Temasek Holdings’ 2006 Review published Wednesday should be a case study for every Singapore retail investor wanting to make money in the market, irrespective whether you are a trader or an investor. The document was packed with information that goes far beyond providing some accountability for how Singapore’s state investment agency is investing its cash.

The document was already an eye-opener:

• The value of its investment portfolio grew 24% to S$129 bln in the twelve months to the end of March.

• Revenues rose 18% to S$80 bln

• Net profit rose 71% to $13 bln.

• Total returns since it was formed in 1974 are 18% by market value and 17% by shareholder return.

• It has paid the government – its shareholder – an average annual yield of more than 7%.

Practically every page contains a nugget each and every market participant can apply in their own trading or investing strategy. Here is my perspective:

Invest for the long term. I’m not going to be popular with traders for saying this but it should be patently obvious that investing with a medium to long term view is more profitable than day trading, when viewed on the risk/reward scale. Sure enough, you might make tons more money trading… but not on a consistent basis. Chairman S Dhanabalan is quoted in Temasek’s statement as saying “the growing economies in Asia continue to hold much promise for the long term, though we can expect bumps along the way.” Trading will leave you in the ditch.

Don’t be scared to sell. Temasek may have bought S$21 bln worth of assets during the year, but it also sold S$13 bln. Realising profits and cutting losses should be part of every investor’s repertoire. This is not the same as trading. But clearly, loyalty to loss-makers is misplaced loyalty, and paper profits aren’t really profits until they are realised.

Be disciplined. Now there’s a real gem for retail investors: Temasek says it will maintain a cautious, disciplined investment stance in the face of global uncertainties in the medium term. Discipline is what many retail investors lack. Get with it.

Diversify away from Singapore. Temasek says investments in Singapore make up 44% of the portfolio. It is aiming to reduce this ratio to 33%. I’m a strong believer in Singapore’s future, but if it’s good enough for Temasek to increase its investments in Asia outside of Singapore and Japan to 34% from 19%, it should be good enough for the rest of us.

Invest in trends, not stocks. Temasek couldn’t have phrased it more succinctly. It is investing in:

1. rising Asian economies
2. growing middle class
3. deepening comparative advantages, and
4. and emerging champions.

Go where the big money goes. Temasek’s investments in financial services, telecommunications and media make up 61% of the portfolio, up from 54%. That’s just about as close to getting “stock picks” as you are going to get from Temasek.

Clearly, investors need to see how Temasek’s investment strategy fits in with their own personal circumstances. But if you want the value of your investment portfolio to increase 24%, your revenues 18% and your net profit 71%, there is bound to be something in their statement for everyone.