RISK AWARE INVESTMENT GUIDE FOR EVERYONE

  Let’s summarize the 5 key one-size-fits-all steps to investing without diving into anything math-related: 1. Begin with a direct stock purchase plan (DSPP) and/or index funds passively managed by a robo-advisor. M any companies offer  dividend reinvestment plans (DRIPs)  that further simplify the investment process. DRIPs automatically buy more shares on your behalf with your dividends. If you reinvest dividends, you can supercharge your long-term returns because of the power of  wealth compounding . This is  dollar-cost averaging (DCA)  in action.    2. Focus on asset allocation using the money you won't likely need within the next 5 years. 3. Y ou'll need a specialized type of account called a brokerage account to actually  buy stocks, mutual funds, and ETFs.  The majority of  online stock brokers  have eliminated trading commissions while offer ing the ability to trade on foreign stock exchanges. Ther...

  Before you invest, make sure you fully understand the product disclosure statement (PDS)[93] and b eware of scammers offering investments or asking for payment using e.g. crypto-assets [94]. The PDS explains how your investment works, the risks, fees and charges involved, how long you should invest, legal and tax implications, etc. What kind of investor are you ? According to your FID discussed above, you may select either defensive or growth investment. Defensive investments include cash and fixed interest short-term investments. Long-term g rowth investments are higher risk and offer a higher potential return compared to defensive investments. They aim to give capital growth and some provide income ( e.g. dividends for shares or rent for property).     But what is the best asset allocation for your age? The rule of thumb used to be that you should subtract your age from 100 - and that's the percentage of your portfolio that you should keep in stocks. For...