Asked by Anonymous

How can I improve my investments portfolio? I'm 25 with 4k take home pay?

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.

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  • Luke Ho
    Luke Ho, Money Maverick at Money Maverick
    Level 6. Master
    Answered on 28 Oct 2018

    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.

    https://www.facebook.com/luke.ho.54

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    • Question Poster
      Thank you for your reply, Luke. I'd like grow wealth overtime as I wish to retire early (hopefully). I'm currently using ETF as it is easy via RSP (via Bank) and lesser management fees via other parties. Unfortunately, I'm more on conservative risk-taker. :(
      29 Oct 2018
    • Maximillan Fox
      How about a set of low volatility fixed income funds of about 6% annualized net of fees? The historical standard deviation over 3 years is under 5%.
      29 Oct 2018
  • Christopher How
    Christopher How
    Level 4. Prodigy
    Answered on 28 Oct 2018

    Good question.

    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? 😁

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    • Question Poster
      Thank you for your reply, Christopher. I would like to accumulate wealth over time and hopefully, will be able to retire early. I'm on conservative side but still willing to take low - medium risk. Thank you!
      29 Oct 2018
  • Chen Zhirong
    Chen Zhirong
    Level 3. Wonderkid
    Answered on 28 Oct 2018

    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.

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    • Question Poster
      Thank you for your reply, Chen Zhirong. I will diversify my investments accordingly (including ETF). As for CPF, is it much better - as I understand that special account gives much higher interest rate but unable to take out until retirement age?
      29 Oct 2018
    • Chen Zhirong
      Yes you are correct. But if you are doing this for retirement purposes rather than child or housing, that should be fine.
      02 Nov 2018
  • Jonathan Chia Guangrong
    Jonathan Chia Guangrong, Fund Manager at JCG Fund
    Level 6. Master
    Answered on 28 Oct 2018

    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

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    • Question Poster
      Thank you for your reply, Jonathan. I'm not that well versed - but I read mainly Seedly articles and wish to start investing (just started this year). I see - I have bought Nikko AM STI ETF SGD and Schroder Asian Growth USD. I'll purchase SSB once my CDP account is approved. Thank you!
      29 Oct 2018
    • Jonathan Chia Guangrong
      No worries. All the best in your investment journey
      30 Oct 2018
  • Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
    Top Contributor

    Top Contributor (Mar)

    Level 7. Grand Master
    Answered on 27 Oct 2018

    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.

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    • Question Poster
      Thank you for your reply. Kindly clarify if 75-80% would mean the amount % of my savings. I'm on conservative side but currently holding only 2 ETFs - Schroder USD and wish to have wealth accumulation over time. Thank you for your kind advice!
      29 Oct 2018
    • Hariz Arthur Maloy
      75-80% is your allocation rate of your investments into equity.
      29 Oct 2018