Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.
What sort of applications and revelations does your platform bring about?
WOOFR is your lifestyle passport. Within a few taps on your smartphones, we bring you instant bookings and exclusive deals to your favourite clubs, bars and music events.
I’ve travelled regularly as a DJ, and I’ve seen so many pain-points in the nightlife space. It’s such a hassle for tourists to discover the best nightlife spots, and the language barrier makes it even harder to book a table or purchase tickets to the venue.
Nightlife venues themselves are still running on traditional methods of reservations (pen and paper), and they are unable to retain data analytics of their consumers such as the name, age, nationality and spending history.
We uncover and bring to our readers the success stories of entrepreneurs and also the hardship and hustle behind each of these success stories. Through these, we aim to foster strong entrepreneurship driven community and ultimately we wish to provide a one-stop solution in terms of guidance for our community.
As retail investors, we often perceive ourselves or by others as inferior
investors that are incapable of obtaining superior returns as compared to
institutional investors. This is partly due to the pre-conception that
institutional investors are more sophisticated and knowledgeable where they can
utilise complicated strategies with confusing instruments. However, with more
and more articles that emphasized the ineffectiveness of active institutional
funds and how passive funds are outperforming active funds, you may be swayed
towards believing that active funds are lacking.
So how do we, retail investors who want to take on a more active investment
approach, do to outperform the market benchmarks?
Given their long establishment and experiences, active institutional funds do
have established processes and frameworks that retail investors can exploit to
improve their chances.
1. Efficient employment of capital
Institutional investors often have large amount of capital. To maximise
returns, it is also prudent to manage and ensure that a comfortable level of
capital is employed for the purpose of earning returns. Evaluation of options
to determine returns so as to effectively utilise capital is also important.
Depending on choice of asset classes, level of capital usage also varies. From
personal experience, in trading forex, 60-70% of capital should be employed
consistently to ensure efficient use of capital to generate returns. Comparing
to other asset classes like equities, this may be low but given the high
leverage nature and buffer for margin calls, this would be sufficient.
Just based on simple logic, by having most of your capital consistently
employed and utilised to earn returns ensures a higher chance of
out-performance.
2. Recording your investment thesis and reviewing when necessary
Institutional
investors often record their investment thesis when they invest. This is important
for the management and continuity of the investment strategy where new
employees can easily understand and takeover an existing portfolio based on
various reasons for investment. Another important step is to review the
investment only if there are material changes in the investment scenario or
market. Unlike retail investors, they are less likely to be impacted by daily
price movements, which are erratic and random. This could be also possible due
to the bureaucracy layered in an organization where it takes slightly longer
than individuals to evaluate and make decisions. This is then one advantage of
retail investors where we are more nimble and sensitive to capture investment
opportunities. This means that we are able to get in at favourable prices. The
tough part is, hence, to differentiate from the noises of the market (daily
price fluctuations) and sticking to your investment plan.
From personal experience, all
these noises are often the ones that distract me from the ultimate underlying
price that I have for a specific investment. The market will often try hard to
force you to move your positions and fake you out before moving exactly in the
way you predicted. Thus, it is important to be able to differentiate what
change is material enough for a change in investment stance.
3. Having
co-investment officer
We could see
that there are multiple successful funds that have 2 leaders to dictate
investment strategies. Examples are PIMCO, KKR. Contrasting this to traditional
leadership models where one individual will make the overall decision for
direction. From personal experience, by having another investor that
understands the overall investing strategy, it helps to keep one another in
check for emotions such as greed and fear, as well as to promote accountability
in managing other's funds, there are more detailed thought process in both
investors before committing to a decision. Discussions are also conducted to
discuss future strategies and evaluate investment options.
Beside these
techniques, what are the other ways you try to increase your investment
returns? Share it here!
There was an article in the past that went viral.
It talked about the advice given to young people by Hong Kong's richest man - Li Ka Shing.
In the article, he talked about splitting our pay into 5 parts, each for a different purpose
30% - Living Expenses, paying for food etc
20% - Socialising, paying off phone bill + creating connections
15% - Learning, buying of books or signing up for courses/training
10% - Travelling, going overseas once a year to broaden your horizon
25% - Invest, SAVE to INVEST or start a Small Business
He used a guy earning RMB 2,000 (roughly SGD $400) as an example of how to split the money.
His example is for people living in Hong Kong or in China.
In my perspective, there are some parts I think we can change to suit it to Singapore's context.
The allocation below is for a Singaporean whose take home pay is $1,500 after CPF deduction.
Some adjustments were made to the allocation and I do not recommend following strictly to the guideline because every individual is different and every month is different.
If you spend more on 1 month, make sure to balance it back the other month. I think a little flexibility in the allocation is okay, but not too big a difference, less than 5% movement range for each category. But do try and keep the last part (INVEST) intact or increase if possible, because that is for the future, YOUR FUTURE!
55% ($825) - Living Expenses, paying for food, transport etc (a)
10% ($150) - Socializing, paying off phone bill + creating connections (b)
10% ($150) - Learning, buying of books or signing for courses/training (c)
10% ($150) - Travelling, go overseas once a year to broaden your horizon (d)
15% ($225) - Invest, SAVE to Invest or start a Small Business (e)
a) The unfortunate part of not earning much is that a huge portion of our pay goes into necessities, rendering us with minimal for other things.
Items like groceries, utilities, meals etc often take up a huge portion of our pay.
Find ways to cut cost and keep them within the 55% budget! DO NOT OVERSPEND!
b) Li Ka Shing advises us to treat 2 people who are able to help us in our career to a meal each month. Allocating about 3% of your pay to treat each person sounds reasonable. And hopefully, if your phone bill is not too expensive, it would probably be less than 5% of your pay
c) Singapore's National Library has got a good variety of books, thus there is not really a need to buy books. Save that money for other use, go to the library to borrow more books to read and learn.
There are also currently a lot of e-courses online that are free, some even available via YouTube. Do make use of these sites to learn and save on the learning expenses.
Of course, if a certification is required, then go for the paying courses that provide certificates.
The government is also providing a $500 subsidies for qualifying courses, make good use of it!
Money saved here should go to the 'Invest & Save' portion
d) Depending on your income, travelling every year might not be possible, unless it's to neighbouring countries. Either it is travelling every 2 years OR you could roll over your money to the Invest or Learning portion.
e) Read up on basic investments, long-term investments. Read up on our post on investment under our 'Investment' tabs to learn more!
Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change?
How many female directors are there in Singapore's top 10 public companies?
While the number of female directors around the world is increasing, is the number of female board of directors in Singapore increasing?
As we embrace gender diversity, should we start pushing for more female directors on our public companies' boards?
Especially when 3/10 of the companies have 0 female directors on their board.
