Layman investing

I have two female friends. I met friend A some months back, she was buying insurance and does not have any unit trust or stock investment. The insurance maybe investment linked or whole life which actually yield lower return. I asked her why don't you invest in unit trust, the return is better. She said "scared leh, money is hard earned one". That's the point, because it is hard earned, you should make it work harder for you.

Friend B told me to recommend her some good stock last year. I told her to open the trading account and read up some investment basic. After half a year, she did nothing. As the stock correction now is an oppoturnity to buy, I alerted her again. She said "need to discuss with you, I am afraid of losing money". She is influenced by people earning quick money in the bull run, yet when there is a stock sale, she is afraid to participate.

Investing is one component of good financial planning. Save some rainy fund, buy some insurance, take the money that you can afford to lose to start investing. Ultimately you would be rewarded with risk that you took. Rather than let the inflation erode your spending power in bank deposit, why not buy a good company. Although not without risk, you can participate in earning growth and dividend. Exchange some of your shopping time to read on investing, surely it yield more than the satisfaction of bringing shopping bag home.

If you don't know stock and don't want that to bother you, buy unit trust. The 21 century belongs to Asia. Buy some Asia fund, hold it for 5 years, I believe you would be doing ok. Some of my colleague, although have no use with their CPF, they just leave it inside the account earning the 2.5% interest. Take some to invest, you won't be wrong.