It’s never too early or too late to invest.

There are high-risk and low-risk investments. Not investing at all is the highest risk as you expose your money to being slowly eaten up by inflation. It is best to invest according to your risk preference and timeframe in order to manage the risk level that is right for you. In order to achieve this, you have to have the right asset allocation.

Asset allocation gets you into different asset classes to match your investment to your risk preference. Asset classes are major categories like stocks, bonds and cash. Some of those categories can be further broken down into geographies like the US market, developed markets and emerging markets. So if you were a “growth” profile, we would invest more into growth assets like stocks for you. If you had more immediate needs, we would try to preserve your investment by putting more of your money into bonds and cash. Allocating your money into asset classes is a much better and more efficient way to invest than buying into individual securities. See How Akru Does Asset Allocation.

Exchange-traded funds or ETFs buy the stocks in an index to track the index very closely. Indexes track markets or asset classes. We Invest in ETFs as a very low-cost method of tracking broad asset-classes and markets easily to give you returns according to your risk preference and financial goals.

We are exposed to foreign currency risks not only in investing but also in our consumption. We all buy a lot of imported food, clothes and cars and some send our children to private schools and overseas universities. Our retirement lifestyle might also include a lot of imported goods, healthcare and travel, so it’s important to plan for that. The growth from a globally diversified portfolio of leading companies will always outweigh and outperform foreign exchange movements over the long term. If this is not so, businesses wouldn’t survive and the world economy will break down! It is far more risky to have a portfolio that is concentrated in only one or a few currencies as this isn’t enough to capture global growth and innovation.

Yes, bond portfolios are usually denominated in one currency eg. the US dollar for a portfolio of US government bonds. This will carry foreign exchange risks which is why we use a higher allocation of foreign bonds for longer-term goals and generally use a higher allocation of Ringgit instruments for shorter-term and income [link] goals (goals where you pay yourself a salary).