Stocks

The thing about stocks is that the risk factor is a lot higher and the fluctuation rate is a lot higher too. However, higher risks means higher returns and you should only buy stocks if you have a strong heart and are willing to ride the waves of volatility.

In my opinion, if you're a first time investor and are afraid of risks but still want to try buying at least a stock counter, try buying blue chips first. This is because they are pretty steady and tend to fluctuate slightly lesser. However, blue chips can be rather expensive. They do sometimes pay a decent amount of dividends too. Unlike most unit trusts, the dividend rate is higher and more regular. Plus not all unit trusts pay dividends at all compared with stocks.

Buying stocks means to focus on only one company in a single country. Unit trusts on the other hand, tend to focus on many stocks from either one or several industries in one or several countries. The risk spread is therefore different. There is no hard and fast rule on which option is the best. I would therefore say that it would be good to have a good mix of stocks and unit trusts in your portfolio.