PFF Panel 2
Seedly PFF 2019
Asked on 02 Mar 2019
Increase your investment knowledge by reading as much as you can. An acceptable and reasonable returns would be somewhere between 5% to 8%. This return is also somewhat we can achieve when we invest in the STI ETF over a long time frame.
Cost is also a factor which will affect your over investment returns over the long term, go for good platforms allowing to the optimize your commission and fx fees. For me, a 6% - 8% return is relatively decent.
You should understand that an overwhelming 80% to 90% of professional investment managers consistently underperform the general markets in the short, medium and long-term. Read https://www.autowealth.sg/strategy.php and click on the hyperlink to see the Standard & Poors Dow Jones research which concludes this.
Therefore, I would suggest you avoid stock-picking and/or market-timing as methods to boost your investment returns. Not until you feel your knowledge and experience is comparable to Warren Buffet, George Soros and the likes.
As an intermediate investor who is able to take on more risk (volatility), you may want to invest in a higher risk portfolio of stocks and government bonds. As a gauge, the projected returns of the AutoWealth Long Term Growth Portfolio of 80% global stocks 20% global government bonds is 6.9% per annum net of fees.
Be disciplined and capitalise on the compounding effect.
Alternative investments and leverage are extremely risky endeavors where most investors get burnt rather than achieving the purported higher returns.
I have a formula I use to gauge my supposed performance of my portfolio.
Years to Investment Goal (Eg. Retirement) / 2 (highest risk) to 4 (lowest risk).
So if I'm planning to retire in 30 years and I'm investing for retirement: My portfolio should be performing at 7.5-15% per annum. Anywhere in between is good enough.
If I'm investing for something in 10 years like my child's university fees fror example. Then my portfolio should be doing 2.5-5% pa. Reason is that I shouldn't be taking much risk anyway for something I need to liquidate in 10 years time.
If you want to better your returns, you should consider upping your investment game through other instruments that can give you higher returns. For me, an acceptable return is minimum of 40%pa, every year with a 60%pa target.
An acceptable return would be the market return from the S&P,STI or whatever market you are investing in currently to be perfectly honest -- if you aren't getting those returns consistently, why try to invest actively and get your returns cut by bad investments, bad timing and trading fees when all you have to do is buy and hold the entire market index, and not have to worry about the index for a long, long time?
That's my opinion at least. If we can't beat 'em, might as well join 'em and get respectable returns.