Anonymous
About to DCA $500 monthly for investing. Would you suggest Robo-advisors or ETF for safer long term investment? Why?
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Benedict Lau
03 Sep 2020
Student Ambassador 20/21 at Seedly
Hello!
If you know which ETFs you want to DCA into and have a good understanding of them, you can set up a TDA account to do so. Since they have $0 comms you can do so comfortably without worrying about incurring costs. If you do not know what ETFs to invest in, I would recommend SA instead. They will handle the portfolio for you. All you have to do is transfer money in on a monthly basis. Hope this helps!
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I’m using robo-advisors as I don’t really know which ETF to invest etc + I have low commitment and they will invest according to your risk index ;)
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Given the $500 monthly investment size proposed, perhaps you could consider Robos to start and once you have sufficient scale, you can then reconsider doing the switch to ETFs if you are looking to minimize cost.
Alternatively, if liquidity is not a big concern for you, you could consider topping up your CPF/SRS for the immediate income tax savings and channel the CPF/SRS funds into a Robo.
If you decide to go for ETFs, the below article is very prescriptive for Singapore investors, as it takes into account ETFs expense ratios, bid-ask spreads, market depth and dividend withholding tax implications.
https://theinvestquest.com/ultimate-stock-etf-l...
If you decide to go for Robos, this article provides a framework to think about which factors are important in choosing a Robo-advisor locally.
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I would suggest DCA Robo advisor as your key word is "safer long term". They are more Diversified a...
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It depends what you are looking for.
I personally like robos because its a truly hands off experience. For those with little capital, the time needed to think about rebalancing your portfolio (even with a passive approach) imo simply isn't worth it. Its much better to spend that time thinking about increasing your income (side hustles like teaching private tuition or advancing your career) ETFs are more cost efficient, but idm paying that little bit of money to outsource my stresses on investing.
Basically, its ultimately up to u xD