Ask the right questions
Why do you invest?
Investing is not just about picking the top-performing asset or the highest ranking fund. The purpose of investing is to make your money work for you. This requires investors to make informed, important and conscious decisions. Here are the questions that you must ask yourself before investing:

Why invest?

  • This refers to the intention that drives you to invest. 'Why invest' is just as important a question to ask as 'what to invest in'.

What to invest in?

  • 'What to invest in' encompasses all activities associated with selecting the fund or asset to buy. What to invest depends on your personal financial goals, investment duration and preferred asset choice. Your risk tolerance should also determine your choice of investment.

How long do you intend to invest for?

  • This is your investment horizon or duration. Your investment horizon influences the asset that you select. The longer the investment duration, the higher the level of tolerable risk can be taken as you can ride out short-term market volatility. Shorter investment durations increase the amount of risk your portfolio has to absorb as markets may turn unfavourable at any moment. Using your investment duration as a guide also prevents hasty decision making such as a selling out when markets fluctuate.

How are you going to invest?

  • Investing is not a one-off activity. Once you have channeled your funds to your selected investment vehicle, you need to actively keep track of it, whether it is monitoring or rebalancing your asset allocation.
  • Decide if you would prefer to employ the DIY method or be actively involved in the investment process. Then ask if you would rather self-manage all ongoing portfolio management activities or use a professional fund manager. Ultimately, it depends on what would suit you best.

Who to invest with?

  • Investment experience, track record and investment processes are important considerations when deciding who to invest with.

Where to invest?

  • 'Where to invest' refers to the geographical market. Investors can invest in Malaysia, regional markets or developed markets. Markets do not move in tandem. Holding assets based in different countries increase diversification and lowers the overall risk for a portfolio.
  • Foreign markets also provide sophisticated alternative asset classes that are not readily available in the country.
  • Consider where to invest, once you have decided on What, Why, When, Who and How to invest.
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