Asked 6d ago
I want to invest my money for the next 5 years and some money for the long-term, but I don't want to think much about the technicalities of it... I am willing to pay a fee, but I hope to get proven results.
Which one will be a better option?
Based on your shorter investment horizon of 5 years, I do not think it is suitable for you to invest in many of the roboadvisors, since the offer USD denominated investments.
Your short investment horizon will limit you to safer investment instruments, and SGD exposure.
From that angle, roboadvisprs are not a suitable platform for your investments. Choose safer SGD denominated investments if you really need the money.
You pay a fee to an advisor to look at your risk, create an allocation cashflow strategy based on your current assets, liabilities and cashflow. Investing into a Robo advisor uses the platform to capture the price benefits as opposed to using a mutual fund.
You are paying for different benefits.
There is no way to have proven results since investment only yields non-guaranteed returns.
Instead, what we should be looking into are the risks associated with the investment, as well as the investment strategies and risk management techniques that we are going to deploy to ensure sustainability over the long run.
With the recent closure of Singapore Robo-advisor Smartly, it makes us realise that counterparty risk and platform risk are real. Therefore, it certainly makes sense to work with a reputable company with strong backing and working capital.
If you are open to some of the financial instruments available from AIA, here is their latest investment result: https://www.blog.pzl.sg/aia-singapore-investment-linked-fund-performance/
However, take note that past performance is not an indication for future performance. On the contrary, we need to spend quality time to use the right investment strategy and risk management technique to make our money work for us.
In addition, it helps to have global investment firms like Mercer, and BlackRock to give us independent and professional advice on asset allocation.
Of course, the downside is the investment risks that you must be willing and able to undertake, alongside with the higher fees as compared to robo-advisor.
All things considered, you may either do further research on your own or to speak with an experienced consultant who is able to evaluate the fine prints with you.
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