If you’re serious about saving while teaching in Asia, you’ll need to ditch the low-interest bank savings accounts and embrace alternative investment options. If that sounds scary, there is a stress-free way to do it. We explain unit cost averaging and how Infinity can help you make the right investment decisions.
Investing for a better return
If you’re teaching in Asia, the low cost of living in certain countries should leave you with relatively high disposable income. It’s the perfect time to get into a savings habit.
And if you really want to make the most of this golden opportunity and get your money working as hard as it possibly can, you need to look beyond the banks for a higher return.
That means dipping a toe into the wonderful world of stock market investments.
Before you run a mile thinking that is far too grown-up a prospect, read on to find out why and how you can invest in the stock market while managing risk.
Keeping up with inflation
Inflation has surged globally in recent times although it has not been as strong in Asia as in other parts of the world. Nevertheless, savers need to be wary of this silent thief at all times.
If your savings are earning a lower rate of interest than the rate of inflation, your money is losing value in real terms. Over many years, the erosion can be severe.
Balancing risk and reward
Of course, it’s not just about keeping pace with inflation. The aim of the game when investing is to maximise reward, but this has to be balanced against risk. The more risk you take, the bigger the rewards. However, not all of us are risk takers and one of the basic rules of investing is to invest within your personal risk parameters.
Here at Infinity, we take that very seriously and we get to know our clients inside out before advising them on the level of risk they should take with their investments. The good news is that there are investments for all levels of risk.
You may want to step outside your comfort zone a little though. If you’re young, with 40 years ahead of you, you can afford to take a lot more risk than a 50-something who will retire within a decade. Our experts can help you make informed decisions about risk.
How do I time the markets?
If you don’t have any experience of investing, you may imagine that you have to work hard to keep up with what the markets are doing in order to make decisions about when to buy and sell your stocks. You absolutely don’t!
In actual fact, unless you are extremely knowledgeable and blessed with exceptional luck, timing the markets is just about the worst thing you can do when building a portfolio.
Market timing involves trying to predict the highs and lows of stock prices to buy low and sell high. However, accurately forecasting these fluctuations is incredibly challenging, even for seasoned professionals. Inexperienced investors may fall into the trap of emotional decision-making, buying when the market is high out of fear of missing out and selling when it’s low due to panic. This behaviour often results in buying high and selling low, the exact opposite of what leads to successful investing.
So, if timing the markets is a bad idea, how do you invest?
The best way to invest
Unit-cost averaging is a long-term investment strategy that allows for steady and disciplined wealth accumulation, without the stress and uncertainty of trying to time the markets.
Also known as dollar-cost averaging, this is a straightforward way to invest that’s particularly suitable for inexperienced investors. Rather than trying to predict the erratic ups and downs of the market, you invest a fixed amount of money at regular intervals, let’s say monthly, regardless of market conditions.
By consistently investing over time, you’ll buy more shares when prices are low and fewer when they’re high, potentially reducing the impact of market volatility on your overall investment.
Maximise return and set yourself up for the long-term with Infinity
If you’re ready to commit to saving for your long-term financial security and you want to maximise your return while teaching and traveling in Asia, talk to us!
We’ll answer any questions you have about unit cost averaging, help you ascertain your tolerance to risk, and advise on the best products for you to build wealth by investing regularly in a diversified portfolio of funds.
Our experienced team has specialist knowledge and a wealth of experience working with expatriate teachers just like you.
Contact us for a chat today!
A leading provider of expat financial services and wealth management services across Asia.
