Although inflation in Malaysia remains stable, having a robust investment plan is crucial. By investing, you can accrue enough wealth to help you survive during uncertain times. Furthermore, reaching future goals that cost money will be easier for you. However, as a beginner, you may need suggestions for what kind of investments to make to gain profit. So, here are some investment ideas worth trying.
1. Start with a retirement account
To start a retirement account, consider becoming a member of the Employee Provident Funds (EPF), such as the KWSP. This investment avenue provides a compelling opportunity for new investors, offering tax-free savings and the advantage of compounding interest, which can significantly grow your funds over the long term. Most importantly, you don’t have to be formally employed to benefit from EPF; even informal workers and homemakers can proactively contribute, with a minimal monthly commitment starting at just RM10. This inclusivity makes it an accessible and attractive option for individuals from various walks of life, fostering a savings culture and financial security for the future.
2. Invest in unit trust funds
Another best investment alternative for beginners is unit trust funds, which closely resemble mutual funds. With this instrument, you can diversify your financial portfolio under professional management to lower the risk. However, unlike mutual funds, you will receive the profits directly. Some popular unit trust funds in Malaysia you can consider include the Public Mutual Funds* or the CIMB Islamic Equity Funds.*
In addition to considering unit trust funds as an investment alternative for beginners, it’s important to note that these funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. This pooling of resources allows individual investors, especially beginners, to access a professionally managed and diversified investment portfolio, mitigating risks associated with putting all funds into a single investment.
Furthermore, while unit trust funds closely resemble mutual funds, a key distinction is that, with unit trust funds, investors receive profits directly. This direct distribution of profits can offer more immediate financial gains for investors.
3. Consider dividend-paying stocks
Stock investment is gaining traction lately, especially since it generally promises a higher rate of return with dividends, a portion of the company’s profits shared with shareholders. By investing in companies that pay out dividends, you can enjoy a regular source of income and potential long-term growth. If you’re new to investing, try finding dividend-paying blue-chip stocks, such as Maybank and Tenaga Nasional.
4. Invest in real estate through Real Estate Investment Trusts (REITs)
REITs allow you to accrue wealth from real estate investments without purchasing a building, making them ideal for fledgling investors. Here, you can buy a pool of shares from commercial and residential buildings.
It is one of the best investment ideas because it allows you to earn passive income through diversification. If you want to start investing in one, the Axis and the Al-Salam REIT are two of the most popular REITs worth trying.
5. Start a small business or invest in one
Did you know that running a small business is also a form of investment? The main question you should ask yourself is ‘What should I invest in?’. Aside from enjoying personal fulfilment from doing what you’re passionate about, you can reap potential high returns from the profits.
Aside from starting a business, you can support local entrepreneurs by investing in their companies. Should you wish to try this strategy, consider investing in e-commerce or the F&B business because people always need them to survive.
Moreover, for those inclined to support local entrepreneurs, there is an opportunity to invest in existing businesses. This strategy involves providing financial support to companies that show promise and align with your investment goals. Particularly, sectors such as e-commerce and the food and beverage (F&B) industry are highlighted as promising areas for investment. These sectors often maintain a consistent demand, contributing to the potential success of the businesses within them.
6. Invest in SME digital financing
Since business owners want simpler and quicker loans, you will not experience a shortage of applicants to fund if you become an investor in small and medium enterprises (SME) digital financing platforms. Therefore, you will enjoy higher returns with a lower minimum investment. One of the most recommended platforms you can consider is Funding Societies because you can start investing in various businesses with as little as RM100 for up to 2 years.
7. Consider investing in gold or silver
Precious metals, such as gold and silver, are the best investment instruments for long-term investors. They are an excellent choice for hedging against inflation since the value steadily increases yearly.
Even more practical is that they’re highly liquid, meaning you can convert them to cash at any time. To invest in silver or gold, you can purchase a physical piece or invest in Malaysian gold-backed funds, such as the Public Gold Precious Metals Fund.
A long-term investment plan is essential for your financial health, even amidst the stabilising inflation rate. There is no better time to start investing than now because the compounding rates you receive will be higher in the next few years.
If you are a beginner, the best investment ideas mentioned above are an excellent starting point. Before investing in anything, you should always research and seek advice from certified financial advisors. Once you start, remember that slow and steady wins the race. Good luck with building your portfolio!
