I have money set aside for emergency funds, and also in to STI ETF and SSB. Looking to move on to my next step of investment. Should I go for dividend stocks or growth stocks?

When deciding between dividend stocks and growth stocks, it's important to consider your risk tolerance, investment goals, and time constraints. Here are some factors to consider:

1. Risk tolerance: Dividend stocks are generally considered less risky than growth stocks. Dividend stocks tend to be from established companies with stable earnings and a history of distributing dividends. On the other hand, growth stocks often come from companies that are expected to experience significant growth but may carry more volatility and uncertainty.
2. Income generation: If you prioritize generating regular income from your investments, dividend stocks can be a good option. Dividend stocks typically pay out a portion of their earnings as dividends to shareholders, providing a steady income stream. Growth stocks, on the other hand, usually reinvest their earnings into the company for future growth rather than distributing dividends.
3. Long-term growth potential: If you have a longer time horizon and are willing to accept more volatility, growth stocks may offer greater potential for capital appreciation. These stocks are associated with companies that are expected to grow at an above-average rate, often in emerging industries or innovative sectors.
4. Time commitment: If you have limited time to monitor your investments, dividend stocks might be more suitable. Dividend payments are relatively stable and require less active monitoring compared to growth stocks, which may require more attention to track performance and stay updated on company news.
5. Diversification: Regardless of whether you choose dividend stocks or growth stocks, it's essential to maintain a diversified portfolio. Diversification helps spread risk across different asset classes and sectors, reducing the impact of individual stock performance on your overall portfolio.

Ultimately, the best approach may be a combination of both dividend stocks and growth stocks, depending on your risk tolerance and investment objectives. You could consider allocating a portion of your portfolio to dividend stocks for income generation and stability, while also allocating some funds to growth stocks for potential long-term capital appreciation.

It's crucial to conduct thorough research or seek advice from a financial advisor who can provide personalized guidance based on your specific financial situation, risk tolerance, and goals. Remember, investing involves risk, and past performance is not indicative of future results.

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The STI ETF is not a good investment compared to the SP500 (see 10 year chart of both indexes)

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Dividend suits your risk and style more.

Before you start investing, it will be best to understand your objective. Here are some questions to help you:

1. What is your capital?

2. How will you want to invest your capital? E.g. lump sum or an amount on a regular basis

3. How long will you want to stay invested? E.g. 10 years

4. What is your risk appetite? E.g. How do you feel about short-term volatility?

5. What is your objective for investing?

There is no one-size-fits-all rule to investing. As a result, we will need to understand your investment objective in order to create a portfolio that you are comfortable with.

In addition to growth or dividend play, you may wish to consider a managed portfolio where you can tap on professional independent advice from the likes of BlackRock and Mercer to provide you with a customsied portfolio that fits your risk appetite.

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