How I averaged 26% profit in investments without really knowing what the heck I'm doing

I have, at best, a rudimentary understanding of economics / how the stock market works.

I do NOT do any technical analyses of companies' financial statements / share price trends (nor do I know how even if I wanted to)

I spend less than 5 minutes a month thinking about my investments (probably less).

I've made $12,168.95 in the past 3 years with my blue chip investments.
(Total invested = $39,392.5; Total sold = $51,561.48; an average of 26% profit)

I've been buying shares with OCBC Blue Chip Investment Plan (BCIP), which is basically a method called Dollar Cost Averaging (this is not a paid advert. But if OCBC wants to pay me I welcome it)

Before I explain, let me do a quick summary of my investment outcomes with some simple graphs:

Y axis = $ value of share bought
X axis = time / months

1. Keppel Corp Pte Ltd

Amount invested/month : $600 - 1400 (not to time market, but because my wife wanted to join in)

Invested: $21,029.82

Sold for: $29,342.09

Profit : 39.5%

My biggest profit margin.

2. Nikko AM STI ETF

Amount invested/month : $1000

Invested: $6,099.75

Sold for: $6,860.00

Profit : 12.46%

3. Capitamall Trust 

Amount invested/month : $600

Invested: $4,192.69

Sold for: $5,372.64

Profit : 28.14%

4. Singapore Airlines Pte Ltd

Amount invested/month : $900

Invested: $8,070.28

Sold for: $9,986.75

Profit : 23.75%

All of these figures have accounted for the transaction fees that OCBC charges (0.3% or $5 each counter, whichever is higher). The figures also do NOT include dividends that I've received from the 4 counters, which amounted to $1,491.78.

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So what is the secret? To preface what I'm going to say, I must state again that I am no guru. I am an absolutely clueless financial nitwit. I am not responsible for any of your financial decisions after reading this.


What is Dollar Cost Averaging (DCA)?

A simple explanation of dollar cost averaging (DCA) is this - you put in a fixed amount of money each month to a particular share. You will buy whatever number of shares that amount can afford.

E.g. You choose $100 as your fixed monthly amount. The original share price is $5. You buy 20 shares in your first month.
In the second month, the price went up to $5.20. You can now only afford 19 shares. You buy 19 shares in your second month, and the remaining $1.20 is credited back to your account.

You do this month after month, and over the long term, you profit. A longer explanation can be found here. In short, when the price is lower, the system will help you buy more shares. When the price is higher, you buy fewer shares. But the approximate amount you put in each month is fixed at a certain amount.

The key benefit of this method is that you are not trying to time the market (e.g. only buy when you think the share price is low enough, and you think it has potential to rise). Ever heard of someone 'getting their fingers burnt in the stock market'? Well, that person tried to time the market. And failed. Horribly.

You simply decide how much you are comfortable with investing each month (for me it ranged between $400 - $1500; at one point when I was job-searching I cut it off entirely, just in case I needed money), and plug that number in to a share counter you are comfortable with, and just leave it to work its magic.


Three Simple Benefits of DCA

It is less daunting to get started.
Let's just take my SIA investment - would you be willing to put in $8,000 in an investment without knowing if it will do well or not? How about just $600/month? or $900/month? This point should be self-explanatory.

Market movements do not worry you.
Share prices dropped by 20%? While everyone is jumping, you are peaceful and calm, as you do not worry about day-to-day or even month-to-month movements. Lower prices just mean you get more shares that month! Yay!

Little technical expertise is needed.
P/E ratios and market caps? Quarter-on-quarter revenue growth and typical yields? I've no idea if these terms are even real investing terms, but I may have seen them in some articles. My eyes glaze over when I see them, so if you are like me, maybe you need a simpler method like DCA, where you don't need to know any of these things. Just pick a share, and chill.


Further questions

Are profits guaranteed?
Of course not. In theory, if a share price permanently declines, that is definitely a loss. The beauty of relying on OCBC BCIP is that all of the choices are blue chip companies.

''Blue chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth"

From my limited 3 year experience with DCA, I have yet to make a loss as you can see from the above summary. Blue chip companies generally don't decline all the way.


How much time do you spend on this? How do you select which company to buy?
I rarely check how the share is doing, unless I'm bored. Every month, I receive a paper statement from OCBC about my investments, so that is the only time I pull up my spreadsheet to update that month's purchases and look at the share price. That takes like, 1-2 minutes maybe?

You only need time to select which company's counter to buy once every.... however often you sell and re-buy your shares. For me you can see it's about once a year. Each time, that takes about... 10-15 minutes maybe?

My personal method is I just check the 1-month, 1-year, and 5-years trend on Google. If the share looks like it's trending up and is generally on a high price compared to historical trends, I will avoid it. If it's on a low price compared to historical trends, I will consider it.

Warning - graphs incoming. Don't worry, it's very simple. Just look at how the line is moving.

highest in 1 year (and 5 years too), and general upward trend.

Quite a low price compared to historical trend, and the downward trend seems to have stabilised. Seems good to buy.

Of course, the more cautious of you may want to do some due diligence to check why the share price has been dropping. You would also want to be comfortable with investing in that company. One example was Comfortdelgro actually had a favourable-looking graph:

Fairly low price compared to past trend.

But in my mind, I didn't have much confidence in ComfortDelgro given the proliferation of businesses like Grab and the like, so I didn't want to invest in this counter.

My latest investments are in Singtel, Sembcorp Industries, and Starhub. I chose Starhub because its share price kind of collapsed in the recent quarter. My 5 minute Google search told me it was because their revenue reports for the latest quarter were quite bad. No problem, I just put a conservative sum of $400/month in it, and see how it goes. If it builds back up, I just made a steal.
Singtel, as the major player in the telco industry, is unlikely to go anywhere or do very badly, and its dividends were pretty good. Price was reasonable, so easy decision here.
Sembcorp had some interesting high spikes / low drops in its past year, and happened to be in one of its lows. Seems good to enter at this point.

As you can see, very fuss-free, very time efficient. The most time I spent was after I sold and was trying to figure out how much to cash out my wife for xD

When do you decide to sell?
My personal benchmark is 20% profit; you can vary it according to your own preference. I sold the Nikko counter earlier as I didn't see it getting much better.


Ha! Only 26%? I make 100% profits in my investments! You noob!
Do share with me how you do it! If there is an equally easy (or not that much harder) way of investing that is more profitable, I would love to learn about it.


How do I get started with DCA?

1. Pick a medium
I'm using OCBC BCIP as mentioned, as I'm used to the UI / i-banking etc and it's fairly convenient. There are other alternatives, like POSB, CIMB, etc. Do your  own research! At the end of the day, I think the differences are not VAST, so just pick something convenient.

2. Decide on an amount to invest each month, and key it in.

3. That's it! 
You may want to set up a simple tracking sheet so you can monitor progress each month. Do account for the transaction fees!


What other forms of investments do you dabble in?

I made the above table, somewhat as a joke, to share with my wife, to compare my DCA method with other typical savings methods. But it does show the importance of getting started on some form of investment, as the interest rates that banks give are quite low and is unlikely to outpace inflation.

But ok, serious answer time.

If you are reading this part, you may be considering what to do with your money. This is my personal advice:
- Set aside 3-6 months of salary as an emergency fund. Do not invest/spend this.
- Once you have the emergency fund, consider buying insurance. If you have HDB loans to pay off, some kind of insurance to protect that may be good (including life insurance). Otherwise, personal accident insurance is key (I just saved $500 recently thanks to my insurance).
- Account for any upcoming big ticket items you may need to save for.
- Then, you can consider how much of your income you want to set aside for investments, based on your monthly expenses.

As you can tell, I am fairly lazy, so I go for convenience in my investments. Hence, all of my other investment instruments are via NTUC Income. I am quite low risk, so I don't do anything fancy like cryptocurrency or shares trading.

• I have an OCBC 360 account. Not the highest IR in the market anymore, but reasonable. Do note that their 1.5%++ interest only applies to the first $70,000, so if you have more than that, you can choose other banks / investment tools
• NTUC Income (generally all 5% yield or more)
• Revoretire - a retirement savings plan. $2,400/year, till 65 years old. Will give me a hefty sum then (can choose to pay out over time for more profits), and together with my CPF, should be more than sufficient for retirement.
• Revosave - a 25-year savings plan that matures when I'm about 40. $1,175.25/year. Will get about $64,000 I think? Not sure. This is an Investment-linked product meaning it has some Insurance functionality too which I didn't bother to remember.
• Growthlink - some investment plan which I kinda regret buying and is making a loss now. Minimum $30,000, basically sell when you are comfortable with current price. Bought this together with my wife, we figured we can use this for our kids (if any) university fees.

If this is so good, why doesn't everyone do it?
This is not a get rich quick scheme. You generally need to hold your shares for at least a year or maybe more to see profits. If you looked at my graphs carefully above, you'll see I held each counter for at least 6 months:

• Keppel -> 24 months
• Nikko -> 9 months
• Capitamall Trust -> 9 months
• SIA -> 11 months

Also, DCA is generally seen as a low risk, low yield investment method. I mean, I'm not the most acquainted with investment yields, but 20+% sounds pretty good to me! How much do you earn with other methods?

I've also tried the 'standard' way of buying shares - I bought one lot (1000) of ST Engineering in 2014 for $3,678, and only managed to turn a profit some time in 2017 (the price never went above what I bought, despite it being 'low-ish' when I first bought it), and quickly sold for $3,761, for a measly 2% margin. Never again.

Can I invest with you?
For now, no. Firstly, it was a big headache trying to calculate how much to pay my wife when I sold off some shares. Can't imagine with more people.

Secondly, as mentioned, I am a finance noob so I don't want to be responsible for losing your money.

Thirdly, while I can see some logic in pooling resources to avoid transaction fees... this is really as fuss-free as it gets so don't be lazy! It will probably take you 15 minutes or less to set it up.

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Ok this turned out longer than I expected. If you want to tell me how dumb I am, or want to discuss investments, do feel free to hit me up! I am always keen to discuss. You can drop me an email at atqhteo[at]gmail[dot]com, or Whatsapp me if you know me. Good luck and happy investing!

5 myths or stereotypes about working in the Public Sector vs Private Sector

This is part 2 of a ‘career advice’ series I wrote, due to the frequency of such queries I receive through email. Part 1 was ‘Career Prospects for Psychology Graduates’, and you can read it here.

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A frequent question I receive is ‘so do I apply for public sector or private sector? Which is better?’. There is no simple answer to this, but I’ve heard many myths/stereotypes. My hope is that this post provide some extra information, and helps you make an enlightened decision in your career selection!

STEREOTYPE / MYTH: There is better work-life balance in public sector.

shameless stock image

This is one of the most commonly cited ‘advantages’ of public sector, but it’s not always true. While the Government does have family-friendly practices (e.g. telecommuting, blue skies Friday, etc), it is not uncommon to hear of people in the Public Service regularly working OT or even working weekends (usually more common in policy work).

I’ve also heard of many private sector firms (usually MNCs) with very good family-friendly practices, such as telecommuting, extra paternity leave, and so on. I know of people personally in the private sector who end work promptly at 530 or 6pm every day, and civil servants who are still checking emails at midnight.

TRUTH: Ultimately, it is the organisation and department that you are in that will determine your work-life culture, so if that is something that matters to you, do ask about it during the interview.

STEREOTYPE / MYTH: Public sector is more stable than private sector

There is some truth in this, as being fired / retrenched is almost unheard of in the Public Service (there is a long and slow process to even get rid of ‘underperformers’ such that line managers may feel a strong inertia to do so; sudden exits usually only happen due to disciplinary cases).

That said, it is not like the private sector is some super volatile Bitcoin-like ticking time bomb. There are large, stable MNCs where you can generally feel quite secure in. When organisations pivot in their business foci, they would try to relocate/move employees rather than retrench/fire them, as recruitment is a huge cost (unless downsizing is a priority). Of course, we will not discuss the obvious like instability of start-ups.

TRUTH: Don’t let fear of volatility keep you away from the private sector, especially if you’re aiming for a larger MNC or a relatively future-proof area.

STEREOTYPE / MYTH: There is more politics in private sector than public sector

Guy on the right looks ready to jujitsu the other guy though.

I have heard of scary backstabbing tales in banks, where veiled insults and behind-the-back snide comments are synonymous with daily work. However, I have also heard of passive aggressive clique-ish behaviour in the public sector. Even the milder form of politics – playing the job hierarchy – is prevalent in the Public Service, especially in uniformed organisations.

TRUTH: Where there are humans, there will be politics. Some industries may be slightly more notorious than others for having politics, and this is not restricted to the private sector, so do your research beforehand.

STEREOTYPE / MYTH: Progression is always slower in the public sector

If you read any salary.sg forums, you will see the typical cynical keyboard warriors parrot the idea that private sector is better because the sky’s the limit! You can progress as fast as you wish! Your pay will leapfrog your peers!

Well, progression is more structured and laid out in the Public Service. In the private sector, there will be industries/companies that reward high performers well, and progress can be fast. Conversely, progress can be absolutely stagnant in private if you don’t meet KPIs. Worse still, if you don’t get the right people to like you, you may not even get to progress at all!

TRUTH: Progression is not guaranteed in either sector. If you are truly good, do the right things, and get lucky, reward will come. That said, an equally good performer may indeed progress faster and pull a higher salary in the private sector than the public sector. Of course, that comes with the corresponding extra responsibilities and work stress.

STEREOTYPE / MYTH: There is more bureaucracy in public sector.

Is 'triplicate' even a word?

Everyone knows the government has red tape. A piece of work can go through 2-5 hands before being completed, and the end product may look nothing like the original draft. Procurement (buying something) can take months.

But is the private sector entirely free of this? I’ve heard of MNCs who also have many layers of approval for things, so it’s not like they are free of bureaucracy. That said, my observation is that the government definitely has more processes in place to ensure accountability, and this may turn off some people.

TRUTH: Private sector firms may grant more freedom and autonomy in your day to day work, though they will still have their reporting structures. Public sector agencies tend to have established processes to follow that can make things seem bureaucratic and deter some, but the structure may appeal to others too. I would say in general, this statement tends to be true more often than not.

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Have any more questions about the public vs private sector distinction? Want to discuss anything in general? Feel free to drop me an email at atqhteo[at]gmail[dot]com

What career prospects does a Psychology Graduate have?

I’ve been receiving quite a few emails from psych undergraduates (or even those from other majors) asking for career advice. Hence, I’m going to write a two-part post (originally planned as one but the first one got pretty long) that is more career-oriented. 

This first part is a general guide on how to decide on your career path as a psychology graduate, with some ideas of actual jobs that psychology graduates are in at the end. The second part discusses the Public vs Private sector distinction.

Part 1: Career Prospects for Psychology Graduates

Alright, so you've graduated after 4 hard years of memorising psych theories and frameworks. What now? One question I'm asked often is:

‘What career prospects do you think a psychology major has?’

The simple answer to this is ‘plenty’. The longer answer…. Well, read on.

1) Do you want to do something psychology-related?

If yes, go to 1a. If no, skip this section and go to question 2.

Don’t feel bad if the answer is no – for me, the answer was no too, hence I ended up doing policy work for MINDEF instead.

1a) Do you like research?

If no, go to 1b. If yes, there is an obvious path in academia, where you pursue a Masters > PhD en route to becoming a university professor.

However, some points to note:

-          Competition will be stiff. Each university only has that many Masters / PhD spaces, and you will have to scout for Professors with similar interests as you, and get them to accept you. This may involve networking (e.g. through conferences) prior to graduation, or even after.

-          The application process is not easy. You may get rejected countless number of times. You need to be resilient.

-          There is a high chance you will need to go overseas for your studies.

-          If you do your Masters / PhD locally, there is a good chance you will not get to work locally, as I heard they like people from overseas. (this is hearsay, so don’t take my word for it)

-          Even if you do your Masters / PHD overseas, if you are not from a good university, you may not be considered in the local unis. (again, hearsay)

-          You need to go be good at managing your time, as there are no fixed schedules.

1b) Are you sure you don’t like research?

Even if you work in a more applied field, chances are that you will need to do some amount of research. Two of the biggest local employers of ‘Psychologists’ are MINDEF, and the Home Team – think SPF, SCDF, SPS, HTA, ICA (you can Google these acronyms). If you end up working in these agencies, your job may entail some amount of I/O / Clinical work, but of course it depends on the context and the specific position. Regardless, you will need to do research projects, which can be quite challenging especially if you are already tied up with day-to-day work. Do also note that while these positions currently require only a Degree, there is a push to need Master’s as a basic requirement to be called a ‘Psychologist’ in Singapore. Regardless, you will eventually need to complete a Master’s degree to progress further in these agencies.

An alternative would be clinical work. This could mean a therapist of some sort (e.g. speech therapist; though most of these would likely require a Master’s), social services (e.g. counsellor, child protection officer, etc)… EVEN THEN, I would think you need to do research to stay current in the latest techniques, etc.

A final option I can think of is I/O Psychology work, perhaps for a private MNC or something (I don’t think smaller firms will actually hire a I/O Psychologist). This usually requires Master’s though, if I’m not mistaken. Again, reading up on current practices is probably a necessity.

2) I don’t want to do anything directly psych-related!

That is fine, your options are plenty – you can apply for any area that only requires a general degree (think of those job ads where they list like a dozen majors). It will then come down to your own personal interest, and you can approach this from two angles, industry-wise (2a) or function-wise (2b)

2a) Industry-wise

Which industry do you have an interest in? E.g. Healthcare? Sports? FMCG? E-commerce? Tech? If you have a strong interest in any particular industry, it can help narrow down your search to companies in these industries. 

For example, there was a period where I had an interest in the gaming industry, and I applied for all the gaming companies I knew, such as Asiasoft, Ubisoft, etc (and got into Garena), from roles such as marketing to operations. Someone I know was interested in healthcare, so she applied to hospitals, MOH, GLCs, etc. You can try to talk to people in the industry which you are interested in to better understand it and the prospects within the industry. You may change your mind after knowing more. Who knows?

2b) Function-wise

Perhaps you have an idea of what job function you want to try. HR? Communications? Marketing? Business development? Advertising? Do know that even within each function, there is a lot of depth to explore? 

For instance, HR could entail Recruitment/Talent Acquisition, HR Administration, Learning & Development, Performance Management. Marketing could be B2B or B2C marketing (very very different). Communications could be PR, internal communications, marketing communications, etc. Advertising could be in an agency or in-house (again, very very different).

Again, it is useful to talk to people in the relevant functions to understand what work is like. Do know that there is no one-size-fits-all answer; work culture is very dynamic and can vary across companies or even across departments within the same company. For example, marketing in Changi Airport Group could mean frequent trips overseas and different time-zone conference calls; marketing in a small local firm could mean sitting in a small cubicle all day taking out newspaper ads, optimising Facebook/Google ads, focusing on SEO etc.

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To sum it up, I will list out some of the actual jobs my Psychology batch-mates are currently in. As you will see, it can get quite diverse. Maybe it will inspire you as to what job you want to try for. As always, if you have any further questions, or just want to continue a conversation, you can drop me an email at atqhteo [at] gmail [dot] com. I reply to all emails, no matter how small the question. Good luck in your job hunt!

Academia (currently pursuing PhD in Canada/Overseas)

Psychologist (SPS, SPF, MINDEF, SCDF, ICA, HTA, MINDS)

Behavioural Insights Team (MEWR)

Policy work (MINDEF, Ministry of Health, Ministry of Manpower)

Speech Therapy (requires Master’s!)

Education (MOE, Special Needs Teachers)

HR (CPIB, MINDEF, PSD, Singhealth, Mercer, Johnston & Johnson, Danone)

Marketing Consultancy (Bain)

Operations / Business Development (Amazon)

Enforcement (Singapore Customs; SPF)

Customer Relations / Case Management (HDB)

Real Estate (Propnex)

Social Services (MSF, VWOs)

Admin Officer / Cabin Crew (SIA)

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Want to read part 2 about '5 Myths/Stereotypes about working in Public Sector vs Private Sector'? Click here!