I’m thinking of starting to invest $1.5k in STI ETF and $500 in S&P next month onwards using DCA. Is it wise considering that it’s bearish for STI ETF and yet all time high for S&P ?

Jacky Yap

07 Jun 2019

Hello there, a lot of people will tell you to start reading up etc. that's a given. :)

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Let me share with you my personal experience, but this is by no means a formula or financial advise (im not affiliated with any financial institutions too).

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When i started to decide what to invest in, i first decided what is my risk profile.

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As an impatient guy, my risk profile is quite high, hence i dabbled into US stocks. US tech stocks have been going up so i was lucky to catch some part of it since i started a year ago. US stocks is probably one of the investment product with the highest risk (daily fluctuation of 1-5%).

Understand that my investing journey will be 10-20 years, so i am more focused on building my capital now (because no money) - hence US stocks fits me best because it can provide a decent capital gain in a short period of time (can go both ways), and i can stomach the risk. Other products like ETFs, REITS etc, you can only see the return in 5-10years for the compounding interest to kick in.

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After putting in some money into the US stock market, i realize that i need to balance out my portfolio with lower risk investment products, hence i looked into funding society for p2p lending, and then a little bit in SG REITs to build my long team dividend portfolio. These are done using the capital gain from my US stocks, diverted into my smalll dividend porfolio (ie REITs).

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So to sum up:

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my first 2 years of investing:

• US tech stocks for capital gain (super high risk)
• balance risk of US tech stocks with p2p lending (medium risk)

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my hypothetical 2-5th year of investing (not there yet this is my 1st year only)

• capital gain from tech stock slowly converted to SG Reits for future dividend portfolio (medium to low risk)

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my hypothetical 5th - 10 year of investing

• slowly build up dividend portfolio and waiting for dividend to compound the returns (medium to low risk)
• CPF should have some money (low risk)

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And the constant thing from start of investing:

1) Read up, follow financial bloggers

2) Save money

3) Reduce expenses (sometimes it is harder to think of how to make extra S$200 a month, than to cut down on S$200 a month in expenses, both resulting in +S$200 in wealth)

4) optimize on credit card rewards

5) be insured

6) always remember that this is a long game (10-20 years)

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At least that's the plan la hahah.

You wont know, why not 50 50

Nobody knows where the market is going, that's why a DCA strategy is good because it gives you a plan to buy consistently regardless of whether the market is up or down. Personally, I would overweight more on the global indexes rather than STI ETF.

If you are doing dca, you should not time the market as you will be consistently buying every month and in the long term, it will average out.