Like many other young adults, I was clueless about the world of investment. All I have heard was that investment is one of the few ways to grow our wealth significantly over the next few decades.
The rule of 72 states that the amount of time to double your money is derived by dividing 72 by your rate of return. For example, if your investment generates 12% a year, it will take you 6 years to double it.
Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it. – Albert Einstein
Rich dad poor dad
My first investment book is the classic Rich Dad Poor Dad. I don’t really like the way the author portrayed hypothetical examples as though they were real.
It also does not add credibility to the book when the author filed for bankruptcy in 2012. One word came to mind: Hypocrite
However, credit should be given for these useful and timeless learning lessons:
- An asset puts money in your pocket. A liability takes money out of your pocket
- Continuously increase your assets by reinvesting its returns
- Rich people buy luxuries last, while the poor and middle class tend to buy luxuries first
- Rich people don’t work for money, they work for assets
If you can look past the flamboyant storytelling, this book teaches important mindsets to prepare for your financial future.
Gone fishing with buffett
The next book I read is Gone Fishing with Buffett, written by Seah Seah, a Singaporean value investor. This book was introduced to me by one of my secondary school classmates when I wanted to start investing but don’t know how to get started.
The underlying message of this book is to invest in great businesses, a concept that anyone can understand and agree with, but difficult to execute.
First, you need to understand yourself, your beliefs, and carefully seek resources to empower them.
The basics of assessing a company is to look at some key financial metrics such as Return on Equity(ROE), Return on Asset(ROA), Price-to-earnings ratio(PE), Price-to-book ratio(PB), interest coverage ratio, long term debt and make sure that they are consistently healthy.
Beyond the numbers, the competitive advantage is much more important and harder to quantify. This is what determines whether a company will still be a good investment a decade later.
This book is a good continuation from Rich Dad Poor Dad, as it introduces the principles of investing in valuable companies.
Into the stock market
2020 is the year that the world and financial markets are hit hard by COVID-19. Stocks crashed in March and recovered quickly in a few weeks.
I remembered my colleagues were discussing excitedly about opportunities to purchase stocks at cheap prices. At that time, I did not have a brokerage account yet and decided to open one with Standard Chartered because their minimum trading fee of $10 is one of the most competitive among others.
After searching for assets to buy for some time, I purchased STI ETF on 19 May. Wanting to read up more on suitable assets to buy, I joined a ShareJunction and InvestingNote.
In August, I purchased Capitaland Mall Trust(now Capitaland Integrated Commercial Trust).
Looking for growth
As these two assets are relatively safe compared to others, I started to look into stocks for greater risk to reward.
With the pandemic still raging on in September, I came across news of companies in the Personal Protective Equipment(PPE) and glove business seeing multiple fold increase in revenue and profit.
Among the few, Medtecs International Corporation Limited and UG Healthcare Corporation Limited caught my attention as their revenue and share price surged more than 10 times since the start of 2020.
Due to the excitement of seizing opportunities, fundamentals were thrown out of the window, and I simply relied on technical indicators and forum discussions to make my decisions.
It went fine and I took a small profit before things turned ugly after Pfizer announced 95% vaccine efficacy on 9 November 2020. Aside from the fact that the vaccine was developed and tested in a hurry, this is a good news for the world. But my heart sank as I keyed in market sell order for both Medtecs and UG healthcare, knowing that the share price will tank the next day.
The tanking of the medical bull
On the fateful day, 10 November 2020. I remembered I was sitting anxiously in my office toilet, refreshing my Standard Chartered trading app for the opening market price. When I saw a 13-15% dip in the price, I cancelled both my market sell orders, which turned out to be a costly mistake, financially and emotionally.
For 3 consecutive days, both Medtecs and UG healthcare dropped by around 13-15%, before recovering around 11% on 13 November. I took the opportunity to cut my loss and sold 70% of my holdings, in order to sleep more peacefully at night.
Here is the visual representation of my not-so-pleasant investment decisions.

The first poor decision was to sell Medtecs at 1.2. This happened due to my mistake because I mistook sell limit for sell stop limit. I wanted to try out the stop loss function at 1.2, but accidentally keyed in sell limit, and the order went through immediately…

The first poor decision was to chase the high because the company reported great results for the quarter. I was taken by surprise when the share price dip instead of rising.
After that I understood that this is the case of “Buy the Rumor, Sell the News“.
Aftermath
After this, I thought that I am just not cut out for stock investment and be better off with safer assets such as ETFs.
But upon reflection, I realised there are some serious problems with how I invest:
1. Poor risk management & asset allocation
As I was looking to make short term trades, I did not have a stop loss. Also, I have allocated too much capital into my positions and over-extended myself, leaving myself with a little window to capture new opportunities.
Around 60-70% of my portfolio was allocated to both medical stocks, which are largely seen as a one-shot wonder covid stock. At that point, the future of these companies is unknown, and I have taken unnecessary risks.
2.Investor psychology: Investing vs trading
I was mainly trading these two stocks, but behaved like a scared investor when the price tanked 35%. Due to poor risk management, I am unwilling to put in even more capital without selling some off.
It is possible to combine investment and trading, as long as I know how to act accordingly. In fact, it is better to have a longer time horizon(1 year) in order to ride out the market volatility.
In the short run, the market is a voting machine but in the long run, it is a weighing machine. – Benjamin Graham
3. Research the company’s fundamentals
After deciding to cut my loss, I also realised that I wanted to hold some positions for the short-mid term horizon, but have not even looked at the key financial metrics, let alone leadership and competitive research.
As of today, I am happy that my unrealised gains have surpassed my losses for Medtecs and UG healthcare, and I will hold them with a longer time horizon, setting an appropriate target profit and stop loss.
Also, I will spend less time listening to the noise on investment forums, and spend more time analysing financial metrics and discussing company fundamentals, competitive advantage.
Why invest?
Finally, the most important question of all is, why invest at all? Why do I want to spend time reading and learning just to beat the inflation, and may even end up with less money if I were to stash them away with banks?
The short and obvious answer is to increase wealth.
To me, investing is more than just buying and selling. It is about understanding events shaping the world, understanding myself, the motivation and psychology behind each decision. The goal, of course, is to make money work harder than I can over the next few decades.