18 Apr 2019
Is it advisable if invest $8000 into STI ETF lump sum for >5 years as a student, with rainy day funds in SSB? Let's say if I were to lump sum, where can I check the dividend yield?
For dividends you can check here: https://www.dividends.sg/
Rainy day funds in SSB is fine but take note that withdrawal requires a 1 month lead time. So, do prepare some extra funds in saving account for those situation where you need the cash immediately.
As for lump sum into STI ETF, that is a good start. You need to understand your goals for index investing into STI ETF.
If your objective is to withdraw with profit after 5 years, then you bear the risk that after 5 years there may be a financial crisis and the STI is down. Investing into an index ETF is for a long term goal, I would say probably 10 years and above, with consistent injection of funds for dollar cost averaging. After the initial lump sum, you might want to consider either monthly or annually topping up your investment into STI ETF.
Or an alternative is to use tools such as POSB Invest saver to automatically invest into STI ETF monthly.
However, if you are definitely going to need this sum of money after 5 years then it is better to play safe and put it into SSB. No one can predict the market direction.
I would recommend doing a Dollar Cost Average (DCA) method of investing for your STI ETF. Maybe split up your $8,000 into 4 parts and buy in at different times. Eg, this quarter, next quarter etc.
For rainy day funds, yeah you can keep it in the SSB as it is fairly liquid and you can withdraw at no fees :)
For dividend yield yeah you can check out at dividends.sg or another way would be to use the Yahoo Finance to check out historical yield.
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