Tips on choosing your investment

QUESTION
I am afraid to invest now, as the market may fall further and I make a loss. What is your advice?

REPLY
When the market falls, you do not really make a loss, if you are a long term investor. The market will recover within a few weeks or months. You never know when the market will turn around, and if it does, you will miss the opportunity.

It is better to invest when the market is low, as you will get a better return.

QUESTION
Is it better to take a guaranteed return, even if it is lower?

REPLY
If you want a guaranteed return, you will get 2% from a bank deposit or 3% from government bonds. Your return is locked up for the duration of the deposit or bond. If you wish to sell the bond prematurely, when interest rate increases, you will have to take a capital loss.

For a long term investor, it is better to invest in equities (which gives a higher return), and choose the right time to realise your investments.