Asked on 04 Nov 2019
I want to invest but I am a beginner and want to learn the best way to invest.
Hey Jasper! Good on you to take this step!
Begin by building up your investing knowledge. Read investing books, follow news outlet (investing.com, Bloomberg etc), read investment forums. I started from HardwareZone Money Mind. Read through the sticky threads on how-to for brokerage accounts, buying/selling stocks etc. And most importantly, ask questions. It will be overwhelming no doubt, but don't be afraid to ask for help, we are all here with you!
Incidentally, I just answered a question that's somewhat similar.
I'll link you to my answer.
How to Start Investing
1. Accumulate capital. Everyone needs to start with some investment capital. Also of your pool of available capital, decide how much you want to invest.
2. If you can, start as early as possible. Compound interest allows your account balance to snowball over time.
3. Open your CDP account (which you have already). For the benefit of those who haven't, sign up via the instructions here: https://investors.sgx.com/cdp-account-opening/#/form-selection
4. Open your brokerage account, and link your CDP account to it.
5. Understand your investment options.
There is a whole world of investment products out there from stocks, bonds, ETFs, mutual funds to the more exotic or less mainstream ones like art pieces, scultures, gold, and cryptocurrency.
Read up lots to understand your risk appetite, and form your own investment strategy.
6. Execution is everything
I always like to say that one can spend a decade reading and not deploy a single cent because of fear of procrastination. I always say to start early, and start investing in small amounts so that you can better understand yourself as an investor.
One of the best ways to learn is to read local financial blogs.
Check out blog such as
3.) https://endowus.com/insights/ (Disclaimer I work for Endowus)
Remember as you begin investing to be Globally Invested, Stay Diversify and Keep Investment Costs low!
All the best!
Well done in taking the first step into the investing world. You can first by DCA in regular savings plan into our local sti etf. The STI etf is made up of 30 biggest companies in Singapore so the names are all familiar names. in the meantime, you can read up on books about investing and research online to improve your knowledge.
You can just learn this three things and you can beat 85% of the stock fund manager worldwide..even the most prestigious one.
1- Read up on modern portfolio theory
2- Use the boglehead investment strategy
3- Increase your personal income and lower your expenses
Hi Jasper, the best and fastest way is to invest in yourself first.
Read more on investment articles from reputable financial blogs such a The Fifth Person, Financial Horse, Investment Moats etc. and familiarise yourself with the different investment methods and tools and choose the one that best suits your needs.
You can also have a crash course or a fast track
to understanding investments by signing up for an investment course. But do be careful of the overhyped and unrealistic promises of some courses. The more reputable ones are Dr Wealth and Fifth Person. SGX also offers free/affordable basic lessons for beginners :)
Some ideas I compiled You can read here, but always think for Yourself:
-avoid buying mutual funds / unit trusts (longterm underperformers, very high fees mostly)
-invest ultra-longterm (Buy & Hold)
-by reading books or on the internet You will find a lot of perspectives, also contradictory ones, so experiment a bit, try to avoid to be subjected to biased information, the finance industry is not a wellness resort. And nobody knows the complete truth or about the future, markets evolve, companies rise and decline, as does everything
Before you start investing, it will be best to understand your objective. Here are some questions to help you:
What is your capital?
How will you want to invest your capital? E.g. lump sum or an amount on a regular basis
How long will you want to stay invested? E.g. 10 years
What is your risk appetite? E.g. How do you feel about short-term volatility?
What is your objective for investing?
There are many tools that you can invest in, e.g. bonds (such as fixed deposit, singapore savings bond, corporate bonds), equity (such as ETF, shares, blue chips), and balanced portfolio.
Depending on your answers to the questions above, start reading into the asset classes that you wish to place your money with. You can read on market news, fund reports, or anything related to the asset.
If you are new, consider using excel simulation to practise and hone your skills. This way, you get to learn without losing money. Through this process, you will reach a point where you are confident enough to invest your first dollar.
Here is everything about me and what I do best.
Wow its a very long post... I will just reproduce what i have typed in two of my blog posts below
If you are always looking for the magic bullet, realised that there is no "best" way without quantifying anything. What can be the "best"? Only when parameters are introduced.
If you are high risk, the first 1 to take note for "best" is the reward and risk ratio. If putting in $1 allows me to gain $2 or $3 in 1 year, that's a ROI of 1 times or 2 times my initial sum. But what about the risk of it lost? Its a probability game here. If I can lose 50 cents but probability to gain $2, seems like a good deal?
What about CPF gaining 4% a year, why do people say its the "best"? Because its virtually risk free (except for political risk and goalpost shifting risk) and have the highest return for its category (like AAA bonds)?
I would instead ask you to focus on your investment mindset as a newbie. Go through Seedly Units (in Facebook) or read through the articles while putting your money (20% out of money you could risk) through dollar cost averaging into a world ETF like IWDA first, or even SSB if you are risk adverse (scared if temporary lost of money).
Read books first. Don’t enter blindly. Be open minded and read on both fundamental and technical analysis. Decide which one suits you more. Long term? Short term? Day trade? Dividend trader?
There is no best way.
Find out what is your investment objective first.
To preserve capital? To grow capital? For passive income? For retirement?
I'd say there is no 'best way' as each person would have own circumstances and objectives which mean different instruments be suited/not-suit depending on who is looking at them.
To get going on enunciating your own particular risk appetite/objectives, perhaps you can start with resources on Seedly website linked below!
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