1ST stock discovery technique

by: Nipaphan Poonsatiensup CFP® Freelance financial planner; writer and lecturer.

Amidst the lower saving interest rate saving accounts might not lead us to meet financial targets. We should then try to look through various channels of different assets investment.

Investment planning should firstly be of “knowing yourself” to be sure what investment is aimed for, i.e. for happy life ending, tax reduction, inflation control, profit gaining and dream following.  The next step is to consider “investing conditions” based on certain foreseen risks and expected returning, whether it is by cooling money (the available money to invest for such risky assets in a rather long term), and what about time limitation etc.  The available answers, if possible, would lead you to your best choice of investment. 

With a better insight of your own situation you can now “knowing the tools”- meaning knowledge about “investment choices”.  Better understanding based on your qualification, risky and gaining environment as well as weak and strong choices will enable you to properly categorize investment to achieve your own targets. 

Investment in SET “stock” is one of the interesting choices since the instrument issued to the shareholder or the “owner” for funding to run the business will provide gaining dividend as well as the margin of pricing based on increment of stock value. 

Nevertheless, earning from stock investment might not be consistent, depending on performance of certain businesses.  In the case of any bankruptcy shareholders will be entitled to their investment refund after the obligated clearance to the creditors.  Certainly, it is the “risk” of stock investment.  This is why stock investment must be properly considered-leading to “how can we choose for the best?” top hit question among all new investors.

We have indicated that investment deciding should start by the clear target and duration since differences in these two factors certainly effect possible return, risk and investment styles.  For instance, some investors might be attracked by the long term dividend from stock investment.  In such a case, the chosen stock should be of a strong basis with consistent dividend payment background.  Once both target and timing has been set, following steps should be followed to identify your first ideal share. 

1. Choosing your first share from the business you are familiar or with confidence in management, being market leadership, monopolized business or of reliable growth and regular dividend payment annually.  The following information is available at 

  • Any brand-new investor can search for guiding information from the topic ‘Starting financial plans’ to recognize your own financial and investment targets and the topic on ‘Learning about investment’ to look for various choices from given steps of investment, including how a brand-new investor should screen appropriate stocks. 

  • We can find information of each stock by putting its abbreviation into the Get Quote to know the company activities and earning, major shareholders, dividend payment policy, present and previous pricing etc. as the decision-making background. 

2.  Since there are over 500 companies registered in SET we cannot possibly search for all information, but instead from the available list of SET Market Capitalization covering SET 50 or SET 100 index.  Accordingly, SET 50 and SET 100 identify levels and movement of 50 and 100 ordinary stocks of high marketing value and regular flexibility with required numbers of small shareholders, meaning that SET 50 stands for the top 50 stocks of market pricing levels.  Therefore, they will serve as our screening guideline.  Then move to No.1 suggestion since you should at least invest for the company you have known about.

3. The first investment should approximately be of 5-10% of the whole preparing fund since it is more or less a learning experience.  You should keep thinking that the first investment is not for the highest return, but the lesson learned for further SET investment.  Accordingly, gaining or losing is not the most important matter, rather it is more for knowledge harvesting from real experiences.  Moreover, investment by a small fund is of less losing affect comparing to what we have acknowledged to become more of investment capability.