Hi Anonymous,
Thanks for your questions.
I know it can be confusing but there are actually three different kinds of things among what you had listed:
Asset classes: Stocks, Bonds, REITS, Crytocurrencies. Think of them as say, rice, vegetables, meat, sweets.
Vehicles or structures for investing: unit trusts, ETFs. Think of them as maybe wrappers for the different types of asset class that can be in any combination. You can wrap with paper only rice and veg; or only meat. Or you can put into a styrofoam container all the four, or just one.
"Distributors": Roboadvisers . Like banks or human advisers, roboadvisers provide advice and recommend how to implement your plan. By putting together the different "packets" of wrapped-up assets.
So among the asset classes, I would say that stocks and bonds are the staple asset classes that would suffice for most of us, in an appropriate combination that matches your need, ability and willingness to take risk. You can take this profile test on our investment robo at https://www.moneyowl.com.sg/investment/
The reason is that the returns from these asset classes are derived from the real economy. Stocks give us the long-term return above inflation, because they are derived from earnings of companies who meet the demand of the population, and represent an ownership of the company with higher risk but all the upside. Bonds give a fixed income as we effectively lend money to the companies, and get paid interest and then our principal back, less risk but no upside.
Globally diversified portfolios using unit trusts like those of MoneyOwl effectively make you bite-sized shareholders and bondholders of 8000 companies, without having to guess which ones will be okay and which would not be. In this way, you participate in the economic growth of the global economy. ETFs are possible vehicles too, but there are some disadvantages. You can refer to this: https://www.moneyowl.com.sg/articles/why-unit-t...
As for REITS, these have a combination of real estate and equity characteristics. They provide some income, but are essentially financial structures that have some quirks and behave like equities. Most of us are already very exposed to property, and a substantial allocation to REITS could be too much of a bet on this asset class that is not really productive in itself unlike stocks and bonds, but there is a lot of financial engineering. COVID has also raised some questions about the long-term viability of certain sub-sectors in REITS.
Crypto: this is pure gambling to me, akin to Toto. So put some if it satisfies your fancy but please don't plan your retirement or children's education on it!
Hi Anonymous,
Thanks for your questions.
I know it can be confusing but there are actually three different kinds of things among what you had listed:
Asset classes: Stocks, Bonds, REITS, Crytocurrencies. Think of them as say, rice, vegetables, meat, sweets.
Vehicles or structures for investing: unit trusts, ETFs. Think of them as maybe wrappers for the different types of asset class that can be in any combination. You can wrap with paper only rice and veg; or only meat. Or you can put into a styrofoam container all the four, or just one.
"Distributors": Roboadvisers . Like banks or human advisers, roboadvisers provide advice and recommend how to implement your plan. By putting together the different "packets" of wrapped-up assets.
So among the asset classes, I would say that stocks and bonds are the staple asset classes that would suffice for most of us, in an appropriate combination that matches your need, ability and willingness to take risk. You can take this profile test on our investment robo at https://www.moneyowl.com.sg/investment/
The reason is that the returns from these asset classes are derived from the real economy. Stocks give us the long-term return above inflation, because they are derived from earnings of companies who meet the demand of the population, and represent an ownership of the company with higher risk but all the upside. Bonds give a fixed income as we effectively lend money to the companies, and get paid interest and then our principal back, less risk but no upside.
Globally diversified portfolios using unit trusts like those of MoneyOwl effectively make you bite-sized shareholders and bondholders of 8000 companies, without having to guess which ones will be okay and which would not be. In this way, you participate in the economic growth of the global economy. ETFs are possible vehicles too, but there are some disadvantages. You can refer to this: https://www.moneyowl.com.sg/articles/why-unit-t...
As for REITS, these have a combination of real estate and equity characteristics. They provide some income, but are essentially financial structures that have some quirks and behave like equities. Most of us are already very exposed to property, and a substantial allocation to REITS could be too much of a bet on this asset class that is not really productive in itself unlike stocks and bonds, but there is a lot of financial engineering. COVID has also raised some questions about the long-term viability of certain sub-sectors in REITS.
Crypto: this is pure gambling to me, akin to Toto. So put some if it satisfies your fancy but please don't plan your retirement or children's education on it!