I am interested in investing but I am not sure if it is a good time to invest now amidst the COVID-19 situation. What do you think? And are there specific markets or investments that I should look into more than others? - Seedly
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Anonymous

Asked on 11 Mar 2020

I am interested in investing but I am not sure if it is a good time to invest now amidst the COVID-19 situation. What do you think? And are there specific markets or investments that I should look into more than others?

I am a fresh graduate who just recently started out in the workforce and is planning to start investing early at ~3k on roboinvestors(e.g stashaway) and ~2k on ETFs currently. Do you think it is a good choice to invest now or should I wait a few more weeks/ months for the prices to drop further? Will it drop further? Thanks

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Hi Anon,

Get started on regular investing now. There is never a perfect time.

If you are dividend investing, some yields are getting good. That's if you can look past the problems in the next 6months.

I remember back in 11 sep 2001, markets came down sharply after the plane crash. The next few weeks was jittery.... Why?

Everyone was guessing where the NEXT ATTACK would be coming from. Could it be a virus letter or another plane hijack. Similar in some ways to now. Where is the next country to show an exponential spread? USA? Malaysia?

From my memory of 2001, there were more attempts to sabotage but the "bad guys" were stopped in time. We upped the surveillance everywhere. We got used to the new risk levels, learned how to survive and actually started to get bogged down by new problems". Now, we can't even remember the trauma of 9/11 anymore.

Everyone wants to wait for the markets to recover first then start to invest. As shared above, it's more often then not "We get used to the new risk levels, learned how to survive and actually get bogged down by new problems" cycle.

Hence, there's NEVER ❌ a "confirmed green light NOR a definitive ❌recovery sign". It is intuitive to hope for it then go in but really... it DOES NOT EXIST.

Markets move first. It looks past an event. Then news and media justifies to the masses. We will figure a way to cope with Covid-19.

I've this new article that addresses specifically what you need to know:

https://www.theastuteparent.com/2020/03/find-the-market-bottom/

If unsure or concerned in this period of investing, speak to a qualified adviser or someone experienced in the markets...

1 comment

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Frankie Rappaport
Frankie Rappaport

13 May 2020

Which speaks for dollar cost averaging instead of market timing

Hi Derrick,

I'm still doing DCA in my UTs, since I don't really want to be bothered with trying to time the markets in general. There are no transactional fees, and I do want to be broadly diversified across markets and regions.

However for my individual stock holdings, I'm loading some ammo and waiting for a right entry price (at least to me). Do your homework, have a idea of what you want and the price, and prepare to wait. You may never deploy all your money, but that's okay too. Short of the market crashing by half or more, I don't think I'll ever deploy my funds fully.

Hope that gives you some food for thought. Good luck!​​​

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Ridhwan Muzaki
Ridhwan Muzaki

26 Mar 2020

Most high level experts would discourage the use of unit trusts as investment vehicles to grow wealth, since the fees can eat into any returns. Is there any reason why you use UTs instead of ETFs?
Sudhan
Sudhan
Level 6. Master
Answered on 17 Apr 2020

Hi anon, research has shown that time in the market is more important than timing the market.

The thing about the stock market is that no one can predict what it will do next.

There's a camp that feels the current market rise is a dead cat bounce while the other camp thinks the rise will be sustainable.

Instead of splitting our hairs on what the market will do, I think the more sensible approach is to focus on the long-term. History has shown markets recover after every major crash.

Going with robo advisors and ETFs are a great start in my opinion. Robos allow you to do dollar-cost averaging, which is great.

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J
Jacky
Level 2. Rookie
Answered on 18 Mar 2020

The best time to buy is when the share prices are dropping, not when it is all green.

Make sure you invest in fundamentally sound companies / index fund, and thank me later :)

2 comments

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Pat Moan

07 Apr 2020

This is so helpful 👍
Frankie Rappaport
Frankie Rappaport

23 Apr 2020

Dubious
Tay WenHao
Tay WenHao
Top Contributor

Top Contributor (Jun)

Level 7. Grand Master
Answered on 13 May 2020

If you are investing, anytime is a good time. Dont need to time the market. Just make sure you do a well research and do your own due diligence. Dont buy what others tell you to.

But ensure you got your emergency funds ready. The economy now is bad. You dont want to be caught in the situation whereby you are forced to sell your investments at a loss.

Aim to hold your investments for the next 10 years.

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Ultimate aim is to invest in good companies

So that even if it goes down, it goes up the fastest.

I make videos about interesting stuff at youtube here

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Penny Chong
Penny Chong
Level 5. Genius
Answered on 13 May 2020

Hello! I think it is a good choice now to invest in diversified portfolios, for example, in index funds instead of individual company stocks. ETFs are a good choice :)

I think the most important thing now is do not rush into buying popular stocks now just because they're cheap. You need the financial knowledge first to pick good stocks and evaluate them yourself. The notion of what goes down will come up worked in the last recession but this one seems to be an unpredictable battle to be honest. While history has shown that there will always be recovery, the speed of recovery is also very important. This is an important factor for consideration too.

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Lim Boon Tat
Lim Boon Tat, Mathematics at Cambridge University
Level 6. Master
Answered on 10 May 2020

Covid19 situation is unprecedented (i know, everyone is using this word, sometimes several times in the same paragraph). Even Warren Buffett didn't buy anything. Even though he says it's because there's nothing attractive, i tend to think it's because he's uncertain what's happening either. Unlike most other "academics" who view risk as volatility, I view risk as a function of how certain you are of the future. In this situation, nobody knows. The market is basically propped up by Central banks throwing unprecendented (i did it again) amounts of money into the system - In Singapore's case, the government threw 15-20% of GDP into the system - That's ALOT. If you're not certain, dont invest. Two rules of investing: Rule 1: dont lose money, rule 2: dont forget rule 1.

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Before you start investing, it will be best to understand your objective. Here are some questions to help you:

  1. What is your capital?

  2. How will you want to invest your capital? E.g. lump sum or an amount on a regular basis

  3. How long will you want to stay invested? E.g. 10 years

  4. What is your risk appetite? E.g. How do you feel about short-term volatility?

  5. What is your objective for investing?

Nobody is able to tell you what to invest in other than yourself. In truth, you need to become responsible for your own actions. After all, it is your profit or loss.

There are various financial instruments in the market that you can invest into, e.g. bonds, equity, REITs, etc. You need to know yourself before we can determine the best tool that fits your needs.

I share quality content on estate planning and financial planning here.

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Colin Lim
Colin Lim, Financial Services Consultant at Colin Lim
Level 7. Grand Master
Answered on 24 Apr 2020

You should start by buying little by little (Dollar cost averaging) in case stock market tank.. if u wait for covid19 to be over then buy...you probably buying high again.

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YT
YT
Top Contributor

Top Contributor (Jun)

Level 9. God of Wisdom
Answered on 24 Apr 2020

This is too broad a question. Are you wanting to start investment now as a new investor? If so, then I would refer you to Seedly's article: https://blog.seedly.sg/working-adults-begin-investing-saving/. While I can give a long detailed breakdown on the types of investments, how they work, and their differences, I believe it is to your best interest of you reading up extensively from various sources yourself before starting your investments. Do note that no one values your money more than yourself and you should not blindly heed investment advice from others, especially if it includes buying and/or selling of investments.

If you're currently an investor, would you consider increasing your current holdings? Why or why not?

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Wilson Nid A Break
Wilson Nid A Break
Level 9. God of Wisdom
Answered on 23 Apr 2020

This question can also be phrased 3 months ago as : Market is at a all times highs, is it still safe to invest?

There are always opportunities to invest in a bull or bear market case, the most important part is to have a strategy to identify those opportunities when they arised

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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Jun)

Level 9. God of Wisdom
Updated on 13 May 2020

Hi, you cannot 'market time', so any time point is the right one. invest regularly, so there will be no question of right or wrong, everything is averaged out over longterm. maybe you don't need a robot, you could cheaper all do it by yourself.

some ideas:

https://seedly.sg/questions/what-is-your-general-investing-philosophy-strategy​​​

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Oh Yi Ning
Oh Yi Ning
Top Contributor

Top Contributor (Jun)

Level 7. Grand Master
Answered on 22 Apr 2020

Don't try and time the market but always be in the market! For a bearish territory, normally it is good to dollar-cost-average your way in. There are certain stocks that are normally expensive that are quite cheap now, you might want to consider them after checking their financials and fundamentals. No one knows when the recovery is so make sure you have holding power for at least 6 months to a year.

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SW
Shaun WQ Lim
Level 7. Grand Master
Answered on 09 Apr 2020

Investing in yourself and upgrading your skillset for the future. Do planning for the next five years.

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Allan Lee
Allan Lee
Level 3. Wonderkid
Updated on 11 Mar 2020

This is a good time to dollar cost average in my honest opinion, S&P500 are back to last year May level. Just keep adding more funds on a monthly basis even during a recession which is likely if the coronavirus gets worse and hits the global economies.

In the meantime if you are interested to hone your investing skill, I do recommend reading up a couple of books. "One up On wallstreet" - Peter Lynch, "Modern Value Investing" - Sven Carlin.​​​

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Gerald Kong
Gerald Kong

17 Mar 2020

Hi Allan, can you share some recommended platforms/instruments we can use to invest in the S&P 500 and other US indexes such as the DJIA and Nasdaq? Many thanks!
Rais M
Rais M
Level 7. Grand Master
Answered on 25 Feb 2020

There are many considerations when it comes to investment. What is your investment horizon? What happens if you have a paper loss? You also mentioned that there is a 'chance' that the full impact will start hitting in 3 to 6 months time.

What is most important now is that you identify the stocks that you are interested in and do your due diligence and analyze the stocks to see if it would be a good investment. As long as it is a good investment, time is not really a factor as we should not time the market.

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