Every investor starts off being a newbie. I was no different; back in 2013, before I made my first investment purchase, I read up on a few investment books and websites to educate myself on the risks of owning REITs and stocks. The below mentioned are some educational resources that I have read prior to investing:
1. The Intelligent Investor: The Definitive Book on Value Investing (by Benjamin Graham)
This is a must-read book if you are new to investing. Benjamin Graham teaches you how to pay less than the intrinsic value of a stock in the market. Basically, you would want to pay for example, $0.90 for every $1 of intrinsic value of the company you are looking to invest. This creates a margin of safety that protects the investor in the event of market downturns and bad decisions. Besides the margin of safety strategy this book shares, it also shares on how to build the right psychology in approaching investing. This is also very important, for more often than not, we trade our beliefs in the market when we buy a security. For instance, how do you react when there is a sell-off in the market? Do you panic and follow the herd, or be a contrarian investor and buy when everyone is rushing to hit the sell button? Highly recommend by world’s famous investor, Warren Buffet, I also advise any beginner to delve into this book.
2. Value Investing in REITs: How Anyone can own Premium Real Estate with Little Money and Collect Income Like a Landlord Every Month (by Attlee Hue)
Okay, because I have interest in investing in REITs, I borrowed this book from my sister who bought it at a bookstore. Unlike what the title claims, I wouldn’t say you can retire by owning real estate with little money (I mean, technically you can own with little money, but to retire with little money, I’m afraid its not possible…). What the author means is that unlike traditional property investments, you don’t need to folk out a huge chunk of your savings at one time to invest. You can invest in bite-sized chunks. This is a beginner’s guide on the various types of REITs available in Singapore and their risk characteristics. For example, there are healthcare, retail, industrial, office and hospitality REITs. Each of them have different risk profiles. The book also provides advice on how to avoid costly mistakes that amateur REITs investors make all the time, like avoiding dividend yield trap (why didn’t I listen to that earlier?). I got my knowledge of REITs from this book, so I would recommend any newbie REITs investor to get this book.
3. Building Wealth Through REITs (by Bobby Jayaraman)
Another good beginner’s guide on the various characteristics of REITs in Singapore by Bobby Jayaraman. He also talks about REITs in a rising interest rate environment, which is quite applicable to today’s context. Many investors thought that REITs are somewhat like bonds whose price will decline in tandem with rising interest rates. However, it is also true that rising rates indicate a strengthening economy, which translates to better rents and net property income. This book also includes interviews with various CEOs of REITs in Singapore like that of Capitamall Trust, CapitaCommercial Trust, CDL Hospitality Trusts and more.
4. Investopedia (investing guide website)
While not a book itself, investopedia is recommended by one of my friend during my learning experience in investing. It is a comprehensive resource site with tutorials and articles on financial news, retirement, investing, personal finance, financial advisers and many more. If I am not wrong, there is also a stock simulator where you can practise your stock trades with virtual money; there is no risk of losing real money if you make poor decisions. Of course, if you do, you can learn from it without the painful experience of losing your hard earned money.
5. The Motley Fool (stock investing website)
Also another website that I browse regularly for updates on the counters I bought in my portfolio, they provide reports on the various companies that are trading in the stock exchange. They also advise on how to invest for the long term in the markets. But of course, you had to eventually form your own judgement on the stock you are holding.
What educational resources do you use in your investing journey to be profitable? Share your experience in the comments section below!