Building A Watchlist

Side note: Anyone read the front page of the Business section of Straits Times yesterday? I find some of their price targets quite interesting (I've written on some of the shares before), I may take a closer look at them if I have more time this weekend.

As you know, I haven't been investing for a long time so not much experience with many of the companies or shares in the market, but I would like to share how I built up my watchlist of around 10 companies which I follow.

(Image source: wikipedia.org)

So to start off, I look at the constituent shares on the STI, the blue-chips in Singapore. I personally am not the most supportive of banks and REITs. Banks because I think that they're earnings are hard to gauge and that there's no real bottom when they start to fall, so I'll look at them only during depressions to see how they fare. The reasons why I'm not supportive of REITs was shared in Thoughts on REITs, I am reconsidering this as REITs have become a lot cheaper since I wrote that post though

My watchlist 

(Image source: sgx.com)

Other than blue-chips, I also look at small and mid-cap companies, but this is on a more ad-hoc basis.Like maybe I just happen to walk past the company's buildings and see good business or  a company that I regularly patronize. Yes, I have a habit of looking up companies that I see on the street to see if they're listed, this has been one way for me to learn about the different companies that are listed. I also look at shares covered by other financial bloggers for ideas too. For these I'll take a look at the P/E ratio of the share and consider the growth prospects before adding to my list of shares to evaluate.

Then I go on to looking at their financial statements, to make sure that all is sound and come up with a rough price that I would pay for the company. Usually I only add shares that I think are nearing the price that I would pay for them, so as to reduce the number of shares that I have to follow daily, but I do occasionally take a look at the other companies that I've looked through.

That's how I built up my small but growing watchlist. Before I invest I'll usually take a look at the financial statements more carefully, so some of the shares in my watchlist may be excluded when I start taking a more careful look at them. Hope this helps you on building your own watchlist

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