5 ways retail investors can take charge in 2024

, Main points are to always think twice before investing, and not to let greed dictate

- David Gerald

It certainly has been a tumultuous year for investors with stock and bond markets undergoing many ups and downs, driven mainly by inflationary worries and expectations of what central banks, particularly the US Federal Reserve, would do to contain rising inflation.

Over the past three months, those worries have subsided - the 10-year US Treasury yield, the most closely watched barometer for inflation and Fed policy, started 2023 crossing 4 per cent in February, then 5 per cent in October but now looks set to end the year well below 4 per cent.

Wall Street stocks have thus undergone a massive rally since November and, going by the latest data, the Fed is expected to cut interest rates three times in 2024.

While it is tempting to conclude that this means a strong year ahead for equities and bonds, caution is required.

The Securities Investors Association (Singapore) or Sias, drawing from its 25 years as a shareholder activist group, looks at five ways in which retail players can take charge of their investments.

MAKE AN INFORMED DECISION

Always think twice or more before investing - if a deal appears too good to be true, it probably is.

It has been Sias' position that investors, when confronted with eye-catching offers that come with promised high returns, must always ask, check and confirm. In our experience, retail investors who lose money on investments always made decisions based on greed and without proper evaluation of the risks.

All too often we read of individuals falling victim to investment scams. This is not confined to only naive investors.

Often, the victims are well-educated and well-informed people. The reason is simple scammers prey on the two main emotions that underpin investing, namely fear and greed, emotions which are present in all of us.