“Price Targets” : The Key to Successful Investment Returns
Goh Teik Cheng, Head of Research & Product Advisory, Personal Financial Services.
Every investment book and fi nancial guru will teach you when to buy into the market.But who is there to help when it comes to locking in the profits?
The IMF in its World Economic Outlook(October 2010) has projected that the world economy will grow by 4.8% in 2010 and 4.2% in 2011, with China leading the charge. We are in the "Growth" phase of the economic cycle (see diagram). While this is not news anymore, it does remind us to focus on our investment objective and not be distracted by the noise being generated in the market.
As risk gets more expensive, investors should understand the importance of setting a price target and having the discipline to sell when that price target is reached. Lock in your profits and wait for the next buying opportunity. Although markets may be trending upwards, they certainly do not move in straight lines. There will be periods of downward movements. Equally important is the discipline in setting stop-loss price targets. If the stock price falls below this limit, sell and keep the cash for the next buying opportunity.
By applying price targets, investors and traders can accumulate their investment returns and behave like the professionals. Price targets take the emotion out of investment decisions.
My point is not that it's wrong to own a stock over the long term. It is possible for a stock to have a great run over many, many years. However, being a successful investor means investing with your head; it is not only knowing when to buy, but just as importantly, knowing when to sell.
At UOB, we may just have such a fund with this “Price Target” feature for you; a fund that automatically terminates when your investment hits the target returns
Goh Teik Cheng, Head of Research & Product Advisory, Personal Financial Services.
Every investment book and fi nancial guru will teach you when to buy into the market.But who is there to help when it comes to locking in the profits?
The IMF in its World Economic Outlook(October 2010) has projected that the world economy will grow by 4.8% in 2010 and 4.2% in 2011, with China leading the charge. We are in the "Growth" phase of the economic cycle (see diagram). While this is not news anymore, it does remind us to focus on our investment objective and not be distracted by the noise being generated in the market.As risk gets more expensive, investors should understand the importance of setting a price target and having the discipline to sell when that price target is reached. Lock in your profits and wait for the next buying opportunity. Although markets may be trending upwards, they certainly do not move in straight lines. There will be periods of downward movements. Equally important is the discipline in setting stop-loss price targets. If the stock price falls below this limit, sell and keep the cash for the next buying opportunity.
By applying price targets, investors and traders can accumulate their investment returns and behave like the professionals. Price targets take the emotion out of investment decisions.
My point is not that it's wrong to own a stock over the long term. It is possible for a stock to have a great run over many, many years. However, being a successful investor means investing with your head; it is not only knowing when to buy, but just as importantly, knowing when to sell.
At UOB, we may just have such a fund with this “Price Target” feature for you; a fund that automatically terminates when your investment hits the target returns
 |
 |
More Information
To experience the privileged life:
- Call the 24-hour Privilege Banking service line at 1800 355 1118 (within Singapore) /
+65 6355 1118 (outside Singapore) - Contact Us
Footnotes:
UOB Asset Management Ltd is a wholly-owned subsidiary of United Overseas Bank Limited.
All views expressed herein are from UOB Asset Management Ltd.
UOB Asset Management Ltd Co. Reg. No. 198600120Z
All views expressed herein are from UOB Asset Management Ltd.
UOB Asset Management Ltd Co. Reg. No. 198600120Z
Contact Us
- Call 1800 355 1118 (within Singapore) / +65 6355 1118 (outside Singapore) or leave your details here. (To qualify for UOB Privilege Banking, clients need to maintain a minimum balance of S$350,000 in deposits and/or investments with us.)
