Hi! I'm 38 this yr & my investment goal is to reach at least 250k by age 55 for my retirement. I've got 6.5k into Syfe's Equity100 & I intend to DCA $600/mth into it. Is my plan sound? Any advice?

I prefer to influence things that I can be be in control of and have certainty in. So if I'm you, with a 17 years horizon, I'll frontload more into my Syfe's portfolio especially if I have more liquidity now.

In case you're wondering, the difference between meeting your intended incremental of $250k is an additional $215 per month BUT have to be done throughout the next 17 years.

I also took your conservative 4% mark as the RoR with anything more being a bonus in terms of quantum or time taken to achieve the goal :)

Pictorial difference here - https://drive.google.com/file/d/1E1-GudoYYLTndB...

I am not too sure which calculator you used but to reach 250K, you would need more than 6.8-7% per annum.

Starting with SGD 6.5K and contributing SGD 7.2K (SGD 600/mth) with a compound annualised return of 7% over 17 years (55 - 38) at the end of each year will only return SGD 242,581.86.

So if we are speaking in absolutes, you will never reach your goal.

Now on to the next question which is whether Syfe100 would hit an average of 7%.

1. While it states that its annual average return is 14.1% over the past 10 years, it isnt clear whether it has accounted for annual fees of 0.4%, if it hasnt then you should expect 13.7%.

2. It uses a smart beta strategy and does not seem like it is benchmarked to any established index and since they only post that they have achieved an annual return of 14.1%, I will take it with a grain of salt and assume that is the best case scenario.

3. Take note that they only backtested it based on 15 years of data. Based on how experienced you are it might be a good or bad thing.

4. There is no information on what is the highest expected loss per year vs highest expected gain per year and the volatily that the fund experiences. But based on the white paper they published it seems like their active rebalancing has helped to smooth out the bumps.

As for your final question on 4-5%, stick with CPF. No need to assume additional risk if you have reached your earlier goal.

In summary, if you only achieve 7% annualised returns based on your initial invested capital of 6.5K, you would never reach 250K. Based on the backtested data and white paper, if the same bear scenarios which occured in the past 15 years did occur again, there is some degree of confidence this fund would perform ok.

However as it did not account for the tech bubble burst in 2000, asian financial crisis in mid 1990s, cold war in 1960s, depression era in early 1930s or a higher interest rate environment basically the whole 1900s until 2007, it is hard to say whether their strategy would work in such scenarios if it did occur again.

Stick with CPF.

Calculator used: http://www.moneychimp.com/calculator/compound_i...​​​

There are a few ways to plan for this.

(1) Achieve a higher level of return with a more aggressive portfolio, and once it hits your target, sell all of it and put it into more defensive 1. This will give almost 100% probability of hitting your goal. (full equities with some diversification and not selling them for a period of time).

(2) Taking modest risk but may fall short of hitting your goal. If you choose to use this route, you will need to buffer for additional monies that require you to top up.

(3) Taking a very low risk (gauranteed yield), like CPF SA (less liquidity, but at 55, things start to get interesting) or ladder endowments policies/bonds (for more liquidity, as they are definitely not locked), to achieve a 3.7% to 4.6% but almost falling short unless bond yields increase.

No matter what you choose, a defensive yield will be required, and some lock-in of your monies is always needed. (even for full equities, you wouldn't sell at a lost unless really no choice).

How much do you invest per month ?