02 Mar 2021
I'm a 24 year old uni grad with a stable full-time job and a high risk appetite. Is it advisable for me to redeem my Singapore Savings Bonds and invest the sum in individual stocks/robos instead?
I'm currently holding 2 SSBs, both purchased quite early on and therefore yielding high(er than usual) interest rates:
1. $20k in SSB Nov 2015 - Currently 3.4% (3.83% in 10th year)
2. $10k in SSB Jan 2018 - Currently 1.71% (3.06% in 10th year)
Looking to diversify my investments/get potentially higher returns. I'm currently only invested in SYFE's Equity100 and REIT+, thinking of either using my SSB funds to beef up my robo portfolios or try trading (eg. tiger brokers). Thoughts?
Yes I think you should redeem your SSBs! Your returns have been decent so far, but the opportunity cost of you leaving your SSBs until the 10th year is quite high considering that it's a solid $30k.
Personally, I would probably beef up the Robo portfolio (more in Equity100) and also complement it with DIY investing into funds that are underweighted in Equity100. This includes small cap, APAC and emerging market ETFs.
Be careful not to confuse trading with investment - they are not the same thing. However, if you'd like to try your hand at trading, by all means, go ahead after doing your due diligence and make sure to try only with a small sum first to see if it's something for you.
Hope this helps & all the best!
Yeah definitely. You've laid out the considerations pretty succinctly. Some people would say, your portfolio should consist of your age in percentage of bonds. I.e., 24% of your portfolio would comprise bonds for you. Some people would say, hold (100 - your age)% of equities in your portfolios.
Ultimately these are all rules of thumb and not meant to be prescriptive. As a general guide, younger = can take on more risk. But if at 24, you have two parents depending on you, and also supporting your own nuclear family of four, with house, car, other liabilities, etc - then it's a very different scenario.
Ultimately, assess your liabilities, decide if your life situation now can afford the volatility that's commensurate with your risk appetite. (It's not just your risk appetite, it's your entire personal circumstances viewed as a whole.)
But if I were you, assuming no other liabilities, definitely yeah take everything out and invest in equities. Longer investment horizon, you can afford to take on a bit more volatility for potentially higher returns.
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