Make your money work harder

Make your money work harder

Should you invest in safe but slow-growing unit trusts? Or something riskier with better returns? Cheryl Ong lays out your options.

Before You Invest…

Anne Tay, senior manager of financial services at Manulife (Singapore), suggests you run through this "TOLERANCE" guide first.

Time horizon If you have family commitments or are older, you have a shorter investment period and may need to invest in safer funds; if you're younger, you may be able to distribute more of your funds to investments with a greater risk, but with potentially higher returns.

Objectives

What are your aims? Think about major life events, like buying a car, a house or saving up for your retirement.

Liquidity ratio

Do you have emergency funds set aside (ie, six months' worth of living expenses?) This should not be used for investment purposes.

Expenses

Are there any costs involved? Some financial planners or fund houses charge annual service and management fees. For example, you pay transaction-based brokerage fees if you trade in equities and exchange-traded funds.

Risk

Do you know your risk appetite (conservative or aggressive) and risk muscle (can you sustain potential losses)?

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