How to Build a Watchlist That Actually Works (A Practical Singapore Investor’s Guide)
How to Build a Watchlist That Actually Works — A Practical Guide for Singapore Investors
A simple, professional-grade system to stay focused, spot opportunities early, and avoid random buying on SGX.
Published: 15 November 2025 | Category: Investor Education / Earnings Analysis
Key Takeaways (If You Only Have 30 Seconds)
- A good watchlist is a decision system, not a collection of “interesting stocks”.
- Keep it small: 10–20 names is enough to track properly.
- Split into 3 buckets: core candidates, high-potential at the right price, and special monitoring.
- Use a simple spreadsheet with only the metrics that matter (no clutter).
- Use buy zones (ranges), not one “perfect” price.
- Update quarterly (aligned to SGX results) — daily updates create noise and bad decisions.
- Add a red flag column and a simple heat map to stay disciplined.
Almost every investor has a watchlist — but very few build one that actually helps them make better decisions.
Most watchlists fail because they are too long, too messy, not updated, filled with random stocks, based on “hot tips”, and not linked to a clear process.
A good watchlist should keep you focused, help you identify opportunities early, reduce emotional decision-making, reinforce your investing framework, and track business performance over time.
In this guide, I’ll show you a simple, professional-grade way to build a watchlist that actually works — specifically for Singapore investors.
1. Big Picture
Your watchlist is not meant to entertain you. It is meant to protect your attention and improve your decisions.
In practice, a watchlist does three jobs:
- Focus: fewer names, deeper understanding.
- Timing: a way to act only when valuation enters your buy zone.
- Discipline: a process that reduces emotional buying and selling.
If your watchlist doesn’t improve your investing behaviour, it’s not a watchlist — it’s a distraction list.
2. Results Summary
The system is simple:
- Start with your investor style (dividends, growth, or balanced).
- Keep the list small (10–20 names).
- Split into 3 buckets so every name has a purpose.
- Track only the few metrics that actually signal business health.
- Review quarterly (aligned to results), not daily.
This approach fits naturally with how to read quarterly earnings and SGX earnings analysis: you are tracking the business — not chasing the price.
3. Income Statement
Even though this guide is about watchlists, the truth is: the best watchlists are anchored on earnings quality.
For most companies, your watchlist notes should capture the basic income statement story:
- Is revenue growing, stable, or declining?
- Is profit improving for the right reasons?
- Are earnings recurring, or driven by one-offs?
The income statement is like your report card. Sales are your “marks”, profit is your “final score”. But you still need to check if the marks were earned properly — or if it was a lucky one-time event.
- In your watchlist, focus on trends and drivers (volume, pricing, mix) — not just the headline number.
- Write one sentence per quarter: what changed and why. That’s enough.
- If you can’t explain the earnings driver simply, you probably don’t understand the business yet.
4. Margins & Profitability
Margins are where business quality shows up. If you want a watchlist that works, track margins at a high level — without drowning in data.
Your watchlist should answer:
- Are margins stable, improving, or compressing?
- Is the company gaining pricing power — or losing it?
- Are costs rising temporarily (timing) or structurally (new reality)?
If you sell lemonade for $2 and it costs $1 to make, you keep $1. If next quarter you only keep 20 cents, something changed — ingredients got expensive or you had to discount. Good businesses usually keep their “keep amount” fairly steady.
- Margin trends are often a better signal than “profit up/down”.
- Watchlists work best when you track direction (improving/stable/declining), not every decimal.
- Persistent margin erosion is a common early warning sign — especially in mature SGX businesses.
5. Balance Sheet
Many watchlists fail because they track “interesting companies” but ignore the balance sheet. In Singapore, leverage and refinancing risk matter — especially for REITs and capital-heavy companies.
Keep it simple. Track:
- Debt level (or gearing for REITs)
- Whether leverage is rising or falling
- Whether the balance sheet is strengthening or weakening
The balance sheet is like your family’s money situation. If you borrow too much, even a small problem becomes scary. Strong companies usually keep borrowing under control.
- Debt doesn’t kill companies — cash flow volatility plus debt does.
- For REITs, track gearing, ICR, WALE, occupancy, and cost of debt as a “balance sheet risk bundle”.
- A watchlist without leverage awareness will push you into yield traps and fragile businesses.
6. Cash Flow
Cash flow is where real business health shows up. This is the heart of “cash flow vs profit”. Your watchlist should track whether the company is generating real cash — not just accounting earnings.
At a high level, track:
- Operating cash flow trend (stable / improving / weakening)
- Whether cash flow broadly supports profit
- Whether cash generation can support dividends and reinvestment
Profit is what you write in your notebook. Cash flow is the money you actually have in your wallet. If the notebook looks good but the wallet is empty, be careful.
- Cash flow is often the earliest indicator of deterioration (or recovery) before headlines catch up.
- If cash flow is persistently weak, treat dividend and valuation assumptions with scepticism.
- For watchlists, you don’t need perfect numbers — you need the trend and the reason.
7. Dividends
Singapore investors love dividends — but dividends only matter if they are sustainable. This is where a watchlist becomes practical: it helps you track dividend sustainability over time, not just chase yield.
Keep it simple:
- Dividend trend (growing / stable / under pressure)
- Whether dividends appear supported by cash flow
- Whether leverage and refinancing risks are rising
Dividends are like pocket money. If it comes from real income, it can continue. If it comes from borrowing, it may stop suddenly.
- A watchlist should help you avoid the “high yield trap” by tracking fundamentals alongside yield.
- Dividend sustainability improves when cash flow strengthens and leverage falls — note these trends quarterly.
- For REITs, dividend safety is tightly linked to cost of debt and refinancing conditions.
8. Management Commentary
Watchlists fail when they are built on stories. They work when they are built on business drivers — and management credibility is one of the key drivers.
Use one simple discipline after each results release: write one sentence on what management said, and whether it matches the numbers.
- Did management explain what changed — clearly and consistently?
- Did they acknowledge risks (not just positives)?
- Do actions match words (capital allocation, debt discipline, strategy)?
A watchlist is meant to reinforce calm, long-term thinking — not amplify narratives.
9. A Simple Analyst Framework
Here is the practical system — using the original structure, but tightened into a repeatable framework.
Step 1: Start with the right question
What kind of investor am I? Your watchlist must match your goal.
- Dividend-focused: REITs, banks, stable industrials, consumer staples.
- Growth-focused: tech suppliers, semiconductors, strong ROIC, capital-light businesses.
- Balanced: a deliberate mix of both.
Step 2: Keep it small
Limit to 10–20 stocks. A huge list creates paralysis and random buying. Most people can only track a small number properly.
Step 3: Use three buckets
- Bucket 1: Core long-term candidates (5–10) — businesses you already understand.
- Bucket 2: High-potential (5–7) — strong companies you want, but only at the right price.
- Bucket 3: Special monitoring (3–5) — evolving fundamentals; watch quarterly for improvement.
Step 4: Use one simple spreadsheet (12 columns)
Keep the watchlist clean. Clarity beats complexity.
| Column | What it’s for |
|---|---|
| Company Name / Ticker | Identity and quick reference |
| Sector | Diversification and risk view |
| Why it’s on the list (1 sentence) | Forces clarity (no vague reasons) |
| Buy Zone / Target Buy Price | A range, not one “perfect” price |
| Current Price | Context only (not for daily obsession) |
| Upside % to Target | Quick valuation discipline |
| Dividend Yield | Income context (paired with sustainability) |
| P/E or EV/EBITDA | Valuation anchor (not a conclusion) |
| ROE / ROIC | Business quality and capital efficiency |
| Debt / Gearing | Risk control (especially SGX yield names) |
| Red Flag(s) | Early warnings (keep it honest) |
| Notes (updated quarterly) | One paragraph per quarter max |
Step 5: Track only the metrics that matter
Use no more than 5–7 metrics per company. Your job is to capture the signal — not to recreate a full analyst model.
Suggested metrics by sector
- Banks: NIM, CASA, loan growth, fee income, CET1, dividend.
- REITs: gearing, ICR, WALE, occupancy, cost of debt, DPU trend.
- Industrials / Consumer: revenue trend, profit trend, margins, ROIC, cash flow, debt, dividend track record.
Step 6: Update quarterly, not daily
Quarterly updates align with SGX earnings cycles and real business progress. Daily updates mostly amplify emotion.
10. Common Red Flags
A “red flag” column is one of the highest ROI additions you can make. It forces honesty, especially when you like a company.
Examples (keep them short):
- “NIM declining” (banks)
- “Gearing rising / ICR falling” (REITs)
- “Occupancy dropping / WALE shortening” (REITs)
- “Margins compressing” (industrials/consumer)
- “Profit driven by one-offs”
- “Negative cash flow”
- “Management credibility concerns”
The watchlist also works better when you write down: one reason to buy and one reason to sell. This reduces emotional “moving of goalposts”.
Finally, a simple quarterly “heat map” helps:
- Green: fundamentals improving
- Yellow: stable
- Orange: weakening
- Red: major deterioration
11. My Overall Take as an Accounting-Trained Investor
A watchlist is like a shortlist of your favourite books to read. If you list 300 books, you won’t read any properly. If you list 10–20, you can understand them well and choose the right time to start.
- What matters most: clarity, consistency, and tracking the business (not the daily price).
- What to ignore: “hot tips”, constant tinkering, and overly detailed spreadsheets that you won’t maintain.
- How this improves decision-making: you buy less randomly and act more deliberately when valuation enters your buy zone.
- Why consistency beats prediction: you don’t need perfect timing — you need a repeatable process that avoids obvious mistakes.
12. FAQ
How many stocks should I have on my watchlist?
For most investors, 10–20 is the sweet spot. It’s enough for diversification ideas, but small enough to track properly.
How often should I update my watchlist?
Quarterly is ideal because it aligns with SGX earnings cycles. Daily updates usually create noise and emotional decisions.
Should my watchlist include target prices?
Use buy zones (ranges), not one exact number. It keeps you flexible and prevents rigid “anchoring”.
What should I track: profit or cash flow?
Both matter, but cash flow is the reality check. Understanding cash flow vs profit helps you avoid stocks that look good on paper but are financially fragile.
Is this framework suitable for REITs?
Yes. For REITs, your watchlist should explicitly track leverage (gearing), refinancing pressure, cost of debt, occupancy, WALE, and DPU trend to judge dividend sustainability.
HenryT is a Fellow Chartered Accountant (FCA) based in Singapore and the writer behind The Accounting Investor. He combines professional accounting training, corporate finance experience and personal dividend investing to help everyday investors read financial statements with confidence.
Disclaimer
This article is for education and general information only. It does not constitute investment, legal, tax or any other form of professional advice, and it is not a recommendation to buy, sell or hold any securities mentioned.
My sole intent is to help readers learn how to read financial statements and think more clearly about businesses. Please do your own research or consult a licensed financial adviser before making any investment decisions. I may or may not hold positions in the securities discussed at the time of writing and am under no obligation to update this article.
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