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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Asked by 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 5. Genius
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 5. Genius
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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