Investing rules

Investing rules
投资指导准则

1. Choose stocks with good fundamental
When you found a good stock put in your list and set a target price to buy. Example you have selected DBS then set $8 as buy price. When it come to $8, just buy. Dont feel bad when it drop further because you never knows when is the lowest. It is not often that it will come to that kind of attractive price.

2. Avoid risk
Even blue chips can drop 10% during correction. So allocating the fund equally and not putting too much in one particular industry ways to avoid risk. Example the oil crisis starting in 2014, if you have put 100% in marine industry, that will be a big problem.

3.长期经营 vs 长期投资
There are 2 approaches, buy low sell high vs Warren Buffett's method of buy and keep forever. I choose the former method because the market is cyclical, simply buy low and sell high. It is not easy to find stocks like Coca Cola which only go up years after years.

4. Right mindset

Don't be affected when the stock price dropped as this is part and parcel of the game. Always ask what is the reason for the drop (market correction, poor results...) and should you add more when it has dropped further. When price dropped be mindful of the general market trend. What is the market trend, up or down, this will affect your decision to add more.

5. Avoid herd mentality

Generally 80% who invested in the stock market lost and 20% made money. So in order to make money be prepared to be different. "Be greedy when others are fearful." Build up your confident and independent thinking. This takes up.