Now that we’ve started a new year, you might be planning your finances for the year ahead. With interest rates at the lowest level in history, and the Covid-19 crisis making us all pay more attention to our financial position, you might also be thinking about ways to make your money grow.
Investing is a good way to grow your money because if you just leave it in your savings account, your money will probably lose value over time due to inflation. Investing can also help you reach your savings goals, like buying a house, planning a wedding or saving up for your retirement.
But investing can be scary and confusing if you’re doing it for the first time. First of all, you have to choose what you want to invest in. You could invest in Fixed Deposits, EPF, Amanah Saham, Real Estate Investment Trusts (REITs), Exchange Traded Funds (ETFs), Unit Trust funds and individual stocks.
Stocks, REITs and ETFs are some of the products you can invest in on Bursa Malaysia, which is the Malaysian stock market. But investing in the stock market can be risky, because stock prices can change very quickly, affecting the value of your investments. All investments have risks and the different investment products have different levels of risk.
So, another factor to think about when investing is how much risk you can take. The level of risk affects the amount of returns you could get — generally, less risk = lower returns and more risk = potentially higher returns (but high risk investments also mean there’s a high chance that you could lose a lot of money!). This is why a rule of thumb for investing is to spread out your risk by diversifying the type of products you invest in.
Diversifying will help you reduce the chance of losing all your money if something goes wrong. It will also help you make sure you could still get some returns from one investment product even if you made losses from another investment product. Try using our investment portfolio simulator calculator to help you see what your total returns might look like if you invest in a few different products!
As you can see, there are a lot of things to think and learn about before you start investing — and we haven’t even covered them all in this blog post! You could take a look at our infographic on the 10 things to know before you start investing, or read our full guide on the basics of investing to help get you started. Don’t forget to watch our video!
And if you want to try investing on Bursa Malaysia without actually spending any money or facing any risk, you could try the My Market section on Bursa Marketplace, a virtual investing site where you can get a feel for investing in the stock market (without using any actual money!) and learn from it before you invest for real. Remember, if you’re still learning about investing and don’t have an investing plan, investing will be more risky. So, with gamification features, you can use My Market to get a step-by-step guide on the basics of investing and trading in the stock market safely. Follow this link to know more about My Market.
To learn more about the world of investing, be sure to read our guides on the different investment products, or try our investment calculators to help you calculate returns and compare investments.