Given the current global economic outlook, what are the options if I have 20k cash to invest with, and looking at roughly 5% p.a. over 5 to 10 years? - Seedly
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Asked by Anonymous

Asked on 27 Aug 2019

Given the current global economic outlook, what are the options if I have 20k cash to invest with, and looking at roughly 5% p.a. over 5 to 10 years?

How should I be investing, single premium or DCA?

My current idea is to diversify by splitting into STI ETF (Nikko AM or SPDR STI), bond (not sure which), and REIT ETF (probably lion Philip because it has 30 assets underneath).

Any thoughts are welcome!

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5% per year, with LTA's PARF. Hope this helps you in what you are looking for.

Higher returns but safer assets.

https://timelyenterprise.com.sg/better-returns-than-singapore-saving-bonds-similar-risks/ I personally won't invest because I prefer higher returns instruments like stocks. I am holding most of my cash waiting for a stock market correction.....

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Question Poster

29 Aug 2019

This is interesting! I guess the biggest risk falls on the credibility of this Timely Enterprise. Thanks for sharing. šŸ™‚
Jessica Ann Lee
Jessica Ann Lee

29 Aug 2019

Agree with you. Have to make sure this business offering the loan has a proper structural and is long enough in business to have incentives. I read the history, seems like it started long time ago lending money to Uber and Grab drivers
Jessica Ann Lee
Jessica Ann Lee
Level 4. Prodigy
Updated on 29 Aug 2019

I won't go into stocks now.... inverted yield. The recession won't come tomorrow but pretty sure within next 2 years?

Maybe buy something short term (6months to 1 year) and wait for the stock market crash?

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Question Poster

29 Aug 2019

Hi Jessica, thanks for the input! Ya I read about the inverted yield too and that it is the sign of incoming recession but not immediately. Sounds like a good idea to stay out of equity for the moment. Any thoughts on investing in REITs now?
Zen Rogue Xuan
Zen Rogue Xuan
Level 6. Master
Updated on 30 Aug 2019

Hi Anon,

It depends on your financial goals. Are you looking for dividend income or to have a long term plan ie retirement? Is your 20k 100% of your savings, or do you have more? When you do lumpsum investment ie single premium, you are betting that your point of entry being a favourable price.

When you DCA, you remove that uncertainty at the cost of a lower return.

Does your CPF Balance have 60k? The first 60k will achieve a bonus interest of 1%, which would mean if you put your fund in CPF SA, you earn a guaranteed interest of 5%. If you are yet to achieve it, I would suggest you do so. While CPF monies above 20k in the OA and 40k in the SA can be used for the CPF investment funds, the guaranteed returns from CPF would make for a weak argument for do so, especially SA monies which earn a nice 4% guaranteed interest. Another way is to consider putting it into SRS- you gain tax relief for doing so, then use the amount to buy into Unit Trusts or Stashaway- apparently, MoneyOwl and Endowus who are carrying the excellent Dimensional Fund are in the midst of becoming SRS certified.

Personally, I feel that the markets are overvalued now. Am waiting for the market crash then go all in:)

You can set up your very own Dividend Re-Investment Plan(DRIP) for REITS.

  1. Do your due diligence and select well established market leader eg Mapletree

  2. Plough back your dividends every year and watch your nest egg grow

Step 3(Optional): Set aside some of your annual bonus and add to your sum

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Zen Rogue Xuan
Zen Rogue Xuan

30 Aug 2019

Updated my answer as images cannot be uploaded in comments
Question Poster

30 Aug 2019

Thanks for the insights Zen! šŸ˜