facebookCan you simply invest in one or a few low cost index funds (ie Vanguard S&P 500), putting in money every month, and hold it all the way until retirement like Warren Buffet recommends? - Seedly

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Anonymous

18 Apr 2019

βˆ™

General Investing

Can you simply invest in one or a few low cost index funds (ie Vanguard S&P 500), putting in money every month, and hold it all the way until retirement like Warren Buffet recommends?

AMA First Investment

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Nicholes Wong

Nicholes Wong

30 Jan 2019

Diploma in Business Management at Nanyang Polytechnic

Yes you can. Buy Ireland domiciled etfs such as CSPX (S&P500) to lower the withholding tax from 30% to 15%. It is also an accumulating etf where they dont pay dividends but reinvested into the fund assets.

Jonathan Chia Guangrong

Jonathan Chia Guangrong

29 Jan 2019

Cybersecurity Trainee at Bank in blue

It's possible, but not easy to do it in an automated way. For one you will need a broker that allows you to access the US market. Forget about using traditional local brokers for this as there are double fees involved. You will need to buy into the chosen etfs manually, which means doing currency conversion into usd on a monthly basis, funding your brokerage account before you can buy into the counters. This is about the process, but come to my thoughts about this strategy. 1. You will be subject to withholding taxes of 30% of all dividends received, not to mention estate taxes once your portfolio crosses $60k usd in size. 2. You may want to consider adding in a bond component (local sg bond etfs or fund) to balance it out as pure equity play will be subject to volatility in the market and there may be years of negative returns. Alternative to what I mentioned above is to make use of a robo advisory. Create a risk profile on one of the platforms available and fund the account and the platform will take care of the rest. Only thing is that you won't be able to choose the specific etfs to buy into, and you will need to trust the platform's investment philosophy. For me, I'll rather skip all this and manage an options portfolio selling bull puts for much better returns, which Warren Buffett does as well. Hope this helps

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