Asked on 21 Apr 2020
I am 22 years old and currently hold some units for CapitaMall Trust, DBS and Singtel which I bought through OCBC'S BCIP. I am thinking if it is worth it to buy more units for CapitMall Trust and DBS now since their prices are lower now.
Either OCBC Bluechip plan or Stashaway- both are better than 2% interest with SCB in the mid to long run :)
If you have specific SG stocks you like, go for OCBC bluechip plans.
if you prefer global exposure, Stashaway.
You need to know how you wish to plan for your future. Without knowing you in detail, there is no way to tell you which is a wiser move.
For example, investments are subjected to investment risks and therefore the returns are non-guaranteed. On the other hand, bank deposits will always yield a guaranteed rate of return. To put it another way, they are different asset classes.
With this in mind, the general suggestion will be to conduct comprehensive life planning such that we know how to manage your money for the future. Thereafter, we can decide whether to invest (and through what tools) or to keep it in the safe box.
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I would put my emergency funds in JumpStart due to the high liquidity and interest rate. I woud not use that as an investment since 2% is too low (CPF gives 2.5%) and it is only for the first $20,000.
Comparing between OCBC BCIP and StashAway.
Since you're 22 and assuming monthly investment of $300 equally into 3 counters, your fees will be $2.64 per month. In contrast, StashAway management fee is 0.8% per year. The fees can be mitigated if you have a multiplier account, OCBC 360, which can award bonus interest of 0.6% for the first $35,000. With the BCIP, you are solely investing in 3 companies which presents higher levels of unsystematic risk. If you prefer something local and is stable, that can be an option, though I don't quite like Singtel. Personally, would be more interested in an ETF where the constituents have much larger room for growth.
Hi it depends on your risk appetite, desired rate of return, and horizon of investment.
To give a glimpse on the pros and cons of every investment instrument you listed up there:
OCBC BCIP allows you to do DCA on the 22nd of every month with minimum amount of $100/month on selected blue chip counters such as Capitaland, Singtel, three local banks and etc. Such investment method are meant for longer holding periods as blue chip stocks are relatively slow growing companies and are meant to serve as dividend income source.
StashAway on the other hand also allows you to DCA without any charges (besides the fixed management fee) on a daily, weekly, monthly or yearly basis (depending on how you want to set up your monthly deposit into your StashAway account). It allows you to have global exposure since most of the money will be invested in different investment instruments globally depending on your risk appetite.
As for Stanchart’s JumpStart account, the 2% interest is only valid up to first $20,000, and it’s a risk-free investment. So if you have more than $20,000 on your hand, or prefer something higher than 2%, you may consider other options.
Recently there are undesirable news on retail REITs and banks, affecting their price a lot. It is expected that retails REITs might have difficulties collecting rents due to Covid-19 situation, hence the huge drop in share price. For banks, higher chances that loans may also be defaulted (eg: Hin Leong) which makes investors feel slightly insecure on the performance of banks in the short run.
Ultimately it depends on how you view the two counters that you are holding, and how long are you willing to hold them if you think they are financially sound investments.