| To be a successful investor in the long term, it is important to understand and avoid some of the common behavioral biases that often lead to poor investment decisions.
We spoke to Kaden Hoe from Fidelity International on how investors can safeguard their wealth and avoid some of the common pitfalls when it comes to investing.
In case you missed the webinar, here are some key takeaways:
1. Don’t Invest Based on Tips or Rumors
Your friends are making money from investments but you are not? Instead of blindly following a tip, assess your risk appetite, study the investment products and identify your investment horizon before making the investments.
2. Diversification, a Potential Cure for Emotional Investor
The adage “don’t put all your eggs in one basket” simply states why diversification is vital. Diversification may help smooth out returns in volatile times, it may provide for higher returns over longer time periods and it may help investors avoid the pitfalls of emotionally based investment decisions.
3. Time in the Market rather than Timing the Market
Instead of trying to time your investments, stay invested through market volatility. If you had stayed invested through the short bout of bear market in March 2020, your investments would have recovered and made a profit by end of 2020. World Bank projects China to grow at 8.5% in 2021. Economic growth may lead to improve company financials resulting in ratings upgrade.
4. Enhance Your Income with High Yield Bonds
Fixed Deposit rates in Malaysia are likely to stay low. At current interest rate of 1.6% p.a., it will take 45 years to double your money from fixed deposit. China High Yield Bonds for example, offer yield to maturity (YTM) as high as 8.8% as of April 2021
RHB China High Yield Fund offers investors attractive yield with enhanced diversification, liquidity, and broad investment opportunities. The fund just delivered 7.5%p.a. inaugural dividend and will soon soft close as it reaches its investment capacity.
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