Asked by Anonymous

As a student with free cash flow of $5,000? How do you recommend investing this? Into SGS bonds? ETFs? Can assume I’m a risk adverse investor! Thanks!

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  • Yeap Ming Feng

    For risk-adverse investor, I believe the Singapore Savings Bond will be a good choice. Low level of risk, ok return. More about SSB here: However, given that you are still a student and at such young age, it is a good time to be able to afford a little bit of risk in your investments, since these are your spare cash (assuming you got your rainy day funds ready on top of this sum of money).

    Here we have a compilation of products you can look at: Personally, I went with the STI ETF when I was a student. Now that there are products such as Robo-advisors, SSB, do check them out. A pool of blue-chips or REITs sounds like a good idea too! Of course, it is important to read up and understand the risk of each product before putting your money in.

  • Kenneth Lou

    This is really good that you are considering to invest with your first $5000. Please make sure that you have 3-6 months worth of rainy day funds (basically projected expenses). Moving on, I would recommend either three options:

    1) Least risky: SSB Singapore saving bonds. But that's really basically a no-brainer and some people actually shared that you may be able to get a better return on savings account eg multiplier around 2-3%

    2) Mild risk: You can start off with a Dollar cost averaging strategy (DCA) on the STI ETF. This take on some risk as with market risk and return (basically it comprises of the largest 30 STI companies on the straits times index eg DBS, OCBC and SingTel etc.) You can simply go and find more about the STI ETF. You can easily set this up with any of your bank accounts (eg with DBS RSP in around 15 mins online with minimum $100 a month)

    3) More reisky: The last option which fits your risk adverse profile would be to look for a blue chip stock or REIT which has steady appreciation with stable dividiend yield (what we call dividend stocks) you can simply use this screener to decide:

    Please ask any questions if you may have! :) Hope this helps.


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