Associate HotseatLet’s Talk Investment

March 3, 2023
Question 1:
Is there ever a right time to invest?
Kevin Shen's answer

There isn’t a single right time to invest, as it depends on various factors such as individual financial goals, risk tolerance, market conditions, and personal circumstances.

Historically, the markets tend to rise over the long term, so investing regularly and holding for the long term can be a sound strategy. However, timing the market is difficult and can often lead to missed opportunities or excessive risk. It’s recommended to consult with a financial advisor to create a personalized investment strategy.

Sharon Ong's answer

There is never a “right” time to invest as the timing of your investments depends on your personal financial goals, risk tolerance, and market conditions. Nevertheless, here are a few general principles that can guide your investment decisions:

  1. Start early: The earlier you start investing, the more time you have to let your investments grow, which can help to maximize your returns in the long term.
  1. Dollar-cost averaging: This strategy involves investing a set amount of money at regular intervals, regardless of market it helps to reduce the risk of investing a large sum of money at the wrong time and also helps to average out your cost basis over time.
  1. Consider market conditions: Generally, investing when the market is low and selling when the market is high can be helpful. However, it can be difficult to predict market conditions accurately. Hence, it is important to have a long-term investment strategy in place.
  1. Don’t try to time the market: Attempting to time the market by buying and selling investments based on short-term market fluctuations is generally not recommended. This can lead to missed growth opportunities and result in higher trading costs.

Ultimately, the best time to invest will depend on your individual financial situation and goals, so it’s important to consult with a financial advisor to develop a personalized investment strategy.

Question 2:
I know very little about investing. Where do I begin to learn and how can I feel confident in this space?
Kevin Shen's answer

You can begin to learn about investing with the following steps:

  • Educate yourself: Read books, articles, or online resources to understand the basics of investing and the different types of investments.
  • Set goals: Determine your financial goals and the amount of risk you are comfortable with.
  • Create a plan: Work with a financial advisor or use online tools to create a personalized investment plan that aligns with your goals and risk tolerance.
  • Start small: Consider starting on a low-risk investment before gradually increasing your investment risk as you become more comfortable and knowledgeable.
  • Diversify: Spread your investments across different asset classes, such as stocks, bonds, and real estate, to diversify your risks.
  • Stay informed: Keep up with market news and events but avoid making emotional decisions based on short-term market fluctuations.
  • Seek professional advice: Consider working with a financial advisor to review your investments and who will provide you with expert guidance.

Remember, investing is a long-term process that takes time to see results. Stay patient, disciplined, and focused on your goals.

Sharon Ong's answer

To start learning about investing, you can follow these steps:

  1. Gain a basic understanding of the financial markets and different investment options such as stocks, bonds, unit trust, real estate, etc.
  1. Develop a clear investment plan that aligns with your financial goals, risk tolerance, and investment time horizon.
  1. Educate yourself on the basics of financial statements, such as balance sheets and income statements, and learn how to analyse a company’s financial health.
  1. Start small and diversify your investments across different asset classes and industries to reduce risks.
  1. Stay informed by reading financial news and monitoring your investments regularly.
  1. Seek guidance from a financial advisor or professional if needed.

Remember, investing involves risks, and there are no guarantees of returns. It’s important to continually educate yourself and make informed decisions.

Question 3:
In Singapore, what are the current investment trends?
Kevin Shen's answer

Singapore has positioned itself as a hub for technology startups, leading to increased investments in the tech sector. Some of the current investment trends include:

  • Sustainability: There is a growing interest in sustainable and socially responsible investments, focusing on companies with a positive impact on the environment and society.
  • Real Estate: Real estate investment trusts (REITs) and property-related securities remain popular due to their stable income.
  • Alternative investments: Investments such as private equity, hedge funds, and commodities are gaining popularity among investors looking for diversification and higher returns.


Sharon Ong's answer

In Singapore, some of the current investment trends include:

  1. Technology and innovation – There is a growing interest in technology-focused investments such as startups, artificial intelligence, and cybersecurity.
  1. Sustainable investing – Investors are increasingly looking for opportunities to align their investments with their values; this includes investments in renewable energy, sustainable agriculture, and socially responsible companies.
  1. Real estate – Despite the COVID-19 pandemic, the real estate market in Singapore remains strong, with investment opportunities in both residential and commercial properties.
  1. Alternative investments – Investors seek alternative investments, such as private equity, hedge funds, and commodities, to diversify their portfolios and hedge against market volatility.
  1. Financial technology (fintech) – Fintech companies are revolutionizing the financial services industry in Singapore, and investors are taking notice of this growing sector.

These trends will likely remain in the future, but it is important to keep in mind that investment trends can change quickly, and investments carry risks. It’s pivotal to consider your financial goals and risk tolerance and seek professional advice before making any investment decisions.

Question 4:
What are the costs to buy, hold and sell my investment?
Kevin Shen's answer

Here are some of the costs associated with investing:

  • Commission fees: charged by brokers when buying or selling investments, typically as a percentage of the transaction value.
  • Management fees: charged by fund managers for actively managing your investments, expressed as a percentage of the investment’s value.
  • Advisory fees: charged by financial advisors for their services, which can include creating a personalized investment plan and ongoing portfolio management.
  • Custodian fees: charged by banks or other institutions to hold and manage your investments, expressed as a percentage of the investment’s value.
  • Trading fees: charged by exchanges or trading platforms for executing trades.
  • Exit fees: charged by some funds for selling investments prior to a specified date.

Hence, it is important to carefully consider all fees associated with an investment before deciding. This is because they can impact your returns over the long term. It’s also recommended to compare fees across different investments to ensure you are getting the best value for your money.

Sharon Ong's answer

The costs associated with buying, holding, and selling investments varies, depending on these several factors:

  1. Type of investment: Different investments have different fees, such as brokerage fees such as brokerage fees for stocks, management fees for units trusts, or custodian fees for investments held in custodian accounts.
  1. Investment platform: The cost of investing varies based on the investment platform or the brokerage that you use and whether there is any minimum amount needed in the account to avoid any fees and for the additional services they offer.
  1. Trading frequency: The more often you buy and sell investments, it may result in higher costs due to brokerage fees and market impact costs.

Here are some of the typical costs associated with investing:

  1. Brokerage fees: These are the fees charged by a brokerage for executing trades on your behalf. They can be a flat fee or a percentage of the value of the trade.
  1. Management fees: Many investment products, such as unit trusts and exchange-traded funds (ETFs), have management fees that cover the cost of running the fund.
  1. Annual fees: Some investments, such as real estate investment trusts (REITs), may have annual fees for maintenance and upkeep.
  1. Custodian fees: If you hold certain investments, such as real estate or private equity, you may need to pay a custodian to hold the assets on your behalf.
  1. Capital gains taxes: When you sell an investment for more than you paid, the profit is considered a capital gain and may be subject to taxes.

It’s important to consider all these costs when evaluating an investment and understanding how they can impact your overall return. It’s also advisable to consult with a financial advisor or tax professional to understand the specific fees and taxes associated with your investments.
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