What's the principle of investing in stocks?
Start NOW!
Starting early does make a difference. In general, every year you wait doubles the required monthly savings to reach the same level when you retire.
An example:
If you keep S$500 every month for 5 years, then stop doing it, or save S$500 after 5 years of doing nothing. You have the save amount exactly after 10 years. So why not start early?
Understanding yourself.
Know yourself. Learn about yourself. What is your goal? What is your need in the future? What do you want? Start drawing a map of where you want to be in after 5 - 10 years. Set a goal, be there after 10 years. If you don't keep reminding yourself of what you want, I am afraid you might slack and go off track.
How healthy are you with your financial system? How much do you have? Earnings? Expenses? Debts? Financial Goals?
Risks?
If you don't make it here, what are you going to do next? Accepting failure and move on is part of life lesson nobody can teach you. Are you willing to take risks? How much risks can you handle? This is all about you. If you can figure it out, you can imagine the risks you can take and learn to adapt with it and expand it slowly in the future.
Plans! Long-term or short-term?
How do you spend your money? U have needs such as cars, houses, girlfriend, family, retirement. It should also detail where the money will come from. Hopefully the numbers will be about the same.
Don't try to time the market. Get in and stay in. We don't know what direction the next 10% move will be, but we do know what direction the next 100% move will be.
Review your plan periodically, and whenever your needs or circumstances change. If you are not confident that your plan makes sense, talk to an investment advisor or someone you trust.
Buy Stocks
Now that you understand yourself, the risk and your goal, invest in stocks. Buy it, and KEEP IT. It require two things, patience and discipline. The stocks will give you benefits, long-term view. Dividends and the stock you bought will definately be a winner. This approach reduces the entire universe of investment vehicles to two choices: stocks and stock mutual funds. In the long run, they're the winners: In this century, stocks beat bonds 8 out of 9 decades, and they're well in the lead again.
Get Help
Some people just can't handle DIY. Try it, and if it doesn't work, seek professional advise.
If you want others to handle your financial affairs for you, just make sure your money is being spent wisely.
