Should I buy stocks, bonds, etfs, properties, gold or unit trusts etc?
Which asset class makes the best investment? It’s never about the asset class but rather the price you paid(valuation).
When it comes to price you paid, you can either use fundamental analysis or technical analysis. More importantly, one must thoroughly understand the prerequisites needed to succeed in that particular investment. As an investor, it is important to know, learn and apply value investing methodology in your decision making. Another way to look at whether the price is good to enter is through the use of technical analysis where you based your decisions by studying the historical prices and volume from the charts. One good course in Singapore which I strongly recommend will be the Options Mastery Programme where students will be taught how to use technical analysis to enter the stocks or etfs that they want using options contracts.
When it comes to stocks, which is of course the asset class which I am most familiar with. By buying when prices are cheap and out of favour, investors receive two important benefits – a higher dividend yield and a discount to the book value of these assets. Book value is so important especially when we are looking at property stocks. Perhaps one day, Journey With Money will do a 1-day workshop on how you can analysis property stocks.
Recently I have the privilege of attending a luncheon with the biggest gold ETF issuer. One key takeaway that I gathered from the session was the importance of gold in today’s multi-asset portfolio. Gold is a unique asset class that has historically low or negative correlation with most other asset classes, is one of those assets that is finding its way into many multi-asset portfolios of fund managers. In the book – Master the Money Game, Tony Robbins introduced the all seasons portfolio recommend by Ray Dalio. He stated in the book that it is good to have 7.5% of gold allocated to your portfolio. Do go read it if you have the time. It will definitely be beneficial.
Lastly, diversification among different asset classes helps reduce the risk of a large loss. However, if you know nuts about a particular asset class, it is best not to touch it. As the saying goes, it is good to stay within your circle of competence. If you really want to invest in a particular asset class, then please go get yourself educated and well informed before making any decision.