Investing in anything, whether it’s your first car or home, will always be daunting, especially when money is involved. So why not start by making some of your hard-earned money work harder for you, through investing in stocks, futures or ETFs? We are currently living through uncertain times and experiencing volatile market conditions, where this global pandemic has trickled down to affect economies, livelihoods and even politics around the world.
Despite the fact that markets have flipped between bullish — when markets are on the rise — and bearish — when markets are receding and stocks are declining in value — markets in recent months, there is general optimism in times of crises. Experienced investors understand that panic selling during crises may actually offer some of the best opportunities for those who are ready to invest. Therefore, it is important to understand your options to make informed decisions when it comes to your own investment portfolio.
So what options are best for me?
Understanding the different options available is the best first step to take when starting your investment journey.
Traditional brokerages, often operated by banks in physical offices, are able to guide investors when to buy and sell, as well as what their best options are. However, such hospitality also comes with an equally high price. On the other hand, online brokerages offer the flexibility of investing from anywhere in the world, as well as lower costs and commissions.
More than anything, it is important to weigh factors such as commission fees, attainable minimums, fund selections and features on offer when it comes to choosing a brokerage. While the price isn’t necessarily everything, many new retail investors do prefer brokerages that offer little to zero commissions on stock and ETF trades. Other factors like attainable minimums are also important to new investors as it allows you to start with smaller sums to invest, all while learning the ins and outs of the trade. Diversity of funds is another factor to consider when it comes to your portfolio, as it’s important to be able to dabble in multi-asset class investments such as Stocks, Futures, ETFs, Options, Callable Bull/Bear Contract (CBBC), and Warrant. All these factors play a role in how to move forward with your investment journey, including testing out your investment style with low minimum sums and commissions in online brokerages.
With so many factors to consider, investing may seem overwhelming, but there is no one size fits all. Investing in stocks opens the world up for you to seize opportunities, whether you’re eyeing for a piece of the pie in the New York Stock Exchange — also the world’s biggest — or something closer to home, like Hong Kong’s Stock Exchange and Singapore’s own SGX. Ultimately, as much research as you are able to do about markets, it is also equally important to invest in brands and companies that you believe in — no matter how big or small.
One of the hallmarks of successful investors is that they stay curious and rely on good old research. Keeping abreast of market trends and economic developments arms you with more information that will allow you to make informed decisions. Case in point, while the Coronavirus pandemic was expected to upend the economy to create a bearish market, it instead reinforced two big trends in stock: the power of technology and “quality” stocks that continue to defy and beat the market. Knowing such trends that buck tradition allows even new investors to gain insight into market forces and how they behave.
Similarly, it is important to not panic buy or sell. While low stock prices may seem enticing, it is not necessarily a reason to dive headfirst in hopes of getting quick wins. The most seasoned investors understand that playing the long game allows you to understand the volatility of investing and thus, reap the rewards for patience. Investments are not just knee-jerk reactions; they must be backed by knowledge — whether you decide to invest in stocks, futures, options, warrant, CBBC, or exchange-traded funds (ETFs).
So, what does this all mean?
At the end of the day, investments are also a personal journey. Understanding how tools can work for you is a big part of the process of making sound investment decisions. Some questions you must ask are: what is your end goal? What kind of investor are you? What is your investment style?
It helps to understand what you want to get out of your investments, which in turn, will inform what types of investments to make to best suit your goals. If passive income is the name of the game, then perhaps dividend-yielding stocks may be best. However, if you are looking to grow your money quickly, then investing in young companies could be the best route.
Additionally, it is equally important to know your own risk appetite. Sometimes, the potential for quick growth also comes with a higher risk of losing money. Your investment style also determines what to do with your portfolio. Are you hands-on and quick or slow and steady? Knowing such factors would help in what tools can work for you and aid your own personal journey.
Investment strategies are something that you hone over time, so it is perfectly acceptable to constantly reassess and finetune your plans as you go along. Having said that, it’s always important to ensure that these strategies can still meet your end goal and objectives. With a few tips you’ll pick up along the way, it will become increasingly easier to make decisions and eventually make your money work for you.
At Tiger Brokers Singapore, take advantage of our sophisticated tools to make your money work harder for you. With everything within the reach of your palm, we aim to make your investment journey easy, whether you’re new or a seasoned investor. At Tiger Brokers Singapore, we treat all our clients as privileged clients, with no tiers to segregate you. For those of you who are looking for convenience and accessibility to the global financial markets, you have reached the right broker.
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