[Investing for Beginners] Overcome investophobia with these 5 tips

Investing with your own money for the first time is nerve-wrecking — what if the market goes down? When do you stay on-course and when do you cut your losses? What if you end up losing money?

News flash: these fears are normal. Even the most seasoned investors were once just as anxious as you are now.

The five principles below will get you started on the trade:

1. Define your goals (short, medium or long)

Investment should not be an aimless game for bigger numbers but a tool to get what you want in life. Know your objectives well, so you can plan your investment strategy accordingly. How much you invest and the risk you are willing to take should fit your goals, not the other way round.

This is called your "time-horizon" and it's probably one of the most important factors when deciding what to invest in.

First, an example of a short term goal: a travel trip or a new phone within a year. The riskier way to go about is short-term or day trading in the stock market; the safer way is a fixed term deposit with a high interest rate or a money market fund.

The mid and long term goals are the life-changing ones — your first home’s down payment, emigration plan, children’s college fund, etc. These require — and deserve — more time and thoughts in planning. Putting your life goals on hold is no good so make sure you're building a diversified portfolio and investing regularly to mitigate your own risk.

One more thing: review often how achievable your goal is. Chasing unrealistic riches like a conquistador looking for El Dorado will get you nowhere.

2. Watch your daily balance

You end up with what you have not spent. The less expensive your lifestyle is, the more you have to add to your investment fund every month.

Today onwards, try to record your daily expenses to understand your spending behaviour. You may find that the daily $30 coffee for the past year could have been one lot of China Construction Bank (00939) shares in your portfolio. Of course, living a life you don't enjoy wouldn't be healthy or sustainable either, so don’t go overboard with cutting costs and pruning your lifestyle.

3. Always be learning

Many beginners hesitate in fear of failure, missing chances upon chances; others enter the market without a proper strategy or mentality and overreact to irrelevant market fluctuations. Investing is not rocket science, but it’s not child’s play either. Start reading financial news and books, and get familiar with common jargons like “blue chip stocks”, “utility stocks”, “index fund”, “price-to-earning ratio”, etc. Analyses and commentaries are also a great resource to gain a deeper understanding on the movements of markets and individual stocks.

With knowledge comes the ability to identify right investment decisions and the confidence to make them.

4. Keep calm

Unless you are an AI investment bot, be prepared for moments of impulse, waver and doubt.. especially when the market appears to be going down!

In case you are looking for an AI investment bot...

Robo-advisors can take the thinking out of investing - compare them now

Your rationality must prevail. A part of you will want unrealistic gains but it's important to be realistic and think about your goals first. As long as you have a diversified portfolio and are taking your goal's time horizon into account, you'll be fine!

5. Prepare for rainy days

Not everything goes according to plan. Unanticipated unemployment and medical expenses will cost you. Without an emergency fund, you may need to prematurely cash out on the investment you have made, taking a toll on your lifestyle and the grander plan for the future. It is highly recommended to reserve at least six months’ worth of living expenses in cash, and top it off with accident, medical and other insurances as you see fit. Remember to always keep a card up your sleeve as you can't be sure what the future holds.

Ready to start investing?

HK Market

US Market

Robo Advisors

Webull

Other Fee

N/A

Avg. Trade Cost

HKD 10

Welcome Offer: During the promotion period, new customers who apply via Planto, successfully open a Webull account, and complete some simple tasks can enjoy rewards valued up to HK$1,000: - Successfully open an account, deposit HK$10,000, and retain it for 60 days to receive a HK$1,000 supermarket voucher. (Complete Planto reward redemption to receive the offer) Terms and conditions apply.

Pros & Cons

Basic Info

Transaction Fees: No commissions - just a HKD 10 platform fee per trade. For a HKD 10,000 trade, that’s: HKD 10 per transaction
Products Available: Hong Kong and US stocks, A shares, ETFs, warrants, IPOs and odd lot shares
Real-time market information: Free real-time quotes for Hong Kong stocks (BMP quotes) and quotes from major global exchanges
Margin Trading: Unavailable
License: Licensed with the Securities and Futures Commission of Hong Kong (CE No. BNG700) for carrying out type 1 regulated activity (“dealing in securities”).

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Webull

Other Fee

N/A

Avg. Trade Cost

HKD 0

Pros & Cons

Basic Info

Transaction Fees: No commissions - just a HKD 10 platform fee per trade. For a HKD 10,000 trade, that’s: HKD 10 per transaction
Products Available: Hong Kong and US stocks, A shares, ETFs, warrants, IPOs and odd lot shares
Real-time market information: Free real-time quotes for Hong Kong stocks (BMP quotes) and quotes from major global exchanges
Margin Trading: Unavailable
License: Licensed with the Securities and Futures Commission of Hong Kong (CE No. BNG700) for carrying out type 1 regulated activity (“dealing in securities”).

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Tiger Brokers

Other Fee

Avg. Trade Cost

HKD 0

Welcome Offer: Successfully open an account through Planto’s exclusive link then complete certain tasks from March 15th to May 31st 2024 to enjoy up to HK$1,400 worth of reward: Exclusive HK$400 supermarket vouchers from Planto, plus: 1. Time-limited Commission-Free Rewards* - 0 Commission for HK stock trading (Lifetime) - 0 Platform fee for HK stock trading (until 30th June 2024) - 3-month free HK Stock Lv1 streaming quotes (until 30th June 2024) - NYSE Arca Level 2 Deep Quote streaming for US stocks (until 30th June 2024) - 0 Commission for US stock option trading (until 30th June 2024) - US Stock Option Lv1 Real-time Quotes (until 30th June 2024) 2. Open an account and maintain a accumulated net funding of at least HK$10,000 within 45 days, to enjoy HK$300 stock voucher (3x HK$100 vouchers) 3. Complete 5 non-forex trades with each trade amounting to or exceeding HK$100 within 60 days after successful account opening (applicable to both Hong Kong and US stocks), to enjoy HK$500 stock voucher (5x HK$100 vouchers) 4. Complete the first option trading to enjoy HK$200 stock voucher (2x HK$100 vouchers). Please note that the award received after successfully opening a Tiger account must be activated after maintaining daily cumulative net deposits equivalent to or exceeding HK$10,000 for 45 consecutive days starting from the account opening date.【45 days】refers to the day of account opening as the first day, followed by a complete 45 days, calculated as a total duration of 45 days * 24 hours. Daily cumulative net deposits = (from the account opening date) cumulative deposit amount - (from the account opening date) cumulative withdrawal amount, excluding asset fluctuations caused by normal trading activities.

Terms and conditions apply.

LONGBRIDGE

Other Fee

N/A

Avg. Trade Cost

HKD 15

Welcome Offer: On or before 30 April 2024, apply via Planto, successfully open an account and transfer net asset worth HK$1,000,000, retain for 90 days and execute 60 transactions, to receive an iPhone 15 Pro Max 512G; you are still eligible if you open an account before 21 February but have not yet transferred the assets. Deposit HK$10,000, you can receive up to HK$1,600 worth of rewards: Planto exclusive HK$200 supermarket coupon Total worth of HK$600 cash coupons (retain assets for 60 days) Total worth of HK$800 cash coupons (retain assets for 60 days and execute 10 transactions) HK Lv1 live stocks quote upon successful registration Life-time free commission on US and Hong Kong stocks upon successful registration Selected money market funds of up to 5.66% 7-day annualised rate of return upon successful registration 0 handling fee for Hong Kong IPO NASDAQ basic quotes Terms and conditions

Pros & Cons

Basic Info

Transaction Fee: For HK stocks, commissions of 0.03% per trade (min HK$3), and platform fees of HK$15 per trade (0 commission during promotion period) For a HKD 10,000 trade, that's: HKD 15 per transaction (excl. mandatory costs by the HK Exchange, etc.).
Product available: HK and US stocks and ETFs
Margin trading: Annual interest rate of 6.5%
License: Licensed by the SFC (Type 1, 4, 9)

LONGBRIDGE

Other Fee

N/A

Avg. Trade Cost

HKD 8

Pros & Cons

Basic Info

Transaction Fee: For US stocks, commissions of US$0.0049 per share (min. US$0.99), and platform fees of US$0.005 per share (min. US$1) - 0 commission during promotion period. For a US$1,000 trade with 5 shares, that's about: US$2 (excl. mandatory costs by the SEC, etc.).
Product available: HK and US stocks and ETFs
Margin trading: Annual interest rate of 4.8%
License: Licensed by the SFC (Type 1, 4, 9)

Futubull

Other Fee

N/A

Avg. Trade Cost

HKD 15

Welcome Offer: Enjoy up to HK$1,900 from April welcome offer Register a new account through Planto and receive an exclusive HKD 200 cash coupon (directly deposited into Futu account) Open an account, deposit HK$10,000, and complete specific requirements can get 1 out of 2 rewards: First level gift (1 out of 2): - Deposit a total of HK$10,000 or above into the Futu HK account.Maintain 60 days daily average asset* of HK$10,000 or above. 1) Alibaba (NYSE:BABA) - 1 share or 2) HK$400 e-supermarket gift certificate Second level gift:： - Deposit a total of HK$80,000 or above into the Futu HK account by 15:00 29th February 2024. Maintain 60 days daily average asset* of HK$80,000 or above. Google (NASDAQ: GOOGL) – 1 share The first reward and the second reward can be stacked. As of the closing price on December 19, 2023, Alibaba (NYSE:BABA) stock price was US$74.390/share. As of the closing price on December 18, 2023, Google (NASDAQ: GOOGL) stock price was US$137.19/share. Asset calculation method: Sum of the everyday assets/60 days; Including Cash/ Stocks/ Funds/ Options/ Futures Investment involves risks. The fund price may move up or down. Investor should thoroughly study the funds' offering documents and other related documents (including risk disclosure statements).

Terms and conditions apply

Pros & Cons

Basic Info

Transaction Fees: For HK stocks, there are no commissions - just HKD 15 / trade as a platform fee. For a HKD 10,000 trade, that's: HKD 15 per transaction (excl. mandatory costs by the HK Exchange, etc.). Tiered pricing also available for people with larger number of trades (min. HKD 1 / trade)
Futu will provide users with free LV1 real-time streaming quotation services (including Hong Kong stocks, options, and futures)
Products Available: HK, US and China stocks and ETFs. Selected funds available via Futu MoneyPlus.
Margin Trading: Annual interest rate as low as 3.98% (for advanced investors)
License: Registered member of the HKEX and licensed by the SFC (Type 1, 2, 4, 5, 7, 9)

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Futubull

Other Fee

N/A

Avg. Trade Cost

HKD 15.5

Terms and conditions apply

Pros & Cons

Basic Info

Transaction Fees: For US stocks, commissions of US$0.0049 per share (min. US$0.99), and platform fees of US$0.005 per share (min. US$1). For a US$1,000 trade with 5 shares, that's about: US$2 (excl. mandatory costs by the SEC, etc.). Tiered pricing also available for people with larger number of trades
Products Available: HK, US and China stocks and ETFs. Selected funds available via Futu MoneyPlus.
Margin Trading: Annual interest rate as low as 3.98% (for advanced investors)
License: Registered member of the HKEX and licensed by the SFC (Type 1, 2, 4, 5, 7, 9)

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Saxo Hong Kong

Other Fee

N/A

Avg. Trade Cost

0.05%

(min. HKD 18)

Welcome Offer: Enjoy up to 4.27%* on cash deposits amount US$10,000 or higher *the interest rate figure is for reference, it could change with the market condition

Pros & Cons

Basic Info

Transaction Fees: For HK stocks, there is a 0.05% commission, with a minimum fee per trade of HKD$ 18. However there is no other trade or platform fee involved. For a HKD$ 10,000 trade, that’s HKD$ 18 per transaction as HKD$ 18 minimum is higher than HKD$ 10,000 * 0.05% (excl. mandatory costs by the HK Exchange, etc.)
Custodian Fee: No custodian fee will be applied to Hong Kong client owning Hong Kong stocks
Products Available: 40,000+ investment instruments including stocks, ETFs, bonds, mutual funds etc. across 37 global exchanges such as Hong Kong, U.S., U.K., Japan, Singapore and many more
Margin Trading: From Hibor+1.62%
License: Licensed by the SFC (Type 1, 2, 3)

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Saxo Hong Kong

Other Fee

N/A

Avg. Trade Cost

From HKD 0.039 / share

(min. from HKD 23)

Welcome Offer: Enjoy up to 4.27%* on cash deposits amount US$10,000 or higher *the interest rate figure is for reference, it could change with the market condition

Pros & Cons

Basic Info

Transaction Fees: For US stocks, there is a USD$ 0.005 - 0.008/share fee, with a minimum fee per trade of USD$3 (depending on your Saxo account tier). However there is no other trade or platform fee involved. Charge is based on the number of US stocks you buy, regardless of how much they were bought for. (excl. mandatory costs by US stock exchanges, etc.)
Custodian Fees: There is no custodian fee
Products Available: 40,000+ investment instruments including stocks, ETFs, bonds, mutual funds etc. across 37 global exchanges such as Hong Kong, U.S., U.K., Japan, Singapore and many more
Margin Trading: From Libor +1.5%
License: Licensed by the SFC (Type 1, 2, 3)

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uSMART Securities

Other Fee

N/A

Avg. Trade Cost

HKD 8

Welcome Offer: April special offer, Open an account with uSmart to earn: • 2024 promotion : US$1.5 transaction fee per trade for US stock, 0 commission and platform fee for HK stock • Real-time streaming quotation for HK stocks (Terms and conditions apply)• Lifetime free U.S. stock commission (only for standard accounts) • HK$20 cash coupons X8 #For HK stocks, you can enjoy 0 commission and platform fee by trading the designated 16 ETF. For US stocks, you can enjoy US$1.5 transaction fee per trade when the value of each trading of main board stocks equals or higher than US$100.

* Terms and conditions

Pros & Cons

Basic Info

Transaction Fees: 0% commission rate per US stock transaction for Standard Account users only, with a fixed US$0.005 platform fee per share
Investment product available:: HK, US and China stocks, ETFs and warrants. Selected funds available via Smart Fund platform.
Investment service available:: Discretionary Investment Management Account, Professional Investment Advisory
Margin Trading: 2.98% margin rate
License: Licensed by the SFC (Type 1, 4, 9)

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Interactive Brokers

Other Fee

N/A

Avg. Trade Cost

0.05% of Trade Value

Welcome Offer: Earn up to 4.83% annual interest rate on positive settled cash balance for accounts with total NAV of US$100,000 or higher. *Accounts with NAV of less than US$100,000 receive interest at rates proportional to the size of the account **Interest rate if for reference only, it may change any time according to market condition

Interactive Brokers

Other Fee

N/A

Avg. Trade Cost

US$0.005 / share

(min. from US$0.35)

Pros & Cons

Basic Info

Transaction Fees: For US stocks, commission fee of US$0.005 / share to US$0.0005 / share
Product available: Stocks, options, futures, currencies, bonds from 150 exchanges in 34 regions including the U.S., Canada, Mexico, Israel, Germany, Netherlands, Japan, Hong Kong, Taiwan, Singapore and India
Margin Trading: as Low as 5.3%
Hong Kong SFC license: SFC license Type 1,2,3