By Leong Sze Hian
Money radio show
When I was hosting a weekly one-hour money radio show for three-plus years, I would get calls and sms about how to invest, practically every week.
Idiot’s investing plan
I devised a simple “Idiot’s Investing Plan” for the listeners, which addressed the following most frequently asked questions and concerns:
- What to invest?
- How to invest?
- When to invest?
- When to sell or take profits?
So, here’s the step-by-step guide to the “Idiot’s Investing Plan”:
- Invest in a globally diversified portfolio of about 10 investment funds comprising about 30% equities 30% bonds 20% commodities and 20% property
- Use a no front-end load (back-end load early withdrawal charge) funds portfolio vehicle, if you do not intend or expect to make withdrawals within the first 3 years
- If you are using CPF or intend to make withdrawals within the first 3 years, such as if you are retired or are 55 years old or older, use a front-end load funds portfolio vehiclee
- Do not use an investment arrangement which has a perpetual extra loading such as a 1% annual advisory fee
- The average total annual expense ratio should be 1-plus per cent
- Re-balance your portfolio quarterly (free re-balancing)
- Whenever you need money, sell the funds that have gone up the most. If you intend to make regular withdrawals such as monthly within the first year – do not re-balance – sell the fund that has increased the most for the amount that you want to withdraw every month
- You should use an investment vehicle/platform that enables you to have free 24-hour online access to your portfolio’s funds’ valuation
“Idiot’s investing guide” video