Dear readers, based on a 2021 survey on investments by youngsters in Singapore:
1) 80% of the around 500 youngsters surveyed are already investors
2) 88% are considering investing in at least one product in the next year.
3) Around 80% of those surveyed save regularly with half setting aside a monthly sum for investments.
4) The average annual investment amount is slightly over $18,000
5) About 50% of these investors use the dollar-cost averaging strategy, rather than putting in a lump sum.
6) 57% of youth allocate 60% of their portfolio to equities, with 40% in fixed income products.
7) Equities are the most popular investment product that young adults are looking to acquire in the next year, followed by cryptocurrencies
Okay, so what do I think of the above investment survey results?
Well, I would first like to say that this survey results indicate that more and more youths are getting onboard with investing.
And second, this increased number of youths getting into investments is a double-edge sword. This is precisely because the gist of the matter is whether these youths have a sustainable and consistent investment strategy to profit from investment over the long-run or will they be speculating in investment from an earlier age over a longer horizon and lose monies?
Where it comes to investing, All it matters is the right strategy that comprises what to invest, when to invest and how to invest.
Because even with the method of dollar-cost averaging method as cited from the survey result, if the equity or stock to which this method is applied is an equity or stock with no strong fundamentals, investors are likely to lose their monies.
Youths should master the two key factors for a sustainable and profitable investing: Greed and Fear (the two emotions which mainly drive investors).
Greed is every real. Once an investor makes some monies from some careful and conservative investing strategy, there is a Greed to make more from investing or speculating in some random stock counters.
Fear is also every real. If an investor has not much knowledge, no real conviction in the stocks he is holding, the fear of selling his stocks at a loss when others are selling is very likely too.
I also hope that the reporting of the survey results will not motivate those youths who are not ready for investing into investing due to the fear of missing out (FOMO). If so, these youths are likely to make a loss from their investments if they do not have the sound investing knowledge.
To conclude, our monies are very valuable as most of us trade our time and efforts for them. If we invest our monies, we must make sure we do not lose our capital (please remember Warren Buffet’s investing rules). We must make sure we earn the return on our hard-earned monies, else we are gambling and not investing.
Successful investing takes the right knowledge and equally important, the discipline not to cave in to the emotions of greed and fear.