Regular Shares Savings Plans (RSS/RSP)
Asked on 06 Feb 2020
I already have some funds in T-bills and SSB. With savings of S$1000 /month, I am planning to invest in equity ETF but confused whether to go for RSP or lump some. I am also willing to go for the Global digiportfolio to diversify but it doesn't allow beginners to do that. In case I go with RSP, how else to invest the S$5000.
0.85% fee for RSP ETFs and 0.75% annual fee for digiportfolio.
First investment. Moderate risk profile. 30 year old. Mostly invest for long term (5-8 yrs).
Lump sum is better and gives higher returns 2/3 of the time. This article by vanguard explains some of the advantages of both methods. https://investor.vanguard.com/investing/online-trading/invest-lump-sum
The markets tend to go up more than they go down, so generally lump sum is a good idea.
But if this is too daunting for you, I totally understand, you should just dollar cost average if it gets you started. You should start investing rather than let the money sit idle.
With regards to both, I would prefer digiportfolio to access the global markets. Singapore markets are not doing fantastic compared to global markets. If the digiportfolio gives exposure to Asia at least it is better than just investing in Singapore markets.
Have you considered other robo-advisors? Many offer far more diversified portfolios than the 2 options you've listed here
It is best to invest in a lump as it will give higher returns then dca most of the time. Also, it will be good for you to invest in global equity as it can give higher returns.
I will say lump some investing 8/10 times because money invested will almost always bring you better results.
If you are worried about entry price , maybe you can DCA every quarter instead of every month
Compared to digiPortfolio which only has 2 portfolios to invest in, I rather choose the OCBC Roboinvest which gives you 20-30 portfolios to choose from. I've invested for 2 weeks and I'm up 3%. I'm monitoring the situation to see if it's because of the market rally or FX before putting in more money.
DBS's digiPortfolio only has 2 portfolios, one local one US. The latter requires you to have a multi-currency account which is quite troublesome. For OCBC Roboinvest they cover US, HK, AUS and others.
Just my thoughts, don't focus on how to invest and what to invest too much.
The main focus should be why investing now and what you are trying to achieve through investing.
By knowing your end destination, you will be able to map out your investment plan.
After mapping out, do remember to monitor and adjust according to the market trends.
You can try investing $5000 or lesser in CrowdFunding like Seedin if you are a risk taker and here's my referral code https://sg.seedin.tech/register-investor?ref=c54f064545
Between the two, RSP for me.
but still slowly accumulate along the way for any opportunity to do one lump sum when I find the markets cheap enough.
by the way, i believe the 0.85% fees on RSP is the sales charge and there will be no more charges along the way. however, the digiportfolio is 0.75% on your account size. means the absolute fees will get higher as your account grows.
07 Feb 2020