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Asked by Anonymous

Asked on 05 Jan 2020

How do I allocate my funds when investing?

Hello. I am a 24-year-old expat in Singapore and I have been living here for the past three years. I have saved up to 95k SGD and invested around 16k in SA. What else should I be investing in?

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Lim Boon Tat
Lim Boon Tat, Mathematics at Cambridge University
Level 6. Master
Answered on 20 Jan 2020

Wow. way ahead of many many 24 year olds. Depending on your risk appetite and financial goals, there's a variety of higher-risk instruments that you can consider, as you have a much longer financial horizon.

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Bjorn Ng
Bjorn Ng
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Top Contributor (Jan)

Level 9. God of Wisdom
Answered on 19 Jan 2020

Hey there,

Great job saving up that amount! Before you look at what to invest, I would suggest you to build up your investing knowledge by reading books, forums, and understanding what kind of products are out there for you to invest. Also, take note to set aside your emergency funds (roughly 6 months of your salary) and expenses before embarking on your journey.

For a start, you can look into investing in STI ETF or robo-advisors which automatically creates a diversified portfolio for you.

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Choon Yuan Chan
Choon Yuan Chan
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Top Contributor (Jan)

Level 9. God of Wisdom
Answered on 14 Jan 2020

Besides understanding your risk profile and future financial needs, i feel at least a small portion of your savings can be allocated to stocks investment. For simple no fuss,knowledgeless investement,i would always recommend investing a bit into the STI ETF

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pat
pat
Level 7. Grand Master
Answered on 14 Jan 2020

You have to confirm your risk tolerance level and expected returns

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Billy Ko
Billy Ko
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Top Contributor (Jan)

Level 7. Grand Master
Answered on 08 Jan 2020

Hey there

There are in fact many ways to allocate funds to invest.

One that I have heard of and feel is rather feasible is between stocks and bonds given how price movements are inverse of each other.

Depending on your risk appetite, you can allocate via percentages in each portfolio. If you have a higher risk appetite, you could consider allocating a higher percentage of your funds into stocks and the remaining in cash and bonds whereas if you have a lower risk appetite, you could do vice-versa.

Following that, set a date where you rebalance your portfolio annually (Buy the shortfall of the percentage, sell the excess to meet your ideal percentage balance)

Hope it helps!​​​

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Question Poster

08 Jan 2020

Thank you Billy for your input. I am planning to invest using robos for a while till I get proper knowledge. Then I will start DIYing.

Hello

First of all - Congrats on the savings! Nice job

I'd start by asking what are your goals with this investment? Is it for short term, is it for retirment, is it simply to be invested and grow your money?

Looks like you already have some in your CPF SA which is for retirement and a low risk investment. Given your young age I would consider most if not all to be in equities and the rest in fixed income or money market funds, a 70/30 split. Or if you have a higher risk tolerance then 100% equities, especially considering you already have some in your SA account.

In the Equities you can put it in lower risk investments such as Index ETFs or even theme ETFs, so whilst its all in equities, its diverified within a basket of stocks.

My whole belief is to start making your money work for you! Create a split between dividend stocks, index etfs and growth stocks.

And the money you have sitting in cash - consider something like Stashaway Simple - where you are atleast getting 1.9% and can pull it out anytime!

Goodluck! Feel free to ask any more questions!

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Question Poster

08 Jan 2020

Thank you Rishi for your input. 70/30 portfolio seems realistic at this stage to me.