Asked by Anonymous
Asked 3w ago
I’m turning 18 soon and I’m looking to start investing. Have around $10k to invest with and I don’t need this money for the next 5years. Thinking of investing a huge portion in STI ETF.
Its great to start investing at an early age, so kudos on starting at 18. However, just leaping straight into it may not be a very good call. It is always good to make an informed decision, especially with your savings. I see that you want to invest a large portion of your capital in the STI ETF, but in the financial world you should not have all your eggs in one basket. Diversification is the key to protect your money, while still earning good returns. For this, I would suggest looking up other opportunities like REITs, robo-advisors etc. so that you are able to arrive at an asset allocation that is in line with your long term goals. I work for Kristal.AI, and it's my passion to evaluate various upcoming investment opportunities.
I hope you find this helpful! Happy investing!
Congratulations on wanting to start investing at such a young age! You're giving yourself plenty of time for compounding to work its magic. And it's wonderful that you have capital that you won't need for the next 5 years.
Investing money in stocks will mean that you will have to go through periods when stocks fall. This is inevitable. Stocks have done very well over long periods of time (developed economy stocks have climbed by 8.2% per year from 1900 to 2018), but they don't go up in a straight line. There will be severe ups-and-downs along the way. So before you actually invest your capital in the STI ETF or any other stock for the matter, I will suggest that you start an investing journal. Spend a few minutes to write down a few key reasons why you're choosing to invest in this stock now. in your journal. The reasons can be simple. In the case of the STI ETF, it could be: "I see the STI ETF as a proxy for Singapore's economy, and I think that Singapore's economy will continue a slow march upwards over time, even though I recognise that there will be recessions from time to time." By writing your reasons down, you can always refer to your investing journal when your stocks fall and see if your reasons for buying the stocks still hold. If the reasons still hold, then there is a good case to be made for continuing to hold onto the stocks - more importantly, having the journal on hand will also make it psychologically easier for you to handle market declines.
I will also encourage you to read books on index investing written by John Bogle (a.k.a Jack Bogle), who is the legendary figure behind the birth of the whole phenomenon of index investing. Bogle has written numerous books, the easiest of which would be "The Little Book of Common Sense Investing." The book should give you context on what investing in an index-tracking ETF means, and what you can expect from this activity.
All the best in your investing!
First, expose yourself to various investment tools (Insurance, Mutual Funds, ETF, Stocks, Options, Bonds, Real Estates, Cryptos, P2P, etc) and method (Trading, Investing, Lending, Fixed Interest Returns)
From there, learn about your risk acceptance level. Don't need the money, not necessary willing to take risk. So understand whether would you be willing to take high risk, especially in investment products that involve higher speculations. Don't need to rush into any investment. And agree with Ser Jing, you may start of with picking some easy reads, like "The Little Book of Investing" Series.
I won't suggest doing it that way. Do not invest until you know what you are doing.
Firstly, you might want to read “the intelligent investor” to roughly understand the stock market first.
Next, understand the difference between fundamental analysis and technical analysis.
Then read up the difference between ETF, REIT, trust and etc.
From there, move on to come up with a strategy. 10k portfolio - x % growth stock, y % REIT, z % blue chips.
Eventually, you will find your own style. Some prefer fundamental and hold for long term growth and dividend. Some prefer technical analysis and go for short term gain.