A few weeks ago, TODAY came out with an article titled "Investing in stocks can be risky, but rewarding." (read it here!) The article roughly covers on how in 2008, the market crashed. And STI rose to a high before dropping again in mid November 2018.
The article also wrote that in the long term no other products perform better than stocks. However, to make it work, an individual would need to have a plan.
One way is to not be so affected by fluctuations and if you are in your 20s or 30s, you can recover from short term losses and gain in the long run as you have time on your side.
Diversification is also another way to improve the performance or reduce the risk that you are exposed to. They recommended having REITs or at least 15-20 stocks of various sectors.
If you are thinking of growing their money, stock markets are the best for the long run. BUT it is also risky at the same time because it involves the future which no one knows and no one can anticipate it.
When I started investing, to be honest, I didn't know the amount of risk that I was exposing myself to because what I have been reading is that investing can grow your money and that to start early would allow your money to grow more due to compounded interest.
But of course, investing has it's risk and I found it the hard way. And I learned it through Design Studio, I bought it due to the attractive dividends that it was giving out yearly and I didn't really do much research into it's financials as I was so attracted to it's dividends.
When it released news about it's profit guidance and it's stock price fell, I was shocked as it was the first stock I purchased that had it's prices dropped by so MUCH. I was real shock.
With that, I did avoid going into the market after that and realised that I should really be clear with what company I am buying so as to make sure that my money is not going to be gone just like that.
Definitely right now, with the market being on a downtrend, I am also apprehensive about going in but if I do see companies which are on my watchlist and prices are right, I would going in as I have been observing them.
For now, I am trying to balance between work and everything else as I am no longer as free as I was when I was in school. School was still the best as I had so much free time to do what I wanted.
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