How to smartly diversify your investments
Directly investing in stocks comes with risks that take a lot of work to mitigate. Some strategies require active management of your investments, forcing you to spend time monitoring the market and catching up on news. This sort of investing is not for everyone. You may still wish to invest your money, but at the same time prefer a less risky, more hands-off approach. On the other hand, products like unit trusts provide diversification since it is a basket of stocks and they are typically actively managed by a fund manager where you outsource the market monitoring and insights to a professional fund manager. Investing in unit trusts also allows you to invest into certain markets that you do not get access as an individual investor.
This allows you to better manage your risk while enjoying the capital gains and dividend pay-outs over time, thus enabling you to take a hands-off approach to wealth creation.
Investors have full control over the amount of money they wish to invest monthly as well, so you won't have to risk more than you are comfortable with.
How can I make good use of my gains with RSPs?
There are two ways to do it. You can request for a cash pay-out of your dividends whenever they are declared or reinvest the dividends which allows your investments to compound and earn capital gains. Depending on your financial goals, you are free to tailor the dividend pay-outs to suit your needs. If you just started working and plan to save for a holiday, reinvest your dividends and grow your capital. If you have young children or you are a retiree, opt for cash pay-outs to help fund the cost of your children's education or for your daily expenses as a retiree.
What is a Regular Savings Plan (RSP) and how will it help me invest smartly?
A RSP is a disciplined way to invest for those who are just starting their investment journey. Through RSPs, investors can invest small amounts of funds every month into unit trusts, thus building up an investment account in a safe manner.
By having investors contribute small amounts to investments monthly, RSPs reduce the investment risk by applying an investment technique known as dollarcost averaging.
Start your Regular Savings Plan with dollarDEX (powered by Aviva)
If you're a novice investor, you should consider starting with a RSP.
dollarDEX allows you to start investing at ease with no fees on your investments. You will not be charged with any sales charges, switching and platform fees unlike other financial institutions. At the same time, you can access to more than 1,000 funds and if you are uncertain of what to invest, you can also complete a risk questionnaire to determine your risk profile so we can suggest an investment portfolio that suits your risk appetite.
Most importantly, you can freely access your investment portfolio any time and perform your transactions in a breeze just like shopping online. As your life stages progress, you can also enjoy the flexibility of changing your portfolio to suit your needs, all at no cost involved.
Open an account today and experience no-fees investing yourself!
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All information here is for GENERAL INFORMATION only and does not take into account the specific investment objectives, financial situation or needs of any specific person or groups of persons. Prospective investors are advised to read a fund prospectus carefully before applying for any shares/units in unit trusts. The value of the units and the income from them may fall as well as rise. Unit trusts are subject to investment risks, including the possible loss of the principal amount invested. Investors investing in funds denominated in non-local currencies should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Past performance is not indicative of future performance. dollarDEX is affiliated with Aviva but dollarDEX does not receive any preferential rates for Aviva products as a result of this relationship. Unit trusts are not bank deposits nor are they guaranteed or insured by dollarDEX. Some unit trusts may not be offered to citizens of certain countries such as United States. Information obtained from third party sources have not been verified and we do not represent or warrant its accuracy, correctness or completeness. We bear no responsibility or liability for any error, omission or inaccuracy or for any loss or damage suffered by you or a third party (including indirect, consequential or incidental damages) arising in any way from relying on this information.
This information does not constitute an offer or solicitation of an offer to buy or sell any shares/units.
This article has not been reviewed by the Monetary Authority of Singapore.
Information is correct as of 13/09/2018.