Financial experts share the best financial advice they have ever received, as well as their worst financial mistakes and what we can learn from them.( PHOTO: Getty Creative)
SINGAPORE — From failed investments to not making informed decisions, we’ve all had our fair shares of financial mistakes. Thankfully, we have the help of those who have walked the path before to guide us back to the track that is right
This is element of a string where Yahoo Finance Singapore will give attention to different factors of millennials and their finances. In this seventh part, we hear from different fiscal experts who share from them.
1 with us the best piece of financial advice they have ever received, as well as their worst financial mistakes and what we can learn. Always make decisions that are informed*)in regards to financial decisions like investing, millennials within their twenties can be less disciplined in reading up and obtaining a better knowledge of the basics.
For instance, some decide to put money into stocks or investment products due to the hype or though it was a good
because it seemed as. While they may not be bad decisions, financial experts wanted that more analysis that is initial be achieved.
“It’s simple to follow trends nevertheless the real alpha is generally made through your own research,” said Salim Dhanani, CEO and co-founder BigPay, a financial mobile app.
“You’ll always be better off doing a bit of due diligence and maybe, you’ll get to the same decision, but you would have taken out some unnecessary risk,” he added.
2 before you hear about it. Never underestimate the benefits of compound interest
Millennials often believe that they need to start investing at a point that is certain their life or by way of a certain age, in spite of how small the quantity. That’s because you can reap the benefits of long haul growth trends and compound interest, dependent on your investment product.
As such, Salim also thinks it is great for youths to start out investing young and also to never underestimate the many benefits of compound interest.
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“It’s incredibly hard to time the marketplace. You might get it perfectly right, but probabilistically, you shall not. To mitigate timing risk, always remember he said.
While that you can generally get a greater upside, or limit downside risk, by averaging into a market position when the trend is going up, and averaging out when there trend is going down This rule is not without exceptions, Salim has assured that this is a piece of advice that has helped him throughout the full years.
3. Know the difference between investing and speculating
Profiting within days from investing can seem like a option that is great fast cash, but fiscal experts also warn associated with the dangers of speculating the marketplace after that.
Gregory Van, CEO of Endowus, a singapore-based technology that is financial, made his first investment in Amazon and profited 7% in 3 days. However, he soon began speculating, which resulted in a disparity that is great returns. From a short 30% profit, he made a 95% loss eventually due to the Global Financial Crisis.
As such, Van advises it is important for differentiate between speculating and investing. It definitely is possible for someone to make money by active trading, but it may be tough to earn money consistently through speculation.
“Personally, This experience that is whole extremely humbling. It set me on the course towards an academic, responsible, and approach that is evidence-based investing that will allow investors to see good returns in the end,” he shared.
4. Some decisions can be quite a gamble
As a finance that is young, Gavin Chia, Head of Managed Investments and Investment Advisory of Standard Chartered Bank Singapore, dabbled in many different instruments.
And like most youths, Chia started trading in options that have implicit leverage in the instrument, so as to make money faster. However, he had failed to understand the liquidity issues and the instrument soon acted opposite to the time in the market adage as option values drop to zero over time.
Hence, he holds dear a lesson that is valuable to carry on to option positions until they turn worthless. Millennials might choose to take full advantage of their buck however it is always important to discern the time that is right pull out too.
“I learnt that hoping that markets move in your favour at the last moment is a gamble, not an investment decision,” he warned.
5. Money should be a tool, not a*)There that is love a requirement for millennials to plan their finances for his or her future nevertheless they must not lose sight to the fact that cash is not a finish by itself, however a methods to support our life goals.FacebookTherefore, the famous proverb that ‘the passion for cash is the main of most evil’ is just a belief that Chuin Ting Weber, CEO of MoneyOwl, a bionic financial advisor, holds on strongly to.in life, we will focus on sufficiency and reliability in our financial plan, rather than maximisation and chasing after the wind,” Weber shared.Twitter“I
“If we keep in mind that our financial plan is ultimately to support what is truly important to us believe it achieves better outcomes and a happier, less life that is stressful both now plus in the near future,” she added.
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