A bond is a fixed income investment in which an issuer or investor loans money to an entity. Entities such as companies or governments borrow the funds for a definite period of time, involving an interest rate. These bonds are used by said entities to raise money or finance a variety of projects.
PREPARATION
If you are comfortable with getting less money in return, then you will benefit from investing on bonds. You may think that bonds are less risky than others. However, this statement is not entirely true. Bonds are usually less risky than stocks when you are comparing products from the same issuing company.
Most investment bonds are whole of life. Thus, there is no minimum term. At surrender or during the occurence of death, a lump sum of money will be paid out. The amount of money depends on the bond’s terms and conditions as well as the investment’s performance.
ACQUISITION
a. Bond ETF
The ABF Singapore Bond Fund is listed on the Singapore Exchange and managed by Nikko Asset Management. Investors can easily sell or buy holdings in the bond fund for as low as S$100. This fund buys the bond issuance of quasi-government entities such as Temasek, LTA, and HDB. What’s the main catch? There is no maturity period for this. The fund will use the proceeds to buy other bonds. You will receive your principal by selling your holdings in the open market.
b. Singapore Government Securities (SGS)
The Singapore Government issues bonds under SGS. It offers treasury-bills, SGS Bonds, and Singapore Savings Bonds. These are typically risk-free and are applied through the three local banks.
c. Investment Grade Bonds
Whether you believe it or not, bonds come with bond credit ratings. These ratings measure credit worthiness. An investment grade bond (i.e., AAA, AA+, or AA) means that the bond issuer is unlikely to default.
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These are just some things that you must consider before investing on bonds. Best of luck on your financial journey!
If you are thinking of trading in the financial market, the first thing you might want to do is open a trading account. With a plethora of platform providers in Singapore, choosing a platform as a preferred broker might be more beneficial to you than you realize.
Since most providers offer very similar services, they may appear homogenous from the very start. However, if you take a closer look at the various services they offer, you will begin to notice all the differentiating factors. Here are some of the essential things you need to consider before opening a cfd trading account in Singapore.
Company’s Reputation
All thanks to the internet, personal finance has become truly globalized. A few years ago, retail investors used to rely on making phone calls to their trading representatives for the purpose of buying or selling their investments. However, in today’s world all one needs is a good internet connection to make use of the platforms being offered by providers in Singapore and the rest of the world.
One major disadvantage to this is that there are plenty of small and obscure providers out there offering brokerage services. A number of such firms offer new clients extremely low transaction costs in order to lure them to their platforms.
If you are looking to open a cfd trading account in Singapore, it is advisable that you go with a reputable and well-established trading firm. This is because CFD trading requires a specific type of skillset.
Ease of Opening a Trading Account
Human beings have the tendency of always looking for the most convenient option. Most people, if not all tend to appreciate a low barrier of entry. When you are able to easily open an account online, it saves you the time you would have taken to physically go to the office to sign up.
Similarly, if you are not required to put up a minimum trading amount to open the account, it will give you a chance to first test drive the platform before making any long term commitments.
Mobile Support
In today’s world, it is crucially important to be able to use your tablets or mobile device to conduct business and check on your trades. This is because people spend more times on their phones and they constantly have their mobile devices with them as compared to desktops and laptops.
Before you go opening a cfd trading account, ensure that the provider has an application that permits you to trade via tablet or mobile devices. This would really come in handy in the long run.
Educational Support
This is perhaps one of the most significant factors to consider when getting a CFD trading account. However, educational support is frequently ignored by both traders and platforms alike. If you want to succeed in financial trading, you need to have full knowledge and understanding of what you are doing. Unlike gambling, CFD trading in Singapore requires a lot of experience, skills and knowledge.
A good company should have industry experts who assist you in trading strategy and other skillsets. Some of the topics covered should include technical analysis, forex trading and algorithm trading among others.
The Platform Provided
Some of the key considerations when choosing a platform should be availability of tools and user experience. These should comprise of charting indicators, as well as customizable features. Other things your trading platform should have include automated trading and stop-loss features among others.
When choosing a financial trading account, ensure that you get one that best suits your needs. There is no right answer when it comes to choosing the best cfd trading account, it all depends with what you intend to do. Whether you intend on making a periodical investment or making more frequent trades in multiple asset classes, the best choice for a trading account really depends on your intentions.
Peer-to-Peer(P2P) Lending, or debt crowdfunding, has grown tremendously since the concept originated in 2005 with Zopa in UK. In 2016 alone, P2P lending has generated more than $300 billion worth of investment opportunities worldwide. The concept helps the underserved or underbanked individuals and businesses access alternate sources of funding from investors who lend and earn passive income in the form of interest.
Southeast Asia is an emerging P2P lending market with a huge financial gap faced by SMEs. In the last 3 years, P2P lending has financed thousands of small businesses to support their growth, while offering investors an alternative investment opportunity. In Southeast Asia, one of the leading platforms, Funding Societies has funded more than S$120 million across Singapore, Indonesia and Malaysia. At the same time, they have given more than 45,000 investors access to this alternate investment class with net annualised returns of up to 14% in short tenor loans.
This article aims to highlight 4 important considerations to maximize your returns in P2P lending with examples of initiatives taken by Funding Societies:
Choose your platform wisely
When investing, you want to choose a platform with decent track record and achievements. These are things to look out for in a good platform:
a. The platform has good risk management practices
Review the platform’s risk management – including filtering out bad quality loans, pricing returns as per the risk, and managing non-repayment and defaults. While most platforms do not publish their proprietary methodologies, their processes should be robust enough to identify potentially bad loans. A good indicator is the platform’s default rates. Funding Societies has a default rate of 1.3% (as of 7 March 2018), one of the lowest in the region.
To illustrate, here is an example of the impact of a low default rate:
Assuming gross annual yield of 12%, platform fee of 2% and default rate of 3% (on the higher side) one can make 7% in returns.
This of course is not assured but depends on many factors including platform’s risk management as mentioned above.
In the inevitable event of a late payment or default, it is essential for the platform to have a process to manage collections or exercise legal action. You should enquire the platform on its processes to have a better understanding and clearer expectations.
b. Skin in the game
Find out if the platform has YOUR interests aligned with theirs, and what’s in it for them to ensure that investors’ money is handled properly and the investment opportunities/loans are of good quality.
Firstly, the platform should know how to handle your money. Funding Societies is the first P2P financing platform in Singapore to engage an independent escrow agent to handle investors’ funds, keeping its operating funds separate from investors’ funds. This gives investors peace of mind knowing that their money is safeguarded by the escrow agent and will not be utilized for anything besides their investments.
Secondly, is the platform as invested as you are? The management at Funding Societies has a ‘skin in the game’ by investing in every single loan, and will do their best to maximize the returns and manage any negative impacts.
c. It cares about YOUR Experience!
Debatable – but a good platform should be all-encompassing in its experience, right? This should start from the platform, mobile app (convenient for you), and customer experience. More importantly, it should be responsive and helpful when you need to speak to someone.
Understand macroeconomic conditions
Knowing the pulse of the economy will help you when you select the loans to invest in. This includes updates for each sector and government initiatives to boost SMEs and specific sectors.
Coupled with the factsheets provided by P2P lending platforms that state the company’s operational and financial health, you will gain a wider perspective of the economy and SMEs you are funding.
Diversify your investments within the platform
As the saying goes, “Don’t put all your eggs in one basket”, the same goes for investing in P2P lending. Diversifying across many loans has its advantages specifically in spreading the risk across many loans and helping to minimise the impact of non-performing loans.
I. Participate in multiple loans with small amount (at times as low as $50)
II. Consider spreading the weightage of your investments in terms of loan amounts
III. You have the option to choose the industries to invest in.
IV. Funding Societies currently provides Business Term Loans and Invoice Financing for investment. You can consider both products when investing.
Using the Auto-Invest feature simplifies your road to diversification. All you have to do is set your criteria based on product, industry, tenor, rate of returns and industry. When an investment opportunity matches your criteria, you will be allocated the investment based on the auto allocation algorithm.
Re-invest for compounding effect
When investing in P2P lending, repayments are made on a monthly basis (30,60,90 days in case of invoice financing), and you can decide, based on your risk appetite, whether to reinvest the repaid funds and thereby compound the returns.
Southeast Asia’s leading crowdfunding platform, Funding Societies, currently operates in Singapore, Indonesia and Malaysia. With more than 45,000 investors and being the only P2P lending platform to win the MAS FinTech Award (SME category, 2016), Funding Societies has also attained global recognition, being recognised amongst the Top 250 FinTech companies globally by CB Insights and winning the Best in Customer Experience for Alternative Financial Services by Retail Banker International.
It should not be construed that Moneydigest is endorsing this article or any of the products and services provided by Funding Societies.
Nothing in this article should be construed as constitute or form a recommendation, financial advice, or an offer, invitation or solicitation from Funding Societies to buy or subscribe for any securities and/or investment products. The content and materials made available are for informational purposes only and should not be relied on without obtaining the necessary independent financial or other advice in connection therewith before making an investment or other decision as may be appropriate.
We know you have been a naughty boy and you want to break your trading routine. The hardest thing of our lives is the best thing that can happen to us and we always want to break it. You can remember how hard it was for your parents to send you to the school. You will have all the sicknesses of the world and still, your daunting mother sent you off to school. Trading in Forex can be boring sometime and you will need a change. Many people try to make that change by not following their routine and the result is not sweet. If you are wondering in your mind and want to know what will happen when you do not follow the routine you have made for your trade, this article will tell you what will happen to your routine.
Discipline is the key to success
In any profession, you need to show a great deal of patience to become successful. When it comes to Forex trading there is no other alternative to discipline. The majority of the senior traders in Singapore are extremely discipline and for this reason, they are able to make a consistent profit. Unlike them, the novice traders are always breaking their rules and losing money. If you look at the success rate among the traders in Singapore you will be surprised to know that most of them are doing relatively well in the investment business. This is only because they always follow the key rule investment. They are never taking any excessive risk neither they are dealing with the market with emotions.
Emotions can easily ruin your trading career and you can do nothing about it. You need to learn to control your emotion by demo trading account for at least six months. If you can successfully demo trade the market, it’s time for you to start trading with your real money. But always remember, discipline is the key to success in Forex trading. Read books about trading psychology since it will greatly help you to become a better trader.
You will get unorganized
The first thing that you will see in your career that you will get unorganized. A routine does not improve a trader but it helps to keep organized. If you know what you are going to do when you have finished brushing your tooth, it will be much easier for you to keep track on your daily works. If you break your routine and do what you want, you may not do something important. When you will break your routine, you will get unorganized and you will make losses. You will analyze the market sometime and sometime you will trade with your mind and you cannot expect that you will make a profit with this trading.
Profit will be harder to make
When you are unorganized in your trades, the profit will not come to you. You have to trade the market with the same routine every day and when you do not do that, you will be trading on a hinge. Following your routine is the right thing to do in Forex and when you break it, you do not make the profit. Traders are always saying to develop your routine and following it every day. This is why it is important for you never to break your routine.
Your career will not improve
Every trader wants to improve their career and it is not possible if you are trading without routine. Always keep a routine and follow it whatever happens. You may not make profit always but you will build consistency in your trading. The successful trader never breaks their trading routine and this is why they are consistent in their career. It is not possible to advance in your career if your routine is not followed. Never break your routine and trade the market with it and you will be successful.
It is no wonder that Forex is the biggest and the most attractive business market in the world. Millions of people are starting their career in Forex every day. If you want to trade in Forex, you do not need your office but you only need your computer connection and your strategy. When millions of people are trading in Forex, it might seem that all these people are having a good day. They are trading in the markets and although they can lose their money, they can be on track in Forex with a little hard work.
It is actually not that simple in Forex if you do not know the right way of trading. Most beginners in Forex lose their career after only a few months of trading because either they have no experience of the trading market or they have not quite get it right. They make many mistakes which are quite simple for them but deadly when you are a beginner. If you want to trade in Forex and thinking that you have a basic knowledge on the market, this article might come to your help if you want to avoid the mistakes that beginners make in their trading. It will not only give your career head starts but it will also improve your career smoothly in the market.
Sky is the limit
When you start your trading career you must wonder about the profit factor in this industry. To be honest there is no need to do the extensive calculation as you can easily understand the true benefit of professional trading just by observing the life of the successful Singaporean trader. Being an active trader you will be your boss and you set the limit for the potential loss or profit. However, trading is not all easy. In fact, this is not suitable for everyone. You need to trade this market in a relaxed environment so that you can take the perfect decision. Before you consider trading as your full-time profession it’s highly imperative that you consider demo trading account as your practice field. Never start your trading career with the real money since you might lose your entire trading capital. First of all, learn all the fundamentals of this market so that you can easily place your trade with an extreme level of confidence. Never take any risk which you can withstand. Find the perfect balance between your risk tolerance level and profit factor to survive in this industry.
Don’t start with live account
Many traders start trading in the market with all of the strategies they have got on the internet. It is a big mistake for you if you have just started your darer in Forex. You will see that there are lots of strategies for you but you cannot trade them in the live account when you are new. You should remember that it is an investment market where many traders lost their investment. You have to practice in your demo accounts to give you some foundation on the market trading. It will help you in your career and you can understand why demo accounts are here.
Choose a simple strategy for your beginning
There are many strategies that are used by professionals in Forex. Do not try to impress yourself and choose a simple strategy. If your strategy is simple and it works then it is not simple. Any strategy with a simple touch of your hard work and trading techniques can make your career bloom.
Never overtrade, never rush
This is the mistakes that beginners love to make. Do not overtrade in Forex as you are not going to make money if you have placed many trades in the market. Also, do not hurry. You need to be patient to give time to the markets to work out. Be disciplined in your trading and patient for your strategy to work.
