SG Budget Babe
AMA Christopher Tan
Asked on 24 Feb 2020
Value investing, income investing, income (dividend) investing, growth investing or index investing? Do you need high capital?
It depends on a couple of factors, and 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?
Personally, I believe in value investing and to invest over a longer horizon for money that I do not need today.
No, you do not need high capital in order to start investing. Instead, you can adopt dollar cost averaging and start with what you can afford. Here is how it works: https://www.blog.pzl.sg/dollar-cost-averaging-singapore-does-it-really-work/
On the whole, you need to understand yourself - the five questions may help you. Then, devise a plan that works to help you reach your goal.
Here is everything about me and what I do best.
Honestly, it varies from individual to individual as well as what stage of your life you are in. A young graduate in his early 20s will invest differently as compared to someone in his 40s. For me, i am more of a dividend investing. I invest in fundamentally strong companies which pays consistent dividends every year. All the dividends gained will be used to reinvest to allow compounding to take place.
You can always start small when it comes to investing. I have experimenting with investing over the last few years.
I started off with growth investing, followed by value investing - beliving that these are the best way to grow your portfolio over the long term. With this portfolio being stable now, I focus on dividend investing now so that I can have an 'income' as most growth and value stocks do not really pay much dividends.
Index (ETF) investing and REITS (for future dividend income) for long term investment (15 years). Not good at stock picking hence go for easier way with moderate return. Some ppl say the return is too little, I would interprete it as its your capital too little.
Value investing is my preference so that one could buy low, sell high. I would need capital but as long as I buy at low prices, I would need lesser capital.