Top 5 ways to do stock picking and be profitable in 2017

Top 5 ways to do stock picking and be profitable in 2017

copy-of-chase-theWhether you’re a veteran investor, a trader who’s just got into the game or a passive value investor, picking the right stocks this 2017 is certainly a concern.

With the list of unprecedented global happenings in 2016, from the lowest oil prices in Jan, Brexit in June, to Trump’s presidential win, we saw the STI both dipping and recovering.

The worse hit sectors in 2016? The oil & gas, offshore & marine sectors. Big names in these sectors include Keppel, Noble and Swiber just to name a few. Keppel doubled down on its share price in 2016, despite being a giant in the stock market and part of the STI.

So, the key to being profitable in investing or trading is really to pick the right stock at the right time.

Although that’s easier said than done, stock picking is an essential skill that both traders and investors should possess, that can identify good opportunities before price surges.

Here are the top 5 ways to pick stocks for 2017:

 

1. Stock screener

What is a stock screener? A stock screener is tool that helps investors filter all the listed stocks in the market after setting their own criteria. By doing so, investors can identify quickly which stock matches their criteria of a ‘good’ stock to buy. For example, if an investor wants to look for stocks that matches his criteria of a P/E ratio below 10, a stock screener will come into good use to help him identify any stock that fits the criteria.

One free, good and trustworthy stock screener is the SGX StockFacts Screener. It allows you to set up to 5 criteria, to select from market data, financials, valuation, industry and even exchange. It is definitely a free and good screener to check out if you’re looking to stock pick from selected criteria.

2. Brokers/Remisiers

If you’ve a trading account with any local brokerage house, you’re likely to have an assigned broker. A broker’s main job is to facilitate your trades, but some good brokers do provide real value. Although brokers are not specifically allowed to give stock recommendations, good brokers will usually tell their clients their analysis and stock tips that can affect investment outcomes. That is why some brokers have a higher client pool and are able to have top-tier status as compared to their peers. Hence, it is important to have a good broker that can help you pick the better stocks. Good brokers are hard to come by, so ask around your family and friends or go online and search for them.

3. Blogs

Yes, blogs have been around for a while. It is the content of blogs that investors should be looking at. Good quality financial blogs should be updated frequently and contain quality posts. As, financial bloggers are good at analysing stocks that they are usually vested in or are considering market entry, reading blogs can help you pick the right stocks faster. Here are some of the financial blogs that every investor must read at least once (non-exhaustive):

http://bullythebear.blogspot.sg/

http://tubinvesting.blogspot.sg/

http://blog.bpwlc.com.sg/author/brennen/

http://singaporetradinginsights.blogspot.sg/

http://www.sreitinvestmentblog.sg/

https://financialveracity.com/

http://investmentmoats.com/

https://www.bigfatpurse.com/blog/

4. Networking

Everyone has that few friends who’re always on the topic about the markets. With their interest and enthusiasm, it is likely that they would a few stock picks on hand. More often than not, enthusiastic people tend to form interest groups to further their interests. Networking has its advantage where leveraging on other people’s passion and knowledge can give you an edge with stock picking. Hence, if you’re looking to improve your investment skills or doing stock picking for the year, take some time to hang out with your friends. One great way is to gather your friends and attend seminars or workshops together.

5. Social Networking

Networking in person is great but not everyone can find time in their schedule to do so. In this digital age, networking has evolved to social networking. Social networking’s biggest advantage is that information can be shared and updated in real-time. Facebook, Twitter and LinkedIn for example, these tech companies have revolutionized the way people communicated across boundaries and even time zones. For tech in finance, networks like StockTwits, TradingView and InvestingNote are the equivalents. As a result of social networking, the amount of people that can participate are limitless – this constitutes to an exponential increase in the exchange of valuable information. Stock picking is definitely a part of the information exchange. It’s easy: see what are the trending topics and stocks other investors are talking about, do your own analysis and make the decision – all at the right time. You might just realise that stock picking isn’t really as hard as it seems when everyone is actively helping one another out online.

Our take:

Apart from picking the right stocks, it is equally important to enter and exit at the right time. Stay updated with the latest news, trending topics and politics as external factors (known as systemic risk) can have an indirect ripple effect on even the best stocks, especially in volatile times. Therefore, it is always best to invest within your means, manage your risk and do your own due homework.

On this note, we wish everyone a profitable and bull year this 2017.

Huat ah!

2

 

Leave a Reply

Your email address will not be published. Required fields are marked *