AMBD Article Investment 101 – When, Where and What to invest in?

AMBD Article

Investment 101 – When, Where and What to invest in?

Everyone wishes to have an unlimited supply of money and wealth today and going forward, but how many of us do keep and save money for future use? We always read about those that are both actively and passively making money from investments, in the news and social media. It makes us want to jump on the bandwagon but do we really know what are we dealing with?

IMG01.pngWhen should you start to invest?

You need to learn how to save before you can start investing. Once you are well disciplined in saving your money, then a portion of the savings could be used for investment to generate more income. You should only invest your surplus cash, because investments are uncertain in nature. Even though there are some principal protected investments available, these are usually very limited and not liquid. This means that you will not be able to easily sell or exchange the investment for cash without a loss in value.

Once you have sufficient savings, including savings for emergency usage, you could also look into takaful or insurance-based products, because they provide opportunities for additional income and also provide protection.

IMG 02.pngWhere to invest?

OK, so now you have some money for emergencies and some takaful or insurance protection in place. You are now set for investments, so you may be looking for additional income from investments. How do you begin? First, you have to look for licensed financial institutions, this is the best and only way to begin your investment journey. Via licensed entities, you could invest in various types of financial instruments such as shares and funds.

IMG 03.pngWhat to invest in?


Let's begin with shares. To put it simply, investing in shares means providing capital to a company, whether it is for a start-up or for a business to expand further. When you invest in shares, you become a shareholder or owner of a company. You can typically expect returns either from dividend payments or capital gains from the share price. Dividends are paid from the company's profits while share price fluctuates based on the demand and supply of the shares.

Shares of a company could either be listed on a stock exchange or not. Company shares that are listed on a stock exchange are regulated and supervised by regulators in terms of reporting and performance. However, an investor will still need to assess all information provided by the company before making any investment decisions.

On the other hand, there are also companies that offer their shares to the public but are not listed on a stock exchange. These are non-listed public companies. Nonetheless, such companies are still required to be registered under the Companies Act.

Investing in shares need time and commitment. An investor needs to understand the company offerings before making investment decisions and they must continue to monitor the company announcements and performance as this may lead to fluctuation of price and dividend payments.

Investment Funds

Investing in a fund is the best option for those who are just about to start investing. However, please ensure that the fund is licensed or recognised by AMBD and make sure to invest via licensed entities.

An investment fund is a type of 'collective investment scheme' where your money is pooled together with other investors. The pooled money is managed by a professional investment manager, who invests the money into other assets or instruments on your behalf based on an investment strategy. The value of your investment will rise or fall with the value of those underlying assets.

Investing in funds gives you exposure to various types of financial instruments, such as shares, bonds and sukuk. Depending on the investment strategy and underlying assets, some funds provide a steady stream of income and some provide long-term return. Some funds also have a capital-protected element. Thus, you will need to understand the offering before making an investment decision.

Investment funds can be a good investment as they offer diversification and access to a broad range of assets or markets with a relatively small amount of money. It may also allow you to make regular contributions. Subject to the structure and terms of the fund, you may be able to withdraw your money or any profit received from the investment. However, most fund investment are long-term investment and not for quick returns.

IMG 04.pngIs it risky?

It is impossible to avoid all risks when you invest. Higher potential returns usually come with higher risks. The important thing is to understand the risks and then keep within a level you are comfortable with.

For example, the risks of investing in shares are:

  • A company's share prices can fall dramatically, even to zero;
  • If the company goes bust, you are the last in line to be paid, so you may not get your money back; and
  • The value of your shares will go up and down over time and the dividend payments may also vary.

IMG 05.pngIs it Halal?

Similar to your savings, return on investment could also be halal or comply with hukum syara' based on where the money is being invested. There are plenty of syariah compliant shares and funds offered locally and abroad. You can talk to your licensed financial intermediaries for more details on their compliance.

So what are you waiting for? Start saving today and start investing. As the Malay proverb says, "Sikit sikit, lama lama jadi bukit".

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In conjunction with the National Savings Day 2017, AMBD will be organizing the Financial Fun Fair, which will be held at the Jerudong Park Colonnade on Sunday, 30 April 2017 from 2pm to 10pm, featuring a host of family fun-filled financial-related programs and interactive activities; and a Financial Showcase on Saturday, 20 May 2017 from 2pm to 8pm at the Airport Mall.

For more information, members of the public can visit AMBD's website at; download AMBD App from the App Store or Google Playstore; or follow AMBD on Instagram at @autoriti_monetari.

Autoriti Monetari Brunei Darussalam