I finally decided to start investing and not leave it in the bank for years. Do you all have any advice on what I should invest in? I am willing to leave it untouched for 3 years? - Seedly
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Anonymous

Asked on 14 Apr 2019

I finally decided to start investing and not leave it in the bank for years. Do you all have any advice on what I should invest in? I am willing to leave it untouched for 3 years?

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    Fatty Finance

    Fatty Finance

    Level 4. Prodigy

    Updated on 09 Feb 2020

    Singapore Savings Bond or continue keeping it in the bank. Look for other high interest savings accounts (dbs multiplier, ocbc 360 or uob one etc etc) that can guarantee your principal.

    I agree with all the others, 3 years is pretty short time period for investing. Given the volatile start of year 2020, there is no guarantee you will gain anything more by investing than just leaving it in the bank for 3 years. In fact, it is possible to lose more.

    Which brings us to another key factor: how much can you afford to lose? This will determine which kind of assets you should invest in - stocks or bonds or a mixture of both.

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    3 years is really a short time to leave the money untouched.

    Instead of what you should invest in for these 3 years, the more important question would be what is the purpose of this money. Are you using the money for wedding, renovation, holiday, or for retirement eventually?

    If the objective of this money is for something that is definitely happening in 3 years time, perhaps you would like to invest into instruments that are liquid and less volatile. An Example would be SSBs or a high interest bank account, or Fixed income funds. In fact, STI or SGX stocks would not be a good suggestion at all because no one can predict the price points 3 years down the road, and unlike what was mentioned, STI or SGX is relatively volatile compared to the instruments which I suggested above. What if a market crash were to happen when you need the money?

    However, if your purpose is for retirement, perhaps you should start reading up some Seedly Articles on Investments and ETFs and get yourself started by setting up a brokerage account. You may consider S&P500 and QQQ or IWDA ETFs. Once you start having a deeper understanding about equities and fixed income and REITS, you may consider building your own portfolio of individual holdings of stock, bonds or REIT.

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    Agreed with all of the previous answers. If youre less experienced, i'd either choose a robot or just put it in a widely diversified ETF (MCSI global). Additionally, look in to what you can save and add on top monthly to your 30k.

    You should use the time reading up and take up on paper trading to know your way around. Go to the libary and start reading - What a boring option, but it does save you money on buing books tho.

    If you really insist in investing actively, only do so with 30% of your money (Depending on your age) and go for some value stock. I just discovered that IBKR is able to also setup portfolios you can just throw money add once you finished building it up.

    Main thing, Save, read and practice.

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    Frankie Rappaport

    Frankie Rappaport

    Level 10. Unicorn

    Answered on 07 Feb 2020

    You should leave it untouched at least 5-10 years if you consider stocks/ETFs

    my thinking:

    https://seedly.sg/questions/what-is-your-general-investing-philosophy-strategy

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    C

    Cam

    Level 4. Prodigy

    Updated on 24 Sep 2020

    It really depends on your financial goals: what is the returns are you looking to yield after three years?

    If you are looking for high interest yield(anything above 2% to double digit) , the investment timeframe of 3 years can be considered too short time frame , and there is high possibility of exiting your investment from market with loss (given the volatility of market).

    Many will prefer investing in longer time frame to aim for higher investment yields (10 years above )

    If earning enough interest to cover inflation is your goal for the next three years , can consider high interest savings account, or well performing bonds (decent yield on average above 2%)

    Or you can consider short term investments like p2p crowdfunding platform (Funding Societies) where it offer good returns (3%-15%pa) in short term(less than 1 years period). High returns in investment means higher risk involved.

    If the money you need three years later is for big spending like buying house or marriage, its advisable to leave this sum of money to high savings account so you have the option to draw your funds anytime when needed.

    Check out seedly article on high interest savings account:

    https://blog.seedly.sg/alternative-savings-account?utm_source=telegram

    Consider you're risk appetite to decide on which method will suit you best.

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    3 years isnt really a long time to invest so I would suggest either putting it in high savings bank accounts (eg SCB jumpstart, CIMB Fastsaver, DBS Multiplier if you have income) or in Singapore Savings Bonds. alternatively maybe you could try using roboadvisers since they dont have a minimum investment amount and high liquidity!

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    Penny Chong

    Penny Chong

    Level 5. Genius

    Answered on 29 May 2020

    S&P500 ETF is a good choice as it historically yields 10% return over its history of around 80 years. It provides easy diversification, which is super important for any portfolio regardless whether you are a beginner or pro investor!

    You may invest it in a lump sum or separate into smaller portions and put in once every month or so if you are worried about not getting the greatest bang for the buck! Be careful of the transaction fees though.

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    Summer

    Summer

    Level 5. Genius

    Answered on 23 May 2020

    Hi there, I would recommend investing 50% in a global market portfolio like S&P500 ETF as it historically yields 10% return and has a general upward trend. I would not really recommend local ETFs as the returns are rather low and is not as established as S&P 500, which is really, a safe bet. The US. global market is highly unlikely to fail as it represents the global market condition.

    I would recommend you to look into the various brokers and their fees before investing, as some are really high and will eat much into your earnings!

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    SW

    Shaun WQ Lim

    Level 8. Wizard

    Answered on 18 Apr 2019

    Without additional information about your current age and financial situation/risk profile/investment amount now, it would be quite difficult to advise you.

    Do you have an emergency fund built up already?

    Have you done a financial assessment?

    Are these funds meant for something important after 3 years?

    What sort of risk are you willing to take or prepared to lose this amount?

    If this amount is not in any high interest savings account, you might want to open one and shift the amount there as a first step.

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    Zann Chua

    Zann Chua

    Level 6. Master

    Answered on 15 Apr 2019

    Hello!

    If you are looking at investing something that has relatively low risks, investing in the Singapore Savings Bonds (SSB) would be a good idea as it is backed by the government and is one of the safer investments around.

    Another way would be to invest in ETFs such as through Regular Savings Plan offered by banks such as DBS. By opting for this savings plan, you will essentially be investing in STI ETFs.

    Besides using regular savings plan to invest in ETFs, roboadvisors would be another way that you can invest your money in. Investing in ETFs through either roboadvisors or Regular Savings Plan usually have higher risks as compared to investing in the SSB.

    It is important to read about the invesments first before deciding to invest in it! The seedly blog has many useful articles about investments that you can check out to help you out with your invesment journey :)

    hope this helps and all the best in your invesment journey!

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    Michael Lee

    Michael Lee

    Level 6. Master

    Answered on 15 Apr 2019

    Start locally with sgx as the volatility isn't big. Diversity your portfolio by buying a few stocks instead of lumping into 1.. you can put some into ssb/robo for mid-long term gains.

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