20 years old and enlisting soon. I have saved up a sum of $5,000 for investment and I will be saving up $1,000 every month for DCA/investing purposes. How should I go about my investing journey? - Seedly
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JustJohn_JJ

Asked on 23 May 2020

20 years old and enlisting soon. I have saved up a sum of $5,000 for investment and I will be saving up $1,000 every month for DCA/investing purposes. How should I go about my investing journey?

I am considering investing the $5,000 into a stock. Some of the stocks I have been looking at are Facebook, Amazon, Mastercard, Sea Limited.

Next, for the monthly DCA, I am thinking of investing through a Robo-advisor. What are your preferred Robo-advisor? I am thinking of Autowealth, despite the $3,000 min investment. Will Robo-advisors be a superior choice over buying the S&P500 stand alone? If yes, why?

Pls feel free to share any idea or criticize. Thank you in advance :D

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Tay WenHao
Tay WenHao
Level 7. Grand Master
Answered on 23 May 2020

Hey bro. Good to see you starting your investing journey early. I would be glad to share some of my experience and tips.

Before you start investing, I hope you set aside a sum of emergency fund. Even though it seems irrelevant/insignificant for our age, it's important in the event of a further economic downturn. It will help in giving you the 'holding power' instead of getting forced to sell your shares at a loss. In this period of pandemic, its hard to predict whats next. Do not ever assume its the worst now.

Moving on to the main question, I am curious how would you be saving that extra $1000 per month after enlisting? Since NS allowance is only around $500-$1000, its almost impossible to save up $1000/mth consistently. It is important as it might affect the way you DCA into the market.

Next on stock picking, if you are new, I wont suggest you to go into specific stock picking. I'll suggest you putting that 5k into robo advisors directly.

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Tay WenHao
Tay WenHao

23 May 2020

'May I know the reason behind the advise to stay away from stocks as a beginner?' - Mainly because of the lack of knowledge and research. I'm not sure what makes you select Facebook, Amazon, Mastercard, etc. But I hope you did fundamental analysis on the companies instead of looking it as a consumer. (Big company, etc) Take a look at SIA, big company and was reliable but dropped from $10 to $3.50. Of course they are different but my point is to do a properly analysis. . 'Many investors have speculated... recommending me not to pour all my funds first' - No. That wasnt my initial meaning. But with this statement, it meant that you are unsure as well. Investing is not speculation. Speculation is as good as gambling. If you did you research (as mentioned above), you should be confident that the company is stable enough to tide through the crisis regardless of US stimulus package. (Back to SIA, its a good case study) But yes, in times of crisis like this, its uncertain and its definitely good to DCA monthly. Sorry if I'm too harsh but it's for your good. I hope you dont 'pay' a hugh tuition fee for your first dip in investing.
JustJohn_JJ

24 May 2020

Thank You! I certainly agree. Shall take your advice and start DCA passively while increasing my knowledge
Amelia Leow
Amelia Leow
Level 5. Genius
Answered 2w ago

Along with the advice below, you can also try using Kristal.AI, which lets you choose / customise your portfolio yourself as well!

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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Jul)

Level 9. God of Wisdom
Updated on 26 May 2020

Better leave the concept of single stock investing and concentrate on some of the lower risk/better diversification alternatives (still risky) and concepts given here:

https://seedly.sg/questions/what-is-your-general-investing-philosophy-strategy​​​

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Would recommend you to put 5k into a roboadvisor and 1k dca into it every month.

However, more information like your risk appetite, time horizon, preference for control, reward expectation do play a part in making the decision around the instrument for investing.

I personally do buy the tech stocks and manage my own tech portfolio however I do spend time studying the business and reading developments around the industry. However, dumping 5k into a single stock is generally frown upon.

I would think Stashaway with its ERAA (Economic Regime-based Asset Allocation) is one of the more recognised robo-advisor in the market now.

Check out https://seedly.sg/reviews/robo-advisors for more information!​​​

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Aik Keong Koh
Aik Keong Koh
Level 4. Prodigy
Answered on 26 May 2020

If your portfolio is small like $5k, start of with a basket of stocks like ETF or a mix of 2-3 counters instead. If you stick to one, you are limiting your gains and exposing your risks as well. So mix up a little, don't have to go all in into one company.

If you are doing monthly DCA, consider your fees in this case. Eg. $1000 into SPY. It cost US$10 each purchase so if each month DCA is $1000, than your fees are 1%. There are cheaper exchange if I'm not wrong but this fees are base on TDameritrade. Just have to take note of fees for transfer of funds, both deposit and withdrawal and exchange rates.

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Jia Hui

2w ago

Good to go with Robo first if you do not have the time to oversee ur acct. But on a side note, also ask yourself what you want. Is it short term or long term returns and from there you decide what kind if stocks you want to buy in. You can look at ETFs and Dividend stocks rather than gg full on into US S&P.
Frankie Rappaport
Frankie Rappaport

2w ago

Yes, TDA has 0.00 USD fees for trading U.S. equity