Due to the recent COVID-19 pandemic, the economies of the world has suffered badly. Many industries like airlines, hotel, tourism, and retail have seen their revenue drop drastically, due to the various lock-down measures implemented to curb the spread of the Coronavirus. The stock market has also gone south as a result.
But looking on the bright side, it may be a good opportunity for investors to enter the market, as market prices are generally lower compared to before the COVID 19 outbreak.
However, if you are not an experienced investor yet, you ought to be well-informed before jumping on any investment bandwagon.
Before you start any investment, you ought to have a basic understanding of market environments in which those shares are traded, the procedures involved in setting up share-trading account, as well as the regulations governing the equity markets.
On top of that, you should assess the most effective and efficient way to conduct a trade with various trading tools available, such as through a online trading, phone trading, or broker. Different investment platforms have different fees, and it is wise to find out what they are.
You should also seek an understanding of the benefits of diversification, and be aware that you have the option to invest in foreign equities (eg. U.S. Stocks). That said, you must also acknowledge that there are risks involved in foreign investments, such as currency risk, liquidity risk and market risk. The different trading hours and different time zones, as well as settlement and custodian procedures may also pose as additional challenges. It is essential that you have knowledge of these issues first, before you conduct any foreign trade.
But what about those who want to invest, but don’t have the time and/or expertise to manage their own investments? For such cases, unit trusts may be a more suitable investment option, because they are managed by professionals fund managers and analysts. However, one of the downsides of unit trusts is they usually incur management fees every year, which will erode part of the potential investment gains.
Managing your own portfolio often requires time and effort to achieve a decent return. While you may save money by not hiring a professional, those savings can be offset by market losses if you don’t manage your portfolio well.
No matter what kind of investment you are interested in, you should do some research before investing your money. If you need professional advice, you can also talk to your trusted FLA Organization Financial Planner today.
To support the fight against COVID 19, our Advisors provide Non-Face-to-Face Advisory too. WhatsApp or Video call our Financial Advisors from the comfort of your home today.
