New to investing and im quite confuse on where to start. I've look up on articles and forums about people saying that investing in ETFs is a good choice. Any advice?

Hi there!

I am also a rather new investor starting out on my journey. Haha I feel you as it can be quite confusing at the start.

From what I have learned, I think the first step is you should perhaps think about what are your goals for investment. Do you want to go for income investing or growth investing. Income investing will be to earn regular stream of income from stocks such as REITS while growth investing is about earning the capital gain/appreciation.

Generally income investing is more so for people who are near to retirement or in their retirement age because they just want to ensure that they get a steady stream of dividends every quarter or every half-yearly. But for young people who just started out working, I think we can afford to go for higher-risk investments by looking at growth stocks to earn returns from the capital gains. That way, we will be able to earn higher returns at a faster pace. Of course having said that, you can go for both types of investing at the same time, and decide for yourself on the allocation of your capital for growth and income investing.

I personally do buy some local banks for the dividends but most of my funds are in the US stock market. For the US stock market, I use TD Ameritrade as it is now charging zero commission fee for stocks.

You may want to check out this YouTube channel The Joyful Investors that I found out recently. I quite like their joyful look and feel that makes learning not so boring. They do cover some basic concepts that I find useful for starting out on my investment journey. Seedly is also the platform where I visit very frequently to read on the questions and answers as well as the articles to gain more insights. Hope this helps you in starting out! Cheers!​​​

Hi Anon,

1. For dividends, it depends on whether the ETF you're investing in is Accumulating or Distributing. The former will automatically reinvest dividends into the fund while the latter will pay out dividends to shareholders. These dividends will be in your broker account which you can reinvest during your next round of DCA.

2. Yes, DCA is a strategy that is typically adopted by long-term buy and hold investors. The goal is to average out the buy-in price of the ETFs over the entire investment horizon. Typically, people don't trade ETFs (as in short-term buy-low-sell-high strategies) because their price fluctuations don't tend to be as big as with stocks, which is what you're trying to leverage when trading.

3. The only Youtuber I watch is Graham Stephan (I prefer listening to podcasts haha). He is a strong advocate of long-term index investing and I personally found it useful when I was just starting out.

Finally, be sure to do your own homework and research about investing before jumping in! It's good to want to invest, but it's important to make sure you understand the key ideas surrounding investing in order to protect yourself from mistakes. You can check out this post about basic investing principles and this post for an introduction to ETFs.

Hope this helps & all the best!

Regards,

thefrugalstudent