For the first book review ever on my blog, I am going to summaries some key points from the book that I have just recently borrow from the library "secrets of millionaire investor " by Adam Khoo.









The book is actually quite interesting to read compared to at least 70% of investing books out there. Not a sponsor post by the way(is there even anyone that wants to sponsor me?😂).





Anyway, back to the book. The next few posts are going to be the key points from the book.





Chapter 1 is basically an introduction, so let's begin with chapter 2.



Chapter 2:The power of investing in building your wealth



1.Investing in low risk and high return

Most investors in the world are risk-averse,(surprise surprise, Warren Buffett is one of them!)

2.A quick introduction of the US stock market

There are three primary U.S. stock exchanges: New York Stock Exchange, Nasdaq, and American stock exchange

The general market performance is measured by the index

An index is a chosen stock portfolio that is used to represent the entire stock market

One of the most common stock indexes to evaluate the U.S. market is S&P 500(now you know what it means and you can show off in small conversations with friends),

The S&P consists of the top 500 companies in the US market and represents more than 70 percent of the US market

The S&P 500 is calculated by taking the average price of the top 500 companies

Another popular index is the DJI (Dow Jones industrial)index (another term to show off to friends)

The DJI index consists of 30 largest companies in the US, similar to our STI ETF

3. Choosing the US market or the Singapore Market?

The author recommends the US market as he makes the best return from there

4. Why the author prefers to invest in the US market?

A wider selection of stocks and deviation

Over 9,000 listed companies in the US market compared to 620 companies on the Singapore market

Easier to find a company that is able to meet the criteria to invest

US companies have a higher potential to increase earnings and sales as the number of US consumer is huge compare to the number of Singapore consumers

More US companies stock have options written on them allowing us to use a wider range of trading strategies

Higher liquidity and volume

US market has a higher volume of stock liquidity per day.

Us market also has "market makers" who will buy the stock that you are selling even if there are no people who want to buy

Superior research data and tools at a much lower cost

Basically, US stocks data such as financial ration are more easily and readily available on the internet compare to Singapore Stock(totally agree with this!!, not all the financial ratio of a Singapore company may be found easily online and often one have to used paid service to analyze Singapore stocks)

The US has cheaper brokerage fees compare to Singapore(totally agree!!)





5. Four investment strategies, from beginner to expert level as follow





Growth strategy 1: Buying Market index and Sectors

Index such as the S&P 500 index, Dow Jones index, Sector refers to the different sector such as healthcare, financial, etc

(>12.08% return annually)

Growth strategy 2: Value investing

A strategy employ of Warren Buffett. In value investing, you will learn to buy high companies at a fraction of what they are worth.

In order words, you will learn when to buy companies stock at a cheap bargain(undervalued) and sell it when the market realize its true value

(15% -25% return annually)

Growth strategy 3:Momentum investing

A short time frame of 3-6 months. Momentum stocks tend to be priced above their fair value. However, due to the optimism of the entire market about the shares potential, these stocks tend to rise significantly in value within a very brief period of time before they are overbought and fall (this is when you sell and make enormous earnings).

(>25% return within 3 to 6 month)

Growth strategy 4:Options trading

the art of how to make 100%-500% returns on your money from as short as one day to a maximum holding period of 3 months, pretty risky

(100% return within 1 day - 3month)

6.The psychology & habit of a successful investor



Buy on strict rules and not emotion

Buy and sell based on rules and not emotions, for example, many successful investors sell their stock once the stock price drop below 10-20%.

They do not let emotion define their buy and sell.

Become an expert and Don't rely on expert

Simply read a little everyday, Don't rely on outside tips.

When there is nothing to invest in, Don't invest

It is not always a good time to invest, invest only when the investment criteria are met(e.g the financial ratio is healthy)

Take 100% responsibility for your result

Don't blame others for your mistake, learn from your mistakes

Be passionate about investing

You must enjoy investing and not see it just as a tool for money-making(When you see shopping malls think CapitaLand, food court you think you, etc).

Better yet, be passionate till you dream about investment in your sleep(just kidding!)

Reduce Risk and maximize return