Develop your competency first

Develop your competency first

SINGAPORE - Full-time investor Ang Hao Yao was formerly a trader but now devotes his energies to monitoring corporate developments of the companies in his portfolio.

He holds a Chartered Financial Analyst certification. Mr Ang, 41 next month, is also a corporate governance committee member at the retail investors' watchdog body, the Singapore Investors Association of Singapore.

Here he shares tips on how young investors can take their first investing steps.

Q: How did you get started?

As a young boy watching my father go through his stock portfolio on weekends piqued my interest in stocks. He invested based on the fundamentals of a company and he mainly bought blue chips. I must have been quite young then since by Secondary 1, I remember discussing stocks with my school teacher.

My actual first purchase of shares was right after I turned 21. At that time I was working at my first job as an investment analyst in a stockbroking company.

Q: How much money do I need to start?

You could probably start off with $5,000 which could be diversified into at least three different low priced stocks. If the starting capital were much lower than that, a large proportion of your capital and returns could be eroded by transaction costs and it would be difficult for you to make any headway. I believe it is not the amount of capital that you start off with that counts, it is your ability that matters.

If you are experienced and skilful, you can turn the five thousand dollars into a million dollars. If you're not competent, even if you were to start off with a million dollars, you could reduce it into five thousand dollars.

Q: What's the first thing any young investor should do or remember?

Investing can be a long, enjoyable and fruitful journey. Do not rush into investing. Take your time to read books on finance, on investing history and on famous investors, keep up to date on developments in the different industries locally and internationally, and talk to as many experienced investors as you can.

In other words, build up your competency and learn from the experience of others.

Q: What was one mistake you made when you first started investing?

I started investing in 1993 just as the bull market then was reaching its peak. So when the correction came, I had almost all my portfolio in stocks. Luckily though they were in pretty solid companies and having just started in investing, I didn't have much to lose.

The lesson I learnt: Not to load up heavily when stocks have already been on a long rally as the risk of a correction would be very high by then.

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