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Daniel Lim

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Daniel Lim

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Daniel Lim

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Stocks Discussion

Daniel Lim
Daniel Lim
Level 3. Wonderkid
Answered on 27 Nov 2019
Who knows?

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Stocks Discussion

Daniel Lim
Daniel Lim
Level 3. Wonderkid
Answered on 27 Nov 2019
TLDR; DCA provides average return, percent base Lump sump maximises value return Yes and No Your math calculations are right. But your first question should be why are you buying the stock to begin with. What I mean is whats the value of the stock? Value is what you get. Price is what you pay for. Simple? Yet hard to assess and decide. For example, if you have valued HarveyNorman at $6. But its current stock price is $4 Potentially you are buying the stock at roughly 34% Discount. Seems very fair right? So lets say you invest $100 in the first month and bought 25Shares of HarveyNorman. Mth 1 Price: $4 Invest: $100 Shares: 25 Now, Mth 2 Price: $5 Invest: $10 Shares: 20 You see that on the 2nd month the price of HarveyNorman stocks goes up. Thats good right? Thats a $1 increment from last month shares. However, if you were to invest another $100 you would now only own 20 shares instead of 25. Which also means you are purchasing the stock only at a 13% Discount. You wouldn’t want that would you? You want maximum value from your purchases. Thats not even considering dividends, which is 10% per annum for HarveryNorman WTF. If you had paid a lump sum instead of DCA you would reap greater returns and quicker cash payout. PLUS every month DCA incurs large amount of commission fee However, this takes time and effort to analyse stocks, figuring out risk appetite.

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MileLion

Daniel Lim
Daniel Lim
Level 3. Wonderkid
Answered on 27 Nov 2019
TLDR; I invested and made profits I started 2018 with a decent amount of savings for a student. Ever since I became 18 I made it an effort to show interest towards Stocks, actively researching and watching educational videos. However, I soon realised that banks do not provide investing services to teens under 21. Faced with an obstacle I decided to shelve the idea of investment. Applying for a CDP, Central Depositary Account, was also a tedious process as well. FFW to 2019, my friend studying in Banking and Finance introduced SaxoInvestor to me. It’s a custodian account with a lot lesser requirements to be met in order to purchase a variation of products (e.g ETFs, MFs, Bonds and Stocks) I quickly signed up and was excited to make my first purchase. But I was overwhelmed by the plethora of decisions I had to make. I spent more time educating myself about financials from affluential individuals such as WarrenBuffet and Benjamin Graham in Value Investing. The hardest purchase was the first purchase. I made sure I analysed every bit of the company (At least I thought so) and I was so certain it will reap great earnings. BaM I bought my first stock. I never stopped learning, and just shy of a month I realised that my first stock purchase was utter trash lol. My investments could have been placed somewhere else reaping greater rewards. Also during this period, Temasek announced that they are acquiring Keppel Oil. Being a greedy teen looking for large returns in short span of time. I quickly bought keppel only to learn that I was too late and I made more losses. I felt like my efforts in investments are futile. After all if it was that easy everybody would be profiting from it right? I turned to reddit looking for answers and more educational content. Long story short, I had to do what I hated the most, analysing data. Being a Inspirational/Dominant personality my weaknesses were paying attention to detail and being too quick to make a decision. I hated looking at numbers. Thankfully, my desire to be financially free in the future got the better of my reluctance to put in hard work. Hence, I bit the bullet and started learning how to read Income statements, cashflow and balance sheet. From there, I was quickly able to sift out the companies that are suitable to my risk appetite. As of today, my positive returns from Garena was 26% (1 mth of holding), Microsoft are 4% (1mth of holding) Just ystd I sold my garena. I can’t say for sure if my stocks will continue to do well. But the progress I have made from day one have been tremendous and I would consider it a success having been able to breakeven from my losses and earn a fair bit. To summarise: •I met my financial resolutions •I succeeded (No losses) •Learning How To Learn “I didn’t fail 1000 times, the light bulb was an invention with 1000 steps” -Thomas Edison P.S. I also started 3 side business over 2 years and all failed! Still hustling hahah
Level 3. Wonderkid
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