AMA The Fifth Person

This AMA will be held on 21st February 2019. Ask your questions here!

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AMA The Fifth Person

(AMA ENDED) I've made 16 profitable stock investments in just 3 years! Ask Me Anything!

Victor will answer all the questions tagged to him on 21st February 2019! This is part of a series in a lead up to our Seedly PFF2019 happening in March this year as we feature some speakers.

Hello Seedly community!

I'm Victor, and I am an equity investor and co-founder of The Fifth Person. The Fifth Person believes in spreading a message — that sound investment knowledge, financial literacy and intelligent money habits can help millions of people around the world achieve financial security, freedom and lead better lives for themselves, their family and their loved ones. In 2018, The Fifth Person won best independent investment website in the ‘GoTo.com’ category at the inaugural SGX Orb Awards organised by the Singapore Exchange (SGX). The award recognises the independent investment-related website or financial blog that most empowers investors to make educated decisions with their money.

Other than investing, I represented Singapore in the 2008 TAFISA World Games in Busan, South Korea and was the 2008 IFMA World Muay Thai Championships bronze medalist, kicking some serious ass along the way. 

Feel free to ask me any questions related to:

  • How to invest?
  • Which countries to invest in?
  • How to look at investments?
  • Risk of investments?
  • Building a dividend portfolio?
  • Dividend investing

NOTE:The host may choose at his/her preference to not answer particular questions. The AMA is moderated by Kenneth from Seedly, so let’s keep the questions friendly and open!

  • Asked by Anonymous

    Junus Eu
    Junus Eu
    Top Contributor

    Top Contributor (Apr)

    Level 7. Grand Master
    Answered on 23 Apr 2019
    Coming from the perspective of someone who has invested in both properties and stocks, it does not need to be one of the other. That said, here are the key differences based on my experience: Initial Cash Outley/Capital Needed Firstly, from an accessibility perspective, you would need lower capital to invest in stocks. Unless you have a large amount of cash lying around for down payment, it is not likely that you will be able to pay for property from the get-go. Risk profile There are two camps to this. Investors who prefer stocks will say that: - Rental properties require more work (I did have to spruce up the apartment and we gave it a new coat of paint) - Risk of tenants damaging the property (I just had to pay for things when say, washing machine broke down, but so far my tenant has been a nice person!) - Tenants gone rogue and don't pay rent (happened to me as well) On the other hand, property investors, will tell you the age-old: - Property will always be there. Ie. is it more tangible. - Not as volatile as stocks - Not at the mercy of speculators who dictate the market performance. Holding Power I definitely will not sell my property now as I am in it for the long term (and see a significant appreciation in value), but I can sell my stocks anytime I need for liquidity. Think about how much liquidity you will need - property does not offer that level of liquidity.
  • Asked by Anonymous

    Victor Chng
    Victor Chng, Co-Founder at Fifth Person Pte Ltd
    Level 4. Prodigy
    Answered on 21 Feb 2019
    Hi, The pro is that you can get a feel on the valuation investors are expecting on similar type of company. The con is that if the market is overvalued and the comparable companies are all priced at overvalue valuation then you may be paying a high price for the company using relative method.
  • Asked by Ang Yee Gary

    Rich Tyler
    Rich Tyler
    Level 2. Rookie
    Answered on 11 Apr 2019
    Hi Ang, If all you want to see are you investment returns it is not too difficult to setup an excel spreadsheet to do it. Otherewise there are some good applications out there that can do what you want and so much more. There is Stock Market Eye that Victor mentioned and others like https://www.stockportfolioorganizer.com/ that handle various currency conversion, dividends etc.
  • Asked by Anonymous

    Isaac Chan
    Isaac Chan, Business at NUS
    Top Contributor

    Top Contributor (Apr)

    Level 7. Grand Master
    Answered on 10 Apr 2019
    Revisting this older question after being reminded about it from reading an article on Hyflux on Business Times. These are the points given by S&P on what we can learn from this fiasco, and I'll just share my brief thoughts on there as well. TL;DR Don't take defensive industry for granted, beware of volatile earnings, debt instruments can be volatile and don't expect the government to save you. "No Sector is Immune to Financial Troubles" S&P brought up the fact that distrissed situations were mainly confined to cyclical industries like the energy and commodity businesses. However, they also brought up defaults of other services such as telecoms in 2015, which had been traditionally thought to be a defensive sector. This reminded of the fact that althought industry analysis is important, we can't just bank on that because high debt levels, poor cashflow management and lack of management foresight can cripple any business. "Situations can evolve quickly with narrow or uncertain earnings quality" S&P cited volatitle EBITDA fluctuation of Hyflux that occured during the past few years, which had led to deep operating losses. This made reminded me of being especially careful with businesses that fluctuate so much. Not only do investors have a harder time predicting the health of the company, management may also have a tougher time forecasting cashflows and being unable to manage their working capital and leverage, which led to Hyflux crumbling. "Losses can be harsh depending on the characteristics of debt instruments outstanding" This is an important point as well, since the increase in more sophisticated debt instruments in the market to retail investors should cause investors to be more cautious. Such instruments have also made it harder to analyse the debt profile of the company. "Investors should not make assumptions regarding a private company's importance to the government" This is another interesting point brought up by S&P, arguing that even though water security is important to the country, this shouldn't lead investors to the assumption that a bailout is likely. Hence, we should also not think that as long as Temasek or GIC has a major stake in a business, we are safe.
  • Asked by Anonymous

    Yeo Kee Kuan
    Yeo Kee Kuan, Bachelor Of Accountancy at Singapore Management University
    Level 3. Wonderkid
    Answered on 07 Apr 2019
    Hi Anonymous! Great question, I feel that besides asking how, what and how much, also consider WHEN to start investing. Investment, in terms of holistic personal finance, is for wealth accumulation which is crucial because you need lots of money to get married, pay off your house, buy a car, finance your children's education, and finally retirement (of course, this list of milestones is not exhaustive). The best time to start investing is after you have built up an emergency fund (3-6 mths of living expenses) and have cleared your debts (excluding mortgage), so this includes student loans if you have any. Paying off debt is not just good from a mathematical point of view, but being debt free gives you the freedom to invest without having to worry about whether your investment is more than your loan interest etc etc. Trust me, it feels a lot better to invest only after you cleared debts and all. Now, if you are debt free (no student loan) and have an emergency fund, than you might be ready. But remember, you still have to consider saving up for near term milestones like your engagement ring, wedding ceremony, house downpayment etc. But I would recommend learning more about investment and personal finance. Go around and talk with people in the industry but don't be pressured to buy anything! Just continue to learn, and of course be frank with whoever you are learning from. If you are learning from a banker or agent, just let them know you are just wanting to learn, some are generous enough to just share without pushing anything to you. This is important because you are unlikely ready to commit to a 20/30 year savings/investment plan just yet. So start learning first, if you want to trade, play small (10% or lower of your net worth) and learn from the best (Benjamin Graham, Warren Buffett, Dave Ramsey, just to name a few). All the best and have fun! Kee Kuan
  • Asked by Anonymous

    HC Tang
    HC Tang, Financial Enthusiast, Budgeting at The Society
    Level 8. Wizard
    Answered on 29 Mar 2019
    Read this for your questions: https://blog.seedly.sg/the-ultimate-cheatsheet-cheapest-stock-brokerage-in-singapore/ For the better brokerage account by current user review: https://seedly.sg/reviews/online-brokerages
  • Asked by Anonymous

    Bryant Tan
    Bryant Tan
    Level 2. Rookie
    Answered on 28 Mar 2019
    I think it would depends on your family life style. Generally, if we were to follow Singapore family "standard" 2 kids with a helper tuition classes, extra enrichment classes I would say around $12K min anyting extra will be bonus saving.. All the best
  • Asked by Anonymous

    Victor Chng
    Victor Chng, Co-Founder at Fifth Person Pte Ltd
    Level 4. Prodigy
    Answered on 21 Feb 2019
    Hi, You should not start to invest first. You should save up more money. Make sure you save up at least 6 month of monthly expense as an emergency fund. Anything excess then you have the right to invest in the market.
  • Asked by Anonymous

    Leonard Tan
    Leonard Tan
    Level 6. Master
    Answered on 20 Feb 2019
    Bonds are much safer than stocks - largely due to bonds not being exposed to market risk- which is of course compensated with greater return. That being said there are still a multitude of risks bond investors are exposed to: Default risk - Non govt bonds hold small % of default risk no matter how insignificant it might be. Interest rate risk - This is the main risk! While bond interest payouts will not change , the real yield and prices of bonds will drop as interest rates(or inflation) increases. Call risk - Only applies to callable bonds. Bonds may be prematurely terminated. Reinvestment risk - Coupon value might not be able to be reinvested at same rate as original bond.
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