Which type of investor are you? (Part 1)
If you don’t have time to read through the whole article, you can check out our short version below:
You can boost your retirement income with the right insurance plan. Here are four types of plans to consider:
Identify your financial goals. This will determine your priorities and the amount of time you have to remain invested.
Select the risk level that you are comfortable with and manage your expectation on potential returns.
More than satisfying your curiosity, learning about your investor profile and risk appetite puts you in a better position to decide what to invest in to achieve your financial goals. So let’s start!
It’s important to identify your financial goals as it changes the amount of time you have to remain invested (your investment horizon). Different investment horizons will affect your approach to investing.
Short term goals are priorities that can be achieved within 2 years, for example, repaying a personal loan. To achieve them, you should:
- Maintain a disciplined approach to savings. Putting your money in principal-protected products like fixed deposits or Singapore Savings Bonds could give your savings an additional leg-up.
- Compare promotions and cashback deals to reduce your overall spending.
Medium term goals are priorities that can be achieved within 2 to 5 years, for example, saving for the down payment on a home. To achieve them, you should:
- Complement your monthly savings with some investing. Consider buying unit trusts or ETFs, which may yield higher returns than the interest on a savings account
- Opt for accumulating share classes or unit-dividends instead of cash-dividends to take advantage of reinvesting and compounding e ects.
- Review your progress regularly to ensure that you are on track to achieving your goal.
- Take advantage of grants or subsidies that could be available for specific goals like your child’s education needs or buying a new house.
Long term goals are priorities that can be achieved within 2 to 5 years, for example, saving for the down payment on a home. To achieve them, you should:
- Invest in products that adopt a long-term perspective when selecting underlying assets.
- Make time to review your existing investments regularly and rebalance your holdings as necessary to maintain a balanced, diversified portfolio.
- Avoid knee-jerk reactions to market events. Conduct a fundamental analysis of the investment to help you to determine if the investment has growth potential in the long term.
- Keep an eye out for market opportunities that may arise from time to time.
Hello, we’re NAV.
Inspired by the word “navigate”, NAV is an initiative by DBS & POSB created to help you navigate your finances, your way. Whatever your financial goals are in life, no matter what situation you are in, we’re here to help you on your financial journey.
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Speak to the Wealth Planning Manager today for a financial health check and how you can better plan your finances.
Alternatively, check out NAV Planner to analyse your real-time financial health. The best part is, it’s fuss-free – we automatically work out your money flows and provide money tips.