Asked by Joshua Ng

Given the upcoming trade war and the fact that the markets aren't doing so good now, should I just do DCA on ETF's? Or accumulate a small sum, then pick a few BC's that have historically performed consistently and reap dividends?

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  • Marcus Goh
    Marcus Goh
    Level 3. Wonderkid
    Answered on 19 Jul 2018

    Yes. You have to figure out your

    1) Risk Profile (Are you risk averse or more high risk taker?)

    2) Investment Horizon (2 years, 5 years, 10 years?)

    Instead of choosing one, why not have both?

    Blue Chip

    It's good to pick some blue chip companies which have decent both capital gains and dividends if you have an future outlook of the particularly company or sector.

    ETF

    ETF can act as a "safety net" in all markets conditions as you are diversifying in different industries and you are accumulating more shares when the share price is dipping. (Wall Street coined this as "Average Down").

    If you do not know how to allocate % of your capital into BC and ETF, you could take 100 - (Your Age) and that is the percentage that you will be vested in equity, ETF or even bonds.

    E.g (100 - 20) = 80%

    Equity (Stocks) - 80%

    ETF - 20%

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  • James Yeo
    James Yeo
    Level 3. Wonderkid
    Answered on 19 Jul 2018

    I believe this is the question on many people minds.

    I feel that it depends on one's risk profile and the time he/she wishes to spend on looking at the stock markets.

    For handsfree approach, go for sti. The more it drops, the better the bargain.

    For higher growth, its good to pick some blue chips which are giving decent dividend yields and you are convinced of its future growth prospects OR that its undervalued.

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