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Just invest, do average dollar costing and get on with life

There are those who effectively soak up information on the market, economy development, the best market and stock to invest in, etc. And they seemed to have good judgement skills and knowledge to be able to be able to make money most of the time.

On the other hand, there are those who does not seemed to be tuned or understand the market well.  This article is meant for this group of folks.

When their neighbors or vegetable seller tells them that they make a lot of money from a particular stock, the kiasu attitude makes them rush out to quickly buy the stock blindly. Unknowingly to them, the neighbor and the vegetable seller already made money as the stock was going up. And what goes up, must enviably come down. There is also the reason why many people are sucked into scams like the earthworm farming which supposedly give a good promise in returns. I even saw The Star featuring the article introducing the earthworm farming months ago- and now, it is nothing but a scam.

Don’t fret on the small stuff.

Someone relayed an interesting story to me recently. There was a man who invested in unit trust. Now, he went into investing in unit trust like how he does in the share market. He monitors the prices of the different unit trusts like a hawk- and tried to speculate. He invested a lump sum and did lots of switching in and out.

For months, that was what he did- he thought he had the market played. Then one day, he went to the customer service and asked her how much he had made. Guess how much the guy made in total?

Just a miserable tiny RM150 for all his efforts and using huge amount of funds! That goes to say that you do too much switching here and there like buy-sell at the stock market. Unit trust and stock market works differently. They don’t work the same. Unit trust or mutual funds are more for long term investment- you need to put in for at least 3 to 5 years before you can see results.

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Relax and let your money work hard for you 🙂

Invest, do average dollar cost and give it time.

You do not need to be a financial expert to get returns in your investment. In the end, it’s what you want: Unit trust may not bag you lots of returns short term but if you spread your investments out, you would not lose money. And you need not constantly monitor them. Just invest, schedule some time in future (3, 6 or 12 months) evaluate if the returns jive with your goals and do a rebalancing. The rest of the time, just relax…..go on with other areas of your life. Get a good agent or financial planner who come under good recommendation to help you to monitor your funds.

In my next article, I hope to share my personal experience in investment to show you why average dollar costing is a better option- just sign up an autodebit to have small amount of money transferred into the fund and let it be (note: this advise works for those who do not want to fret over financial planning but do not want to lose out on investing).

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