Determine an investment strategy of whether blue-chip, dividend or growth stocks suit you best.
Selecting the right stock to invest in can be challenging for an individual investor. Therefore, establishing your investment goal, the amount of risk you are willing to take, and the time frame to remain invested can help to shortlist the stocks to invest in.
Generally, there are two broad investment goals:
Stock prices are subject to volatility, which are movements in the stock market on a daily basis. The higher the volatility, the higher the risk. As such, it is important to consider how much risk you are willing to take, how prepared you are to lose part or all of your capital, and whether you have the ability to make good any losses incurred.
Another key consideration is your Investment Horizon, which is the span of time to remain invested. This determines if you are seeking to capitalize on short-term price movements, or hold on for long term capital gains.
|Blue-chip stocks||Dividend stocks||Growth stocks|
Along with stability may come relatively slower growth and lower returns
Dividend payments may not be made and interest rate fluctuations could affect dividend yield
Stock value may experience a fair amount of fluctuations
Beyond a year due to their stability
Up to 12 months or more if seeking stable, recurring income
Up to 12 months
Passive trading (buy-and-hold)
Identify a list of stocks that you are interested in. Assess your investment goals and adopt technical and/or fundamental analysis to aid in your investment decisions.
Once you have decided on the stock(s), you can monitor their performances and prices with an appropriate trading strategy.
Buy your stocks and execute your trading strategy. Monitor and revise your stocks investment along the way and ensure it is in line with your investment goals and risk appetite.
Trade on the DBS Online Equity platform today.
Don’t have a Wealth Management Account for trading?
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