10 things to know
- Before you get started, set some investment goals
- Save and invest now!
- Invest early to beat inflation and to benefit from compounding
- Invest consistently
- Balance risk and return
- Invest in different products, not just one!
- Avoid high fees
- Do NOT sell in panic
- Do NOT take on debt to invest
- Beware of scams
- Quiz: Investing 101
Invest in different products, not just one!
Invest in different products or “diversify your portfolio”. By dividing your investments across several different products instead of putting all your money in just one product you spread your risk and reduce the chances of losing all your capital if something goes wrong.
This means investing your RM 1,000 across several investment products e.g., investing your RM 500 in Amanah Saham and having the remainder RM500 invested in a different investment product. Click here for our diversification calculator.
To help explain diversification, let’s say that you split your investments across 4 different products like Amanah Saham, ETF, REITs and Stocks. Your combined returns won’t be as bad as your worst-performing investment nor will it be as high as your best performing investment.
In Scenario A above, you decided to split your investment, your returns are higher than if you had only invested in ETFs but lower than if you had just invested in stocks.
But in Scenario B:
If you had just invested in stocks, you would’ve had pretty major losses. By splitting your investments, you’ve contained your losses and still made some returns.