AMA SG Young Investment
Asked by Anonymous
Asked on 06 Sep 2018
Preferably nothing too illiquid, low to medium risk profile.
For low risk, I will go for Singapore savings bond which is capital guaranteed. Its not really a bond even though its called a bond, it works more like a deposit and the good thing is you can sell the bond every month in case you need the money and get back your full capital plus interest.
For low to medium risk, i would go for some bonds such as government bonds or corporate bonds of large corporations (eg capitamall trust, Singtel etc). However, it is not advisable to invest in bonds in a rising interest rate environment like currently.
For medium risk, which is still my favourite especially when we are young, stocks is a good choice to explore. I would invest in some reits, some blue chip companies and try to build a diversified portfolio of stable dividend stocks. I would also invest in some growth stocks to further grow the money.
**Ask the individual what he wants the $100k to perform as.
**1. An income provider
An expense coverer
A capital appreciation asset
**It could be all 3 pts above but does he or she knows how to do it bcos by getting answer here is the door way.
Without the key which is the planning, by going thru tt door will be regrettable when macro market is against everyone.
The first step I would do would be to assess my needs.
1) Emergency funds?
2) Outstanding debts?
3) Immediate needs - need to buy house, renovation, wedding, kids etc. Whatever that will require loans or debts
And consider setting aside some money for it. Assuming 1-3 are already covered, I will consider whether your parents retirement funds are already covered. If they are not, then this will have to come out of your own future. cash flow. I will consider topping up their RA to at least FRS which will give them lifetime income via CPF LIFE and alleviate your future cash flow.
Assuming that is covered as well, then let's talk investment. Low to medium risk profile would suggest 50% SSB and 50% S-REITS ETF (Lions Philips S REITS ETF) for income and diversification
Top Contributor (Jan)
I'd place 50k in a globally diversified portfolio of actively managed funds with a fixed income allocation of between 40-60% due to the low/medium risk appetite if I don't need the money for the next 5 to 10 years or so.
The other 50k, I'll leverage on an annuity that'll give me 6.5% for life. This will give me my passive income as I'd reinvest the dividends and coupons in my fund portfolio.
I would allocate the following:
1) 30% SSB - 2.42% (hold 10 years)
2) 30% Fixed Deposit - 1.5 to 2% (hold for 2 to 5 years)
3) 40% High yield savings account (assuming you are working) which will get you - 1% to 2% p.a (and this is liquid, you can withdraw anytime) (Reason also cos up to 50k is insured, unless the bank goes bust)
Yup! from lowest liquidity to highest :)