facebookI'm a fresh grad, new to investing here. Does it make sense for me to invest in both STI ETF and Robo-Advisors to diversify? What should the split be in terms of how much to invest? - Seedly

Anonymous

26 Aug 2020

Robo-Advisors

I'm a fresh grad, new to investing here. Does it make sense for me to invest in both STI ETF and Robo-Advisors to diversify? What should the split be in terms of how much to invest?

Hi! I'm looking to take out around $350-$400 of my salary to invest. Have read through a number of Seedly articles, but I'm still confused.

  1. Does it make sense for me to diversify by buying STI ETF + Robo-Advisors (Global ETF)? What's the benefit of diversifying, if I'm looking to hold this for the next 5-10 years when according to what I read, there's generally an upward trend in terms of returns? (As compared to only buying STI or only Global ETF)

  2. How should I decide the split?

Discussion (15)

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Benedict Lau

26 Aug 2020

Student Ambassador 20/21 at Seedly

Hello!

The purpose of diversifying is to eliminate as much as risk possible so that only market risk (risk that cannot be diversified away) remains.

With a budget of around $400, I would put it all in a robo advisor. Reason being is because i cannot ascertain how much risk i'm minimsing by getting both portfolios. On the other hand, if I use a robo adviser (Stashaway for example, which I use) I can be certain of the risk that I'm taking up through their portfolio's risk index. Do let me know if you need a referral code. Hope this helps!

Tan Yu Ji

13 Aug 2020

Economics at Nanyang Technological University

I would recommend not investing in the STI as the growth is too stagnant! If you only have $350-$400 every month to invest, just put it into a robo advisor and they will help you to diversify your portfolio!

Samuel Wong

12 Aug 2020

Banking & Finance at Singapore Polytechnic

Warren Buffett recommends retail investors to just invest 90% in S&P 500 and 10% in Short-Term US Govt Bonds. If your investment horizon is long (20+ years) don’t waste time (and money) investing in the STI

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Yeap yap, it is a good idea to diversify as the sti etf only focus on the top 30 companies in Singap...

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