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Victor Lye

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Victor Lye

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Founder & CEO at SquirrelSave

48Upvotes

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Founder & CEO at SquirrelSave

Victor Lye

Top Contributor

Founder & CEO at SquirrelSave

48Upvotes
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Insurance

Endowment Policies

Having run investment, insurance and healthcare businesses, your finding is no surprise. Let's start with a brief breakdown and basic principles to help you understand. First, my opinion is that many people are sold insurance which they don't fully understand. Try asking someone to repeat the features and benefits of an insurance product they bought. Chances are that even a CEO level person is clueless and embarrassed. This has to do with the sales methods and the way insurance has been marketed. It has improved a lot over the years and there are many well-meaning salespeople, but there is an arguable mismatch between the sales and buy side of the insurance market in terms of sophistication, motivation and needs. Second, most sales-driven insurance methods end up selling you the highest premium product. Due to the inevitable mismatch between the sales and buy sides of the situation, the buyer is often less motivated to know the exact details, often ending up with the proposition as "what is your budget?" and the sales side tries to cobble a product that sucks up what you say you can afford. This is an unfortunate reality. Third, insurance is mostly a bundled product comprising an actuarial component - let's call it "A", and a savings component - let's call it "B". A is constrained by actuarial calculations and is rather fixed. B can be as high as possible to suit your budget. There is a tendency to sell a higher premium insurance product because the commission is percentage-based. So the only way to motivate sales is to structure a bundled A+B product - which means there tend to be sales of what we call - whole life or endowment insurance products - which contain a lot of B. Fourth, when the insurance company gets your B, it adds up all the Bs from all insured members and pools it into an insurance fund. But the way the insurance fund is invested is constrained by the actuarial considerations and regulatory requirements - which tend to limit the ways your B is invested. Mostly, into long term bonds. Hence, the returns are constrained because the risks must be set relatively low. Fifth, you will note that you may likely have been sold an insurance product which contains a high proportion of B which is then managed in a pool which has no regard for you as a person. For example, if you are 20 years old and the others in the pool are of different ages (and risk profiles), your B together with all their Bs are managed according to the insurance company’s profile – not yours. There is no personalization. Lastly, the above explains why your returns are low – without going into greater details. I would add that in the case of “non-participating” policies, the insurance company merely gives you the returns indicated in the insurance benefit illustrations and can keep the extra returns it earns – if at all. Not bad for the insurance company. In response to the market, insurance companies offered to share these potential returns through commonly called “participating policies” where you not only get the illustrated returns in the benefits documents, you also get to share in the gains made by the insurance company through bonus declarations. I hope these basic points give you a better understanding, though there are more details. What I would do is to clearly define my protection needs. Then consider buying term insurance which purely A component which will be cheaper than a bundled A+B product. Use your resulting premium savings (by avoiding the bundled A+B product) and invest that sum regularly. Today, using digital life insurance platforms and Robo-investments, you can construct your own A + B product without the bundled constraints and high commission expenses. Bear in mind, insurance commissions for bundled A+B products can be as much as over 100% of your annual premium! Seek advice from a financial adviser and make sure it is not an insurance sales push. All the best!

Investments

Savings

Insurance

Loans

CPF

First, do your budget for at least the next 5 years. Make sure you do not overspend and can generate a surplus each year. Second, use the surplus and decide the proportion to pay down debt, invest and build an emergency fund. I recommend building an emergency fund of 3X to 6X your monthly salary. Once you achieve that, consider your investment risk profile. If your potential return based on your risk profile is significantly greater than the loan rate, you can invest, especially if you are young. If not, pay down the debt. All the best!

Investments

Robo-Advisors

Understand your anxiety. One lesson I have learnt the hard way, and which was already shared by many before me, is that we should not time the market. If you want to speculate, bet or gamble, by all means, timing the market is one technique. But true investing starts by knowing your own risk profile and making sure that your mix of underlying assets results in a risk that matches your own profile. In all my years of investing as a professional wealth manager, I realise that I am also subject to the same problem - just as my clients are. If you look at most crashes and corrections in the markets, it would be a stroke of luck, not skill, to consistently navigate every drop in the market. Same for the bull runs. Data suggests that most corrections and crashes were done within a span of 2-3 years. The upturns in the markets tend to be longer. Truth is, we can't time these turning points well as humans due to our emotions. So if you want to invest, take at least a 1-3 year time horizon, know your risk appetite and start early. There is never a right time to start but start early. In fact, I believe even children should start investing, simply because they have a long runway and do not need the money until they grow up. Since you can invest a small amount monthly, you can start now and ride the ups and downs. Robos that allow you to start with small amounts are welcome investment methods which were not available in the past. Traditional investments required minimum investments and were not as efficiently diversified. So choose a Robo that is global and manages downside risk. For these reasons. I created SquirrelSave. Of course, every Robo has its pros and cons. So take your pick according to your comfort. All the best!

SeedlyTV EP04

Investments

MoneyOwl

Stashaway

Autowealth

Robo-Advisors

To add to the chorus of answers here, I would say that robo advisers bring a breath of fresh air to the investing landscape and the same goes for the traditional managers who try to innovate. However, the key is you - the investor. What is your objective? I would say, it is not to gamble, right? If so, then you must be (i) disciplined in deciding your risks you are willing and able to take, and (ii) committed to a time horizon. I created SquirrelSave as a fully end-to-end AI offering as my experience as an investment manager taught me that humans are good at chasing returns (behaviour more like calculated bets) rather than managing risk, Managing risks require real-time and massive data tracking 24/7 - which humans cannot do. Go read more if you like at https://www.squirrelsave.com.sg/blog/why-replace-human-investment-manager.html So, I replaced myself as the investment manager and developed machine learning techniques to assess the markets and diversify globally in real-time. We are not a trading engine, and we are suitable for investors who want to be disciplined and committed. Our AI does not chase returns but on managing risks first. We believe that a time horizon of at least one year is needed. Else, you should be a trader like how people bet on horses. Read more at https://www.squirrelsave.com.sg/blog/smart-investing-with-global-diversification.html Do check out the choices available and all the best!

Investments

ETF

STI ETF

Robo-Advisors

Regular Shares Savings Plans (RSS)

SeedlyTV EP04

Hi, in my view, investing requires the investor to be disciplined and committed to a time horizon. Else, you will become emotional and tend to "buy high, sell low". In all my years of experience of stockbroking and asset management, I have seen enough data points to convince me of the differences between investing and gambling. We should do less gambling and do more investing. People say they invest, but it is easily proven using science and maths to confirm we are mostly gambling. The key to investing is to decide our risk tolerance, which is a function of risk attitude and risk capacity. Go read my whitepaper at https://squirrelsave.com.sg/blog/risk-profiling-just-another-questionnaire.html to understand the subject better. The other experts in this thread have explained the difference between RSS and Robos. As for Robos, there are differences. Do check them out. SquirrelSave which I founded is new. My aim is to use machine learning to take the human emotion and betting tendency out of real investing. The system remembers the risk profile you set and does not need the investor to make any day-to-day decisions. I used to be an investment manager. But with the availability of live data, the evidence led me to decide that the machine will offer a better investment outcome over the long term compared to the average human investment manager. Check out my blog at https://squirrelsave.com.sg/blog/why-replace-human-investment-manager.html to learn more. Given my recommendation to get your risk profile right, I created a tool to help people assess their own risk profile. Try it out and have some fun doing it. https://app.squirrelsave.com.sg/Start/RegisterRiskProfiler#loaded Therefore, the answer to your question whether to start with high or low risk is that it is not the appropriate question if you want to invest, It should be a mix depending on your risk profile. All the best!

Investments

Singapore Saving Bonds (SSB)

Bonds

ETF

STI ETF

Robo-Advisors

Stashaway

The short answer is to diversify globally. We are seeing increased global uncertainty. This is the worst time to invest narrowly unless you are a trader or speculator. ETFs are relatively low-cost investments compared to unit trusts. And I would choose a Robo which invests using ETFs and diversifies globally. StashAway has been around earlier. However, SquirrelSave is new but uses machine learning AI to manage each person's portfolio 24/7. I created this after years of managing clients' monies and insurance funds. It was the best I could do until live streaming data made AI come alive. So do check out SquirrelSave and the other auto-investing choices in the market. All the best!

Stocks Discussion

Investments

Savings

As you are young, you have a longer investment runway than most. And it is good you started early. However, I note you invest $300 regularly in the STI Index. Presuming there is no need for you to be only invested in Singapore, you should understand that the STI tracks the movement of the component Singapore stocks. Unless you believe that the component STI stocks are going to be going up all the time, you should consider diversifying your portfolio globally. Data shows that somewhere in the world, an asset class will do better - relatively - than the rest in terms of the returns for the risk taken. So your portfolio will be in a better position if you diversify it across global asset classes than to confine it to just the STI. Your idea to invest in a Robo is an improvement as most Robos invest globally. However, I created SquirrelSave not only to diversify globally but to offer real-time tracking and management of your portfolio versus your specific risk requirements. A human will find it very hard to do this for hundreds and thousands of investors with different investment amounts. So SquirrelSave uses machine learning AI to do this, working 24/7 just for each investor - whatever the investment amount. Also, check the underlying investment assets. I recommend using ETFs as these are low cost and offer real-time prices compared to unit trusts. SquirrelSave only uses ETFs which are diversified and represent global asset classes - e.g., USA, Japan, China, Brazil, gold, etc. These ETFs are screened and adopted by our system which has been data trained with machine learning techniques. As for your question as to when to take your money out, there is no "good" time. You have to start clearly by deciding your own risk profile. If you feel nervous, then it is likely you have taken on more risk than you should. Remember that in investing, any loss that you stare at is an "unrealised" loss until you decide to take it out - in which case, it becomes a "realised" loss. It is common to see "buy high, sell low" situations. Apart from your risk profile, you should decide on a clear time horizon. You can review your investment performance once the time horizon is reached. Investing requires risk setting and time horizon with recommended diversification. Else, the behaviour is more trading than investing. In my view, trading will be more like betting on horses. To start trading REITs or stocks - which is like betting on horses, you will need to sign up with a licensed stockbroker. Check for the commission charges and look out for any minimum commissions applicable. The CDP is merely an electronic registry that records your ownership of stocks. But you should check that your CDP is operational. Simply go the SGX website to look for the CDP online login. All the best!

Investments

Savings

Insurance

Lifestyle

Career

Bank Account

Victor Lye
Victor Lye
Top Contributor

Top Contributor (Aug)

Level 4. Prodigy
Updated 3w ago
First, thank you for serving our nation. Second, it will be important to understand your stage in life. Presumably, you may be turning 19 after your A-levels or 20 after your poly studies. Either way, you are young and have a long investment runway ahead of you. Third, where can you place your money while you serve the nation for the next two years? www.squirrelsave.com.sg Assuming you can get emergency funding if needed from your parents, then you must decide the risk you want to take in placing the money. The safest (lowest risk) with no return is to literally keep your money in the safe. That’s not the best way frankly when there are slightly riskier ways to grow your money with decent returns. One possibility is to place into a bank savings account in Singapore, preferably in a fixed deposit which offers a higher return than the basic savings account. However, I would recommend investing in a well-diversified global portfolio, especially when you have two years of runway to grow your money. After all, it will be good to have good returns after you complete your national service to help you meet expected expenses when you further your studies or take a well-deserved holiday. Investing globally is easy with Robo-advisers. Pick one which is fully automated where you don’t have to make decisions except how much to invest. In selecting the Robo, check if the risk management is done by machine learning AI or if it is managed ultimately by a human manager. Diversification requires massive data analytics, which is not humanly possible. Yet it is easily done with the computing power available today. Before you start, you need to know or select your own risk profile. It is not easy as most people do not do what they say. Further, conventional risk profiling poses technical questions which some people may not fully understand. Instead, look for risk profiling tools which reflect your personality and risk-reward behaviour. Using such a tool that can analyse your risk-reward attitude is a critical step to start your investing journey. www.squirrelsave.com.sg

Investments

Savings

Lifestyle

Insurance

Robo-Advisors

Stocks

Victor Lye
Victor Lye
Top Contributor

Top Contributor (Aug)

Level 4. Prodigy
Updated 4w ago
At your age, you have a relatively long investment runway compared to others. I note that you have invested the bulk into bonds and a small portion in Robo investments. You should note that Robo investments typically allocate some of your investments into bonds or fixed income instruments. So it is duplication for you to invest the bulk into bonds while investing in a Robo. Also, it would appear that your risk profile is highly conservative. This seems counterintuitive as you are very young. It would be useful for you to re-assess your risk profile. In doing so, note that most people do not do what they say. Conventional risk profiling poses technical questions which some people may not fully understand. Hence, their answers may not be accurate and neither is the resulting risk profile assessed. Try to use unbiased risk profiling tools which assess your personality and risk-reward behaviour. Using such a tool that will analyse your risk-reward attitude and is a critical step to start your investing journey. Try the gamified risk profiler that I created at www.squirrelsave.com.sg Investing in bonds may be chunky as many bonds require a fixed minimum sum. You will also incur charges (spreads) from the bond dealer. There is no liquid secondary market unless you can move big sums. And if you do need to move out of the bonds, you will face potentially hefty bond dealer charges. As for your intent to invest 25K and query about financial advisers, note that there are fees and charges apart from the tendency for advisers to sell products which earn them commissions. Hence, do ask upfront about the fees, charges and commissions. Perhaps you should leverage technology and investing globally using a digital investment manager who is fully automated - where you don’t have to make decisions except how much to invest. My view from having managed other people's money professionally is that investing should be about risk management first before chasing returns. Yet, I know I can't do that. It is humanly not possible. I need to sleep and have other activities that take my eyes off the markets which are 24/7 as the earth turns. Investment risk with real-time data 24/7 is better done by machine learning AI than a human manager. Investing and diversifying globally requires massive data analytics, which is not humanly possible. Today, it can be easily done with computing power. So do reconsider how you have allocated your assets between bonds, Robo and a financial adviser. Such an allocation tends to be static. Otherwise, it requires you to review the allocation periodically. It is better to allocate all to a Robo which is fully AI and automated without the need for you to make day-to-day decisions. Such a digital investment service should employ dynamic asset allocation which continually seeks out more efficient portfolios which aims at the highest possible returns matched to the risks you are willing and able to take. Go to www.squirrelsave.com.sg!

Investments

Savings

Insurance

REITs

Bonds

Insurance is not an asset class viz bonds and REITs. Life insurance is fundamentally a bundled product that contains an actuarial element and a savings component. You have no control over the investments made by the insurance company. In any case, the investments made by the insurance company does not consider your individual risk profile as it is pooled into a fund. Endowments are also insurance products and similar to what is described above except that the savings component is proportionately much larger than the actuarial premium. It has the same drawbacks where it concerns your individual needs and personalisation. ILPs or Investment-Linked Policies are also insurance products. Sadly, many are sold the ILP insurance product as if it is an investment. Yet, the underlying investment or savings component is typically outsourced to a third-party investment fund(s). There are high distribution expenses (commissions paid to agents) and product fees in insurance/endowments/ILPs which you should ask about. It's better, frankly, to "buy term and invest the rest". That is, separate your protection and savings needs. Don't bundle them up in an insurance purchase which contains high charges, fees and commissions. You have greater flexibility in adjusting your savings strategy as your life needs change without risking your protection cover. Bonds are not as liquid unless you move large sums. There are spreads that will eat into your returns. However, bonds offer lower risk in general than equities - but you should review carefully the risk ratings, if any before considering it for your portfolio. REITs are like equities and fixed income at the same time. The underlying REIT price can fluctuate - affecting the effective yield return based on the dividends paid. However, depending on the REIT selected, the yields can look very attractive to bonds and equities. Yet, REITs carry price fluctuations like equities. Your time horizon of 10 years is more effective for higher risk-taking, all other things constant. After several years of managing people's money, I take cognizance of AI technology to improve the investing method. I strongly recommend that you invest your monies in a Robo that is fully AI to remove human bias and that automatically rebalances and optimises your portfolio. Use a psychometric focused risk profiler tool to assess your own risk-reward behaviour. After all, people don't do what they say. Once your risk profile is assessed with accuracy, you can start your investing journey with confidence assuming you pick the appropriate digital AI investment manager. For this reason, I started www.squirrelsave.com.sg to offer smart investing for anyone, anywhere, anytime. No knowledge needed. No complex decisions. Just know yourself.
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