Any recommendations on how I should build my portfolio, with around 1k/month to invest? - Seedly
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Anonymous

Asked on 16 Oct 2019

Any recommendations on how I should build my portfolio, with around 1k/month to invest?

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%)

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Hi anon,

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.

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Question Poster

17 Oct 2019

Thank you! That helps a lot! Appreciate it!
Arpita Mukherjee
Arpita Mukherjee, Community Evangelist at Kristal.AI
Level 6. Master
Updated on 05 Nov 2019

Hi Anon,

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.

I work at Kristal.AI, and my mojo is to help people make the right financial decisions.

If you think I helped you, do give me "Thumbs up". If you think my response was biased let me know, I will work on it.

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Hi!

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

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Heah Min An
Heah Min An
Level 5. Genius
Updated on 16 Oct 2019

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

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Question Poster

17 Oct 2019

Got it! Any recommendation on which books/courses I can consider?
Heah Min An
Heah Min An

17 Oct 2019

I invest in stocks, which is an ownership of businesses plus I’m passive thus I like value investing. I started off with Robert Kiyosaki’s 2nd book: A Guide to Stock Investing; it was 10 years ago thus I may have gotten the book title wrongly.