Asked on 16 Oct 2019
Hi, I'm 25, I have set aside an emergency fund of 6 months expenses and managed to save around 100k for my warchest.
The 1k/month is purely for investing as I have another sum set aside for future big-ticket items, such as house and wedding.
I would say I’m aggressive, currently on $200 monthly to StashAway (high risk, 36%)
To put things in perspective, you will want to compare your current portfolio size with your warchest.
If you have not started anything or have a small or negligible portfolio size, then consider taking maybe 20-25% of your warchest to start off investing. If your portfolio is already sizeable, just stick with $1000/mth and retain your warchest in FD or high-interest saving accounts.
Although your profile is aggressive, it is still prudent to ensure that you have hedged yourself against market risk. Consider putting together a multi-asset portfolio with various asset classes in order to make sure your portfolio achieves some semblance of balance. Your budget of $1K/mth can be used to build this portfolio while the warchest sits and waits for opportunities. If you need help understanding the classes of assets available to you, speak with an independent financial advisor to understand your options.
Lastly, if you have 6 months of expenses in an emergency fund, consider bumping it up to 12. In the current economic climate, finding another job can take as long as a year.
17 Oct 2019
If you really want a steadily-growing and diversified portfolio, you should start by not putting all your eggs in one basket. Building a successful portfolio requires thought and you must analyse each and every one of your investments rigorously before you invest. You might find this process daunting, which is why it is more beneficial to build your investment portfolio slowly over time, rather than rushing into making a ton of investments quickly. Allow yourself the time and space to grow and learn before diversifying or rebalancing anything. Of course, if your advisor tells you to do something specific, you should certainly take that into consideration too!
Here's something more elaborate.
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Good that you have already set aside emergency fund for rainy days and by the loook of it you are ready to compound your wealth!
I would like to share my opinion as an ungraduate and investor for your current situation:
Read up some investment books and understand what kind of investing tool suit yourself (Learn about yourself better)
Identify your target and work backwards for the require rate of return
Even though the information here is that you are an aggressive investor, always set aside enough money to average down the stocks you buy when they dip
My 2 cents on building a portfolio:
Invest in your own investment education first, e.g. invest time to understand your tool like how does the tool help you achieve your returns.
Rule 1: Never lose money even if you're aggressive or have set money aside for bigger ticket items
Rule 2: Remember Rule 1
17 Oct 2019