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Investment Strategies - 1

A few friends of mine keep on buggering me about how to "play" with stocks or shares. Actually, I find it not as something to be "played" with. Its more like how to invest your money or make your money work for you. There are various investment strategies, look at all those books available in your local bookstore or Internet and you will know what I mean. So these little series of investment strategies I am coming up with are my own experiences with the local Singapore stock market. Actually it involves in a lot of common senses. If it works for you too than I am happy for you but Please, don't sue me if things does not work out.

First, you need to find out the type of investor you are. Are you trying to get rich as quick as possible or are you trying to maximize the savings you have in your bank? If you are the latter, my tips might work for you. No such thing as getting rich quick here as if so, I won't share them at all. :)

Having savings in bank or additional money means that you do not need to draw on these money on your monthly spending. If let's say you earn 3k per month and you are left with $100 every month, that $100 is your additional money that you could save and make it work for you. It does not need to be a big amount but it would be nice to have at least a substantial sum.

Another thing to note is that are you insured?? :) Before you plunge into the stock market. You should have already bought some insurance (health or accidental) to cover you for uncertain "things" that might happen to you. "Things" like losing your job or getting sick which you need to be hospitalised. If you don't have such insurance policies. Go get at least one, used that $100 to buy a policy and forget about using my tips. The main reason is that only (have to stresssed) ONLY if you have additional money in your bank then my tips will work.

If you have these pre-conditions worked out. The tips I give should help you make you richer or the extra money could make more money for you rather than a fixed deposit. (Of course unless market crash lah)

Now how do we "work" our savings? Let's say I have $10,000 savings. Its good if you could save to at least this amount before you start entering the market. What I will do is always keep 30% of the money ($3000 here) as reserves (never touch them unless absolutely neccesary) and 70% in the market. 60% in blue chips and the rest in penny stocks. Next week, I will continue on why such a ratio.

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