Asked 3d ago
Taking a contrarian view
Yes if you enjoy stability and don’t mind slow price movement & have the captivity to hold in the long run.
On the other hand, many are betting on US stock because of its high volatility and are hoping for some quick gains.
Hi! That’s amazing that you’re taking a contrarian view, i’m hoping to find more that do! Keep it up with the learning!
STI surely seems attractive now. I Guess the main issue is whether it meets your financial goals.
My personal take; US & China for capital gains, Singapore for dividends. Most like the idea of passive income with dividends, but remember to do your calculations... we need close to a million dollars for sustainable passive income.
Going for capital gains first before cashing out and switching it to dividend Investing in the future is one way.
A contrarian view is always right and important.
Historically - as compared to the SP500 or MSCI China or Europe stocks -
the STI is not unloved now, but rater on longterm.
See attached longterm chart for this index comparison (however distributed dividends not included)
My opinion is depend on what you want, capital gain or dividend? If capital gain, go for US example S&P 500. However, the risk is say for example after holding 5 years, before realise your gain, a black swan event and all your gain all gone. Thus 5 years of holding wasted. As for STI, not much capital gain, but there is cash flow as you receive good dividend.
I think you may consider look in deeply into what are the current equity holdings in the STI Index which may potentially give you an idea on what the prospect of STI ETF?
From what I understand, now STI Index currently have more REITs holdings as compared to the past. You may take that as a consideration. If you believe there is potential for the STI to recover back to its pre-COVID19, you may consider DCA it instead of throwing lump sum into it and look for other potential investment opportunity.
This is my personal view. Hope it helps.
I believe one would have to answer these 4 key questions to be able to reach a definitive answer to your question.
What makes you think the STI is "unloved"?
Is the timing right for yourself?
Are there better opportunities out there?
Are there any other stronger reasons to buy into STI ETF besides "being unloved"?
As of now, it might have limited downside, but upside is also relatively limited also
Hi,I assume you are refering to the STI ETF and if thats the case then certainly agree that it is a great time to pick up more units!
However you need consider a few factors:
Your investment timeline. My view is that because there is not much price movement for STI ETF daily, it will be a long way to recovery before the STI ETF will be anywhere near the the 52 week high and push past that level. Hence if you are looking at captial returns, it will depend on how long you are willing to put your money into the STI ETF and certainly no one can gurantee that the STI ETF will trade at the pre-covid levels in the future
Your investment strategy. Are you looking to incrase your portfolio value through dividends or captial returns? If you are looking for a stable dividend income then loading up on the STI ETF now may be a good option. The G3B gives about a 4.64% dividend a year while the ES3 gives about 4.71%. This are not fantastic returns but it is still considerably better high interest rate bank accounts. However you lose out on liquity in return for a higher return.
Lastly you still need to do your own due diligence and see what works for you and not go in blindly.
My partner is loading up his STI to bring down his average cost although I am against it. To put things in context, his ABF SG Bond investment is so much smaller and he has no other investments to grow his wealth! Really not sure what's his "game plan" lol. Although past performance does not indicate future performance but it gives a relatively good gauge, I personally really wouldn't pump so much money into it.