Markets are down, time to trade?

2022 has undoubtedly been a tough year for equity markets with global indices such as the S&P 500 down approximately 18% year to date.

A falling market can present interesting situations to different investors, and some would now see the glass as half-full. For instance, they may view cheaper valuations as a safety net that offers a larger margin for error. For investors who are thinking of starting their trading journey now, they can consider exploring with OCBC Securities. A wholly owned subsidiary of OCBC Group, OCBC Securities is a brokerage in Singapore that offers reliable services with transparent upfront fees. Now with their newly revamped iOCBC mobile app that comes packed with a myriad of user-friendly features, an even more seamless investment journey with iOCBC awaits.

Here are 5 new features on iOCBC that can help you spot timely trading opportunities:

1. Intuitive interface throughout the entire trading journey

For those who trade, they will know that every second counts. From the overall look and feel to small thoughtful details, the iOCBC Trade Mobile App is now designed intuitively for traders to trader smoother and faster. To start with, the biometric capabilities allow you to login and submit orders in a flash.

When browsing the markets, their predictive search bar with suggested results can help you to find the security you are looking for quickly, and also show you other similar instruments that are available on the iOCBC platform.

You can then add tickers to your watchlists from various convenient points through the app such as the search results and order ticket. Customise your watchlists to your preferences with collapsible columns to choose what information you want to see upfront or hide, and easily organise your watchlists with the drag-and-drop function.

As a new investor, making your first few trades can be incredibly stressful. With iOCBC, fret not as their trade order form comes with pre-built order validity checks. For newbies, this is very helpful as it will automatically display possible errors upfront by ensuring valid lot size and price range. Seasoned traders will benefit from this as well as it helps to reduce chances of fat-finger errors and also speed up your order placement.

After your orders are placed, tracking them is a breeze as the orders page is cleanly designed with colour coding to easily distinguish between buy and sell orders. Filter your orders by status (active, filled and unsuccessful) and see exactly how each order is filled and at what time with a detailed order log.

2. Gain market insights

The iOCBC mobile app is packed with features to help you spot trading ideas and validate them with your technical analysis. Their professional-grade yet easy-to-use charts powered by TradingView comes with more than 100 Technical Analysis indicators and over 50 smart drawing tools to support you in identifying actionable technical patterns. Investors can also choose to discover new trading ideas effortlessly with iOCBC’s trading tools – Market Statistics, ChartSense and StockReports+. StockReports+ is especially helpful for new investors as reading these reports will help them gain valuable sectoral insights. With in-depth market analysis from industry reports, coupled with charting tools ready at disposal, these could help to elevate trading performances.

3. Manage your portfolio like a professional!

How would one know how well he/she is doing without keeping score? Not to worry, an investor’s portfolio is updated in real-time for timely monitoring as part of holistic portfolio management on the iOCBC mobile app. Amazingly, various types of corporate action events including stock splits, dividends and rights issues are tracked so that the average cost of holdings, realised profit and losses will be adjusted accordingly.

4. Know the fees you pay upfront

Whilst you might have heard of other brokerages having hidden fees that customers may not be aware of, you will be glad to know that OCBC Securities has always been upfront about the fees that it charges to investors. With something as critical as your trading portfolio, you would want to know what you need to pay for and trade with peace of mind.

5. A reliable and secure platform

Lastly, OCBC Securities is a wholly owned subsidiary of OCBC Group, and OCBC Bank is consistently ranked among the World’s Top 50 Safest Banks by Global Finance! OCBC Securities offers reliable, secure end-to-end encryption trading and custodises your foreign shares with a renowned global service provider. With more than 35 years of experience in the industry, OCBC Securities has always been a brokerage that priorities their customers’ needs. Customers of OCBC Securities are provided with a dedicated Trading Representative to guide and assist them on their queries and even discuss market ideas. For beginners, this means you will have someone to handhold you to start your trading journey.

Apply for an iOCBC trading account today to get started!

The article is published by MoneyDigest and does not represent OCBC Securities Private Limited (“OSPL”)’s view on the matters mentioned. All views or information expressed or provided in this article belong to and are that of the writers and are for information purposes only. They do not take into account the specific objectives, financial situation or particular needs of any particular person. You should not make any decisions without independently verifying or assessing the contents. No representation or warranty whatsoever (including without limitation any representation or warranty as to the accuracy, usefulness, adequacy, timeliness or completeness) in respect of any information (including without limitation any statement, figures, opinion, view or estimate) provided herein is given by OSPL and it should not be relied upon as such. OSPL does not undertake an obligation to update the information or to correct any inaccuracy that may become apparent at a later time. OSPL shall not be responsible for any loss or damage howsoever arising, directly or indirectly, as a result of any person acting on any information provided herein.

Trading in capital markets products and borrowing to finance the trading transactions (including, but not limited to leveraged trading or gearing) can be very risky, and you may lose all or more than the amount invested or deposited. Where necessary, please seek advice from an independent financial adviser regarding the suitability of any trade or capital markets product taking into account your investment objectives, financial situation or particular needs before making a commitment to trade or purchase the capital markets product. In the event that you choose not to seek advice from a financial adviser, you should consider whether the capital markets product is suitable for you. You should consider carefully and exercise caution in making any trading decision whether or not you have received advice from any financial adviser.

 

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Top 5 Investments Business Owners Should Make

When you run a business, whether it’s a small start-up or a large corporation, you need to be confident in where you invest all company profits. Pumping a lot of the money back into the business is the place to start in order to help it grow and remain profitable. Yet there are many other areas in which you can invest as a business owner that will provide dividends to gain further profits for strengthening the firm. Here are five of the best investments for business owners to make.

  1. Penny Stocks

Especially for start-ups, new and small businesses, penny stocks are a great place to start for any business owner making their first investments. These are companies that trade with exceptionally low share prices (usually £3 or less), which means a lot of shares can be invested in with a low amount of capital. They are a highly volatile investment but do make a great starting place for learning the basics of investing.

  1. Forex

If you want to find a reputable way of making some extra money for your business by investing profits, then forex trading with Fx Pro is a good option. There are a number of safe currencies to invest in during times of uncertainty, or more risky choices if you’re feeling brave. For beginners or experts, it offers a good way to boost profits across international currency markets.

  1. Equity

Buying an ownership stake or equity investment in another company can provide additional capital for your firm. Obviously, it is highly inadvisable to invest in any competitors. Finding a successful company or one that is on the rise to take an ownership stake can result in good percentage profits for your business, as long as it doesn’t perform poorly or go bankrupt.

  1. Property

Real estate is a great way to enter an entirely new market and with house and rent prices still rising, it can be incredibly lucrative. It may be better to invest in commercial property, related more to your business though, such as buying your office rather than renting if you have the profits. This provides a useful asset and one that will hopefully grow in value.

  1. Bonds and Mutual Funds

For long term, safe investments bonds and mutual funds are the go-to option. Government bonds are some of the safest investment options out there, while mutual funds can be found that have low risk attached to them. They provide a good place to learn about market trends without the risk of losing big in one go.

Consider these five investments if you’re a business owner looking to put your profits in a worthwhile place.

 

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Investment Basics: Bonds Versus Equities

BONDS 

  • Just like some people, organizations and governments need to borrow money in order to function. An organization may need funds to expand into new markets while the government may need money to improve the infrastructures. However, some organizations need more money than the bank can provide. This is why they have to issue bonds to the public market. After which, a number of investors can lend a portion of the capital needed. So in a sense, bonds are borrowed money with a fixed and stable rate of return.

EQUITIES

  • For an aggressive investor that embraces risks, consider purchasing equities. Equities are the shares sold by companies. Buying equities means you become a shareholder – an owner of a percentage of the company. But if the company gets bankrupt, an equity investor will get the last claim on its assets.

PROS

BONDS

  1. Including bonds to your portfolio provides you periodic interest revenue for a certain length of time. Since its interest rate typically does not change, you will know what to expect.
  2. In an unfortunate event that the company goes bankrupt, bondholders are the ones who get paid first because they are creditors with the first claim on the company’s assets.
  3. There are various types of bonds to choose from such as government bonds, zero-coupon bonds, and corporate bonds.

EQUITIES

  1. Since equity investors become owners of a percentage of the company, they are equipped with the highest possible returns.
  2. You can profit it different ways such as gaining from the increase in share prices or dividend income (if the company declares dividends).
  3. Depending on how huge your shares are, you may have power to vote in the company’s decisions and issues.

CONS

BONDS

  1. Since the market changes and the bond’s interest rate relatively remains the same, it can lead you to getting lower investment returns.
  2. If you are keen to sell a bond with an interest rate that is lower than the current market rate, you will have to sell it at a reduced or discounted amount that what you originally paid for.

EQUITIES

  1. Equities are volatile and riskier than bonds. As much as equities can give you the highest returns, they can also give you greater losses.
  2. Unlike bonds, there is no guarantee of dividend payment in equities. Based on the current market and business circumstances, the company can choose whether it pays the dividends or not.
Image Credits: pixabay.com (CC0 Public Domain)

Image Credits: pixabay.com (CC0 Public Domain)

Sources: 1,  2, & 3

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What should you invest in? Equities or Bonds?

What should you invest in? Equities or Bonds?

The answer depends on two major factors: how young/ old you currently are, and the riskiness of your job. To elaborate, it is good to understand some basic concepts:

There are basically two types of investment products, bonds and equities.

  • Company issue bonds, which is borrowings with a fixed rate of return (interest rate). Bond holders do not own the company, so do not get to vote in company decisions.
  • Company sell shares, which is equity to shareholders. Shareholders own parts of the company, so they get to vote in company decisions, as such, shareholders also undertake the risk the company takes.

chart

Basically, it shows the simplified balance sheet of companies.

The revenue that company earns goes back to pay business expenses (eg. employee salaries, tax, etc), before paying for the interest owed to bondholders, leaving what is left as the profit.

The company can then choose to distribute part of the profit as dividends.

So in the 3 scenarios, they look like:

  • Normal economy – Revenue minus business expenses minus interests for bonds equals profit.
  • Boom – Revenue increases by quite a bit, minus business expenses which is more or less fixed, might increase a little bit, minus interests payable to bondholders which is the same, and leaves quite a lot of profit. Shareholders then get to share in the profit.
  • Recession – Revenue dropped by a lot, minus business expenses which is roughly the same, maybe drop a bit only because you can retrench some staff, but can’t retrench everyone, minus interests payable to bondholders which is the same, leaves very little as profit.

In the event the company goes bankrupt, it will have to pay the bondholders first, because in bonds, they owe money to bondholders. After that, any money left then goes on to paying the shareholders.

In the case of stocks and shares, share cycles typically lasts 8 to 10 years.

Total earning potential is the sum of your earnings from today until the day you retire. Given the above, which total earning potential scenario is higher?

  • When you first started work fresh out of university or
  • After working for some years and possibly earning at your peak?

The answer is obviously the former, where you first started your first job in your twenties. Why is this so?

Imagine that you retire tomorrow, your total earning potential will then be your salary today + your salary tomorrow.

This means when you first started work, you have a long earning timeframe until you potentially retire. While counterintuitively, when you are possibly earning at your peak after several years of working experience, you may not have a high total earning potential.

graph

Diversification is then spreading your investments over a number of assets to reduce risk.

What this means is:

Age wise

  • When you are young – you behave like a bond (because if you get fired when you are young, it is easier to find a new job because your salary is still low, and got more time to accumulate wealth)
    • So when you are young (bonds) – you should buy equities
  • When you are old – you behave like a share (because more risky, less time to accumulate wealth and see through the stock market cycle)
    • So when you are old (equities) – you should buy bonds

Occupation wise

  • When you are in a low risk job (eg. government sector, teacher although I know thatnowadays the “iron rice bowl” is not as low risk as it usedto be) – you behave like a bond (less chance to get fired)
    • So when you are in a low risk job (bonds) – you should buy equities
  • When you are in a high risk job (eg. private sector, banking) – you behave like an equity (more chance to get fired, but got potential to earn a lot in good times)
    • So when you are in a high risk job (equity) – you should buy bonds
Image Credits: pixabay.com (License: CC0 Public Domain)

Image Credits: pixabay.com (License: CC0 Public Domain)

So there you have it. Depending on where you are in your career life cycle, and whether your career behaves like equity or bond, invest accordingly to achieve the desired diversification effect.

“Work hard, save up to invest, retire young.”

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