AMA Christopher Tan
Asked on 21 Jan 2019
Would you recommend ETFs like everyone else in the community?
Hi anonymous, thank you so much for your question and so sorry for the late reply. I generally do not like to prerscribe a product before understanding the full context of your financial situation. It is like deciding what ingredients to buy before we know what we want to eat and the recipe.
But I would generally say "yes" to your question. My firms' (Providend and MonwyOwl) investment philosopohy is that we do not believe in timing the market. There is no need to as well. We also believe in lowering the cost of investing. ETFs is one good way to access index investing and also it is low cost. However, as ETFs are listed on the stock markets and there are brokerage cost involved in buying them, please be mindful that you do not do many small transactions.
And by the way, if I have only $10,000, my preference is to invest in a more broadly diversified ETF such as the SPDR S&P500 rather than STI. The Singapore market is just too small.
Hope this helps.
I would put into low cost index fund and let it grow, but I chose to invest in properties, no right or wrong. Just that now I have more knowledge on equities market. I have start to diversify my investment into equities now.
I would not recommend investing the first 10k into ETF. However, as part of the first investment, I do recommend to invest in ETF on a DCA basis, e.g. $100 per month.
For the first 10k, I would recommend investing into dividend stocks. This will allow you to generate a dividend income so that you can grow your warchest for future investment.
I would invest in tech stocks such as facebook and apple as they have already proven themselves now. So if i were to turn back time, i would buy those stocks.
For me, I invested my first $10k into ETFs and I wouldn't change that given a choice. I believe it has helped me to avoid many of the mistakes i would have made if i went straight into stock-picking.