Value investing in Singapore focuses on a long-term time span with a minimum of 6-month duration in studying financial statements and trend charts. It is more sensible to become a long-term value-oriented market player as most are not able to monitor the daily volatile stock fluctuation movements.
Here are some worthy to note golden rules. These rules may sound simple, but mastery of them takes a long-term effort.
Recognize that the Market is Efficient
Every public listed company is required to file all required financial statements to the Stock Exchange Commission (SEC). These financial statements and public records like Owner’s Equity Statements, Cash Flow Statement, Balance Sheet, and Income Statement are readily available online. These data are constantly monitored and scrutinized extensively by various investors and analysts.The efficiency of the stock market pricing process has greatly improved because of internet use and extensive usage of technology has enabled information to be spread online to all at lightning speed.
Recognize that the Market is Irrational
Market psychology is another important factor that affects the stock price. The trigger can be because of non-economic events like environment, politics, or dramatic headline from the news channel. Stock prices can easily drop steeply because of the inherent human nature of fear. Such factors can sometimes create an oversold buying opportunity in the initial steep drop upon bad news’ breakout. Prudent investors will always ask themselves if that incident would be fatal to put the company out of business, or as an entry point for more investment.
Buy Low and Sell High
It is obvious that you have to buy low and sell high for making a profit and you can easily find a number of theories on identifying “cheap stock”. For this purpose, you are advised to take up investment courses to learn, as all market sectors are known to have their up and down cycles. After understanding why a particular stock is temporarily out of favor in the market, you can be confident that the fallen angel will have its up days in the near future.
For those that are interested in investing on your own, there is a vast information available in online publications. Educated investors should be armed with different strategies and concepts in both the long-term and short-term investing so as to enjoy investing as a profitable hobby.