Why would a person want to spend extra time learning about investments when he does computer programming for a living?!

I suppose that before reading this article, you would already have some answers to that question.

Investments is a very large term that emcompass things such as buying properties, investing in unit trusts and mutual funds, trading in shares, and even founding a business. All that they have in common, is just one thing: The desire that over time, whatever time and financial capital you have invested would significantly appreciate.

What is the stock market? To some people, it is a gold mine. To others, it might be a strange place that does not belong in their 'world' and thus, something that should not be explored. And to the rest, its basically a legal casino.

Stocks, in a very general concept, represent ownership in a company. A stock market is not unlike a wet market where you bought your groceries from. The only difference, is that the people wear suits and they don't smell like fish.

The stock market is a place where companies offer shares to public. What this means is that when you buy a share, you own a part of the company, in terms of any future gains or losses.

Its sort of like pooling money together to start your own company, but on a much bigger scale. And unlike your own company, the shares you buy are usually a very very small fraction of the total number of shares available.

Setting up an account to buy shares in Singapore, is actually a relatively simple process. You just have to walk into any of the brokerage houses (Some of them even have branches in the heartlands!), say you want to open an account, and the nice lady will hand you all the forms to open an account.

And forms, primarily is the brokerage account form, CDP form, and also an electronic payment for shares (EPS) form. This is primarily to let you pay from any ATM or internet banking rather than sending them cheques everytime you wanna buy something.

So what kind of investor are you? Are you a typical 25 year old with not much spare cash, some debts, willing to take lots of risk, and will put in money every month? Or are you a 50 year old, semi retired, got $500k in the bank, and looking for stable but not necessarily high returns.

Those are some of the questions  you've gotta ask yourself before you start to invest. Questions pertaining to: Time horizon, Risk portfolio, Active/Passive investing, types of research, amount of capital, etc..

While I won't go into all those topics on personal finance (for now), lets just look at how all these factors do affect your investment styles.

In the earlier article on investment styles, we talked about time. In this article, we will be looking at risk.

What is risk? Risk essentially just means uncertainty. When something is deemed high risk, it just means you are very uncertain of the outcome. For stocks like Singapore Post, they are deemed low risk, because you are pretty certain on the outcome. Do note this really does not say anything about the returns.

When a person invests, what he wants to do is to obtain as high a return while risking as little as possible. While it might sound obvious, most people actually do the opposite. They take big risks, and when the stock does turn a small profit, they take the profit and run.

And because of the fact that people have different risk profiles, it results in a few types of investment styles.

In the earlier 2 articles on time and risk, basically that is about how you invest, or trade. After choosing a certain time horizon, time span, risk profile and risk management style, you decide on how your investment style is like. When you start talking about research, that determines how you decide your entry, exit, and what you look out for in your investment style.

Generally speaking, there are 2 main investment research styles. Fundamental Analysis is the art of looking at a company's management and finances, and possibly future potential, before deciding if the price is right for buying. Technical Analysis is the art of looking at the price movements of the stock, before deciding if the timing is good. However, just by saying that 2 statements, is barely scratching the surface.