"don't play a game if you don't know how it works"

It has been awhile since I last posted, and it was because recently I picked up two web projects to work on. One is an online voting system and another is a lifestyle platform. I had tons of fun coding even though that means a lot of time with my computer. Therefore, to make my day more fulfilling, I have been investing in the stock market along with web development tasks. Well, after all I’m still a Finance major who had been a portfolio manager for my school’s endowment fund (smile).

The reason why I enjoy it as a hobby, just like how I enjoy poker, is because “it’s gambling, but with skills”. There are risks and there are returns, but you are not betting on the odds without any information. You can see your hands in a poker game, and you can understand companies in the market inside-out. You are responsible for your own decision whether you want to be a risk taker or not. That’s the interesting part.

My investments focus solely in the Hong Kong market, and there have been extreme comments in 2013 about where the market is heading. Personally I’m optimistic about the 2nd half of the year and I believe in a bullish market. I’m not an experienced stock picker, but I still have some ground rules and interesting points I would like to share with you guys.

###1. Pick the big player Never invest in companies you’ve never heard of. That’s not exactly true, because our daily lives involve only a tiny number of listed companies. What it actually means is look at the company’s background, check if it is a major player in its industry, examine the volume, avoid buying companies with no one trading it. By investing in the big players, you get a higher dividend and also, as long as you have patience, your money won’t sink into the ocean.

###2. Fluctuation during the day tells more than just looking at the closing price Few years back I invested in a few stocks, and I didn’t follow the market closely and only checked the closing price once a day. I ended up losing a ton of money because I had no idea where the market was heading. I came to realize observation during the day is essential as it can provides insight about what could happen the next day or two. If you’re a busy person, don’t invest in stocks.

###3. Watch out for manipulation from funds Don’t believe in what magazine and newspaper say or recommend. Too many people are manipulating ups and downs in the market, and you have no way to avoid or observe that. However, if you pay attention to the companies’ news, and watch the particular stock prices raise and fall, you kind of sense that a few enormous funds are “playing” with the innocent public. Watch out for the shark.