Asked by Anonymous
Hello, I currently just started investing STI ETFs (Nikko AM & Schroder USD) through RSP ($200/month/ETF) with my bank. Is it wise to have additional robo advisors for $500/month or should I just put same amount to SSB? Thank you very much.
Set an objective to your investments. Most people who invest in liquid assets fall into trap of investing for the sake of making money. With no purpose, you'll compromise on the making money portion extremely quickly during market volatility.
Being young, I'd actually urge you to go even more aggressive than robos. Push for funds and ETFs that make double digits annualized with long time horizons of 15 - 20 years. If you're not someone who has thought it very much through, the usual two objectives I suggest to my clients are their mid 40s and their retirement (or if they want to retire early, its one big objective).
You can contact me if you'd like to consider investing in such funds, as I do well with them.
What you need to ask yourself is what is your objective.
If you just have surplus savings and want to put the money in somewhere with a lower risk than STI ETF, then it makes sense to put the money in SSB.
If your goal is to increase the coverage of your investments to go beyond just Singapore alone, robo advisors are one of the easiest way to diversify your investments across the globe without a large capital.
So, what are you going to do? 😁
I would stick with STI ETF for the first 2-3 years until you feel confident enough to invest in local stocks and then global ETFs.
You can go with robo advisors but I feel that that will simply stunt your growth in learning how to invest globally. However if you feel you don't want to learn/will learn later, then you can do so in order to gain exposure.
No point putting in SSB at this age! Would rather top-up in CPF instead as returns in SSB are too low for someone this young.
How well versed are you in investing? If somewhat experienced and you want a hands off approach, consider buying into a global stock Etf, local Etf (sti) and bond Etf or similar (can consider using ABF Singapore bond index fund or ssb) . This is discussed by Andrew hallam in his book millionaire teacher, which is a great read. Now if you want a hands on approach, consider managing an options portfolio. You will probably need to pay to attend a workshop on this to get started and avoid mistakes but results are worth it at 30% pa or more. All the best
Skip the STI and invest more in a globally diversified portfolio. For your fixed income allocation, you can either use SSBs or CPF as an alternative to a bond fund.
You have a 30-40 year horizon, you should have a higher allocation into equities until you hit your 30s. Your equity allocation should be 100 - your age. I this case 75-80% would be ideal.