facebookI’m 25 now and I have months saving so what I should I do next for investment ? Can I play stocks? - Seedly

Anonymous

05 Aug 2020

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I’m 25 now and I have months saving so what I should I do next for investment ? Can I play stocks?

Sorry for my bad English. I have insurance,Cpf,monthly saving of $700,insurance savings plan. What should be my next steps?

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As the others have mentioned, you don't play stocks. You may end up losing your entire invested amount if you don't know what you are doing.

Get emergency funds in place together with your insurance and medical in place first. Know your personality - how you handle money. You can try taking a personality test like MBTI or enneagram to know yourself better. Then know what is your risk profile like. Are you a conservative or aggressive profile? If more of the former I'd suggest that you avoid stocks altogether until you can stomach more risk.

If your risk profile is suited for stocks, can consider reading up books like millionaire teacher or rich by retirement. Both are written for our local context. Then go with etfs or robo advisories if you are not confident in stock picking from the go.

If you play with stocks, you will get burned by it, some day some how.

If you dont intend to spend the necessary effort & time to improve your financial literacy in order to build up your own personalized portfolio, then better to use one of those Robo-Advisors. Just need to contribute monthly/regularly and time and the compunding effect help you out. Most Robo-Advisors would use US ETFs to help you construct a rather well-balanced, international exposed portfolio.

I would avoid RSP & investing in STI ETF. RSP still does not take away the fact you must be able to choose (selection risk) individual stocks that are able to succeed in the long term. While STI index performance over the last 10 years, been pretty atrocious compared to indexes such as the Heng Seng & S&P​​​

Elijah Lee

06 Dec 2019

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi anon,

I don't mean to sound harsh (this is the internet and you can't convey feelings easily through typed responses). But....You don't 'play' stocks. This is not something for playing. It's a serious thing and you can wipe out completely if you don't know what you are doing.

You didn't mention an emergency fund, which should be your next step if it is not in place already. 12 months of your expenses before you start your investment journey.

While that's being build up, start by gaining knowledge first. There are many forms of investments besides stocks, so take time to understand all of them, how they work, their pros and their cons. Open a CDP and a trading account to prepare yourself to start. Knowledge is king.

When you start, make sure you start slow and don't rush in. Dollar Cost Averaging can be good for starters, and you can also build a warchest waiting for opportunities. Be aware of the transactional costs of investing.

Dont say play lah.. hahaha

Investing is not gambling or a game. It is something where you can do se...

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