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Why should we diversify our investments?

Why should we diversify our investments? I think the answer is, it really depends on us.

Just have all my money in FD (Fixed Deposits)?

Should I have money in the Fixed Deposits? Yes. How much should I put in there? Some say 6 months, some say 12 months and some say more. Just manage our expenses and I think 6 months is probably that minimum amount we should have.

Just rent since renting is cheaper

Should I own the place I stay versus renting my whole life and paying rental till the day I say bye-bye? Yes, buying seems expensive (monthly repayment versus the rental we are paying) but renting is forever. The tenant seems to be enjoying and the owner seems to be suffering but between the two, only one enjoys a potential capital appreciation if the home price increases.

Simply split the money?

Should I just split all my money into different assets and is that called investment diversification? Not really. That’s call splitting. Investing means you REALLY know the reasons why you invest and what you are really looking for. Now, let’s listen to two financial professionals on what they think about investment diversification and what it really is.

Article in One should reduce portfolio risks. MIDF Amanah Investment Bank Bhd VP and head of research Imran Yassin Md Yusof said, “We believe that diversification of assets is an essential investing strategy regardless of the situation. This is in order to limit any downside risk, as the diversified assets will average out any losses from one asset class with the profits of another performing asset class.”

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said investors must be clear about the type of assets they want to venture as each one would carry its own risk-reward profile. He said, “Therefore, it is a combination of many factors before one could really diversify into different assets. This may also include your financial goals and the liquidity requirement.” Please do read the full article here: Article in

Question is, do we want to invest?

This is a tough question because everyone wants profits but not everyone wants to invest. Investing is as interesting as watching the grass grow. That’s investment. It means that time is really needed. It also means that we understand what we are investing because all of us know that grass do grow, just that it grows slowly. However, if we believe investment is buying as much seeds as possible, dump it into the ground and tomorrow many fruit trees would start bearing fruits, then it’s proven that we are not ready for investment.

Investment is essential because inflation is eating away everything we earn today in the future. Unfortunately, savings alone is no longer enough because we need more money as we have a much longer life expectancy these days. We are fortunate that we have more time to enjoy after our retirement. We are unfortunate because now, ‘money is not enough’ term will be with us in the near future. Thus, please do invest and yes, diversify the investments. Just put all money into property investment is not enough and vice-versa for the stock market.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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