Semi-new to investing. What are some options I can consider investing in to attain approximately 4-5% return at low-mid risk? - Seedly
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Anonymous

Asked on 03 Dec 2018

Semi-new to investing. What are some options I can consider investing in to attain approximately 4-5% return at low-mid risk?

I'm currently 27 and have managed to save $120,000. I have half in SSB and robo-advisors. I'm keen on trying my hand at low risk stocks and am particularly interested in bonds with regular dividend payouts.

Can anyone recommend some options I can consider investing in (or even articles)? Thank you & much appreciated!

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Yixiong Chang
Yixiong Chang
Level 7. Grand Master
Answered on 03 Dec 2018

How about allocate some funds for retirement planning by topping up your CPF special account.

You will earned a guaranteed rate of 4%. For the first $60k in your CPF combined balance (with only up to $20k max from OA), the monies will earn an extra 1%. Since you are still young, u will not be near the limit yet. Thus it is worthwhile to topup to earn effective 5% return. Risk-free, regardless of market conditions.

In additional u will receive tax relief for the topped up amount. Eg, your taxable income is $40k, for every dollar u earn above 40k is taxed at 7%. Therefore, if u topped up $1000 into your special account, u get $1000 tax relief, u saved 7% of $1000 = $70 tax money. Effectively have gotten 7% return on your money, in additional u will earn 4%-5% interest yearly guaranteed.

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Alan Kor
Alan Kor
Level 6. Master
Answered on 03 Dec 2018

no such thing as low risk stocks

investment in itself is a risk

maybe learn to manage your risk appetite 1st?

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If you're looking for income streams, you can get them from: Bond Coupons/Funds (3-4%), Annuities (4-6%), Rental Payouts from REITs or Property (4-6%), Dividends from Stocks (6%).

I've also listed them from lowest risk to higher risk.

Honestly, Seedly's articles and other local investor's blogs cover them to a quite in depth extent.

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