You know you're #adulting when:
- Sleep deprivation is the only constant
- Conversation with friends revolves around housing, insurance and investments
As age catches up, the need to stretch your dollar becomes very real. While banks offer interests, the additional amount is not much. This is where many turn to investments. The world of investments can be daunting but here are 4 must-knows to get you started.
Know your risk tolerance
One of the commonly asked questions is �??How much money should I invest?�?� As a rule of thumb, you should only invest an amount you�??re comfortable parting with. Nobody wants to make a loss, but with high returns comes high risks.
Bad days are just as common as good days. Making a sound decision can be tough, especially if you�??re still learning how to read various data and study the market. Thankfully, there are accounts out there like @shadow_investing to turn to for bite-sized learnings.
Diversify your portfolio
As the saying goes, �??Don�??t put all your eggs in one basket.�?�
Investing involves risks and it therefore makes sense to split your money across different assets. While it�??s tempting to invest all your money on the most promising asset, if that one asset you�??re banking on takes a negative turn, you�??ll lose just as much since there aren�??t others to cushion your fall.
ETFs (Exchange-traded funds) are a good start. They are basically a group of stocks/securities from different companies that move independently. This means that your earnings or losses are calculated as a whole, and you don�??t have to commit to one company.
That said, don�??t go overboard with diversification as it reduces your profits.
Invest logically
There are numerous companies you can invest in, and you can get carried away in the initial stage. Many people search up brands they are familiar with, but the truth is that established brands enjoy slower growth albeit their stability. Avoid investing based on emotional attachment to a company. Instead, conduct research and read up on news related to your company of choice.
The key to making the most of your investment is to simply let it be, even if the value drops in the short-term. If your investment horizon (the total duration you intend to hold your investment) is long, long-term gains should be your main focus.
Start today
It�??s never too early to start investing.
Take my friend for example: She started investing in Tesla stocks while it was about 400USD and now, the price has gone up to about 700USD. In fact, if your investment value is on a decline (aka on sale), perhaps it is time to increase your investment.
If lack of extra cash is holding you back, living below your means could be a solution. In other words, cutting back on �??luxuries�?� like bubble tea, online shopping and eating out. It�??s not easy but it�??ll be worth it in the long run.
Looking for a place to start investing? Try Minterest, a digital investment platform regulated by the Monetary Authority of Singapore. Unlike most platforms, they offer real estate and corporate investment opportunities, which are usually inaccessible to the masses.
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