SG Budget Babe
Asked on 23 Apr 2020
Basic intro about myself, 22yo saved about 10k to invest.
Spent ard 4k few days ago on my first investments. Any SGX stocks/reits to recommend? Preferably with high div yield or growth prospect.
Understand how you want to invest your monies. Do you want a fuss-free, hands off approach? Or do you want to be an active investor?
You can find out more from this webinar that Ruiming from WokeSalaryman and I did..
Hi there, this is a great question and I'm glad to see that you have been saving regularly and looking to start investing! All your savings should go towards a financial goal (Retirement, Buy a house, etc), including building a safety net. This is a recommendation from our Co-Founder and CEO, Michele Ferrario:
Build a very basic safety net of approximately 3 months of expenses in liquid and very low risk instruments. The goal here is to make sure this money is readily available when required but whilst being as protected from inflation as possible. Our StashAway Simple Portfolio, which is currently yielding 1.9% at T+2 liquidity is a great way to do this.
Pay off any outstanding debt that charges more than 2-2.5% interest. Why 2-2.5%? You should be able to generate a liquid and low or no-risk return of approximately 1.9-2% in the market today. For example, you can do so with some savings accounts or with StashAway Simple. If you’re servicing a debt of 2% or less you’re much better off taking a little more risk, investing that $100, $500 or $1,000, and earning that margin of return through investing it. If the debt you are servicing is above 3-5%, again you are better off paying that debt off as it’s a risk-free return to yourself of 3-5%+
Grow your safety net to consist of 6-12 months of expenses (i.e add an additional 3-9 months). Continue to invest in liquid and very low risk instruments to make sure this money is readily available when required, but still as protected from inflation as possible.
Start contributing towards your main long-term goal, i.e. retirement: Invest in a diversified portfolio which spans across asset classes and geographies, targeting the right level of risk given (i) your risk appetite (i.e. will you be able to sleep comfortably at night and stay the course during the natural ups and downs of the market? if not, then you may have taken too much risk and (ii) the timeline (i.e. the longer you have, the more risk you can take)
Start contributing towards your other goals and use the same investment logic as in Step 4: investing in a diversified portfolio which spans across asset classes and geographies, targeting the right level of risk given (i) your risk appetite (i.e. will you be able to sleep comfortably at night and stay the course during the natural ups and downs of the market? if not, then you may have taken too much risk and (ii) the timeline (i.e. the longer you have, the more risk you can take).
SGX growth maybe not much... dividend should be ok however u need to know that dividend for the next few years might be low cos of the effect from covid19.
i wouldnt really recommend which REITs to buy...you have to research and understand your risk area....research is good means u know the sector well...
i can recommend some sectors...Logistics, hospitality, healthcare...there are many other sectors that looks good too..
Whether you prefer active or passive investing
go for investment courses to see which method you prefer
study how the rich make money from stocks
SG stocks that have business overseas will be able to grow faster, tech stocks as well
Div yield probably reits or undervalued dividend stocks can give you high yield
Stocks like Parkway life reits or industrial reits for dividends
I make videos about interesting stuff at youtube here
Congrats on starting your investing journey! First and foremost, it will be great if you stick to a style of investing. For young people like us with long time horizon, we should invest more aggressively but again this is up to your own risk appetite. I personally own 100% equities (21 years old) 5 digit sum, aiming for my first 100k. I would recommend you to build up your financial knowledge and take online suggestions here with a pinch of salt, doing our own due diligence will save us from costly mistakes. For stocks recommendations, you can look into fundamentally strong stocks such as Ascendas Reit, MLT/MCT, DBS. These are counters I own myself and MCT is currently my strongest holding (+24%) but again I bought it during the March low. Again this is not a buy/sell advice and I reccomend you to do your own research. If you want to know why they are fundamentally sound, do drop a comment and I can tell you more. Cheeers!
*Disclaimer: Not a certified Charted Financial Accountant or financial consultant, just saying this based on my own experience. Please DYODD.
My best recommendation for you as a new investor is NOT to get stock tips online, nor should you buy because of online recommendations. Learn how to invest yourself instead.
Firstly, congrats on taking that step towards investment. It is a great place to grow your wealth.
However, TGH will like to highlight that there are lots of work to do, whether it is understanding fundamentals or technicals. But some of us research more and understand the technicals of a TV they are about to buy, than the stocks they buy.
Your portfolio seems like a mix of growth stocks and high dividend yield stocks. Nothing wrong having both, but you must understand that they have very different things to consider and requires different psychology for buying them, sitting through it, and selling them.
Won't be able to share specific stocks as TGH is not an adviser.
However, TGH invests in growth stocks, albeit in the US.
The US has more high growth stocks due to the innovation and creativity there. Also, the comms on the platforms are relatively much lower to buy the shares there. In addition, you can purchase fractional shares i.e 1 unit only, especially for smaller portfolios.
You may take a look at TGH's website for more details on growth stocks.
In general, stocks aren't recommended for new investors. Reason being there is a need for research to be done for the financial fundamentals of the company and it has to be done well. What might be good is to get into the discipline of investing prudently and well instead of knowing which stocks to pick. ETFs are good for beginning investors!
If you are looking for growth prospect, look at the US market instead. You can invest in S&P 500 ETF monthly for your growth prospect. For consistent dividend, you may invest into SGX REITs monthly after studying their valuation and foresight. In this manner, at least you gain exposure for both side and also have a certain degree of diversification.
But do take note to have a long holding power because the market is volatile at the moment. Automate your investment and let it run by itself! Focus on your research instead!
Nobody is able to give you responsible recommendation without knowing you in detail. This is especially when none of us own a crystal ball that is capable to predict the future growth of a company.
Instead, start taking charge for yourself and do comprehensive research on assets that suit your risk appetite.
I have non-specific advice for stocks...
We can't tell whether we have reached the bottom, so whichever stock you buy, just be mentally prepared to hold it for the LONG term, and don't look at the prices every day (look at it once every quarter, maybe)
Stocks are for long term investments :)
What not to do, here:
You can use https://www.dividends.sg/rank/blue to compare the dividend yield of the companies listed. Do note that high dividend yield may not always be good since it could be paid out unstainably or not in the company's best interest (profits are given mostly to shareholders rather than for reinvestment).
For growth, there are different metrics that are used. Traditionally, PE has been used as a method of valuation. However, this metric does not take into account of variations of profit margins in different business cycles. An alternative would be Shiller PE which uses 10 year rolling PE data to calculate a cyclically adjusted PE ratio. You can also look at PB data. However, you have to note that while low PE means the company is profiting a little, low PB could mean not profiting at all. Over many years, companies with low PE and PB tend to increase as an effect of means reversion. There are also companies that are likely to remain status quo.
Here, I have only listed two examples of methods you can you to find valuations. There are many out there including (PEG, DCF, etc.) and different strategies including net-net strategy that you can try out.
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