PFF Panel 2 - Seedly
 

PFF Panel 2

Panel is moderated by Kenneth Lou from Seedly

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Welcome to Seedly’s inaugural Personal Finance Festival 2019!

Want to invest but not sure how to? Join our panel speakers as they share the various methods you can choose to invest with your salary!

  • Vikas Jain (Senior Director of Funding Societies)
  • Ow Tai Zhi (Co-founder of AutoWealth Singapore)

This panel will be moderated by Kenneth Lou from Seedly.

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PFF Panel 2

Seedly PFF 2019

Savings

Best ratio is zero :) More seriously, a ratio 25% is on high side and guide is to take caution with anything more than 33% (1/3) as it would mean difficulties dealing with unexpected situation.

PFF Panel 2

Seedly PFF 2019

CPF

You can consider using this from CPF Board to calculate: https://www.cpf.gov.sg/eSvc/Web/Schemes/LifeEstimator/LifeEstimator

PFF Panel 2

Robo-Advisors

Seedly PFF 2019

Amanda Ong
Amanda Ong
Level 3. Wonderkid
Answered on 09 Apr 2019
Hi there, My name is Amanda and I am the Head of Client Engagement at StashAway. We do not generally comment on our competitors and do not engage in debates on this topic online or offline. We will provide you with all the information you need on StashAway to make an informed investment decision. We also recommend investors to do their own research before deciding on a robo-advisor or an investment product. With that said, there are a few inaccurate observations highlighted by Tai Zhi below that I would like to just clarify. 1) We completely agree with Tai Zhi's point on the fact that research has shown that active fund managers tend to underperform the market. It is true, there is a lot of data published by SPIVA that prove this point. In fact, this is something we have discussed extensively and advocate for in our seminars on investing. Let’s be clear of what this “active” vs “passive” comparison looks at: in this comparison, “active” means to participate in securities selection (buy and selling single names stocks or bonds for example), and “passive” means to buy an entire asset class through ETFs or Index Funds. We believe in passive investing: StashAway invests using ETFs which are an index-tracking investment vehicle listed on a major exchange. Moreover, research shows that 80%+ of differential returns among porfolios come from asset allocation. This is where it makes sense to have a dynamic, strategic approach, rather than a static one. If you've read the white paper on our Investment strategy (https://www.stashaway.sg/r/stashaways-asset-allocation-framework), this is the exact basis of our investment framework. It focuses on asset allocation and not individual security selection. When there is a fundamental change in economic conditions, StashAway will re-optimize your portfolios for you. What this means is that, for example, if the economy were to go from “good times” to a “recession”, StashAway will recommend a re-optimization that will reduce equity exposure and concentrate it in protective sectors (e.g., consumer staples), and increase allocations to asset classes such as government bonds, particularly for long maturity dates, and gold. Our investment framework (ERAA) is risk-centric: the goal is to maintain your risk exposure constant across market and economic cycles while optimizing returns. We will always be more than happy to share details about how we've performed. If you'd like this information, you can reach out to us via [email protected] or ask our Co-Founders during the Q&A of our Academy Seminars. We are more than happy to share that with you. 2) Contrary to the belief that it "may expose the investor to a lengthy court process to claim back the assets if the robo-advisor ceases operations for some unforeseen reasons", the process at which you can claim your assets back should StashAway go bankrupt is actually quite simple. We hold a Capital Markets Services License. We decided to get a license with stricter capital, team experience, compliance and audit requirements (vs a Financial Advisor one) as we felt that it was important to build StashAway on solid foundation that can provide the necessary peace of mind to our customers. You can read about our license on MAS website here. To clarify, Tai Zhi writes that “AutoWealth, on the other hand, adopts an even higher level of safeguard by opening personal segregated custody accounts for each individual investor in his/her legal name so that the legal ownership is 100% clear”: they do so through SAXO, and you can check SAXO’s license on MAS website here, so that you can drive your own conclusions: both StashAway and SAXO have CMS license for Fund Management and Dealing in Capital Markets Products. Unlike SAXO, StashAway does not have a custodial license, and that’s why our customers’ assets are protected by the custodian relationship with SAXO and their sub-custodian institutions (HSBC for cash and SG securities and Citibank for US securities), such that those funds are kept separate and un-mingled with StashAway’s finances. 3) Tai Zhi write that “Other robo-advisors like Stashaway are pure digital platform with little or no human touch.” This is incorrect. StashAway leaves the option to you- you can decide to have zero human interaction if you want, or talk with any of our Customer Engagement (CE) team members through a variety of tools. If you're a client with us, you would know that you are able to choose to upload your documents with us via WhatsApp. In that interaction, you are talking to a CE team member who is assisting you with your onboarding. This WhatsApp feature has been available since day one when we launched in July 2017. To make it easier for you to reach out to us, we have also started placing the WhatsApp chat feature in our mobile app last year. You will see a button at the corner of the app that allows you to quickly open up WhatsApp to speak to the CE team. When you send an email, WhatsApp, Facebook message or call us, you are speaking to an actual person from my team. For our clients, you would already know this. If you are not currently a user, you can contact us via any of the aforementioned channels, my team will be happy to answer any of your questions (https://www.stashaway.sg/contact) If you’d like to meet our team in person, we host weekly seminars in both Singapore and KL and we are always happy to stay back for Q&A sessions. You can find the calendar on our StashAway Academy page. I do hope the above has clarified some of the misconceptions or inaccuracies stated about us. If you'd like to learn more on any of the above points or on StashAway, please feel free to reach out to me or my team at [email protected]

PFF Panel 2

Seedly PFF 2019

Luke Ho
Luke Ho, Money Maverick at Money Maverick
Level 6. Master
Answered on 09 Apr 2019
Someone who can answer the conflict of interest well would make a good financial planner. I'm not perfect at it, but its what I'm striving for. Some have even higher aspirations, like being an Independent Financial Advisor (via MAS definition, not working for an IFA). What factors does that consist of? Typically it means that when they pitch you something they give you more than one choice. They also can tell you how it benefits you, and how much commission they make if you ask. They can also answer why they are pushing a particular plan if it happens to benefit them more. That's a good start.

PFF Panel 2

Property

Seedly PFF 2019

Jim Tay
Jim Tay, Director at Jimtay.com
Level 2. Rookie
Answered on 05 Mar 2019
Hey! Whether a HDB is a good first choice for a new buyer is a question of affordability. You are right that at the end of the day you return it to the govt. However, because of the generally lower quantum compared to private properties, it is usually where first time buyers start their real estate asset journey. If you can afford a private property right away as a new buyer, why not? Less restrictions and greater investment potential. Cheers.

Property

PFF Panel 2

Seedly PFF 2019

Jim Tay
Jim Tay, Director at Jimtay.com
Level 2. Rookie
Answered on 05 Mar 2019
Putting it in the simplest terms, the cost of using your CPF funds is 2.5% per annum. (compounded, and ignoring the additional 1% on the first $20k) So, if you can make more than 2.5% compounded returns on your cash, then use your CPF for mortgage. Otherwise, use your cash.

PFF Panel 2

Stocks

Seedly PFF 2019

Investments

Sandra Teo
Sandra Teo
Level 6. Master
Answered on 05 Mar 2019
Hi there! Some sectors that benefit from interest rate hikes are consumer discretionary stocks, in other words manufacturers and sellers of consumer staples (food, beverages & hygiene goods) and healthcare stocks . Healthcare stocks will continue to perform as consumers still need to go to the doctor and buy medicine in spite of the market doing well or bad.

PFF Panel 2

Property

Seedly PFF 2019

Zuhdy Farhan
Zuhdy Farhan, Consultant at Jna Real Estate Pte Ltd
Level 3. Wonderkid
Updated on 03 Mar 2019
Unless you are extremely sure that you will not be selling this flat and moving to a new one, I would strongly recommend NOT to get the old flat that is above 40 years. Yes, cheaper, but depreciation for HDB flats are imminent after 40 years, which makes selling it in future a huge challenge + you would potentially be making losses. < 10 year old flats still have some depreciation, but not as much. (In fact, there was an article by CNA which allegdly mentioned that up to 10/20 years, HDB flats depreciate less than condos of a similar age) And depending on external factors (i.e. new MRT? new nearby amenities?) there may be a chance for appreciation. This has to look at URA's Master Plan to see if there's any potential. Otherwise, it's pretty tough. Of course, there are other factors to look at, and this suggestion is purely based on the provided context and how the financing of HDB flats work. Feel free to contact me for more information.

PFF Panel 2

Seedly PFF 2019

Tai Zhi
Tai Zhi, Chief Investment Officer at Autowealth
Level 4. Prodigy
Updated on 05 Mar 2019
I have shared this during last Saturday's panel. The worst nightmare for investors who just got started is to take excessive risk, suffer a catastrophic loss, lost confidence and then never ever invest again. (1) Start low risk, build confidence before gradually increasing portfolio risk Investors who just got started should go low risk first. Be patient. Go through a market correction to feel the market fluctuations and better understand your emotional resilience towards market volatility (ie fluctuations). When you gain more confidence and experience, gradually increase your portfolio risk to accelerate your wealth accumulation. (2) Invest broadly to diversify away risk Do not be too narrowly focused, diversify broadly so that specific market developments like U.S.-China trade tensions will not cause a catastrophic loss. Therefore, try to start off with a globally-diversified portfolio of stocks ETFs and bonds ETFs with a higher allocation to bonds ETFs. For example, you may consider starting with the AutoWealth Conservative Portfolio (60% global government bonds ETFs 40% global stocks ETFs) before switching to a portfolio with higher risk. Check out our blog posts for other useful investment insights and concepts: https://www.autowealth.sg/blog/

Robo-Advisors

P2P Lending

PFF Panel 2

Seedly PFF 2019

Tai Zhi
Tai Zhi, Chief Investment Officer at Autowealth
Level 4. Prodigy
Answered on 05 Mar 2019
To address your concerns about asset security/safeguards, robo-advisors are required by law to hold clients' assets and monies through a third-party MAS-licensed custodian/trustee. In the unforeseen event the robo-advisor ceases operations, clients assets and monies are still safely held at the third-party custodian/trustee. AutoWealth offers an even higher level of safeguard by opening personal segregated custody accounts for each individual investor in his/her legal name so that the legal ownership is 100% clear and the investor can claim his/her assets from the custodian directly. This is fundamentally different from the "ONE omnibus custody/trustee account holding ALL clients assets" arrangement for other robo-advisors which may expose the investor to a lengthy court process to claim back the assets. You may check out this link for other frequently asked questions: https://www.autowealth.sg/faq.php
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