My Investment Journey

Published: Tuesday October 6, 2020

Although I did not complete my undergraduate degree in Economics and Finance, I still have an interest in the financial markets; blame it on my risk-loving nature. My first foray into investments was day trading when I was in my early 20s. I got badly burnt; lost a sizable sum of money. Trying to get rich quick and cocky in nature, I traded on CFDs and used leverage of up to 100x thinking I can magnify my profits. Mistake learnt. Trading using leverage or otherwise known as margin trading is risky as your profits and losses are exponentially magnified.

I do still trade occasionally but with not as much leverage and with monies I can afford to lose only. Short time trades, about 1 hour holding period, I use 20x leverage and medium-term trades, about a month holding period, I use 5x leverage. I have also strictly set my take-profit and stop-loss targets. I use both technical and fundamental analysis.

I also invest for the long term using methods such as a Regular Savings Plan, my CPF and using schemes such as Retirement Sum Topping-Up Scheme. This is to build up my retirement nest. For those that do not know what CPF is, it is a comprehensive social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement. It also addresses healthcare, homeownership, family protection and asset enhancement. Instead of earning the floor interest rate of 2.5% in your Ordinary Account, I have invested it in hopes to earn higher returns.

For those of you interested in optimizing your CPF savings, I recommend buying into funds. When you invest in a fund, your money is pooled together with other investors. A fund manager then buys and sells assets, such as shares or bonds, on your behalf. You don’t own the underlying investments, you own ‘units’ in the fund. These funds manage a basket of risky assets and this lowers risk through diversification. I also use a broker, fundsupermart.com, that does not charge a sales fee.