If you’ve got a regular savings habit – you also need to start investing your money across various asset classes. If you haven’t already begun, now is the time to start.
But when should you start?
Start as early as possible. If you already have a pool of savings set aside as an emergency fund to tide you over for a six-month period, you can direct some towards investments. There are a few advantages to starting to invest early:
1. The earlier you start to invest, the better. Starting early can give your investments the time to overcome short-term fluctuations expected in the market. Start early to get used to and gain that comfort level with putting your money to work.
2. Invest early, even with a small sum of money, and reinvest the returns. Continue doing this over time and reap the benefits of compounded interest.
3. Starting early also means you spend more time investing and learning about the market. You will begin to effortlessly plan your money allocation across spends, savings and investments – a skill which will help greatly as your responsibilities and commitments increase.
How do I start investing?
Depending on your financial goals and risk appetite, you can put your money into different investment types across different asset classes. As a beginner investor, you should always obtain advice from an investment specialist or financial expert in order to correctly assess and explain suitable investment products for you.
What types of investment products are there?
There are different investment products that may suit your risk tolerance, investment objective and time horizon. If you are risk-averse, you may consider investing in money market securities. Higher yield products (that may carry a higher risk and require you to keep money invested for a longer period of time) include bonds, stocks and unit investment trust funds, among others.
You can also invest through a product which can help you invest systematically and conveniently on your behalf. BDO’s Easy Investment Plan (EIP), for instance, incorporates valued inputs from investment experts to leverage on the benefits of cost-averaging – where fixed amounts invested in regular intervals over a period of time average out and diversify your risk. This can save you the precious time and effort on making decisions about complex factors like asset allocation and when to buy or sell stocks.
It is never too late or too early to start investing. Whether you are looking for ways to build up your retirement fund, accumulate money to buy a new house or save for your children’s college fees, it is important to begin investing as soon as you can.
Unit Investment Trust Funds (UITFs) are not deposits but trust agreements. They are not obligations of, nor guaranteed, by the financial institutions who established them (the “trustee”) and are not insured by the PDIC. UITFs do not carry any guaranteed rates of return. Any income or loss arising from market fluctuations and price volatility of the securities held by the UITFs, including government securities, is for the account of the investor. The units of participation in the funds, when redeemed, may be worth more or worth less than the initial investment of the investor. Historical performance, when presented, is purely for reference purposes and not a guarantee of similar future results. The trustee is not liable for losses unless there is fraud, willful default, bad faith or gross negligence on its part.