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Home Investing Strategy Get Smart: Your Buffet of Winning Stocks

Get Smart: Your Buffet of Winning Stocks

Singaporeans are known for travelling great distances across the island in search of delicious food.

As a typical Singaporean, I do enjoy searching high and low for great food places.

At the same time, a good buffet offers the convenience of a delectable spread of dishes that leaves you spoilt for choice.

While the pandemic has altered the buffet landscape, we can still have ala carte buffets.

And if you are hungry for more, there’s always the stock market.

Picking your favourite restaurant

Dining at a favourite restaurant is something many people can relate to.

Using this as an analogy, investors need to select their favourite stock exchange first.

Certain exchanges, such as the NASDAQ, are well-known for technology stocks.

Others, such as the Hong Kong Stock Exchange (HKSE), are known for their links to China, thereby offering investors a plethora of choices to tap the Asian market.

Picking an exchange is important as it determines the type of companies you will find.

These should, in turn, align with your investment goals and objectives.

Income-seeking investors may prefer the Singapore Exchange with its wide variety of REITs.

Growth-oriented investors, on the other hand, may gravitate towards the US as there are companies there displaying a decades-long track record of growth.

Selecting dishes that suit you

When you decide on an appropriate exchange, the next step is to select the stocks (dishes) that appeal to you.

It may be tempting to just gobble up whatever looks the most appetising, but a word of advice should be given here.

You need to ensure that you do some basic research first to understand if the stock is suitable for you, in light of your circumstances.

Just like someone who has to watch what he or she eats for allergies or dietary restrictions, you also have to carefully review the available stocks on the exchange and pick only the best ones to savour.

Understand the risks and rewards of your intended stock picks and whether they can continue to deliver the results you are looking for.

By doing so, you can savour the sweet taste of success without worrying about indigestion.

Curating a smart portfolio

Even with a buffet of choices, putting together a well-rounded meal takes some effort.

Likewise, when it comes to investing, we have to be clear about what we expect from each stock.

An income stock, for instance, might not be built for speed but acts as a steady workhorse that delivers dividends consistently in the future.

A growth stock, on the other hand, adds some speed to your portfolio, whether it is from capital growth or a dividend that grows over time.

Beyond that, we should size our position to reflect our conviction in the idea.

We can take smaller positions in riskier stocks to limit our exposure. Conversely, we can also put more money on stock ideas that resonate deeply with us.

Get Smart: Picking stocks to suit yourself

The great thing about picking stocks is that you can build a portfolio that’s suited to your own investment style.

If you’re into growth investing, choose stocks that display consistent and steady growth. Our Smart All Stars Portfolio contains a portfolio of growth stocks that suits just this purpose.

But if you are more of a dividend investor, then dividend-paying stocks or REITs should suit you better. We have The Smart Dividend Portfolio, a Singapore stocks portfolio that is income-focused.

And if you want the best of both worlds, go for a combination of growth and dividends in the companies you pick.

There are endless combinations of stocks that can make up your ideal portfolio.

The best part is that this portfolio will be tailored just for you, the Smart Investor.

Over time, you can curate a portfolio that fulfils your investment objectives, leaving you richer and happier.

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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.