THINK you can make money on the stock market just by knowing the best stocks to buy?

Think again, warns IPP Financial Advisers investment director Albert Lam, 45, who says knowing what to buy is just half the battle won.

'When you buy, it must always be based on fundamentals. But knowing what to buy is not going to make you money,' he said.

'Money is made from knowing when to buy and when to sell. That's when the technical analysis part comes in.'

Mr Lam should know - he spent three years as a technical analyst or chartist at Vickers Ballas Investment Research prior to joining IPP in 1999.

People generally dismiss charting 'as a lot of mumbo jumbo'', but his counter is that the complex charting techniques factor in the vital and constant component of mass human behaviour - the herd instinct.

'When someone goes in to buy a stock, there are elements of greed and fear that result in a decision to purchase at a certain price. These emotions are constant through the decades and you can map the behaviour and use the past to predict the future as people don't change,' he explained.

Mr Lam's current portfolio is made up of mainly unit trusts and stocks.

At IPP, he came up with a selection process to identify 'champion' funds - now numbering 30 - out of the more than 500 unit trusts available in Singapore.

He evaluates the funds' performance when markets are moving up, and down, giving greater weightage to funds that do well when markets are heading south.

He also looks at volatility and how well fund managers manage risks.

He said the type of bull market seen currently happens only once every 10 to 15 years.

'The bull cycle that started in March 2003 is half-way through. I think it has another two to three years to go. Maybe a person will enjoy two to three cycles like this in a lifetime.'

His tip to investors is not to put too much into fixed deposits but to invest in unit trusts and stocks, and for anyone with extra funds to jump into the red-hot property market.

Q What are your money habits?

A There is a time and place to spend, save and invest. I typically carry $200 to $300 cash in my wallet at any time and I have three credit cards, to take advantage of the benefits of each card. All are paid in full each month.

For most people, the more you earn, the more you spend. If we don't plan, money will disappear no matter how much you make. Wealth accumulation is a matter of discipline.

At all times, I try to maintain enough savings for six months' expenses and the rest is invested, which is about half of my income.

I also give 15 to 20 per cent of my income to my church in tithes and offerings.

Q What financial planning have you done for yourself and your family?

A I divide my investments into two categories. The first aims to achieve a decent return without too much risk. For that, I put part of my money in unit trusts and they have done well, generating returns of around 20 per cent since 2004.

The second is stock investing. My entire portfolio enjoys annual returns of above 70 per cent.

My definition of financial planning is to make sure that if anything happens to me, my family will have a home fully paid for and enough money to generate a passive monthly income of $5,000 with all education expenses provided for until university. Anything beyond that is a bonus.

Q What about insurance planning?

A I consider it irresponsible to have no insurance because if anything happens to the breadwinner, the family will suffer greatly.

I always tell people to take care of their family first before putting their money in investments.

My whole family is insured, including my eight-year-old daughter Melissa. Her policy should generate enough money for her education.

I have three whole life policies covering me for $1 million, and hospitalisation and critical illness covers. My annual premiums are about $14,000.

Q When and how did you get interested in investing?

A When I went to Canada, a friend and I signed an agreement to buy a property in Montreal for C$45,000 (S$64,782) in 1985 with no money, no job and no credit. Then, many people were migrating to Canada from Hong Kong before its return to China, so fortunately, we managed to sell the property and made C$15,000 in two weeks. After I graduated, I became a mortgage broker in Canada for five years.

Q What's your investment philosophy?

A There are three ways to build wealth. Most people work to build wealth but if you don't get a high-paying job, you can work until the cows come home and you will still be trying to make ends meet.

The next group of people start their own business. Some make it but many don't.

The third group make money work for them through investments. I have a decent-paying job that I love and I invest to make my money work for me - two engines working to accumulate wealth.

My investment philosophy is: Know when to be aggressive and when to be conservative. Know yourself, your level of greed and fear.

For example, if you are a fearful person, you can't make big money in the stock market because the moment the stock goes up 10 per cent, the fear of losing comes in and you want to sell out to preserve your profit.

Q What has been a bad investment?

A My worst investment resulted from investing in someone's business venture two years ago. My loss amounted to more than $200,000.

The product is great and sales were great but the management lacked the unity and wisdom to handle the expansion strategy.

Q Do you have property investments?

A My best property investment was in a unit in Amber View in the Katong area. I bought it for $450,000 in 2005. It was sold en bloc for $1.03 million a year later.

Currently, I hold a Siglap property for investment and I hope it will eventually go en bloc.

Before I invest, I always assume the worst-case scenario - that property prices stay flat and no collective sale goes through. I then ask myself: How much can I rent it out for? Can it cover the mortgage? These are very important considerations. Otherwise, one bad investment can wipe you out.

Q Moneywise, what were your growing-up years like?

A My father owns an optical shop in Ipoh where I grew up. There were nine of us in the family. Money was often tight and I had to work my way through university.

Q Any retirement plans?

A I have never thought of retirement because working is fun if you enjoy your work. The day when I don't enjoy my work is the day I retire.

Q And your home now is...?

A I live in Pebble Bay condo at Tanjong Rhu. It was purchased at the start of last year at $760,000.

Q And your car is...?

A My dream car is the Lexus RX300 but as I work in a financial advisory company, I have to be prudent with my money. Therefore, I gave up my dream and got a wish, a Toyota Wish.