3 Smart Principles for Investing in Singapore

Understanding Your Risk Appetite and Time Horizon

A longer time horizon may provide you with more flexibility to consider investment options with varying risk levels, according to the Central Provident Fund Board (CPFB).

If you are saving for a short-term goal such as taking a vacation or an upcoming home renovation, consider short-term investments that can be easily converted to cash.

The Power of Portfolio Diversification

By investing in a mixture of assets, you will be able to lower the risk of having all your earnings wiped out due to a single market downturn.

To apply diversification to your investment portfolio, consider spreading your money across different assets, such as stocks, bonds, Exchange-Traded Funds, and unit trusts.

FAQ

Why does time horizon matter for risk appetite?

A longer time horizon may provide you with more flexibility to consider investment options with varying risk levels, according to CPFB.

What should I consider for short-term savings?

If you are saving for a short-term goal like a vacation or home renovation, consider short-term investments that can be easily converted to cash.

How does diversification reduce risk?

By investing in a mixture of assets, you can lower the risk of having all your earnings wiped out due to a single market downturn.

What types of assets can be used for diversification?

Consider spreading your money across different assets such as stocks, bonds, Exchange-Traded Funds, and unit trusts.