8 steps to investing successfully

April 3, 2020

Investing may be an overwhelming proposition, especially if you are new to it. However, with this 8 step guide, you could get a head start on your investment journey.

1. Have an investment plan

Investing is not a one-time thing. You need to do it regularly and make it a habit. As such, it is important for you to have an investment plan where you save and invest a certain portion (e.g. 10 – 20%) of your income regularly.

Personalise your investment plans

Your spending and saving habits are different from your friends and family. As such, your investment plan should not be the same as theirs.

Through Crea8, you can set up a custom-made investment plan for yourself.  Tell us how much you want to invest monthly and what you are investing for (to buy a car perhaps), and we can provide you with an optimal investment portfolio to suit your needs.

Adopt adaptive investment plans

Our plans are adaptive so even if your personal circumstances change (e.g. you want to save and invest more over time), you can simply update your plan and Crea8 will revise your optimal portfolio.

Similarly, when your portfolio does well or badly, Crea8 will provide suggestions for you to switch or to change your savings pattern. This will ensure that you are on track towards your goals and your portfolio is optimal.

2. Evaluate your ability to take risk

All investments involve some form of risk. If the value of your investments decline, do you sell, hold or buy more? All these questions go into the evaluation of your risk tolerance. 

You should understand your risk tolerance and invest in the appropriate mix of stocks and bonds. This will help you stick to your investment plan and not veer of course if markets get choppy. More importantly, you will not lose sleep over your investments. 

Crea8 can cater for various risk levels and can help you find out your risk level

We provide investment plans for people with various risk tolerances from the ‘very cautious’ to the ‘speculative’ investor. 

Not sure of your risk tolerance? We can help you find out through a series of questions. Then, we can provide you with advice on the optimal mix of stocks and bonds to invest in.

3. Do not pay high fees

Fees erode a significant part of your portfolio over time. The traditional way of investing using mutual funds and unit trusts is costly.

Here are some of the charges:

  • Initial sales commission or set-up fees: this is typically 3-5% of your initial investment. So, if you invest $ 100,000, only $ 95,000 to $ 97,000 is actually used to buy the stocks.
  • Annual management fees: this is typically 2-4% of your portfolio. So, if your portfolio earns 10%, you only get 6-8% net of fees.
  • Exit fee: these are increasingly rare but some mutual funds or unit trusts still charge.

Crea8 cuts out hidden fees and offers 3 simple and transparent fee structures

With Crea8, you will not incur any initial set-up fees or commission fees. Instead, you pay an advisory fee that is either charged monthly, based on the size of your account or based on the performance of our recommendations. 

Our tiered fee structure ensures that the more you invest, the lower your fees will be. 

For example, if you select our tiered fee plan and invest $ 100,001 in some stocks that make 10% annually over the next 30 years:

All benefits of low cost execution accrue to you – Crea8 receives no kick back fees from brokers

Unlike some traditional fund managers, we do not receive any kick back fees from the execution broker. Hence, all benefits from using our low-cost broker partner accrue to you.

4. Diversify – do not put all your eggs in one basket

Every stock has a chance of falling, so investing in one company is a risky proposition. Instead, spread your investments across multiple asset classes, geographies and sectors to properly diversify your risk.

Access to a plethora of investments with Crea8

With our Goal based investing service, you get access to up to 350 ETFs that are based on various asset classes from stocks to bonds and commodities.

Our Factor based investing service gives you access to 2,500 stocks from 18 countries.

From these, Crea8’s algorithms generate the best mix of ETFs and stocks for you to achieve diversification benefits.

5. Ride on themes – invest in stocks that deliver above average returns

To beat the market, you need to ride on sustainable long term themes and select stocks that earn above average earnings to allow your portfolio to outperform. 

Crea8 leverages on big data and machine learning

Using sophisticated technology, powerful algorithms and continuous R&D, Crea8 offers you the best investment solutions to ensure that your portfolio is ahead of the market. 

6. Rebalancing your portfolio regularly

New information and market fluctuations will result in your portfolio straying away from the optimal mix. If this is the case, you could be taking on more risk than necessary and earning less than what you should. 

Hence, rebalancing your portfolio regularly will help bring your portfolio back to the optimal asset allocation.

Crea8 rebalances your portfolio automatically

Investment plans and strategies that you set up with Crea8 are automatically rebalanced on a regular basis, or we will send you reminders to do so. This way, you can relax knowing that you are not taking on more risk than necessary and that your investment plan is on track to meet your goals.

7. Use smart algorithms to monitor your portfolio at all times

Traditional fund managers purport to manage and monitor your portfolio and charge a fee. We believe that this can be done by algorithms and achieved by regular rebalancing and automatic portfolio monitoring.

Crea8 offers free and automatic portfolio monitoring

In between the rebalancing date, we suggest that you enter cut loss and take profit orders. By using smart algorithms, we aim to cut your losses and let your profits run. Hence, you can sleep well knowing that your portfolio is monitored and up-to-date.

8. Do not panic and sell at the bottom during volatile markets

Human psychology and emotions affect our investment decisions. This is pushed to the extreme when markets are falling and volatile. There is a greater chance that you make the wrong decision to liquidate your portfolio at the wrong point.

Crea8 approaches market volatility rationally

We do not encourage you to take on excessive margin in your portfolio and let Crea8 help you manage your portfolio systematically and rationally. 

Using a rational approach, you can stay calm and do not sell in a panic during volatile markets. 

Crea8’s Advice

We understand that investing may be a daunting proposition for some, especially those new to it. That is why we have available services to make your investment journey easy and seamless.

Tips for your journey

One of the more common reasons people start investing is to plan for their retirement. Check out our tips and recommendations on how to save for your retirement, including how we can help you with this.

If you want to learn more

Our Factor based investing service lets you apply factor tilts to portfolios. Find out more about factor investing here. For further insight into our investment methodology including our Goal based investing methodology and Factor based investing methodology, check out our white papers.
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