Hi I would like to find out about the various strategies that people use for investing with CPF-OA?

Hi, i am new relatively new to the workforce (<1 year) and currently still do not have enough funds in my OA to start a CPF-IS account. However, i would like to find out about the various strategies that people use for investing with CPF. Personally, I would like to be prudent with my investment. Hence, i am thinking of just selecting a couple of SG banks and REITs which are larger and more stable. Or are there any other options worth considering? How often should I DCA as well?

Discussion (5)

What are your thoughts?

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Rhee Hyuk Kee

29 Sep 2020

REITS in my opinion is not essential - the same exposure / diversification can be obtained from a mixture of equities and bonds. https://www.youtube.com/watch?v=IzK5x3LlsUU

Even from a dividend paying perspective - one should be impartial/indifferent. (unless you're old and you need monthly/yearly payouts).

https://www.youtube.com/watch?v=f5j9v9dfinQ

DCA as frequently possible as you can.

As mentioned in previous answers, avoid investing disproportionately and soley into SG banks. Since you're using CPFOA, i highly recommend Endowus.

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Sharon

27 Sep 2020

Life Alchemist at School of Hard Knocks

Update 27/09/20:

Dr Wealth wrote an excellent piece on whether you should invest your OA into REITs.

https://www.drwealth.com/should-you-buy-reits-w...

I forgot that REITs can raise money via rights issue. If you plan to invest in REITs, you will have to deal with this by forking out more money to avoid dilution.

Hence, the easiest way out is if you don't want to actively manage your investments, just dump the money in the funds parked with Endowus. Hassle-free and you can sleep well at night.

I parked a lump sum from CPF-OA with Endowus (no DCA). Invest globally will do you better than just invest in Singapore. Do note that the min. sum for investing with Endowus is $10,000. I'd think you may not have this sum yet.

Hence, what I would do in your situation is to accumulate more investible money in CPF-OA until I reach the min. sum and invest with Endowus. I just feel that if you want to pick individual REITs, you must be very careful. If you want to go ahead, then I'd suggest to attend a reliable course. I find the Dividend Machines by The Fifth Person may be able to give you a head start. I attended it in early this year. It's for beginner and quite affordable. Unfortunately, the admission for this year is closed, so you'll have to wait for 2021 enrollment.

As for banks, I'll avoid them, as they're facing headwinds and even if we get a vaccine next year, the low interest environment is going to continue. It's not good on their profitability.

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