How Often do You Check on the ‘Health’ of Your Investments?

How Often do You Check on the ‘Health’ of Your Investments?

Just like you do a periodical physical health checkup on a regular basis to make sure that everything is ok, you also need to perform “health checkups” on the companies you’ve invested in, to stay updated on its latest developments, and also make sure that the reasons why you have decided to invest in the company back then remains valid.

And in case you’re wondering, no, I do not mean keeping your eyes peeled on the company’s share price movements (In fact, I do not bother about the company’s share price movements at all.)

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This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1055  followers.

Following up from my post yesterday where I shared 3 of the most basic things one should look at before they make their investment decision in a company (the post is titled “Would You Marry Someone Who You Meet for the First Time?”, and you can read the post here, in case you’ve missed it), your work is not done after you’ve invested in the company.

In my post today, I will be sharing with you 5 things I personally do to keep myself updated on the companies I am invested in:

1. Reading Business News from the Various Websites

There are two sites I visit everyday to get myself updated on the latest business news – they are The Edge Singapore, as well as Singapore Business Review, both of which are updated everyday with the latest news, and you can read the articles for free.

In so doing, I can not only stay updated on the latest news that may be released relating to companies I am invested in, but I can also seek out potential investment opportunities from the articles (for those of you who are wondering where I got my investment ideas from, there you go) – killing two birds with one stone.

2. Reading Analyst Reports

Analyst reports on companies by the various brokerage firms in Singapore are one of the best sources for me to learn more about the company I’m invested in. Most of these reports are extremely detailed and they allow me to get a much better insight about the company.

The easiest way to locate these reports is to Google for the company name, along with the words “sginvestors.io…” (without the inverted commas). For instance, if I want to look up for analyst reports by SBS Transit, I’ll Google for “SBS Transit sginvestors.io…”, and you’ll find the following:
Results Returned by Google for My Search about “SBS Transit SGinvestors.io…

Once you’ve accessed the website, click on the tab “Analysts Say” and you will find all the analyst reports published by the various brokerage firms within:
A List of Analyst Reports Published by the Various Brokerage Firms on SBS Transit (SGX:S61)

One thing to note from the analyst reports – as much as I enjoy reading those reports to learn more about the company I’m invested in, but I normally will ignore their “target prices”, and their “buy/sell/hold” recommendations since I’m going to invest in the company for the long-term.

3. The Company’s Quarterly Reports

From this year onwards, many companies have switched to providing their financial results on a half-yearly basis (from every quarter previously), and in the first as well as the third quarter, some of the companies will just provide business updates.

It is in these business updates and latest financial reports that I can learn about the company’s latest performance – particularly if the company report a weaker performance, I will dig further to find out why is this so; is the weaker performance due to a one-off, or is it because of the company’s business fundamentals weakening. Especially if it is the latter, I will ask myself if the reasons why I’ve decided to invest in the company back then still valid – if it is not, then I will divest my investment in the company, and “recycle” my capital into other companies.

4. The Company’s Annual Report

As a shareholder, reading the annual report, particularly the “Letter to Shareholders” (typically found in the first few pages) by the company’s CEO will allow me to learn about the top management’s thoughts about the latest year’s financial results, their look in the year ahead in terms of navigating through challenges, targets to be achieved in the new year ahead, along with projects the company is embarking on.

5. Attending the Company’s Annual General Meeting (AGM)

The only time you can come face-to-face with the company’s top management is during their AGM.

This is when you can hear directly from the company’s top management who will be presenting not only about the company’s latest financial year performance, but also on the outlook ahead. It is also during the company’s AGM where you can bring up any questions or concerns you may have as a shareholder.

I like it if companies I invest in have a management team that is candid and honest with highlighting challenges faced (along with action steps that will be taken to navigate through these challenges), and also one that is open in addressing any concerns that fellow shareholders have brought up during the meeting.

In Conclusion

The above are the exact things I do as a shareholder in the companies I’m invested in (for those of you who like to know what’s in my long-term portfolio, you can check it out here), and I hope my share today will help fellow shareholders who are new to investing have an idea of what they can do to keep abreast on the latest developments about the companies they are invested in.

As always, if there is anything you would like to clarify, or if there are anything you would like me to talk about in my future posts, please feel free to let me know here.

Once again, this article is a guest post and was originally posted on ljunyuans profile on InvestingNote. 

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