It’s the new year and you’ve started to take stock of your finances and realised you have quite a fair bit of cash on hand that you’d like to invest. Don’t just sink it all into new comic books, no matter how much money you think they’ll make you in future.

Instead, consider these 4 easy ways to get into investing.

1. Smaller lot sizes for stocks and bonds

Last August, the Singapore Exchange announced new trading rules. Starting from January 19th this year, the minimum lot size for stocks on the Singapore Exchange will go from 1,000 shares per lot to 100 shares. This means that more people will be encouraged to start investing in shares, since you don’t need to have over $ 50,000 on hand in order to buy just one lot in a blue-chip stock like DBS or SembCorp Industries. (You only need $ 5000, which might still be out of reach for many)

Of course, come Monday, it also means there’ll be a lot more amateur investors out there, hoping they won’t be the next stock market victim. If you’re investing for the first time, do consider what kind of investor you want to be. There are 5 different ways you can invest in stocks and bonds. Just remember, like any investment, there are risks involved. Be prepared to lose money, as long as you’re willing to learn from your bad stock market experience.

2. Exchange Traded Funds

The reason why exchange traded funds are so easy to get into is because they have a low requirement for time and cash. We’ve discussed exchange traded funds before, but in summary, it is a form of passive investing based on an index. If the index goes up, you make money, and generally, in the long-term, indexes go up.

You actually don’t need more than $ 100 a month to begin your investment journey with exchange traded funds. Because it’s a passive investment, there’s really no need to pay too much attention to the day to day fluctuations of the index. Instead, you pay a nominal fee so that a fund manager handles the investment decisions for you.

A popular exchange traded fund in Singapore is based on the Straits Times Index, by investing in a basket of Singapore blue-chip stocks like DBS, OCBC, SingTel and UOB. A tool called the Regular Savings Plan is available from DBS, OCBC or Phillip Securities to help you invest in the STI Exchange Traded Fund. Pick the best Regular Savings Plan for you to start investing.

3. Real Estate Investment Trust

Think of a Real Estate Investment Trust as a basket of properties. It’s a type of unit trust that manages and rents out various properties, whether industrial or commercial. For example a REIT like CapitaMall Trust manages commercial properties like Plaza Singapura, JCube, Junction 8 and Tampines Mall. A REIT like Sabana manages industrial properties that are compliant with Shari’ah or Islamic law.

Depending on the type of properties they manage in their portfolio, investing in some REITs are more likely to be low risk and provide recurring dividend income compared to others. But even then, you should still do the necessary research in order to make sure you’re comfortable with the investment strategy of the REIT Manager.

REITs are bought and sold in the same way shares are. Here is some more information about how REITs work.

4. CPF Investing

Complaining about CPF is a national pastime, and it will continue to happen until the day the government gives us all our money back (hint: wait long long). But in the mean time, you can use the money inside your CPF account to start investing.

To do this, you need to be above 18 years old and have more than $ 20,000 in your OA (Ordinary Account), and more than $ 40,000 in your SA (Special Account). Next, open a CPF Investment Account with DBS, OCBC or UOB. Using this Investment Account, you can channel a portion of your CPF money into unit trusts, investment-linked insurance, fixed deposits, bonds and other products.

Of course there are charges for all these transactions, but they are comparable with regular investment options. What is different is that when you sell your investments, any money you make goes back into your CPF Investment Account. NOT your wallet. On the other hand, if you lose money on your investments, you won’t need to top it up either. So, you’re essentially building up your retirement fund without affecting your current cashflow. In the meantime, learn more about how to make the most of your CPF.

How will you be investing your money in 2015? Share your investment strategies with us.

The post 4 Ways To Start Investing More in 2015 appeared first on the MoneySmart blog.

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