I intend to invest $6-10k/yr in syfe, minimally 10 yrs. I have a $6k/yr endowment plan for 20 years, and do not intend to surrender it. How should I split my investment portfolio in syfe, and why? - Seedly
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Anonymous

Asked 2w ago

I intend to invest $6-10k/yr in syfe, minimally 10 yrs. I have a $6k/yr endowment plan for 20 years, and do not intend to surrender it. How should I split my investment portfolio in syfe, and why?

I just turned 28 year old.

Assuming I do not want to diy, how should I pick my syfe portfolio? Was initially leaning towards equity100 only but the reits+ 100% portfolio also sounded tempting.

I guess I am using my endowment as my safety net although I know it is quite high but I guess in a sense it allows me to take a higher risk with investment.

Aiming to grow my wealth but not a risk-taker so thought robo like syfe could help (on top of the endowment).

Appreciate all responses!

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Daniel Kok
Daniel Kok
Level 5. Genius
Answered 1w ago

Hey there!

similary to your situation, I'm currently investing in both REITS and equity100 too! I started off at the age of 27 with an endowment plan as well.

For SYFE's portfolio, I did 50/50 as well on REITS and equity100. I started off with REITS because I'm attracted to the dividend income and it felt more "safe".

but I decided to diversity into the US market as well because I feel that at my current age I'm able to take the risk. :D

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Question Poster

1w ago

Lol! Actually my bf has been bugging me to invest rather than keep my spare money in FDs and wth, the recent FD rates are really horrible so this is kinda no choice just invest and I've been reading around and people saying robos are good for starters! But come to think of it, I may just play around with robos for the diversification but it's a risk I'm willing to take (lower returns due to fees incurred haha) Appreciate your thoughts, Daniel, thanks again! ^v^
Daniel Kok
Daniel Kok

6d ago

You’re most welcome! Yes fixed D is really quite bad. However if you do have emergency cash that you want to park aside, you can consider singlife($10k at 2.5%), and singtel dash ($20k at 2%) both have flexibility to withdraw and their interest computes monthly basis. :)
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Jovan Lai
Jovan Lai
Level 4. Prodigy
Answered 2d ago

Hi Anon!

I would like to share a less talked about point on diversification. Over-diversification can expose you to more risk than it reduces.

It is important, as Warren Buffett mentioned, to stick within our circle of competence. Buying into something we do not understand for the sake of diversification can actually expose us to more risk than we think. It is the same as investing in something we have not done our research about and did it because others are doing so.

Diversification is unique, there are many takes on it, some say use the formula

110 - age = % of stocks

More conservative portfolios like Ray Dalio's all weather portfolio has a mix of bonds, commodities and equities.

Other portfolios like Bill Gates, Warren Buffett, Cathie Wood, Adam Khoo, Bill Ackman and many more, are fully or mostly into equities only. However, within their portfolio, it is diversified into different types of stocks.

Diversification is important! I’m definitely not against it! But it is very subjective and I’m just trying to point out that even though many seem to say spread it out amongst equities, gold, bonds, that is just one view on diversification. There are many great investors that argue otherwise.

Ultimately, stick with what you have affinity to, know your risk tolerance, financial goals and circle of competence. Becareful investing into something for the sake of diversification if you do not understand much about that asset/market/industry/sector. It may cause us to make poor decisions in times of un-met expectations. i.e. sell when its low only to see it go up tremendously OR buy when its high and take ages to see any returns.​​​

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Question Poster

1d ago

Thanks for the insights, Jovan! Will do more research into diversification.. Didn't think over diversification may expose me to more risks! :(
Jovan Lai
Jovan Lai

1d ago

Yes indeed(: I thought it was important to share because it’s something less talked about. Most would agree diversification is important, and I do too! However, I think the issue is that most stop at “why we should diversify” but nothing much is discussed about “how we should”
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Hey there!

It really depends on what you're looking at. You can look at a 50-50 allocation into the equity100 and reits portfolio. Do note that both of them are still equities related so depending on your risk profile, you can choose to opt for a diversified portfolio for equities instead of the equity100 portfolio.

Financial planning is an integral part of life. You can reach me here to find out more.

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Oh Yi Ning
Oh Yi Ning

1w ago

Normally for decisions to split allocations, my rule of thumb is to take 50-50 and decide which we want to weigh out more and prioritise more then from there and decide :)
Question Poster

1w ago

Appreciate your response, thanks again! :D
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Anthony Chan
Anthony Chan
Level 4. Prodigy
Updated 2d ago

Many useful insights here!

Here's my take: When choosing financial products, always look beneath the surface and understand the details. I invest in Equity100 too, but I would not place it in the very well-diversified category given that some 44% of the portfolio is invested into QQQ. As the recent tech sell off has shown, such a portfolio may be more risky and volatile. But if you believe that tech will continue to dominate the markets, then it's probably a decent portfolio to invest in. Still, don't forget currency impact as the dollar will trend downwards given the QE measures and low interest rate environment amidst the COVID-19 pandemic.

I understand that Syfe has committed to rebalancing Equity100 twice a year. Given that it is a new product, we will have to wait and see what happens at the next rebalancing. (Some analysts have pointed out that it may be time to invest in cyclicals.)​​​

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Question Poster

1d ago

Hi Anthony! Yes, I believe tech will continue to dominate the markets for at least the next 10 years! Didn't consider about currency impact though, thanks for the heads up! Rather than wait and see, I have invested a small sum to see its performance for now haha.. What if wait and see and it really performs? Then I would have missed the boat! :(
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Benjamin Lim ZY
Benjamin Lim ZY
Level 3. Wonderkid
Updated 1w ago

I'm trying to follow a rather conservative 50/25/25 plan for my investments, where 50% goes to the Syfe global portfolio, 25% into syfe reits+ and the remaining 25% into eq100 along with other riskier investments (individual stocks/crypto).

This for me is pretty diversified and offers safety (e.g. last thur eq100 dipped 3.7% whereas my global managed one only dipped 0.2%). Although I'm planning to invest for the long term, I also want my capital to be relatively safe in case I need to withdraw some of it in the coming years (housing etc).

Since you already have the 'safe' part covered in the form of your endowment plan, you could split your remainder 50/50 into syfe reits+ and eq100. Reits+ do offer capital appreciation and since it's sg denominated, there's no currency impact. You also get dividends which is always nice to see. The other 25% in eq100 could offer greater capital appreciation and although it's pure equities, I would say it's already well diversified enough.​​​

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Question Poster

1w ago

Thanks for the insights, Benjamin! At least your global can anytime withdraw.. My endowment stuck inside haha.. Pros and cons!
Benjamin Lim ZY
Benjamin Lim ZY

6d ago

Yea I am! A mix of dca and some bigger quarterly trenches in case the market dips further. I used to automate the dca but now choose to deposit by myself to have slightly more control over when I choose to enter (can be good can be bad).
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You can split them up. If you have an endowment as an insurance for wealth and you find it adequate, you can stomach higher risk with your equity portfolio. Not to mention unlike endowments, equity portfolios are flexible and have no fixed term, it allows you flexibility to stop when circumstances change.

Statistically if your time horizon is over 20 years, I would not bother with REITs unless you are nearing retirement. Just stick to profitable companies via S&P500 Equity and you will do better with capital appreciation.

Since you have mentioned that you are not a risk taker, Stashaway might be a better vehicle, they diversify and manage risk better as compared to a 100% equity exposure.

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Aaron Leow, CFA, ChFC®/S
Aaron Leow, CFA, ChFC®/S

1w ago

Fees only start to matter when your portfolio crosses 100k. The 0.2% isn't really going to make a difference in 5 years. Just top up an additional $500 and you cover it for 5 years. Whether you prefer reits depends on whether you prefer income. If you want capital appreciation, REITs will not win equity. People shift to income near retirement as their concern is income, not capital gain.
Question Poster

1w ago

Appreciate your thoughts, thanks Aaron! :D
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