I have money set aside for emergency funds, and also in to STI ETF and SSB. Looking to move on to my next step of investment. Should I go for dividend stocks or growth stocks? - Seedly
 

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Stocks Discussion

Asked by Anonymous

Asked on 29 Jan 2019

I have money set aside for emergency funds, and also in to STI ETF and SSB. Looking to move on to my next step of investment. Should I go for dividend stocks or growth stocks?

Especially since I lean more towards the risk adverse side, and also don't have a lot of time to monitor my stocks

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Answers (11)

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Bjorn Ng
Bjorn Ng
Top Contributor

Top Contributor (Jan)

Level 9. God of Wisdom
Answered on 10 Dec 2019

When I started, it was dividend stocks, and the best one would be REITs. Seeing that you lean more towards rise adverse, I think REITs would be suitable for you. They give about ~5% returns annually. If you would like to take a read at it, you can start from here: https://forums.hardwarezone.com.sg/stocks-shares-indices-92/investor-basics-fundamental-analysis-concepts-reit-2972824.html

For growth stocks, you would need to be able to identify and take the volatility. And you can't really find that in Singapore as the businesses listed here are more or less pretty matured already.

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18

If you are risk adverse, then you should not be doing too much stocks, or even none at all.

However if you do want to enter, then you would be better off with either stable dividend paying stocks, or diverisified ETFs or funds. However, you will have to monitor your investments (note: investments, not just stocks) since you can't expect things to run on their own.

I won't recommend growth stocks since they have massive price swings and are mostly in overseas markets; you will really need to spend time understanding them, monitoring them, and finding an entry point.

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Bibiana
Bibiana
Level 7. Grand Master
Answered on 11 Dec 2019

Go for growth stocks!

There is a book called Value.Able where you are able to see that for growth stocks, they retain most of their capital and they were able to compound beyond the dollars.

The author also proven that to get income, you can consider to sell the shares of growth stocks. Net-net, you are still better off.

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pat
pat
Level 7. Grand Master
Answered on 17 Jan 2020

Dividend suits your risk and style more.

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Before you start investing, it will be best to understand your objective. Here are some questions to help you:

  1. What is your capital?

  2. How will you want to invest your capital? E.g. lump sum or an amount on a regular basis

  3. How long will you want to stay invested? E.g. 10 years

  4. What is your risk appetite? E.g. How do you feel about short-term volatility?

  5. What is your objective for investing?

There is no one-size-fits-all rule to investing. As a result, we will need to understand your investment objective in order to create a portfolio that you are comfortable with.

In addition to growth or dividend play, you may wish to consider a managed portfolio where you can tap on professional independent advice from the likes of BlackRock and Mercer to provide you with a customsied portfolio that fits your risk appetite.

Here is everything about me and what I do best.

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Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 8. Wizard
Answered on 11 Dec 2019

Mm should you be involved in stocks if you are more risk adverse? If you are still keen to do so, you may want to look towards stocks with a strong moat or with big competitive advantage. Stocks like Sheng Siong or Netlink trust or even reits with strong sponsors. Alternatively, look to create an account with a robo advisory and save the headache of having to stock pick at your current stage.

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Wallace Chai
Wallace Chai
Level 9. God of Wisdom
Answered on 11 Dec 2019

Hi there,

In my opinion you should go for growth stock now. Make time to do proper research and buy into high quality growth stock. Sit back and relax and do nothing. This is what you should be doing.

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Choon Yuan Chan
Choon Yuan Chan
Top Contributor

Top Contributor (Jan)

Level 9. God of Wisdom
Answered on 11 Dec 2019

Dividend stocks since you are more risk adverse. Dividend stocks will suit you more than growth

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Wilson Nid A Break
Wilson Nid A Break
Level 8. Wizard
Answered on 10 Dec 2019

Dividend Growth stocks - Stocks that pay consistently pay out an increasing dividend due to well managed fundamentals

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Cedric Jamie Soh
Cedric Jamie Soh, Director at Seniorcare.com.sg
Level 8. Wizard
Answered on 10 Dec 2019

Why not both?

split into both, give it a couple of year to see what you like and what suits you?

Best way to experience swimming is dipping your toes in :D

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Lok Yang Teng
Lok Yang Teng
Level 8. Wizard
Answered on 29 Jan 2019

Growth stocks. More often than not, dividend yield will increase as the company grows (thereby increasing dividend and share price). Dividend stocks are generally blue chip stocks with low potential for growth but maintain steady appreciation. Some are overvalued so beware.

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