How to Invest in Stocks

October 7, 2021

Do you want to invest but don’t know how to start?

Investing might seem daunting, especially when you first start but it doesn’t have to be something that terrifying.

I still remember the first book that I read on investing: Benjamin Graham’s “The Intelligent Investor”.

There were new terminologies that I had to get a hold of but what really helped me was the realisation that investing isn’t about beating others at their game.

It’s about controlling yourself at your own game. It was also from there that I understood that:

“An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”

So, while investing can involve a lot of complicated jargon and various investment asset classes, the first thing to do before you invest is to understand the difference between investment and speculation.

Failure to distinguish between these two is a sure way to lead yourself on a roller-coaster ride of emotions and performance.

Different types of investing

Now that you know the difference, how to start investing and putting your money to work?

There are generally three types of investing styles:

  1. DIY Investing
  2. Passive Investing, and;
  3. Use an investment advisor

If you are looking at DIY investing, or “Do-it-Yourself” investing, it requires you to do the research on your own.

You will also have to build your own portfolio and keep track of the changes. It’s more suitable for people who have the time to spend on research and monitor their stock portfolio. Trust me. It’ll take a lot of your time.

Yet, the main benefit of it is that you have full control of your portfolio. And the experience is more fulfilling when you do it with a community of like-minded individuals.

Passive investments are more suitable for people who have a busy schedule. We wouldn’t want doctors to be checking their portfolio performance while performing surgery, right?

Among some of the available options include mutual funds and exchange-traded funds (ETFs). In today’s age, we have also seen the rise of the robo-advisor.

These platforms tend to automate the investment process based on a certain algorithm once you’ve answered some questions in terms of your investment objectives and risks appetite.

Using an investment advisor is a mix of both active and passive investing. You can also either leverage the research of others and make your own decisions or simply leave it to the professionals to make the decisions for you.

Overall, knowing the type of investor you are is really just the first step. You would then have to decide on the asset classes that you are keen on based on your risk appetite.

You can read more on our “How to start investing” guide here or “Investments for beginners” guide here.

Investment is a lifelong learning journey

There is no one-size-fits-all solution when we talk about how to invest. There are various strategies and people have been successful at different investment styles.

The bottom line is that the “how” doesn’t guarantee you success at investing but it is the realisation that it’s a process over which you can have full control that does.

And the beauty of it is that you don’t have to beat others at their game in order to succeed at investments.

The “how” in investing is very much dependent on your risk appetite, time horizon, personality, budget and various other factors.

At ProsperUs, we’re excited to be a part of this investment journey with you. Whether you’re looking to invest for your children’s education plans or if you are simply building your retirement nest, investing is the best way to go about it.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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