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Stocks Discussion

*Disclosure*: The threads on this post are just opinions on investments, so please do your own due diligence before investing

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Hi Anon, Generally speaking ETFs are good choices for new investors as they are passive and do not require you to spend alot of attention on it. You might consider roboadvisors as well At your age, having a 10K capital is very impressive and you can start investing asap as you are young and time is on your side. Investing early means you can make full use the effects of compounding interest.

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Hi anon, UTs can definitely be considered as part of a balanced portfolio. The real question, however, is which UT to buy, as well as how much % your UTs should take up in your overall portfolio. While some UTs underperform their benchmarks (usually an ETF), others outperform and it is these that you should be looking to buy. RSP into UT is also zero cost on the right platform and that essentially removes the cost of investing, compared to the brokerage charges on shares, etc. As you are in your mid-30s, you will probably want to take a step back and look at your current portfolio to see if it will be on track to where you intend to be when you retire. You will want to ensure that you have an overall strategy/thesis in place to invest, maintaining a war chest for market opportunity, consistently building your portfolio through RSP (be it ETF or UTs), and ensuring that you have a framework that will serve you in your 40s and 50s and finally when you retire. It is also important to understand that retirement, being your longest holiday, will necessity careful planning in order to ensure that your income assets will be able to provide you with the income stream you need. If you have more specific questions, feel free to reach out and you can get a more detailed answer. For now, based on your post, these general guidelines should help you to stay focused and plan the big picture.

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Isaac Chan
Isaac Chan, Business at NUS
Level 8. Wizard
Updated on 15 Apr 2019
TL;DR There could be some strong earnings potential from growth in developing countries for Singtel's investments overseas, although the telco market in Singapore is quite lukewarm. ! Business Profile I don’t think Singtel needs much explaining since most of us have used one of their products before and is the largest telecom operator in Singapore. What you may not know, is that its Australian subsidiary Optus is the second largest operator in Australia. Singtel also has substantial stakes in telcos in the region – Telkomsel in Indonesia, Bharti Airtel (Bharti) in India, AIS in Thailand and Globe in the Philippines. Financials Income Statement ! For FY17/18, revenue was 17,532m with a YOY increase of almost 5%. There was a hug increase in exceptional items due mainly to the gain on disposal of an associate. This suggests that the much higher profit from operating activities of almost 70% is driven by non-core activities like disposal of subsidiaries, and less by operating activities like revenue. Overall profit after tax was 5403m, a 41% YOY increase, but as mentioned, the disposal of the associate should not be treated as a recurring and core activity of Singtel. Balance Sheet ! Current Ratio for FY17/18 was only 0.72, suggesting that Singtel’s short-term liquidity isn’t strong. Interestingly, much of Singtel’s current assets was made up of receivables, whereas Singtel’s payables is predominantly made up of payables and unsecured borrowings. Singtel’s leverage (D/E) is 0.35, showing that the Singtel’s capital structure is made up mainly of equity. A L/E of 60%, also reveals Singtel’s greater dependency on equity holdings as compared to liabilities. Cashflow ! Singtel’s cashflow from operating activities was a slight improvement, due to higher profit before tax and stronger working capital management. For investing activities, there was a large purchase of intangible assets (5X previous FY), comprising mainly of telecommunications and spectrum licenses. Cashflow from financing activities had a large outflow due to mainly repayment of term loans and special dividends paid out. Risks Competition in Singapore ! The increased competition in Singapore’s telco space has led to intensified efforts by Singtel to maintain it’s foothold and market share. Additionally, the telco space in Singapore is already quite saturated with different competitors and a market size that is unlikely to grow due to slowing population growth and a lack of innovation on mobile offerings. Weak Enterprise Segment ! There have also been a slow order flow from Smart Nation projects, and the hype from this national development may lead to a lower valuation given by investors who had believed that Smart Nation development will improve Singtel’s earnings. Growth Associates Growth ! The listing of Airtel Africa in the middle of this year could allow Singtel to monetise its stake there. Also, increases of tariffs in India or a partial exit from its digital businesses could also help to lift earnings this year. Developing Countries Other than Australia and Singapore, Singtel also operates in Thailand, India, Philippines and Indonesia. These developing countries have a growing middle class that usually demand greater mobile and internet connectivity. This provides potential upside to Singtel in the long run.
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Harvey Tan
Harvey Tan
Level 5. Genius
Answered 1d ago
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Hi anon, We don't know when the market peak is, or if it is even already past. Having said that, you can allocate a 1/3 1/3 1/3 strategy. Start with 1/3 of your funds, go into the market. Take 1/3 of your funds and spread them over 1-2 years of DCA. And the last 1/3 can be used as a 'warchest' for market opportunities. Remember, time in the market is far more important than timing the market. So don't time the market. Just go in. The results will show themselves in time. For more information, do look at a previous question I answered here: https://seedly.sg/questions/is-it-really-true-if-you-do-dollar-cost-averaging-time-in-market-outweighs-timing-the-market

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Hi Adam, Great question! General things to look out for when investing in one Unit Trust or a portfolio of Unit Trusts are: 1.) Cost. As Boon Tat helpfully pointed out - there are often Upfront Sales Charge that is taken from your initial investment amount and then management fees that are taken from the Net Asset Value. Very often distributors would charge between 1-3% of Sales Charge and then the Management Fee would typically be from 1-1.75% per annual. And as Boon Tat rightly pointed out - they are exorbitantly expensive. 2.) What is your investment goal? Are you utilizing the Unit Trust to supplement an existing Stock portfolio? Or would the Unit Trust be the primary investment instrument to fulfil your financial goal? These questions would then determine whether you buy a specific focus fund or you would buy a more diversified fund. 3.) It's a great idea to utilize your CPF OA to invest. Investing in a cost-efficient globally diversified portfolio that is appropriate for your risk profile for over 20 years would give you a statistically higher chance of reaping rewards more than the guaranteed 2.5%. I am the Client Experience Lead from Endowus - a fee-only digital advisory fee and we do not take an upfront sales charge and does not take any trailer fees, therefore, the total expense ratio of our customized portfolios are significantly lower than the industry norms. We create cost-efficient diversified portfolios for investors with different risk profiles - expressing the investment ideals of "global diversification, cost efficiency and staying invested" through a seamless digital platform. We will be launching our investment portfolios for CPF-OA monies very shortly - please do visit us at https://endowus.com/ or PM me if you are interested. All the best! "Be Globally diversified, Keep cost low, Stay Invested"

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Hi anon, Yes, if you back-calculate the cost of investing in shares/ETF/REITs listed on SGX, it's around $8K to $9K per transaction to make it worth. Now I don't advocate just going into the market once you have accumulated $8K, it is actually more prudent to have a watch list, analyse the share first and then decide if it is a company you actually want to invest in. Watch for pullbacks in the share price, this represents an opportunity and a margin of safety for you, but be aware that the fundamentals of the company are still ok. On a side note, I do make sure that I do my transactions based on that size for the trade value. On the allocation, there is no one-size-fits-all solution, as some people prefer REITS, some people prefer shares, etc. What's important is to make sure you achieve sufficient diversification that a price swing in any one counter will not have an overly adverse impact on your portfolio. When I bought my first share many years ago, yes, it was 100% of my share portfolio, but buying into other shares has steadily reduced the proportion of that share in my portfolio. So you'll notice that it takes time to achieve this. Don't be disheartened. FYI no single share/REIT takes up more than 25% in my portfolio, and I'm aiming to eventually bring it down to 15% or less. My stock portfolio is also not more than 50% of my entire investment portfolio, which comprises of both bonds and UTs. And in that vein, I also have not included my CPF assets and the expected valuation of my private annuity.

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Han Jinyuan Larry
Han Jinyuan Larry, Senior Lifeguard at Certis
Level 3. Wonderkid
Answered 3d ago
Yes. Can you think of reason(s) that you should not buy? https://www.dbs.com.sg/treasures/investments/product-suite/equities/direct-equities

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Assess the potential in the future, if it has more potential than your satisfactory yield, then keep it. if the potential growth is way less than what you hope for, do sell it and buy another growth stock :D

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Historically, the traditional asset classes were equity, fixed income and money (money market/fixed deposits). In recent years, property, commodities, and even things like cryptocurrency have been added to the mix. Now, there's no right or wrong answer to how to structure your investment portfolio, a person adverse to risk might want to reduce or eliminate stocks completely, a person willing and able to take risk may skew the portfolio heavily in favour of stocks. What is important is to build a multi-asset portfolio with the flexibility to shift your allocation across the various asset classes in tandem with your evolving finances, age profile, risk appetites and lifestyle. Most young people often say that with time on their side, they start out with a portfolio that is high risk: I suggest an alternative viewpoint as such: Imagine that you have saved your first $50K after some time and you decided to purchase some shares. Now, due to lack of experience and knowledge, you end up buying something that doesn't really appreciate, or even worst, tanks 50%? How long do you need to save up another 25K to compensate for what you have lost? Hence I feel that there is a need to start cautiously when you begin your investment journey. If anything, the number one rule of investment is not to lose money, but by and large, most people suffer losses. I do advise my clients to ensure that there is sufficient diversification in their portfolio that if a bad investment decision was made, their portfolio should recover within a short amount of time. Once some experience is gained after your start, you'll be able to confidently take on more risk while minimizing your downside due to your newfound knowledge and experiences. On a personal note, I'm 40-50% in cash and 50%-60% into a diversified portfolio of UTs (regional equities, global bonds), shares, REITs and some SSB. The division between my UT, stock portfolio and SSBs is approximately 45/45/10. Adding on monthly to my UTs, I do DCA to ensure that I remain committed to growing my UT portfolio, for stocks, it is a matter of identifying opportunities when a good company becomes undervalued, which requires a lot of patience, I have a position in a local bank which I waited for more than a year to enter at a price I found acceptable. I don't intend to maintain a 1:1 ratio on UT/stocks forever, and I do see that a gradual shift to a 2:1 ratio as I age will most likely be the scenario. As we age, we will want to step down our risk, remembering that longevity is the multiplier of all risks when you are 70, you won't be able to handle your investments the way you did when you were 50. Topping that off, I have an annuity to complement CPF life when I retire, which I have not included in the figures. Hopefully, you will have gained some insight into my thought process, methods and philosophy, and incorporated the parts you found relevant into your own plans. Good luck!
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