In recent months, a new threat has emerged in the global financial market, Yes, it’s the infamous Trump vs China tariff war, which sends the entire equities market to its knees. The global trade war had created so much chaos and creating market fears and pushing market indexes on the bear run.
So what does it do to the average Joe on the street?
Many panicked and worried about their investment, “OMG, will the market crash like in 2008?” “Oh no, my investment has already gone into the loses, will I lose everything, should I sell off or not?” “Will an avenger appear to ease the fear and save the world, where is that superhero!!!!!?”
For those that are invested at this time
Fear not my friend, be assured that the investment journey is like a roller coaster ride, the excitement only starts when it goes down, and when it ends and the upward climbs starts, you will be breathless and pleased that you have stayed throughout instead of jumping off. (in most cases, jumping off a moving roller coaster is considered suicidal!)
For those that have not invested, it may be a good time now!
So now after a long procrastination, you have finally decided to take the first baby step to invest. Before you do so, you will need to assess what are your risk preferences, and your investment time horizon (meaning what is your expected time period of profit taking). This can be done with your trusted financial advisor (got BOH??). Once your risk appetite is professionally evaluated and time horizon determined, then it’s time to decide what funds to pick.
The funds shopping process
There are many types of investment funds available in the open market, so which ones are suitable for you? Imagine walking into a supermarket with your partner, your partner intends to get a packet of orange juice. At the juice section, you are faced with an array of brands of orange juices. And your partner turn to you and ask “Ooi which one is the best ah?”
Firstly, let's look at the different risk categories. Basically funds are mainly categorised into these 3 main risk categories; Equities - high risk Balanced(mixture of equities and bond) - medium risk Fixed income/bond - Low risk
Secondly, we can look at the types of fund Geographical limits - US, Asia, India, emerging countrie etc. Industry - technology, healthcare, industrial, property etc.
Thirdly, look at the investment objectives that fit into your risk appetite and time horizon. If you are a young millennial, probably a “growth fund-capital appreciation” is the right choice.
If you are looking for passive income without eroding your capital, dividends fund might be the better option. There is bound to have something to fit into your investment portfolio.
Last but not least, understand the fees involved when making these investment decisions.
Upfront sales charge: 0% to 5% (one time only)
Fundmanagement fees: up to 1.5% per annum.
Platform fees: up to 0.2% per annum.
Trailer fee: up to 1.5% per annum.
Always look for an experienced financial advisor with relevant knowledge to discuss in-depth on the funds selection and fees involved. You probably can learn a thing or two from him. Like I mentioned in my previous article, mutual funds investment is the first step towards your investment journey.
For more information if you are interested in how to start your investment now PM me on my Facebook page - or drop me a mail (firstname.lastname@example.org) or just initiate a Chat directly with me on this page