My Stock Market Investing Journey

When it comes to managing money, my philosophy is always to give as much as you can afford to those in needs. Firstly, give to the church and Christian organizations. Secondly, to charitable organizations that provide medical cares and those that helps the poor. Thirdly, I will render support financially to any of my relatives. This is my way of laying up treasure in heaven. (Matt 6:19,21). As such, I don’t really have a lot of savings, never more than $50k as emergency fund. But I am not concern about “rainy days” or having lay-off from my job as I believe God, Jehovah Jireh is my provider when I am really down in need.

¹⁹ “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. ²⁰ But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. ²¹ For where your treasure is, there your heart will be also.

But as I get older and near to retirement age, I realize that soon I will be out of job and out of money. $50k can probably last less than 2 years with frugal expenditure. Facing with this reality, I need to think of what happen when this day come in a few short years. Then in 2014, Pastor John Koe came to preach in Riverlife Church. He talked about how God helped him to invest in the stock market. This was the first time that I heard about preacher talking about stock investing. To me stock investing is equivalent to gambling. Yet, here is a pastor who is still investing in stock. This became the turning point – perhaps the stock market is the place to provide another income after retirement. And so the journey to understand and learn about what stock investing is all about begun in December 2014:

Stage 1: Stock market = Casino

The stock market is a risky place. That is what I used to believe. You just put money in and hope the price will go up. It all sound so random and luck. So, it is best to be avoided. But as I started to read more about trading and investing in the stock market, I find that there are actually technical analysis that help you to know how the market moves. Being an engineer and having acquired a technical and analytical mindset, the casino imagery of the stock market began to dissipate and risk can be managed through careful analysis and understanding of stock price action. I am still learning …

Stage 2: Stock market = dividend money tree

I also started read about how other people invest their money. One of the common ways is through dividend. You buy a company and the company give you money yearly, half-yearly or quarterly. Hopefully, the dividend continues every year and even grows bigger.

2 very inspiring investors using dividend method as passive income are:

Lady you can be free:  http://ladyyoucanbefree.com/

A Singaporean stock investor: http://singaporeanstocksinvestor.blogspot.sg/

You will be amazed how much their dividend is every year. And they are just in mid forties. I encourage you to learn from them if you want financial freedom.

And so, I started to buy blue-chip stock. Sure enough I began to get dividends and got excited. But when the dividend comes, the stock prices of the companies dropped and continue to drop with no upside. I started in early 2015, when the Singapore stock index is the highest, close to 3200. It reaches the highest at about 3500 in April-May 2015.  And so, growing a dividend money tree is good only when the Stock index and stock prices is near the bottom. Or else, you have to continue to manage it when you buy at the peak prices like I did. After suffering some losses, I need to think what I should do. What should I do when the price drop?  Through common sense reasoning, I should sell my shares. And when it stabilized at the low, I bought it back. This way, I still have my stock and made money due to the sell-buy price. After trying it out a few times, it seems a good strategy for falling stock prices that I hold. That forces, me to learn more about stock trading rather than stock investing. And so, putting the paper losses aside, my journey to stage 3 began in end 2015.

Stage 3: Stock market = treasure field or minefield

My initial experience of stock trading is like finding treasure, looking for stock that look good and will be moving up soon. Occasionally, the technical analysis shows that it is moving up and so I found treasures. Sometime though, the price move against me and it is like stepping on a minefield. Making losses always hurt and create fear to continue in the stock market. Thankfully, my gain is always greater than my losses and God has been good in my learning journey so far. But I believe the stock market is not about finding treasure and avoiding minefield. There has to be a more systematic approach of entry and exit from the stock. And so my journey of learning continues to stage 4 in mid-2016.

Stage 4: Stock market = oceans with varieties of fishes

Actually, the stock market is an ocean with many types of fishes and sea creature. These are the different types of stocks – companies, REIT, ETFs and the common one that I familiar. The rest, I am still no interested. Just like catching fishes, there are many ways to trade the stock market. At this moment, I am still using a “line and hook” to trade with tiny bait, so to speak. I need to build confidence. Some stocks are easy to catch. Their up and down are so easy to see. Even if you made mistake, just wait for it to correct itself and move up again, so long as you never buy at the 52 week price, which I always avoid, having learn the mistake from 2015 when I first started. In fishing in the stock market, I need to control my emotions and follow closely to the technical chart. Sometime, my emotion got me excited when the price is falling I quickly throw my line and hook to buy. That is when I caught a “falling knife” and got losses. These are the time where I made losses. Otherwise, I am pretty OK. My trades are still very very small because of the lack of confidence. Also, my target is to exit those lose stock made in 2015 which I am still holding. So it became a stumbling block to move forward.

Be Financially Free

I wish I had learnt all these in my younger days. All it takes is actually 20 years to be financially free. Think about it, if you start working at the age of 25, earning $2.5k a month, you can actually retire at the age of 45 – 50. For the first 5 years, one should save about 20 to 25% of his salary. He should also learn all he can about stock investment and trading. After 5 years, with the knowledge and saving, he can then start to do some investment when the stock cycle is conducive to go in. Youth has the advantage of time.

There are 2 resources God has given to all of us, if you are born healthy. They are time, and your life. Firstly, always keep yourself healthy – eat well, exercise, sleep and rest. Next use your time to grow in wisdom - learn, experiment, increase knowledge and skills. Once, you have the knowledge and skills in almost anything that you set your goal in, you can then launch out to achieve it with your healthy life.

And with that I leave you a good verse from the Bible to chew on it:

¹⁵ Be very careful, then, how you live—not as unwise but as wise,¹⁶ making the most of every opportunity, because the days are evil. (Eph 5: 15,16)

Agape