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Wednesday, June 23, 2010

Buying stocks

Buying stocks is like buying a used car. You have to spend time and attention to make sure that you buy the right stock and pay the right price. Read this article. Do not listen to tips from friends or ask for their advice.

My observation
If you are not sure which stock to buy, buy the STI ETF. It is invested in the shares of the 30 largest companies listed in the SGX. It has low transaction and annual management fee. You can mitigate the risks of investing in this ETF by following the principles explained in Practical Guide on Financial Planning.

Another alternative is to invest in a life insurance policy, provided that you are able to find a product that offers a low "effect of deduction" as explained in that book.

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