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Year of the Horse – 3 Tips For the Year Ahead

The Chinese New Year would be upon us in a week or two, which means the year of the Horse is just around the corner!

Apparently, it is going to be a great year for those born in the year of the Bull (like me!) according to Feng Shui experts.  Other zodiac signs that are pegged to have a nice year ahead include the Rooster, Pig, Ox, and Rabbit.

But regardless of whether the year of the Horse is predicted to be a smooth or bumpy one for you, it won’t hurt to have some investing tips to help prepare you  for the year ahead.

1. New Year Resolutions

Before you start jumping into the market, you need to have an objective in mind. Spend some time working out your objective for investing and your risk tolerances. Are you looking for cash flow income from your investments or you are able to focus more on capital appreciation? Or perhaps you are retiring soon and want to keep a portion of your wealth for capital preservation, in order to leave something for your children?

Once you know what you are seeking for in your investments, you can start the search.

2. Digging for Gold

If you are looking for cash flow income in your investment, you might consider focusing your research on real estate investment trusts as they generally give higher dividends in the market.

You could also choose to look at companies with dividend yields higher than the market average. The market’s currently yielding around 2.7% and simple examples of blue chips with higher yields include telecommunications provider SingTel (SGX: Z74), conglomerate Jardine Cycle & Carriage (SGX: C07) and stock exchange operator Singapore Exchange (SGX: S68).

Company

Share Price

Dividend for last completed financial year

Dividend Yield

SingTel

S$3.52

S$0.168

4.8%

Jardine Cycle & Carriage

S$38.68

US$1.23

3.9%

Singapore Exchange

S$7.02

S$0.28

4.0%

Source: S&P Capital IQ

If high-yielding shares don’t catch your fancy, then a company’s that reinvesting its earnings for growth might do the trick.

3. Continue the Search for Knowledge

Lastly, there is a famous Chinese saying that goes “活 到 老,学 到 老”. It’s literally translated as “The older we grow, the more we learn.” Learning is a never ending process. Save some time in the coming year specifically to grow your knowledge and extend your circle of competence. You never know when that extra piece of knowledge about a company or industry will come in handy.

Foolish Bottom Line

If you have been putting off investing your money for many years, reconsider your decisions as time is one of the greatest partners an investor can have.

All told, the act of investing, like riding a horse, is exciting and liberating, and you never know what surprises it might bring you at the next corner.

Here’s wishing everyone a mightily prosperous new year – or as the Chinese would say, “恭喜发财(pronounced ‘Gong Xi Fa Cai’)!”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.