I'm considering to put some of my money in higher risk vehicles (looking at 5-7% p.a.). what are the key metrics and articles i should look out for? - Seedly

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Asked by Anonymous

Asked on 02 Nov 2018

I'm considering to put some of my money in higher risk vehicles (looking at 5-7% p.a.). what are the key metrics and articles i should look out for?

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Luke Ho
Luke Ho, Money Maverick at Money Maverick

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Level 6. Master
Answered on 03 Nov 2018

Hariz already talked about the asset allocation portion, so I'll talk about the Time part - you need to determine your time horizon.

If I wanted double digits annualized, which I could do pretty easily, frankly speaking - I'd still need a crapload of time (historically about 15 years with a leeway of 5-8 years).

5-7% is pie. It would depend on your objectives.

In summary, if I could share two 'metrics'

1) Goal - Consider your objective for wanting higher returns and stick with it.

2) Time - If your time horizon is shorter than 10 years, it could be a bit riskier to get that pot of gold at the end of the tunnel. You may want to talk to a consultant about the asset allocation so you have a higher probability of it not going to crap.

You could always drop me a message if you have any questions.

https://www.facebook.com/luke.ho.54

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You have to choose if you're looking for growth or income.

If growth, US Equities can easily do 6-8% p.a in the long run. You can invest in an index fund or an ETF for this.

If income, most REITs or high yield bonds could also give similar returns. For HY bonds, using a dividend paying Unit Trust instrument would be ideal.

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Jacob Chong
Jacob Chong, Executive Financial Advisor at PIAS

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Level 3. Wonderkid
Answered on 02 Nov 2018

Hi I guess you want to put you money in higher Risk vehicle because you are expecting that higher return to compensate for the risk taken.

Seems like you have invested before and want to juice up a little more on the returns of your investment. Great !!!

Look a tactical play in current market condition. Tactical meaning the sum invested must not exceed a certain % of your core investment portfolio. This % is determine by your risk appetite and how ready are you lose this % of your core investment.

Core investment denotes those that are stable and gives a stable returns and you are confident with the movement of the shares in good times and bad times.

Tactical Investment (usually higher in risk) are looking for pocket of opporunity in under value stocks i.e cheaper PE ratio. but for tactical play you need to monitor more actively and move them when you have reached a targeted return or stop loss level

If you are more to the invest and let play kind you can try choose some dividend yielding Unit Trust that can gives you a steady stream of income of about 5-7%. Multi Assets Income, Asian Income etc. But do note that there are cost involve. I am referring to Unit Trust. NOT ILP.

Cheers hope you are able make some good money from your tactical play

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