How to start investing in Malaysia

Investing is essential in achieving continuous growth and financial stability. Newbies have numerous options for investment in Malaysia. They can choose between the safer side, like unit trusts, and the riskier but potentially more profitable side, like Forex trading. Starting to invest in Malaysia with the proper knowledge and investment strategies for beginners could lay a solid foundation for financial success in the future.

Understanding investment basics

Comprehending basic investment strategies is essential in making informed financial decisions in Malaysia. In addition to unit trusts and Forex, you can choose from other options like bonds and mutual funds. You must perform enough research on the topic first or communicate with an expert to maximise your potential. By understanding the options available, you can choose the methods you feel are best for yourself and your finances.

Investing your earnings must be your priority for long-term financial success. Start making any investment with whatever money you have, as there are options with a low minimum deposit requirement. A beginner could invest in low-risk options like a unit trust to gain experience.

Types and strategies

• Stocks or equities. They represent ownership in companies. Stocks and equities offer capital gains and dividend income potential but come with higher risks.
• Bonds or fixed-income securities involve lending money to companies or governments in exchange for regular interest payments and the return of principal at maturity.
• Mutual funds and ETFs are collective investments that pool money from many investors to buy various assets, offering diversification and potentially lower risk.

You should also understand the key strategies:

• There is active and passive investing. The former involves actively buying and selling securities to outperform the market. It requires frequent trading and higher fees due to active management. Passive investing is a 'buy and hold' approach that mimics market indices, offering lower costs and risks.
• Value investing focuses on purchasing undervalued assets with strong long-term prospects. Investors like Warren Buffett have popularised this strategy.
• Growth investing targets companies with accelerating earnings or revenue growth. This strategy is often used in bull markets and involves higher-priced shares in dynamic industries.
• Income investing aims to generate a steady income stream through dividend-paying stocks, bonds, and real estate investments.
• Diversification spreads investments across different asset classes (e.g., stocks, bonds, real estate) and sectors to reduce risk and enhance portfolio resilience.
• Dollar-cost averaging (DCA) involves investing a fixed amount of money at regular intervals, regardless of market conditions, to reduce timing risks.
• Compound growth reinvests earnings to achieve exponential growth over time. Starting early and maintaining consistent contributions are key to maximising this effect.
• Goals-based investing aligns investment strategies with specific financial objectives, such as retirement savings or income generation.

Each strategy has advantages and disadvantages, and the choice depends on an investor's goals, risk tolerance, and time horizon.

Investment options in Malaysia

Many options are available to invest your money or grow your wealth; some are suitable even for beginners. Below, we'll describe the top three options for investment in Malaysia for newbies.

Forex

Many people are curious about how to trade Forex in Malaysia. Don't worry. Foreign exchange trading is a common choice for many investors worldwide. Both newbies and experienced ones use it to diversify their portfolios and profit from constantly changing currency markets.

While Forex trading does involve risks, it’s possible to learn it. It also requires a small initial amount to enter and offers quicker potential profits, making it appealing to investors.

When trading Forex, you basically exchange one currency for another to earn on currency value fluctuations. Here's a step-by-step guide on how to trade Forex:

1. Understand Forex basics. Forex is traded in pairs, such as EURUSD. The first is the base currency, and the second is the quote currency. You should also learn about long and short positions: going long means buying the base currency (when you expect its value to rise), while going short means selling it (when you anticipate it will fall).
2. Choose a trading style:
   • Scalping means quick trades to profit from small price movements.
   • Day trading is opening and closing positions within a day.
   • Swing trading is holding positions for a few days to capture larger price movements.
   • Position trading is long-term trading to profit from significant trends.
3. Open a trading account. Pick a credible and licensed broker, such as Octa, with a user-friendly interface and low trading costs. Fund your account with the required sum to start trading. At Octa, it is as low as 25 USD.
4. Learn trading strategies.
   • Technical analysis. Use charts and indicators to predict price movements.
   • Fundamental analysis. Analyse economic news and events to predict currency movements.
   • News trading. React to economic announcements and news releases.

   This may sound complicated, but learning to trade is simple with Octa. The platform offers a built-in analytical feed called Space and provides free daily trading ideas and strategies, which are easy to follow even for newbies.

5. Set stops and limits. The Stop Loss automatically closes a trade if it reaches a certain loss level. Take-profit orders close a trade when it reaches a certain profit level. Trailing Stop adjust the Stop Loss as the trade moves in your favour.
6. Monitor and adjust your strategy. Stay informed about economic events that could impact currency values.
7. Manage risk. Use leverage wisely, as it can amplify both gains and losses. If necessary, hedge positions to mitigate risk.

Forex trading involves risk, including the risk of losing money. To improve your chances of succeeding in this investment field, you must understand how Forex trading works, your available options, and how to assess the risks and rewards of various trading strategies. Octa offers numerous free educational materials like live webinars, courses and articles to help you learn to trade step-by-step.

Cryptocurrencies

Bitcoin, Ethereum, and other digital currencies are some of the most searched investments in the digital world. Many people in Malaysia have started using digital assets like Bitcoin and Ethereum due to their growing acceptance and utilisation of blockchain technology. The development of blockchain technology will lead to further growth and diversification of the crypto market, making it an essential part of the changing financial world.

You can not only buy and hold crypto but also trade it. Octa offers 30+ pairs with crypto for trading, which means you can earn not only on rising, but also on falling prices.

Unit trusts

As of March 2024, the fund management industry in Malaysia announced assets under management of RM1.04 trillion. This figure highlights the role of unit trusts in shaping Malaysia's dynamic investment market.

For beginners looking for low-risk options to invest in Malaysia, unit trusts are a good choice. Unit trusts aggregate the funds of many investors to create a diversified pool managed by experts. These lower the risks involved in investment and give you stable returns, making them a good choice.

How to start investing in Malaysia

This country offers a variety of investment opportunities with growth potential. To select a suitable investment, take into account the following factors:

Your personal objectives. Determine your purposes, whether you want to trade regularly to earn short-term profit or want long-term appreciation by holding investments for a longer period. Your decisions related to your investments will differ based on your aims.

Risk tolerance. Before making investments, it is essential to assess your risk tolerance. While higher-risk options such as Forex may offer potentially high returns, they can expose you to losses if you do not learn thoroughly.

Timeframe. You have to decide whether to invest in the short-term or long-term assets. Both have pros and cons. Choose the one that best suits your financial goals and risk tolerance. Thinking about your time horizon can help you decide whether to invest for a short term or select a longer-term option and the capital outlay required. For instance, long-term investment may require massive capital due to market whipsaws.

Diversify risk. Never put all your funds in one asset. Manage and mitigate risk in your portfolio by investing in several asset classes. It is one of the best ways to achieve a well-diversified investment portfolio.

Common mistakes

You may blow up your finances with the following mistakes:

Taking the wrong level of risk. If you want an investment with a high yield, you better understand the risk behind it. Many investors make the mistake of being over-leveraged, which raises the risk in a portfolio and can lead to massive losses if the markets take a downturn.

Failing to diversify investments. If you put all your money into one asset, you have very little chance of succeeding if that investment fails. By diversifying your portfolio across different assets, you reduce your risk in case some of your investments perform poorly.

Neglecting to review your strategy regularly. People usually make wrong investment choices because they do not check their performance regularly. Investors should continually evaluate their portfolios and adjust to align with their financial goals and risk appetite.

How to build a sustainable investment plan

To invest in the Malaysian market, be committed, patient, and disciplined to achieve sustainable growth.

To build a sustainable investment plan, consider your goals, risk tolerance, time horizon, research, and consult a financial coach. Make it a point to review your investment regularly and make changes if needed. Continuously educate yourself on sustainable investing trends and best practices to make informed decisions.

If your investment is well-researched, your unexpected peace of mind will be unlimited.

Final thoughts

• In Malaysia, investors can choose any of the top investment options available in 2025, such as unit trusts, Forex, cryptocurrencies, etc.
• When making investment decisions, it is essential to consider your investment objectives, risk appetite, and current market conditions.
• Diversification is key to managing risk and maximising returns. Thus, it is essential to know the intricacies and possible flaws of different investment vehicles.
• Looking for help from expert financial advisors can make your investment strategy even better by giving tailored insights and risk assessments.