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Anonymous

29 May 2020

SeedlyAMA

How do I start investing? What should I start investing in? How much to invest and how much capital should I have first before investing?

I’m An undergraduate with no income currently, looking to diversify my portfolio.

AMA The Fifth Person

Discussion (6)

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It is important that you first figure out your finances! Think about how much you would need for your emergency funds, which should be 6-12 months of living expenses that you cannot go without. Put that amount into a high savings account like Jumpstart.

After that is settled, as for beginners, you may look into investing in ETFs as they are lower risk investments as you are investing in the market as a whole, compared to individual stocks, mutual funds and other securities. Like you said, diversification is important and ETFs are an easy way to diversify! One recommendation I always give is the S&P500 ETF which has historical returns around 10%.

Hmmm I'd say start by finding out how you want to invest, i.e. pick a strategy. Growth stocks, dividend stocks etc.

For me, I focus on dividend growth investing, which essentially means I pick companies with strong fundamentals, that increase their dividends year on year. I like it because it is similar to getting a pay raise, for absolutely doing nothing ! Doesn't that sound great?

For the amount of capital you should have before investing, i'd say $500? Just enough so that the commissions wont take out a huge % of your gains!!

I have a website that you can check out, where I share stock analyses as well as investing articles to help you learn more !

https://sgstockmarketinvestor.com/

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