Regular Shares Savings Plans (RSS)
Asked on 09 Sep 2019
I am currently serving NS and intend to start on some small investment for about $200 per month! Came across different RSS plans in SG like the OCBC Blue Chip Investment Plan. I also went to look at different counters in Singapore but not sure which counters to start with. Anyone have any tips or tutorials for me to start from? Appreciate all your kind advice!😀
I would suggest that you take into consideration the costs of investing, as Takingstock as detailed below, fees will put a dent into your investment. However do note that Unit Trusts have zero fees on POEMS, so you're basically investing every cent from the first dollar. You should examine if UTs are a suitable asset class for you first before proceeding, as there are many types of UTs out there.
Take some time to gain knowledge first as you are still young and time is on your side. There's no right or wrong answer, but only what suits you best. For blue chips, I would very much rather wait for low prices to buy in, instead of dollar cost averaging (due to fees)
Hey there! That's great that you explored OCBC BCIP! It's called a Regular Savings Plan (RSP). Basically how it works is every month, they will automatically take an amount which you decide (eg. $500) to invest in a stock of your choosing. For a start, you can consider STI ETF (top 30 blue chips in SG) or Lion Philip S-REITs ETF. Those will yield you about 3% annually.
Generally speaking, those 2 are pretty safe for a start as they are auto diversified. However, I would recommend you to read up more as well! I started from Hardwarezone Money Mind forum, great place to start with a lot of how-to sticky threads, but of course you got to filter out those "trolls" haha!
Do browse the online digital investment services now available. These are the alternatives to traditional investment services which charge higher fees and require higher minimum sums. You should also assess your own investment style.
After years of investing experience, I advocate steady investing and global diversification. Problem is that we sleep and we can't monitor markets all the time. Hence, using AI-driven investment services is an alternative.
Hi, it's great that you have the idea to start investing when you are in NS! That's an early headstart comparing to many people!
I'm a student in NUS now and I only have the idea of financial freedom after I ORD, before entering University. Regretted that I did not save up every penny I had and invest in knowledge during NS.
My advise to you as an NSF is to save as much as you can (reduce nights out spending, eat more at cookhouse), then spend your time meaningfully by reading up more Investments/Financial Education book: Rich Dad Poor Dad, One up Wall Street, 5 Rules of Successful Stocks Investing.
While you're 'upgrading' yourself, you can consider parking your money with the SSB as they at least can reduce the inflation effects on your liquid cash!
If i were you, i would go and get some books to read 1st. To broaden up my knowledge before i start to invest in anything.
Or else I would save more and go for a proper investing course to fast track my learning!
I feel this is better than just simply invest monthly.
It’s good that you’re thinking of investing at an early age. But before you start investing, I’d suggest building up your emergency fund, having adequate insurance and minimising any high-interest loans like credit card debts.
You can consider RSS plans if you want exposure to Singapore stocks. But if you want a diversified portfolio with exposure to global stocks and bonds, digital wealth managers like Syfe may be another option. (Syfe has no minimum investment amount.)
Apart from investing early, diversification is one of the other keys to successful investing. Simply put, don’t invest all your money in the same place e.g. in one specific stock. A diversified portfolio helps reduce your investment risk so that you won’t lose everything if the market underperforms. To diversify your portfolio, you would want to invest in different types of assets such as stocks and bonds. Next, diversify your investments within these asset classes. With stocks, this could mean investing in a mix of large cap, mid cap, and small cap stocks for instance.
This is also the reason I generally advise against picking individual stocks. Instead, I recommend investing in Exchange Traded Funds (ETFs) for quick, easy diversification since ETFs allow you to invest in a large number of stocks through a single transaction.
How to Start Investing (and since you have time when you book out, even better!)
1. Accumulate capital. Everyone needs to start with some investment capital. Also of your pool of available capital, decide how much you want to invest.
2. If you can, start as early as possible. Compound interest allows your account balance to snowball over time.
3. Open your CDP account (which you have already). For the benefit of those who haven't, sign up via the instructions here: https://investors.sgx.com/cdp-account-opening/#/form-selection
4. Open your brokerage account, and link your CDP account to it.
5. Understand your investment options.
There is a whole world of investment products out there from stocks, bonds, ETFs, mutual funds to the more exotic or less mainstream ones like art pieces, scultures, gold, and cryptocurrency.
Read up lots to understand your risk appetite, and form your own investment strategy.
6. Execution is everything
I always like to say that one can spend a decade reading and not deploy a single cent because of fear of procrastination. I always say to start early, and start investing in small amounts so that you can better understand yourself as an investor.
Am trying to answer something similar for a friend, but will share my thoughts if it helps others.
A) For OCBC BCIP, the fees work like this - a minimum of $5 or 0.3%. So above monthly investment amount of $1700, you will start paying 0.3% fee charge, which is $5.10 for 1700. You have about twenty options to choose from under BCIP.
B) For the POSB invest saver, I think you only have two indexes to choose from, but the transaction fee % remains fixed at 0.82%.
For me, at about monthly savings of $600, there will be no difference between the two in terms of fees, because BCIP will land about 0.83%.
The rule will be going for the lowest fee possible.
If you have no investing experience, then going for an index fund first is a no-brainer. You buy into the average, and you will get the same returns as the index for the lowest cost.
However, if you have done your homework, and believe the counter you have selected will beat the index, then do that if your transaction fee % does not go above... well, I did say 1.3%, which would be at least 400 for BCIP.
At 200 / mth, the fees work out to be 2.5% under BCIP, and it can really put a dent into the overall returns. Unit trusts used to have a sales charge of 2.5% or more, and it would take a while as you investment first tries to overcome the transaction costs before you see returns.
1 more comments
09 Sep 2019
09 Sep 2019
First of all great to take the first step of courage!
The thought of losing money can be daunting when you are new and inexperienced.
Perhaps start first by:
1) deciding your risk profile of how much heartache you can take - would a +/- 10%-30% +/- 4-8% or +/- 2-3% aggressive, moderate, conservative- this will kind of point you to look at investing in unit trusts or robo portfolios of foreign company stocks that can yield high returns (but also swing with market sentiment) or more mixed asset unit trusts with mix of bonds and stocks) or local blue chip etfs like OCBC blue chip that is generally stable and more dividend yielding
2) while you are green at investing, investing in companies or markets or industries you are more knowledgeable about in terms of believing they will grow in next 5-10 yrs.
For me as a novice too, I picked Unit trust baskets of rising tech companies globally like alibaba facebook netflix jd.com (OCBC Lion Global innovation fund) and also some blue chip dividend stocks
First look for that plan with the lowest (total) annual fees,
then look which one allows the cheapest passive indexing ETF trading option.
Look for large and cheapest ETFs (world, and U.S. exposure, like VOO or VVI),
but have patience (more than 10 years required to be successful).
The SGX listed ETFs have higer fees than U.S. or Europe domiciled, try the latter two.
Avoid SWAP based ETFs (like f.ex. XTrackers uses), they have counterparty default risk,
the better method is to only buy 'physically replicated' ETFs.
Avoid mutual funds / unit trusts completely.
For beginners, I always advocate the usage of STI ETF because it is dviersified across 30 singapore companies of various industries. You obtain the beneifts of diversification in one counter. Here is my write up on it
Before you start investing, it will be best to understand your objective. Here are some questions to help you:
What is your capital?
How will you want to invest your capital? E.g. lump sum or an amount on a regular basis
How long will you want to stay invested? E.g. 10 years
What is your risk appetite? E.g. How do you feel about short-term volatility?
What is your objective for investing?
Know yourself, that is the most important thing to do for a start. From there, understand your risk tolerance and explore the various investment tools that are capable to help you achieve your goals.
Do proper research and reading on whichever counter that you are interested in and understand its fundamentals. Once you are confident, start with a comfortable amount that you don't mind losing. This is because there is no guarantee in investment returns.
I started my first invesment when I was in NS too, and am blessed with a portfolio that I eventually sold off for a decent profit to buy a car.
Here is everything about me and what I do best.
Stay consistent! $200 per month, regularly even when the market takes a big hit...
You stay calm and invest always.
Go for ETF of the broad Singapore straits times index.
Get STI ETF.
After a few years when you have a bigger budget, then you can go for global ETF like IWDA.
Enjoy your NS!