3 major local bank stocks in Singapore: DBS Bank (SGX: D05), OCBC Bank (SGX: O39), UOB Bank (SGX: U11) have already achieved historical high peak prices, supported by the bullish global economy. With the rising bank interest rate, Net Interest Margin (NIM) would be larger, banks would have higher profits from this traditional business, not to mention other divisions such as credit card, insurance, wealth management would also make more profits.
3 major banks in Singapore contribute to about 30% of STI stock index. Trend of STI does not reflect all the sectors in Singapore, it is important for trader and investor to study the respective sector index, instead of using STI alone to compare with individual Level 1 stock.
Bank stocks can be multi-role players in an investment dream team, can be a defender (passive income generation) or can be a striker (short term trading for quick capital gains). Currently Ein55 coaching students (Jan-May 2018 batch) are working on a special project on global bank stocks, shortlisting 28 excellent bank stocks from over 500 good bank stocks globally. Under the guidance of Mentors Isabel & Chye Tin, The students will use the next few months to study the financial reports in details with bank stocks unique performance indicators, choosing the best bank stocks for various categories of investing from these 28 excellent bank stocks:
– Growth stock (mainly capital gains),
– Defensive stock (low risk, life time investing),
– Defender stock (investing for income with dividend)
– Midfielder stock (capital gains + dividend)
– Striker stock (cyclic / momentum trading for short term capital gains)
In Ein55 coaching this week, we have reviewed several short term global & local momentum stocks with potential, just nice riding this recovery wave. The Level 1 individual stocks are aligned with Level 3 global stock market performance: corrected by about 10%, hitting low optimism for short term, then recovering well above intermediate support. A nice entry signal for short term trader after breaking the intermediate price resistance.
The last few weeks of 10% correction of global stock market is an alarm, after the recovery, when it is forming twin peaks (double top) or head & shoulder next time at high optimism, the risk is even higher. Remember we are walking on layer of thin ice now, safer to position as a short term trader but having investor mindset (eg. considering only giant stocks). In short, be a short term investor = Buy stock as an investor + buy/sell as a short term trader.
For general public, you may start learning how to invest in global bank stocks and other blue chip stocks through free 4 hours investment courses by Dr Tee, sign up today.
