Asked on 28 Nov 2020
Is a portfolio of STI ETF, StashAway and S&P 500 ETF a good investing strategy for a beginner?
Andy Chan, Seedly Student Ambassador 2020/21 at Seedly
Answered on 29 Nov 2020
Investing in the STI ETF isn't necessarily bad. Just take note that the STI ETF is more for dividend investing. i.e. You can expect tax-free dividends from the ETF, but don't expect your investment value to appreciate as much as the S&P500 ETF.
It is also probably a more cost-efficient way to invest in the local market. Buying individual stocks would cost more as you'll incur flat fees from buying through the brokerages.
For the most part, I would say your strategy isn't bad.
You have the STI ETF denominated in SGD that serves as a hedge against currency risk.
You have investments in a globally diversified portfolio for growth.
If you're unsatisfied with the performance of the STI ETF, you can consider:
Allocating more to StashAway
Purchasing SG bonds instead and increasing your risk in StashAway to allocate a higher % to equities.
Of course, the above are just suggestions, do your due diligence as well.
Should NOT buy STI index, coz is contain some bad apples in it. Just buy the 3 local banks. It make up of almost 40% of index. Sg stocks can DCA, coz the price is so stagnent compare to US.
S&P500 would propose periodically 1 lump sum to invest. Because every few month market will have some huge correction.
03 Dec 2020