You want to hire a financial planner?

Then ask the right questions for the right person.

1. Always follow the monies.
Ask him how is he compensated for providing the service. You pay him consultation fees or will he receive commission rebates from products that you invest in or BOTH?

2. How long have they been doing this?
Experience really counts in this trade. There is no room for theoretical knowledge in my opinion.

3. What are their qualifications and licences? Is there an active organisation backing their qualification with regular monitoring of business ethics and learning needs?

4. What is the service scope?
For the fees that you are generating for him, what are getting in return ie.
- report - by type and regularity
- interaction - by mode (ie. phone/sms/email/face to face) and regularity

Source - Hiring a Financial Planner - Jack Waymire, ST22Oct 2006 page 20

Picking Small Cap Stocks

Ms Teh of Business Times polled 5 stock broking firms for their respective top 5 picks among the small cap companies in Singapore.

After 1 year since that fateful poll, she presented the following conclusion.

1. Avoid stocks that are recommended by many analysts. Too many investors have already stocked up on the counter. Limited upside should be expected.
2. Be careful in chasing after recent big winners unless you are familiar with the industry.
3. But don't dimiss all recent winners too. You maybe able to ride on the strong upside momentum.
4. To appreciate the fact that picking a winner is difficult and staying with the winner is even more difficult.

How do you know you have done well?

When you "beat the market" , then you have done well.

ie. when your return exceeds the respective indices or when your return exceeds cost of funds and rate of inflation.

Happy investing... :)

Reference - "The art of picking small cap stocks", BT Oct 14-15, 2006 pp 6.