Set up your monthly investing and write three rules for what you will do when prices fall.
Your long-term plan needs two things written down. The first is regular investing that is already set up, with an amount, a date and a method. The second is three rules: one for checking, one for market falls and one for reviews. The rules are instructions for your future self, the one who may open the broker app during a crash and want to sell everything. The exercise takes about 30 minutes.
Nadia is the worked example. She is a first-time investor in Singapore. She owns her first ETF, has a broker, chose her fund for written reasons and keeps a contract note in a folder. Her fund is called Fund X here, which is a placeholder name and not a real product. She doesn't yet have a plan for the next twenty years, and she has no instructions for herself if markets crash. Her dates and figures are made up, so adapt them to your own pay, budget and broker.
Start by writing down three things. The amount comes from the goal page you made in lesson 2.4, "Write down what this money is for and when". Use the tested figure, the one that still held up in a heavy month.
The date should fall just after payday, so the money is invested before it can be spent. A day or two after your salary lands works well.
The method is the one you chose in lesson 7.2, "Regular savings plans: how they work and what you own". It is either a regular savings plan or your own orders through your broker. If you place your own orders, you also need to decide how often to buy. You can buy monthly, or less often if your broker's minimum fee makes that cheaper.
Then set it up. For a regular savings plan, complete the application and check the date of the first deduction. For your own orders, set up a standing transfer from your salary account into the account your broker debits. Then add a repeating calendar reminder for each purchase date.
Nadia is paid on the 25th. On the 26th, a standing instruction moves S$500 a month into her linked bank account. She buys four times a year. On the first trading day after the 26th in January, April, July and October, she places a limit order for Fund X and invests about S$1,500 each time, which is three months of S$500. She has set up the standing transfer and four calendar reminders that repeat every year.
Choose how often you will check. It should be a frequency you can stick to, and low enough that you stop reacting to daily noise. Lesson 7.4, "First-timer mistakes that cost Singapore investors money", explains what checking too often leads to. Once a month is a sensible default. Tie it to a date you will remember.
Write this rule, and the other two, as an action you will take. You can then tell later whether you kept it. Nadia checks her account once a month on the 26th, when the transfer goes through. She doesn't check on other days and keeps no price alerts on Fund X.
The rule for a fall is the most important of the three, and it's the one you will be most tempted to break. Base it on your numbers from lesson 7.3, "What a market fall looks like in your own account". The rule should say three things: what you will keep doing, what you will not do, and what you will do instead if the urge to act gets strong. A good rule for a fall closes the exits before you need them.
Nadia knows she tends to stop investing when things look frightening, so her rule covers that. When Fund X falls, she keeps the standing transfer and the quarterly orders exactly as planned, and she doesn't sell. If her balance is down by more than S$10,000, she first rereads her goal page and her two-sentence fund reason. Then she waits two weeks before making any change.
The waiting period is deliberate, because most panicked decisions do not survive a fortnight. What you do instead can be rereading your own documents, a waiting period, or both, as in Nadia's rule.
A review is a step back to check whether the whole plan still fits your life. It asks three questions. Does the amount still fit your budget? Has your goal changed? Does the fund still meet your must-haves? A review involves no buying or selling. It only checks that the plan still fits your life. Once a year is usually enough, plus whenever something big changes.
Your review rule can also say that a market fall cannot trigger a review. This stops a panic from being relabelled as a review.
Nadia reviews every January, using her goal page and her investing log. She also reviews if she changes jobs, gets married, buys a flat or has a child. A review can change her monthly amount or her goal. Under her rule, a market fall cannot trigger one.
Put the plan and the three rules on a single page that you can read in about a minute. Keep it where you can find it in a hurry. That could be printed and pinned up at home, or a note on your phone next to your goal page.
A finished page has the amount, date and method, all already set up. Below them are the three rules for checking, falls and reviews. Each rule should be specific enough that you could look back in a year and say whether you kept it. Nadia's page has five lines of plan and three rules. At the bottom, she added a note to herself: she wrote it while calm, and she should trust that calm version of herself.
This page completes your project file, which now holds: the plan page the goal page the broker sheet the fund shortlist the first contract note
Set up your monthly plan now, then write your three rules on a page you'll be able to find when markets fall.
Set up your monthly plan, then write your three rules on one page you can reread when markets fall.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).