Singapore Profit

For beginning stock investors, it may be tempting to follow the experts’ advice and put all your money into a few hot stocks. However, research is required and you need to understand some terms. It may be more worthwhile to buy US stocks compared to local stocks. It all depends on how much knowledge you are able to have about each company.  

There are many free tools on the internet that allows you to find out more about each stock, whether it is overvalued or it is a blue-chip company. Some of the tools include http://morningstar.com and http://moneycentral.com.  There are some online brokers that provide virtual accounts. You can test your stocks without putting in money. One of them is Optionsxpress Singapore.  

One trick is to look for stocks that have low P/E ratio. P stands for Price and E stands for Earnings. 15 is considered fair value. 20 and above is overvalued and 10 and below is undervalued. This is just a rough guide. For example, if a stock’s earning per share is $10 and it is currently trading at $150, it would be a P/E ratio of 15.

You cannot simply just monitor the prices of the stocks per se. There must be other fundamentals that you must research on. Currently, I’m monitoring this stock Total (TOT), a discount-priced French energy behemoth that is growing fast and buying back lots of stocks, according to Fortune Magazine. They have a recommendation of 40 stocks. Do get hold of this issue: Retire Rich.  In addition, I’m reading up on Secrets of Millionaire Investors written by Adam Khoo and Conrad Alvin Lim. During my recent trip to Redang, I spent my afternoons reading the book by the beach. This is my ultimate aim of making profits, to laze at a beautiful beach with a book in my hands.     

Sarah Tan - SingaporeProfit.com

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