The road of investing might be a dangerous one to take, but not if you've prepared yourself with the right knowledge. Thanks to the advancement of technology and the magic that is the Internet, normal people like us have more access than ever to the different investment vehicles around the world. With so many choices and so little capital, we can't possible try them all.
So which ones are suitable for us? To answer that, we first have to find out what kind of investor you are. Here is a list of some of the things you first have to make a decision on before starting your investing journey:
#Experience Level
1. Total Newbie
This category would most likely include teens and fresh graduates, but it is not exclusive to them. There is no wrong in being 30, 40, or 50 years old and only planning to start investing. The shame is in not wanting to learn and not wanting to start. If you're in this category, you can start off by taking most of the money from your regular savings account that doesn't even give peanuts in interest and putting them in somewhere that gives you a higher return but is still safe.
Suggestions:
- Fixed Deposits
- High Yield Savings Account
- Mutual Funds / Unit Trusts
2. Dipped My Toes
Do you already have some money in fixed deposit accounts? Maybe have shares of a few companies under your belt? Then you already have some investing experience! At this stage, you are most likely looking for more information and avenues to make your money work for you.
Suggestions:
- Stocks
- Commodities
3. Seasoned Veteran
If you fall under this category, I probably am in no place to give you advice. At this point in your investing life, you are probably seeking to expose yourself to more niche and more exciting investments. Just remember to keep in mind the lessons you've learned along the way and why you started investing in the first place so as to not stray away from your financial goals.
Suggestions:
- Futures
- Options
- FOREX
- Cryptocurrency
#Time Horizon
1.Quickly Now (Short-term)
Looking for a quick buck? Heard of some news or hype and want to join in on the ride? Althought we never recommend any investment to be short time, there are still people who just want to get in quick, get rich quick, and get out. Always remember, high volatility can be a friend or foe.
Suggestions:
- FOREX
- Cryptocurrency
2. Hold, Hold, Fire (Mid-term)
If you plan to hold and monitor your investments for the next 3 to 5 years, then you are a mid-term investor. This is more preferred than short-term investing as it gives your investments enough time to show their true value and for high volatility stocks to perhaps settle down.
Suggestions:
- Stocks
- Options
3. In For The Long Run (Long-term)
Anything more than 5 years can probably be considered long-term investing. At this duration, we can see strong investments prevail and weaker investments fail (which you should weed out). Keep in mind that if you are taking a "buy and forget" approach, look for investments with good fundamentals and intrinsic values so that you don't have to worry about their long-term prospects.
Suggestions:
- Stocks
- Mutual Funds / Unit Trusts
- Commodities
#Risk Appetite
1. Sleep Well At Night
For those of you who are more risk-averse, who prefer to play it safe, don't worry, there's still money to be made. Although nothing in this world can 100% guarantee profit (even banks and governments can fall), some of these investments get pretty close.
Suggestions:
- Fixed Deposits
- Government Bonds
2. Go Big or Go Home
Here's to the ones who dive into the pool head-first, who are not afraid to lose it all for the opportunity to make it big. With high risk comes high reward, but that doesn't mean you should just go all in on some coin you saw on the Internet. Learn about and understand anything you're investing in. It's called investing, not gambling.
Suggestions:
- Pretty much anything else.
So, go through the list and determine what kind of investor you are. How much experience do you have, how long are you willing to wait, and how much risk you're willing to take. This will then help you determine what kind of investments you need in your portfolio.
**We are by no means certified financial planners and this article should be taken as knowledge sharing and not official financial advice. Investments have risks and you should do your due diligence before investing. Only invest money you are prepared to lose.
