Cash after crash
A big loss didn't deter investment coach Kenny Loh. Instead, he kept the faith and learnt from his mistakes
He started in 2009 with an investment capital of $100,000 from his savings, but lost most of it in about two years.
But investment coach and financial blogger Kenny Loh, 45, was undaunted.
He says: "If I keep thinking about the $100,000, I cannot start again.
"I cannot give up. I realised that to be a successful trader, I need to be disciplined. Everyone has a different risk profile and goals.
"I continued to convince myself that there is no shortcut or quick fix - I need time and experience. In an environment of low interest rates, we have to invest."
Mr Loh, who previously held a senior management position in a multinational corporation, said his mistakes were costly, but they helped him devise his own approach in investment.
This approach combines fundamental analysis, technical analysis, real estate investment trusts (Reits) assessment and analysis of the global economy for passive income generation.
He says: "You need to go through the whole cycle before you know how to anticipate."
Mr Loh started accumulating stocks after reading investment books in February 2009 during the global financial crisis.
He says: "At that time, stocks were cheap. Counters like OCBC and KepCorp were at about $4. I didn't have any financial knowledge, so I just looked at price."
He realised he couldn't just rely on books so he enrolled in a course, which cost him $4,000.
He says: "After four days, I still couldn't invest because I was still blur and confused due to an information overload.
"From zero knowledge to so much knowledge... I couldn't absorb it."
Mr Loh decided to blog about his investment journey because "if I don't practise, I will lose the $4,000 (in course fees)".
He says: "I force myself to do analysis before I post.
"I also use the blog as my library - I can be trading anywhere in the world, and yet I can still refer to my blog entry."
He started accumulating S-chips - Chinese companies listed on the Singapore Exchange.
Says Mr Loh: "After you know the tactic, you feel that it is so easy to invest. That was how I got burned. Theory and action are different."
One of the S-chips he bought into was sportswear-maker China Hongxing Sports. He bought$50,000 worth of stocks.
But the stock was suspended from trading in February 2011 after external auditors flagged financial irregularities in the company's accounts. It remains suspended as of Jan 4 this year.
Mr Loh says: "Back then, it passed all the criteria - all ratios looked good. So I started accumulating the stock. Now, I cannot trade the stock. My money is stuck there. Once it resumes trading, people will sell. I assume the investment is gone. Otherwise it will affect me.
"This is something investors will not know. Whatever is in the financial statement can be manipulated. It can be fake. There is no chance for us (investors) to run.
"Because of this, I don't trade in penny stocks even though the entry level is easy and cheap."
Through his costly mistakes, Mr Loh learnt invaluable skills, which "you cannot learn from a textbook".
"Everyone won't share how they lose money," he adds.
He is now teaching his 16-year-old son how to invest.
"I learnt all these skills but it was too late for me. At a certain age, you can't take too much risk. I am more defensive now."
He now invests in Reits, which give him a consistent passive income as he builds up his retirement portfolio.
He has about tens of thousands invested and is keeping the majority of his assets in cash, in anticipation of a market crash, where he plans to pick up stocks on the cheap.
Despite the threat of rising interest rates affecting the real estate industry, Mr Loh looks for Reits that are not affected, such as those that do not need refinancing in the next few years so that income is protected.
To learn more about investing, there are some courses offered by SGX Academy that a beginner can sign up for, such as Build a Dividend Portfolio for Regular Income on Jan 13.
His top investing tips
IF YOU FAIL, TRY AGAIN
"Work hard and be persistent. Do not give up. Losing money is part of the game, and you need to manage it," says investment coach and financial blogger Kenny Loh, 45.
FIRST, INVEST IN KNOWLEDGE
"I am lucky because I made the right first move - I went back to basics with the courses that I attended. It is (about) building your foundation. Once I have the basics, in the future if I want to trade anything, I am able to do so because I have the foundation," says Mr Loh.
DON'T COPY BLINDLY
Different approaches are required for investing in stocks in different markets as they have different characteristics. For example, the valuation and analysing method for OCBC Bank or Apple Inc stocks are different.
DON'T LISTEN BLINDLY
"No one can predict the market. I trust my own homework and analysis."
He recounted an example where a financial adviser predicted that the market would go even lower - even though his own analysis showed that it was a good time to enter.
"If at that time I didn't listen to him, my portfolio would have doubled."
PICK A PATH, STICK TO IT
"Sometimes our education is like a stock chart. The more you learn, the more confused you are. So you have to be very clear about which approach you are taking."
He gives the example of how some beginners attend course after course to find the Holy Grail.
"Sometimes, the more courses they attend, the more confused they become," he adds.
YOU WON'T GET RICH OVERNIGHT
"Give yourself at least three years to learn and devise a system that suits your personality and risk appetite.
"I was working full-time and needed to find what would suit me. As I learnt more, I picked one that suited my personality and time."
NO RIGHT OR WRONG WAY
"You can still make money even if you are wrong. You can still lose money even if you are right.
"It is not important whether you are right or wrong. What is important is whether you are making money."
CONTROL YOUR LOSSES
"You cannot control how much the market gives you, but you can control how much you lose."