The first question a person asks is usually when to start investing and how to go about investing. Usually it is impossible to create a diversified portfolio when you do not have adequate savings but it is still good to start investing with small amounts. However, the basic concept of which group of investor you are in still applies.
You should start investing as long as you have at least $1000 after setting aside part of your savings for rainy days. Next, you should choose a unit trust distributor like the following:
Disclaimer : I do not make any commissions from recommending them and should you have more platforms, kindly send me comments to add to these list.
The above is for DIY funds management where you buy and sell funds using the platform provided. However, if you are not IT savvy or are busy, you could engage with a personal banker or an insurance agent. Do note that when you are dealing with an insurance agent, you need to make sure that you are buying funds without any insurance options tagged to it, as premiums no matter how minimal are still considered costs (This is one of the mistakes I made when I started) that offsets against your profits. Forget anything the insurance agent tells you about claiming tax relief because under IRAS, insurance relief is bundled with your CPF relief (If you had capped your max CPF relief, it doesn't help and moreover, it's always better to separate insurance from investments). Do also note that for DIY, the sales charge is usually much lower than the sales charge quoted by the banker or insurance agent which is about 1.5-2.5% vs 5-5.5%.
For a conservative investor, you should start with bond funds, for "fence" investor, you should pick a global equity fund while for aggressive investor, you should pick a higher risk fund like single country fund (For more information regarding which group of investor you are in, kindly read my previous posting). Alternatively, there are also portfolio funds that are available like balanced funds or progressive funds according to their allocation to bonds and equities.
You can also have a regular savings plan arrangement with your banker or your distributor to buy funds either monthly or quarterly. For this, you would need to come up with an initial sum before commiting a fixed sum of a minimum of $100 every month regularly (If you are interested in monthly payments) to buy into that particular fund. In this case, you are using what investor called the "dollar-cost averaging" approach to grow your money. This approach allows you to average out the costs of the fund and tends to provide you appreciable returns with lesser risks over a long period of time.
For my future posts which would sadly be weekly unless I have more to add, I would provide some analysis of the markets and perhaps recommend some funds available although my focus tends towards a more aggressive approach.
