My First Investment?

After tons of research, reading, reading and more reading. From SGX, Money Sense, SIAS, Investopedia, Financial Times, Books, Forums, Blogs... [

I think I've now got a good sense of fundamental analysis - interpreting financial reports, figures and ratios.

I've done several exercises where I try to derive financial ratios and figures of the company, based on its financial report alone. (It's sort of like doing 10 years series assessment, then checking the answers at the back)

So.

I think I'm ready to make my first step into the world of investment.

My first security purchase.

As a new investor, my approach will be: Explore around, but be caution.

My personal opinion is:

- The stock market is kind of overpriced right now (STI at >3000). No one knows when the crash will hit.

- I could consider buying ETF (safest), but I feel I won't learn much from it. I want to be more involved and engaged, even if it means slightly more risk. I want to be vested in a company, so that I can learn. The ups and downs, the process, etc...

- I don't want to take on too risky (penny, even mid cap) stocks. I don't need to, and I also don't want to. Maybe when I become more experience, or have more capital, etc... I could allocate some to them. But not now.

- The most reasonable choice now would be blue chips. Unfortuntely, they feel really overpriced. The 3 telcos are high-sky. The 3 banks are out of reach for me. The others are either the same, or not my cup of tea (don't invest in something you don't understand).

- In the end, my conclusion is to wait for the 'crash' before buying stocks. Rather then buy a growth stock, I decide to follow my idol - buy an income stock.

- What are some of the best income generating stock? REITs. Are they without risk? No. They are riskier than the ETF, but safer compared to stock.

- The greatest threat to REIT now is the impending interest rates hike. Therefore, I must choose very carefully.

- Another reason for REIT: I intend to hold this stock for the long term - as long as I need to. Hence, I'm not worried about the price. It just needs to be my extra source of income. :)

- And hence, my first decision - allocate a portion to REITs, and keep the rest as back-up ammunition. Opportunities come to those who wait.