What Do I Invest In?

Investing like money has always been as something as a social currency where you have heard friends or colleagues brag about being in the "stock and property market". We need to change that perception to see investing as a necessary financial tool much like our monthly income, it is key to build long term wealth.

Investing has also been something that is "too risky". Well so is travelling by yourself or crossing the road, one needs to properly understand the risks involved in order to make a more informed decision based on industry and expert advice. I am not advocating that people all become stock traders but to simply understand the importance of these products that can grow their growth over time.

To lower the stigma and the mystique around investing, I want to talk about my investment portfolio to show why I chose these specific products to help me prepare for retirement.

StashAway

I was quite lucky when I started to invest because robo-advisories had just entered the market and because of their low charges and investment amount. It was so simple. The user experience within the app made investing exciting and simple as they quizzed me about my financial goals and showcased my portfolio's allocation and performance in a transparent way.

StashAway focus predominantly on building portfolios based upon Exchanged Traded Funds or ETFs which is another reason I like StashAway. ETFs are a bit like unit trusts in the sense that they are groups of securities but ETFs track the overall performance of a market or segment and qualify as a passive investment.

Also their auto-deposit option makes takes the emotion out of investing as it happens every month after the salary comes in.

You don't need thousands to start. If necessary, start with RM10 and see how that grows over the course of the year. During that time, educate yourself of your portfolio and in particular the different types of investments that make up your portfolio.

Unit Trusts

A unit trust is essentially a group of stocks grouped together in a fund. It gives investors a diversified investment as it spreads the risk across the different companies that the fund is invested in. So when a company fails or isn't doing financially well, the losses will be spread against the gains that the other companies deliver.

The one negative people might give is that the returns are so little in comparison with individual stocks which is true in certain circumstances but I just don't have time or knowledge to invest stocks and my investment timeline is in decades. So I look to fund managers and fund houses to deliver me returns over the long term and all I have to do make sure I stay invested and invest regularly.

Buying into this unit trust is a bit murky as Unit Trust Consultants will probably push you to buy into funds that are to reach their sales targets rather than thinking about what's best for you as well as charge ridiculously high rates. I personally recommend going through Fundsupermart as they have over 500 unit trusts to buy into as well as a range of articles and tools that can really help you find the unit trust for you.

Summary

It was a long journey to get me to be comfortable to invest but what really helped is to set a long term goal so that the investment focuses on a goal that can fully utilise the power of compound interest. I personally don't think that investing should be to grow the wealth of retail investors, that's the job of professions and entrepreneurship but that's just me.