PFF Panel 2
Seedly PFF 2019
Asked on 02 Mar 2019
I've just sign on as a RSAF spec. How can I invest my lump sum bonus ($30k)?
With such a long time horizon stock investing could be very successful compared to other asset classes. passive indexing ETFs would be the choice, mutual funds should be avoided
(higher fees for on average lower returns, mostly obsolete nowadays)
more on my private thinking here:
I have addressed this indirectly at last Saturday's panel discussion.
If you just got started, go low risk to avoid catastrophic losses. Be patient. Go through a market correction to feel the fluctuations and better understand your emotional resilience towards market volatility (ie fluctuations). When you gain more confidence and experience, gradually increase your portfolio risk to accelerate your wealth accumulation.
Most of the investors with zero or little knowledge are profiled and recommended portfolio risk 2 (4 being highest risk) on the AutoWealth platform. This means they will be recommended to start off with a 40% global stocks 60% global government bonds portfolio. You may consider trying something similar, then build confidence over time and gradually move towards something closer to portfolio risk 3 (60% global stocks 40% global government bonds) or portfolio risk 4 (80% global stocks 20% global government bonds).
10 years is a long investment horizon. You should take more risk to accelerate your wealth accumulation. On the AutoWealth website (click Get Started), you may check out (a) the probability of making a profit and (b) the projected maximum decline in portfolio value by adjusting the time horizon lever and the portfolio risk level lever. https://www.autowealth.sg/advisory_module.php
You may also check out our blog posts for other useful investment insights or concepts: https://www.autowealth.sg/blog/
From what you have mentioned, seems like you may be new to investing. For now, look to set aside funds for emergency first. This should be about 6 months' worth of expenses. Look to educate yourself in investing via books and articles. Books like Money, master the game by Tony Robbins or millionaire teacher by Andrew Hallam are good starts.
Know your personality as well. How you handle money, and this will give you a guide to how you handle investments. Can you sleep when market plunges and you incur a big paper loss? Or are you the type to just shrug it off and proceed as normal? If you go into panic mode every time the market corrects downwards, you may wanna look into something that is safer in nature for a start. Like what Nicholas has mentioned about ssb and high yielding savings accounts. You can also do a monthly contribution into the Abf bond fund Etf via posb or dbs; this invests into bonds issued by our government and stat boards.
Take small steps into investing, get your feet wet and learn from mistakes. It's not a sprint but a journey in itself. Just avoid so called wealth management products from banks and insurance companies, and definitely avoid unit trusts or ILPs. The fees are quite ghastly and you won't really get anyway much with such products. Hope this helps
I assume you want to use the money in 10 years. Then investing in stocks might not be a good idea as it is volatile. You can consider CPF, SSBs or high interest savings account.