In today's well-connected world, retail investors can access a wealth of consumer guides on financial planning and money decisions - all just a click away.

These address the key concerns and questions investors may have in areas such as insurance, investment products and retirement savings.

The Investment Management Association of Singapore (Imas) has just updated its personal investing consumer guide with infographics and reader-friendly text.

Its 36-page booklet explains investment concepts like diversification and discusses the characteristics of cash, shares, bonds and unit trusts. Here are some highlights.

ASSET ALLOCATION IS KEY

Contrary to what most retail investors think, one of the most important investment decisions is not what particular stocks or securities you buy but how you allocate your investable funds to the various asset classes.

Asset allocation is the process of deciding what percentage of your investable funds should be in cash, bonds and shares. People often stick to the asset they are most familiar with and ignore the others, which means they do not diversify their financial assets sufficiently.

Imas cites studies showing that what really makes a difference to a portfolio's returns and risks is not what shares or bonds were chosen but how much was invested in each. In other words, the asset allocation decision is the main deciding factor determining a portfolio's returns and risks, and can be much more important than the selection of individual securities.

Factors to consider when allocating your assets include identifying your investment goals, time horizon, risk tolerance, suitable asset mix and the foreign exchange implications.

Diversify and don't just follow the herd

The asset mix you choose will depend on your expectations about the performance of the various assets and forex movements.

Investors in their 20s can afford more risks, so they can hold a higher percentage of stocks and smaller amounts of bonds and cash. People in their 50s may want to be cautious as they are likely to be nearing retirement. As such, they should hold the reverse - higher percentages of bonds and cash than shares.

In addition, make it a point to review your asset allocation periodically amid changing circumstances.

INVESTING IN SHARES

Historically, shares have tended to yield more robust average annual returns compared to other investments such as cash and bonds.

Imas research shows that in the period from 1995 to March 2015, the average annual return of shares in the United States was 9.31 per cent, while cash yielded 5.35 per cent and bonds 7.38 per cent. The average annual inflation was 2.9 per cent.

Shares have been "among the best hedges against inflation" and protect and enhance the real value of savings, notes Imas.

Other advantages include potentially generating high dividends as a source of income and steady long- term capital appreciation.

However, investors should note that shares are among the most volatile investments in the short term as they are influenced by many factors. So share investors must take a long-term horizon and have a risk appetite strong enough to withstand market volatility.

In addition, there is no substitute for thorough homework when picking stocks. The common ways of evaluating shares include looking at their price-earnings ratio, price- to-book ratio and dividend yield.

INVEST WITH A LONGER TIME HORIZON

Most retail investors understand that in order for an investment in global equities to generate positive returns, a long-term investment horizon is needed.

Generally, as the holding period lengthens, the chance of losing money significantly falls as the outcome of the investment is less affected by the timing of the entry or exit regarding the investment.

As such, the lesson is: invest with a longer time horizon.

But how long is long term?

Some believe three to five years is long enough for their investment to grow, but Imas says the chance of losing money over three to five years is still about 31 per cent.

Stretch the investing period to 10 years and the chance of losing money falls to 13 per cent. The findings come from an analysis of global equities in a 25-year period from January 1991 to January this year.

However, if you compare this with an earlier 25-year period from June 1984 to June 2009, you will see that the chances of losing money were lower over the same periods of three, five and 10 years. For instance, the chance of losing money was 14 per cent over five years, falling to a marginal 3 per cent if the investing period was 10 years.

Mr Albert Tse, chairman of the Imas education committee, says the past 16 years have been a very difficult period for equity investors, after strong performances by global equities from the 1970s to 2000.

"The global equity index failed to register new highs after 2000 at the previous peak of 2007 and the recent peak in mid 2015," he adds.

"In summary, global equities were still theoretically in a secular bear market since 2000 and the recent rallies (2003-2007 and 2009-2015) are deemed by many as rebounds within a secular bear.

"Because of this unique observation over the past 16 years, it is quite sad to note that unless an investor had invested within the first half of the recent two rebounds, their returns after three years or even five years would be negative."

So if an investor missed buying global equities during the first two years of the rebounds from bottom, they would need 10 years or more to stand a chance of not losing some of their investment capital.

Mr Tse stresses the importance of diversification, asset allocation and making use of dollar-cost averaging to mitigate these problems.

A regular savings programme is a good way of taking advantage of a dollar-cost averaging scheme as it allows you to invest a fixed sum of money at regular intervals, regardless of a rising or falling market.

INVESTING IN UNIT TRUSTS

A unit trust pools money from many investors which is then invested in a variety of assets in order to meet specific investment objectives. These unit trusts or funds can be actively or passively managed. For example, a passive fund invests in the component stocks of a market index and does not require specific stock selection decisions.

Unit trusts provide diversification, broaden your investment opportunities and let you tap the skills of professional fund managers.

Some retail investors are stumped by the various fees that come with unit trusts. For instance, there are fees that are one-off and go mainly to the distributors of the fund. These are paid when the units are purchased ("front-end" fees) and, sometimes, when they are sold (redemption fees). These fees are also called "loads" and can be as high as 5 per cent of your initial investment in a unit trust.

A 5 per cent load means that for every $10,000 you invest, $500 will be deducted as fees. Only the remaining $9,500 or 95 per cent of your money is invested in the fund.

In addition, there are recurrent fees. The biggest of these would be the management fee paid to the investment manager of the fund. This is usually around 1 per cent of the trust's net asset value (NAV). Others include the trustee fee, registry and valuation fees and audit fees.

Together, these fees make up what is called the total expense ratio (TER), which is usually between 1 per cent and 2.5 per cent of NAV. For your unit trust to grow in value it must first generate sufficient income or capital growth to cover the TER. So find out a fund's TER is before deciding to invest.

INVESTMENT TIPS

In the light of today's volatile market environment, here are some tips for retail investors.

Plan your portfolio: As highlighted in the Imas guide, asset allocation is probably the single most important decision you have to make.

Mr Tse says research has shown that 90 per cent of returns generally come from asset allocation.

"Asset allocation provides the big picture, the map of your investment plan. Having settled on that map, you then can go down to tactical questions - what stocks to buy, what fund manager to select, down the line," he adds.

Matching asset allocation with an investor's risk profile is an important consideration.

For low-risk investors, DBS Bank's model portfolios recommend allocating 35 per cent of your investment to fixed income, 15 per cent to equities and 50 per cent to cash assets.

Investors with higher risk tolerance could significantly increase their equities allocation.

Diversify, diversify, diversify: Diversification is the key to managing your risk. You should have a basket of investments where some will do well and some will not do so well.

Diversification can take various forms. For instance, you could diversify through asset classes, so you have a mix of equities, bonds, property and cash.

And you can diversify within asset classes.

Asset classes tend to move and react differently to the economic environment.

Stock markets or even property markets, for example, might do poorly in a recession while bonds may do well. So if you have a portfolio that is well spread across equities, property and bonds, you are better protected.

In the current volatile market, Ms Chung Shaw Bee, UOB's head of wealth management, regional and Singapore, advises investors to consider higher-quality assets.

She says: "For example, they can invest in bonds from quality companies which they are willing to lend money to, or in quality stocks from companies which they are keen to be a shareholder of."

Mr Marc Lansonneur, DBS Bank's head of investment products (Singapore), says: "Avoid concentration in single shares or bonds. In this respect, unit trusts or exchange- traded funds offer diversified exposures."

He also encourages investors to spread investments over certain time periods using regular investment schemes or savings plans to mitigate the effects of short-term volatility.

Another important consideration is managing currency risks by ensuring your investments are not overexposed to forex movements.

Steer clear of the herd: Financial experts say that greed and fear are the two most powerful emotions when investing.

When markets are going up, a lot of people tend to want to jump in so as not to miss out. However, when markets fall, everyone becomes fearful of losing even more.

Mr Tse notes that successful investors try to fight this herd instinct as they are independent thinkers. They try to act independently.

He says: "The buy low, sell high principle is probably the most important investment rule. In order to buy low, sell high, investors should buy in times of crisis or despair and then sell in times of exuberance."

And if you do not understand the investments you are making with your hard-earned money, take the wise route of getting help.