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Many people avoid investing because they either have no time to invest, worry they might lose money or think that investing is just gambling. In this video, I’ll show you how you can invest without using too much time, and still able to achieve similar results as the professionals. Enjoy!
0:00 – Intro
0:58 – Index Funds
Warren Buffett recommends average investors to invest in index funds, because many investors are bad at stock picking. Index funds is just a basket of stocks representing a certain country or industry. So instead of betting 1 company will do well, you are betting that an entire country or industry will do well. Examples are VUSD representing US, STI ETF representing Singapore, SXLK representing US tech companies. If you are super lazy, you can create a lazy portfolio, which represents the entire world. It consists of 3 funds, namely IWDA representing developed countries, EIMI representing developing countries, and bonds etf which we do not need as we already have CPF.
3:49 – Robo-advisor
Robo-advisors are just computer programs that help you to invest. All you need to do is choose a robo-advisor, sign up, choose a portfolio, deposit money then wait for the money to grow. The catch is that you need to pay a small fee. Robo-advisors have shown that they were able to beat the market consistently, ie rebalance the portfolio to reduce downside and increase upside.
Check out my robo-advisor reviews:
6:45 – Active Funds
While index funds are passive, active funds are actively managed by fund managers. They do all the research, then buying and selling stocks for the fund, which in turn will hopefully give good returns to investors. A famous example of active funds are ARK ETF, which gave super good returns in the past. The downside to investing in active funds is that their fees are much higher than robo-advisors and index funds.
9:12 – Individual Stocks
Investing in stocks doesn’t actually need a lot of work, because all the work is actually done at the start. You just need to identify the good stocks. They can be products or services which you use daily, like consumer products, banks, food. After that, all you need to do is just consistently dollar cost average.