Asked on 09 Oct 2018
Noob question. Just curious. People keep talking about it. How exactly do we do it?
Consider the source of the advice - will whoever is recommending the action benefit from it? What exactly are the benefits and USP it has? (And no, "my cousin's sister in law's lawyer friends' secondary school class mate said so and he works for Warren Buffet so bao jiak" or " trust me I'm a (self proclaimed) guru and I won't con my friends/relatives/colleagues etc " doesn't cut it)
Look for counter opinions - If it's such a wonder product, why isn't everyone rushing to get it? What are the reasons of the naysayers?
Engage common sense - which side sounds more rational to you? Double check whatever numbers they spouted with a independent source (e.g. If they say property prices has doubled every 10 years Google for statistics to see if it has done so) and then think if it's even relevant to the point they are making.
Decide on your own.
It means do your own homework and assess if that is suitable for you. Usually is to put as a disclaimer on any financial advice you see anywhere. When make money, all happy but when lose money will blame others.
Read up more and know what it is all about before venturing into something. E.g. Before buying a particular stock, download and analyse their annual financial statement to see how the business performed for the past years . If trying out a new investment like P2P, know about the risks involved and if you're willing to take that risk for the higher returns
Google will be your best friend on doing due diligence. Other than that, ask others like those in the community here as well as friends and family. Find out what they say. Then use all this to make a judgement call on whether to go ahead or not. Hope this helps
Nicholes Wong, Diploma in Business Management at Nanyang Polytechnic
Answered on 09 Oct 2018
Research. Research. Research.
Always question the validity of advice/information from people & then make your own judgement on it!
Especially with financials - if you don't know, ask. If you've asked, take the answers with a pinch of salt and do your own research thereafter!