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We recently had the opportunity to sit down with Vee Leung Phan, the Founder of TrackRecord Trading to ask him about some of the things that Malaysians might want to know about getting into overseas investments.
Vee is a professional trader with an illustrious history working with banks around the world, such as Chase Bank (Now JPMorgan Chase & Co), Deutsche Bank, and Morgan Stanley. He later founded his own training academy which was first started to provide training to professional traders in institutions, and expanded his services to help retail traders as well.
The interview goes over some of the biggest questions that are often asked with regards to trading overseas, such as how difficult it is for Malaysians to access the international investment market and how much you would need to get a good start investing overseas. By the end of this article, you should have everything you need to kick-start your international investment journey.
Advantages and risks of trading on the international market
Vee believes that accessibility is the biggest advantage of trading on the international market.
All you would really need is access to the internet and a brokerage account, especially one that is credible and regulated, to get started. Information on listed companies is widely available, making verifications fairly straightforward.
What are the advantages?
Themes are also much clearer and easier to understand thanks to how interconnected the world is today, especially due to news coverage and information gleaned from the internet. For example, artificial intelligence (AI) is a particularly hot topic in the investment scene. If you are not too familiar with it, you can generally get a good idea by searching for it online and even find out which companies are linked to AI.
“The biggest advantage in trading on the international market today is that you can find information on almost any company that is listed, especially the big ones.
But of course, that doesn’t mean that everything you read online is true. It is just much easier to verify. Themes are also clearer as there is more coverage and news to draw from.” – Vee Leung Phan, CFA
A good place to start looking for reliable sources of information would be the well established media agencies such as Bloomberg, Reuters, or the Financial Times. You can also try looking up the philosophies and strategies of highly successful investors such as Warren Buffett and George Soros.
Manage risk by checking experts credibility
Larger markets tend to also have a larger number of experts whose knowledge you can rely on to make informed decisions. However, you will need to do a little extra work to find out how credible said experts are. Credible experts are those who have a proven track record of success. Professionals who have written peer-reviewed advice articles are a good place to start. As mentioned previously, consistent and high profile investors who have a history of success are also great sources of knowledge.
Is it difficult to start trading on the international market?
Vee says that it really is only as difficult as you make it out to be. Internet trading accounts today take relatively small deposits before letting you begin.
Certain brokers even offer demo accounts that can help you get the practice you need for more effective trading.
So how do you get started?
Learn about the market
To get started with investing in the international market, Vee offers a simple solution: you need to learn more about the market itself. Learning from those who have a proven track record is also another strategy that can work well. In particular, Vee mentions that he himself finds great inspiration from Warren Buffett, one of the world’s most successful investors, whose investment philosophy may be a great place to start learning.
It will take some time to fully explain Buffett’s investment strategy in full, but the gist of it is that Buffett looks for companies with a durable competitive advantage, such as a strong brand, high barriers to entry, or a large and loyal customer base, and invests in them at a price that provides a some form of a safety net.
“One common mistake that I believe people make is that they try to be smarter than the established experts without any prior experience. For example, I believe Warren Buffett is one of the best investors of our time. His philosophy about investing and trading is freely available online and is a great place to start,” said Vee.
Find the right advisors
Finding the right people to learn from is also something of great importance. Unfortunately, the world is full of bad actors who are more than willing to take advantage of novice investors with fraudulent get-rich-quick schemes and poor financial advice. Investors must be vigilant at all times to ensure that their financial advice comes from a place of proven solidarity and success. Make sure that your advisors are professional traders with extensive experience in trading.
“The worst thing you can do is fall for promises of irrational returns. Be especially wary of professional traders who fashion themselves as ‘trading gurus’. While not all of these gurus are frauds, there are plenty of professional speakers who are selling their services but only have a surface level understanding of how trading actually works,” Vee added.
How much should you put in to begin with?
Vee says that there is no right or wrong answer for this question. He mentions that you generally should start with as little money as possible that would make sense to you. However, he also mentions that “little money as possible” is also a rather relative term. To some, this may be a hundred USD; to others, it might be five hundred USD.
Start with money you are willing to lose
The basic idea is to always trade with money that you can afford and are willing to lose because there will be times that you will lose money. Investment is a long game and you will see both highs and lows throughout your investment journey
“When you are starting out, trade with as little money that makes sense. Of course, ‘little money’ to you, me, or someone else is quite relative. This is why you should always invest money that you can afford to lose. In fact, you don’t even have to risk any money to begin with by opening a demo account,” said Vee.
Try investing with a demo account
As mentioned earlier, Vee recommends utilising a demo account if you are worried about losing money early on. These accounts can help you get used to the system and get a feeling for trading before you start with the real thing. This will also help to train you to make more objective decisions during harsher times, as it will be easier to make such decisions when there is no real risk of you losing your money.
With that, you should have everything you need to begin your foreign investment journey. Remember to always do your homework to find reliable sources of information so that you can make better informed decisions. Also, be ready to take some losses as stock prices never just go up. There will be high points and there will be low points over time. The trick is to learn when the best time to cash out and look for other opportunities
If you would like to learn more about TrackRecord, their resources and information can be found on their website, or check their social accounts on Instagram, X and Facebook.
