• Mind & Body
  • Food
  • Family
  • Beauty & Health
  • Style
  • Great Women
  • Videos
  • Events/Win
  • Mind & Body
  • Covid-19 Health Guide
  • Food
    • Food
    • Quick & Easy Recipes
    • Healthy Recipes
    • Asian Recipes
    • Dessert Recipes
    • Eating Out
    • Festive Food
    • Cooking Tips
  • Videos
  • Family
    • Family
    • Parenting
    • Sex & Marriage
    • Travel
  • Home Ideas
    • Home Ideas
    • Decor Tips
    • Organising
    • Appliances
    • Domestic Diva Awards
    • Entertaining
  • Beauty & Health
    • Beauty & Health
    • Skincare
    • Makeup
    • Hair
    • Awards
    • Diet & Nutrition
    • Fitness
    • Wellness
  • Fashion
  • Career
  • Money
  • Real Life
  • Great Women
  • Entertainment
  • EVENTS/WIN
Subscribe Now!
  • Also available at:
Privacy Menu
SPH Magazine

Copyright © 2021 Singapore Press Holdings Ltd. Co. Regn. No. 198402868E. All rights reserved

  • Mind & Body
  • Food
  • Family
  • Beauty & Health
  • Style
  • Great Women
  • Videos
  • Events/Win

Family

Want To Start Investing? Here Are 4 Costly Mistakes To Avoid

Generic selectors
Exact matches only
Search in title
Search in content
Generic selectors
Exact matches only
Search in title
Search in content
Save Money

Want To Start Investing? Here Are 4 Costly Mistakes To Avoid

Jumping the gun can lead to some pricey consequences

July 28, 2020
Mistakes to avoid when investing

Covid-19 has led to many of us reevaluating our financial choices. Besides finding ways to save money, an interest has also been sparked for alternative ways to make money. Investing is one of them.

Tempting as it may be, being a form of passive income alongside our main and side hustles, investing can be risky especially if you’re new. Find out what the common mistakes are and safeguard your hard-earned money with our pointers below:

READ NEXT

Want To Start Investing? A Financial Expert Shares How To Start

3 Ways To Teach Your Kid To Be More Money-Savvy

10 Easy Ways To Save Money On Groceries In Singapore

https://www.womensweekly.com.sg/gallery/family/save-money/investment-mistakes-avoid/
Want To Start Investing? Here Are 4 Costly Mistakes To Avoid
1. Lack of adequate financial planning
image

Many individuals know that they want to invest, but also have very little free time to conduct their own research and analysis. Furthermore, many are unaware of the professional services available to them, or are unwilling to pay for such services. This can be a recipe for disaster. We strongly recommend that any individual interested in investing their own hard earned money should study basic investing and valuation techniques before getting started.

For those that would rather leave it to the pros, it is worth considering one of the leading robo advisors. These services charge a fraction of the management fees of a traditional financial advisor. Furthermore, some robo platforms even offer attractive promotions to new users, which effectively lowers the cost of their services. Even those skeptical of paying for investing services may want to consider that using a trusted robo advisor is a more sound strategy than haphazardly investing or simply following the latest trend in the news.

bongkarn thanyakig/Canva
2. Incorrectly attempting to time the market
image

Some retail investors think that they can “time the market”, or buy stocks when the market as a whole is temporarily down. While this type of approach does appear to follow some basic logic (i.e. buy low, sell high), this type of speculation is not truly an investing strategy. Instead of researching companies and analysing their financial performance, market timing relies on the often mislead notion that the individual can predict the short-term movements of the market.

While you may be able to predict movements once in a while, very few are able to do so consistently. Therefore, you stand to lose money by randomly guessing, rather than conducting your own thorough analysis.

Kaique Rocha/Canva
3. Falling victim to shortsightedness
image

Market volatility can make investors lose track of their long-term objectives. In some cases, individuals will be scared off by sudden drops and will panic, sell their shares, and lose money. For example, on March 16 the S&P 500 dropped 11.98%, the third worst day ever in percentage terms.

However, unless you were planning to sell in the near future, this kind of drop should not be as worrisome as it may have seemed back in March. In general, the stock market has performed very well over the long-term. Therefore, most retail investors should not get caught up in short-term losses.

Falling victim to shortsightedness

Along the same lines, the market has sustained even longer downturns (see the chart below for 2008), so it is important for investors to keep in mind that they should expect ups and downs in the stock market. The most risk averse individuals may want to consider other types of investments, which offer lower rewards without as much risk, such as government bonds or even high yield savings accounts.

Falling victim to shortsightedness

Artem Beliaikin/Canva
4. Settling for an online brokerage with high fees
image

If you buy and sell securities online, it is important to be aware of the cost of these transactions. Traditionally, some online brokerage companies have gotten away with charging exorbitant fees. However, thanks to increased transparency and competition, many now charge much lower fees than their competitors.

For new and experienced retail investors alike, we recommend reviewing the fees of your current brokerage with the most affordable options available, to make sure that you aren’t being taken for a ride.

Not convinced? Consider this, the average minimum fee per trade is twice that ($20) of the leading brokerage ($10, Saxo Markets) in ValueChampion’s review. This means you might be paying twice as much as you need to!

Anna Shvets/Canva
Keep a balanced approach
image

The best way to invest is through proper planning. If you want to invest on your own, this means getting up to speed on investment strategies and conducting thorough analyses. If you plan to pay a professional to manage your money, make sure you understand how your portfolio will be constructed and that your incentives are aligned with your advisor.

We also recommend reviewing the fee structure of several advisors before handing over your funds. In short, your financial strategies shouldn’t change drastically during an economic downturn. The best way to survive during a bull or bear market is through prudent planning, rather than impulsive or speculative decision making.

Text: William Hofmann/ValueChampion, Additional reporting: Cherrie Lim

Read Next

9 Tips To Save Money At Starbucks (We Guarantee You Haven't Heard Before)

10 Clever Ways To Stop Wasting Food At Home And Save Money

5 Easy Expert Tips To Save Money

Andrea Piacquadio/Canva
  • TAGS:
  • finance
  • investing
  • investment
  • investment mistakes
  • money
  • smart money
SHARE THIS ON

What’s Hot

Save Money

12 Things You Need To Know About Giving ...

Save Money

6 Things Singaporeans Waste Money On Dur...

Save Money

12 Most Affordable Singapore Florists Wi...

Save Money

5 Ways To Indulge And Treat Yourself Whi...

Save Money

Money-Saving Hacks On How To Maximise Yo...

Save Money

This Singaporean Shares How He Saved Up ...

Save Money

Everything Singles Should Know Before Bu...

Save Money

Zalora, Lazada & Xiaomi: The Best Sales ...

Save Money

9 Reliable Courier Services In Singapore...

Save Money

The 2021 Guide To Giving Money At Weddin...

Save Money

Can You Survive In Singapore Without Spe...

Save Money

3 Reasons HDB Prices Are Still Set To Ri...

Must Watch
Betty Crocker Pancakes Done 3 Ways: Classic, Berry Bear & Chunky Monkey
Don’t Miss These
  • Food Betty Crocker Pancakes Done 3 Ways: Classic, Berry Bear &...
  • Wellness How 3 Singaporean Women Define What It Means To Love Your...
  • Beauty & Health Is This Taiwanese Clinical Skincare Line The Secret To Yo...
  • Family A Kid-Friendly Art Tour From The National Gallery To Litt...
Editor’s Picks
  • Save Money This Singaporean Shares How He Saved Up To $15K In A Year
  • Save Money Can You Survive In Singapore Without Spending Money? A Freegan Shows Us How
Don't Miss Out Ever Again!
Tips & tricks to stay sane + win invites to our events!
Will be used in accordance with our Privacy Statement
Footer Menu
  • About Us
  • Contact
  • Conditions of Access
  • PDPA
  • Privacy Policy
?>
SPH Magazine

Copyright © 2021 Singapore Press Holdings Ltd. Co. Regn. No. 198402868E. All rights reserved