B more than anybody or any book can ever teach you then later on when you gained enuf "reality experience" decide if you want to invest in such a business or do it on your own.
I actually borrowed a few books and read up a bit but the problem is I get confused along the way and like I said, I don't understand some of the jargons used. Also, most of the books are based on non-local markets so it adds to my confusion. Hehe.. Maybe you guys have any recommendation of any good books to read to learn the basics? Or websites?Originally posted by shade343:Hmm...lets see, I would recommend that you go attend seminars and speak to a financial planner to learn about the basics. Or you can borrow some books in the library on Finance to learn the financial terms.
You might also like to obtain annual reports of companies and read them. That was how I learn my financial stuff.
Its not exactly action, but I just want to make sure I know what is happening to the money I'm going to put in thats all hehe..Originally posted by Li Ka Shing:BUT seeing your post and your age, I bet you are not this kind of personality, right? You want action, right? hehe.....
This is the problem. I have read and heard about trade derivatives, options and futures but I don't know what they exactly mean. Patient enough to explain to a noobie?Originally posted by Li Ka Shing:OK you want the fastest game in town? Trade derivatives. Options and futures. It will suit your personality the best. Exciting. Im sure you will love it.
Thanks a lot for the replies guys.. And girls if theres any here..
-
the worst thing is to ask for advice here.
if we are good we will be busy making money and not answering your questions. -
Since oyu are young, my advice you is to work for others first. Let your employer pay for your mistakes and gain your experience and build your NETWORK.Originally posted by dinky1409:Hi there! I'm new to the world of investments and business which I am getting interested in. I'm in my early twenties and my savings in bank is not too much. The thing is how do I start?
Buying of stocks? I have read a bit and there a lot of terms and jargons I don't really quite understand. Mutual funds, fund managers, options and all those nonsense. What is the difference? What is good and what is not? What is advisable and what is not? How do I know which to buy or invest in? How do one choose a stock or fund to invest in? Land banking? Property investments?
Business? F&B business? How easy or who difficult can having a F&B business be? Is it worth it?
It would be good to hear replies cos I would certainly want to be enlightened. Hope to hear from you guys soon.. =)
Before you jump into any business you must first have a good business model, and please dont try to reinvent the will just because you want to do it. -
Hi....
If you dont understand the books you read, then maybe those books are intermediate. You might want to try getting a basic book first to gain a better understanding.
I dont know which basic books are good, but maybe you can search and borrow from libraries.
If the books talk about overseas markets, that's better. Dont worry about local or overseas, markets need to be big and the bigger the better. Right now the biggest markets are US, Japan. It doesn't matter really.
Ill tell you why big markets are good.....whether u are talking about stock market, or meat market at my local wet market, or housing market, or online market like Ebay, same thing....
Big markets are good because that means there are many buyers and sellers. If you buy, there is likely a seller willing to match your price. If you sell, there is likely a buyer willing to match the price. You can get in and out quickly.
Small markets have less liquidity, meaning less money and fewer buyers or sellers.
When you trade in small markets, tipically the buy/sell price difference is big. It's because when u want to buy, nobody is there willing to match your price, so you increase your buy price until you meet a willing seller. Conversely with selling too. The buy/sell price spread is therefore bigger than in more liquid markets.
Big liquid market like US is therefore much better for tighter spreads and faster transaction.
Secondly, small markets tend to be more volatile. Because the market is small, a big seller or a big buyer can shake the price balance suddenly. Big markets are better and more 'sturdy' and less volatile.
Thirdly, Big markets have more information and resources. It makes your life easier.
Just wanted you not to get concerned about local/ overseas. With the internet, we can just click here click there, it doesnt matter. The reason why many investors/ traders from all around the world tend to invest more domestically in their own countries is psychological. They think they have more intimate knowledge of their own home countries. Like a comfort zone. It's a psychological thing. -
I disagree. The forum is here for a reason.Originally posted by dragg:the worst thing is to ask for advice here.
if we are good we will be busy making money and not answering your questions.
Thanks I'll keep that in mind..Originally posted by Gazelle:Since you are young, my advice you is to work for others first. Let your employer pay for your mistakes and gain your experience and build your NETWORK.
Right.. So you mean in future I should invest in companies or funds or properties in overseas markets right? As in its a better choice is it?Originally posted by Li Ka Shing:Hi....
If you dont understand the books you read, then maybe those books are intermediate. You might want to try getting a basic book first to gain a better understanding.
I dont know which basic books are good, but maybe you can search and borrow from libraries.
If the books talk about overseas markets, that's better. Dont worry about local or overseas, markets need to be big and the bigger the better. Right now the biggest markets are US, Japan. It doesn't matter really.
Ill tell you why big markets are good.....whether u are talking about stock market, or meat market at my local wet market, or housing market, or online market like Ebay, same thing....
Big markets are good because that means there are many buyers and sellers. If you buy, there is likely a seller willing to match your price. If you sell, there is likely a buyer willing to match the price. You can get in and out quickly.
Small markets have less liquidity, meaning less money and fewer buyers or sellers.
When you trade in small markets, tipically the buy/sell price difference is big. It's because when u want to buy, nobody is there willing to match your price, so you increase your buy price until you meet a willing seller. Conversely with selling too. The buy/sell price spread is therefore bigger than in more liquid markets.
Big liquid market like US is therefore much better for tighter spreads and faster transaction.
Secondly, small markets tend to be more volatile. Because the market is small, a big seller or a big buyer can shake the price balance suddenly. Big markets are better and more 'sturdy' and less volatile.
Thirdly, Big markets have more information and resources. It makes your life easier.
Just wanted you not to get concerned about local/ overseas. With the internet, we can just click here click there, it doesnt matter. The reason why many investors/ traders from all around the world tend to invest more domestically in their own countries is psychological. They think they have more intimate knowledge of their own home countries. Like a comfort zone. It's a psychological thing.
Anyway you still haven't explained to me whats derivatives, options and futures and their differences.. That is if you don't mind explaining it to me.. Thanks! -
By the way, what exactly is short selling?
Stocks or funds? -
F&B? is a growing sector.. perhaps the next fastest growing industry would be hospitality.
if u wan overseas opportunities, try dubai or vietnam -
Originally posted by dinky1409:
Right.. So you mean in future I should invest in companies or funds or properties in overseas markets right? As in its a better choice is it?
Anyway you still haven't explained to me whats [b]derivatives, options and futures and their differences.. That is if you don't mind explaining it to me.. Thanks![/b]
Im just saying widen your choices and get to bigger markets, as they have better opportunities.
Derivaties comes from the word 'derive' which means to get something from something. Put in other words, to draw something from the parent substance.
Options and Futures are derivaties as they are entities drawn from parent entities, which can be stocks, currencies, etc.
What are these options and futures exactly?
They are basically leveraged instruments (meaning faster moving than their parent entity). If the parent move a bit, the child move with a magnified degree.
For more detailed explanation, is something you might want to learn later. Now you have to learn the basics first or it'll just confuse you. (wrong order of learning) -
Hello....Im 'Li Ka Shing' above....Originally posted by dinky1409:By the way, what exactly is short selling?
Stocks or funds?
When you look at an entity, such as a stock for example, and you think it's going to go up, you buy this entity with the hope when it goes up later, you sell at a higher price and get a profit.
Just common logic, right?
This is called 'long' . Buying low with the hope of selling higher later.
But an entity can go down too. When you think it's going downwards, you can still get a profit by doing the opposite of long, which is short.
Short selling means you borrow a stock (or whatever, a stock is the example here) and you sell it at the market price. When the market price drops, you buy it back, and return the stock to your lender. The difference of higher sell price and lower buy-back price is your profit.
It's the same like the 'long' principle of buy low sell high. Except it's reversed in order, it becomes sell high buy low.
Basically it's for participating in market downward movement. -
Oh ok ok then.. Thanks for explaining the short selling thing, but there's gotta be a fee for 'borrowing' the stock or something right? Ok then thanks guys.. I'll go and read up more at the library. Be back if I have things I don't understand. Thanks..
-
I'm sorry if this sounds like a stupid question but here it goes anyway.. What are the factors that changes the prices on the market? How exactly does it affect the ups and downs?
-
Dont worry there's no stupid questions in this world.
The factors which will affect the price...supply and demand, but if we talk more specifically about the general stock market, that would be the general economic and political conditions where that stock market is in.
That would be, for economic conditions......GDP growth, inflation rate, central bank interest rate, average earnings growth, and some more minor datas like unemployment data, housing data, consumer spending data, etc.
Also price of oil. Important nowaways.
For political conditions....basically whether it's politically condusive and stable. For example when a new president comes in, and during campaign he already promised some measures the market like, the stock market will go up, in anticipation of more condusive environment. That's an example of a politically motivated price movement.
A politically motivated price movement can be caused by election results, scandals, etc.
Another important mover is 'unexpected events' such as disasters or terrorist attacks.
If you talk about specific stock/ company, apart from the general conditions above which also apply to them, additional factors include: news, earnings growth, new product launches, FDA approvals, mergers and acquisitions, analysts ratings (downgrade/ upgrade), etc.
But....how to keep up with all these, right? So many of them.
That's why people say the market is already pricing in everything that it knows currently as well as what it expects to happen in the future.
So to know how the market price will behave, we need to study charts.
By studying charts, we are studying what the market thinks. We are free riding on other people who study more detailed datas like above.
It's nice to be a free rider, isn't it?
Studying charts basically mean drawing graphs and predicting the future based on the chart. That's usually for the near and medium term. -
Thanks people for helping answer his queries.
-
Mmm okay then, but for example I have stocks in company A and B which deal with real estates. How exactly would prices of, for example, oil affect the ups and downs of my stocks? How do inflation and interest rates affect?
If I buy stock A at $1.00 each, and all of a sudden people start selling it. $1.00 goes up or down? As long as the company does not go bankrupt or close down, the stocks that I hold are 'safe' right? I mean even if it goes down all the way to a temporary low of $0.10, I don't have to come out extra money to maintain the number of stocks I had right?
How exactly do good news for company A, for example, "a better board of directors going to take over the current ones", or "sales for company A are going to go up this period of time" affect the rise of the share price of company A on the market? Does that mean I can just call up the newspaper and spread good rumours about company A, and when it appears in the newspaper, everyone will start buying the stock of company A thinking its good news for company A and it will prosper, the price goes up, and I sell for a profit? Is it this simple as I think or no?
What I gave are basically examples of the logics/systems/theories in the stock market that I don't exactly understand so hopefully someone can help me here because I doubt books can help me understand this part. Thanks for the previous replies guys I appreciate it.. ^_^ -
A stock price reflects a company's valuation. And it is affected by its specific factors as well as the overall economic, and political condition, where that stock is in.
Therefore a stock price is affected by the price of oil, inflation rate, GDP growth, average earnings growth, central bank interest rate, etc, as these are indicative of the overall economy.
How closely a specific stock follow the general move of the broader market as affected by these factors, depends on the nature of each company. Some companies are more sensitive, while others are less sensitive. This difference could be caused by its size, or its sector(s) where it's in.
If you want to interpret the datas..... = means same move, >< means opposite.
GDP growth =
Inflation rate ><
Central bank interest rate ><
Average earnings growth =
Oil price ><
Some more minor datas:
Unemployment ><
Consumer spending =
Housing data =
Etc...
Example, up in GDP growth, means better overall economic conditions, the stock market goes up as well. Up in inflation rate, means worse overall economic conditions, the stock market goes down (opposite).
When all these datas come up, you are confused how to interpret them as a whole. Like if it's 3 up, 3 down, so what does that mean?
Even the best economists miss their forecasts. We don't try to be an economist. We look at the overall market price. The overall market price has already priced in everything it knows including the overall economic and political conditions.
So like I said, we just be a free rider. Just look at the INDEX.
The index reflects the overall market price, which means it reflects the market digestion of overall economic and political condition as a whole.
Since a specific stock is always affected by its specific factors as well as general economic and political factors, the index will always affect a specific stock price. How much so, look at the Beta (correlation of the 2). If you want to break it down, like oil price, also find the Beta for that component.
Your second question. If people sell, price drop of course. If it drops from $1 to $0.10 like you said, you don't need to pay for any maintenance and it's safe, but theoretically you got a massive loss. This should worry you more than any maintenance. Such massive lost will not happen in real life though, since you have risk management like placing stop-loss.
Your third question. You can spread rumours of course and if the stock is cheap and small, your rumour can move the stock, and you can con them all. However if the stock is big, your rumour will have very little impact. -
Right.. So if the INDEX is healthy, its a good day to invest, but how does that arrow down to the very stock that one would want to buy? It does not mean that if the INDEX is healthily positive, all stocks are good to buy right? So how do I choose a company to invest in by being a free rider?Originally posted by Li Ka Shing:So like I said, we just be a free rider. Just look at the INDEX.
The index reflects the overall market price, which means it reflects the market digestion of overall economic and political condition as a whole.
Since a specific stock is always affected by its specific factors as well as general economic and political factors, the index will always affect a specific stock price. How much so, look at the Beta (correlation of the 2). If you want to break it down, like oil price, also find the Beta for that component.
So some times we use the INDEX, sometimes we zoom into the factors themselves?Originally posted by Li Ka Shing:How closely a specific stock follow the general move of the broader market as affected by these factors, depends on the nature of each company. Some companies are more sensitive, while others are less sensitive. This difference could be caused by its size, or its sector(s) where it's in.
Lets just say 200 people want to sell at the same time. When exactly and how exactly do the price drop? After the first, lets just say, 100 people sell, the price drops significantly? SO first come first serve basis? Or is it after everyone, in this case the 200 people, sell at that particular price, then the price drop accordingly? Which means all 200 people have managed to sell at the same price.. (Sorry I think this is basic econs but I'm not too sure how it goes about..)Originally posted by Li Ka Shing:Your second question. If people sell, price drop of course. If it drops from $1 to $0.10 like you said, you don't need to pay for any maintenance and it's safe, but theoretically you got a massive loss. This should worry you more than any maintenance. Such massive lost will not happen in real life though, since you have risk management like placing stop-loss.
When I check out the different INDEXes in the newspapers, I notice that the names of the listed companies have additional words such as "50c" or something similar like that. What does this means? 50 cents per share? What about those names which does not have this "50c"? -
Maybe you might want to PM to me. I have a feeling we are spamming this thread. Or open a new thread specific to your questions.
-
well, I think its ok. You may continue your lessons to him here if you think its necessary.Originally posted by Li Ka Shing:Maybe you might want to PM to me. I have a feeling we are spamming this thread. Or open a new thread specific to your questions. -
waa.....not to say lesson la....
Sorry if I appear too talkative.
But to continue,
Dinky, I mean price is supreme. That's what I meant. That's why if you want to know how a company stock is doing/ going to do, look at its price chart, and same with the general stock market, look at the index.
How to pick a stock, many ways, if you want to follow the index then filter stocks which have high Beta value. (Beta is correlation). Or just trade the index itself. But there are many possible filters, don't have to follow this filter.
What I mean actually is, instead of getting concerned with multiple factors and multiple analysis, just look at the price behaviour, thats all.
Im not sure about the 50c thing. I seldom check newspapers.
Prices are constantly updated almost instantly depending on the system load, so I guess it would change as soon as an order went through. It won't wait for a block of 200 orders. -
I also thought that definitely being a business owner is more exciting than sitting in front of the computer. So, just explore your options in life. Maybe you will find more fulfillment by working and then open a business. Investing is not only through the stock market. The problem is, trading the stock market can be very boring.