[ADVICE] Investing with 5000

[animeonegai]

Where should I start?

My risk appetite isn't that high. Losing 10-20% is more than enough for me.

Another thing, should I use the money instead to start trading commodities and silver?

Pls advice.

 

[kebinu]

If you gotta ask, you gotta wait till you really start to trade.

 

[Shiny Things]

I'm going to set up a TextExpander macro that saves me from typing "advice is the noun; advise is the verb".

OK, if your risk appetite is not that high, you absolutely must not start trading commodities and metals - you'll blow through 20% of your money in a heartbeat.

Now that that's out of the way, a couple of questions:

1) Have you set up an emergency fund yet - six months' worth of expenses, in a bank account where you can easily get to it?

If the answer is "no", then do that before you even think about investing. If the answer is "yes", continue to #2.

2) When will you need the money? Will you need it for something within three years, or can you leave it in for more than three years (like, for retirement, or for a house purchase five years from now)?

If the answer is "within three years", stick it in a fixed deposit. If the answer is "three to five years", open up a brokerage account (at Standard Chartered), and stick it in A35 - the ABF SG Bond ETF, which is a fund that invests in Singaporean government and government-ish bonds. If the answer is "more than five years", open a brokerage account at Stanchart, and stick it in ES3 - the STI ETF, which is a fund that invests in all the stocks in the Straits Times Index.

 

[frenchboxers]

i would put 90% in high dividend yield stocks,singapore blue chip essentials or US index etfs.screw bonds,this is conservative enough.

the other 10% i would treat it as a gambling fund,just pop it in forex,or oil or penny stocks or whatever hot tip ur bookie just gave u.im not sure what it will accomplish.but hopefully u might hit on some miracle microsoft or berkshire harthaway stock and be a multi millionaire 20 years down the road.

 

[sinkie4life]

i think you would also be interested in asking WHEN should you start.

with major stock markets at their 10-year all-time high, do you really want to start now?

 

[animeonegai]

I'm going to set up a TextExpander macro that saves me from typing "advice is the noun; advise is the verb".

OK, if your risk appetite is not that high, you absolutely must not start trading commodities and metals - you'll blow through 20% of your money in a heartbeat.

Now that that's out of the way, a couple of questions:

1) Have you set up an emergency fund yet - six months' worth of expenses, in a bank account where you can easily get to it?

If the answer is "no", then do that before you even think about investing. If the answer is "yes", continue to #2.

2) When will you need the money? Will you need it for something within three years, or can you leave it in for more than three years (like, for retirement, or for a house purchase five years from now)?

If the answer is "within three years", stick it in a fixed deposit. If the answer is "three to five years", open up a brokerage account (at Standard Chartered), and stick it in A35 - the ABF SG Bond ETF, which is a fund that invests in Singaporean government and government-ish bonds. If the answer is "more than five years", open a brokerage account at Stanchart, and stick it in ES3 - the STI ETF, which is a fund that invests in all the stocks in the Straits Times Index.

Wow thanks for the wise advise! Even dividendwarrior supports..

i think you would also be interested in asking WHEN should you start.

with major stock markets at their 10-year all-time high, do you really want to start now?

No, its a inflated sum. but it is expected the bear is coming, but when will that be...? No one knows for sure. The tapering news is a cheer to investors, I don't know why...

i would put 90% in high dividend yield stocks,singapore blue chip essentials or US index etfs.screw bonds,this is conservative enough.

the other 10% i would treat it as a gambling fund,just pop it in forex,or oil or penny stocks or whatever hot tip ur bookie just gave u.im not sure what it will accomplish.but hopefully u might hit on some miracle microsoft or berkshire harthaway stock and be a multi millionaire 20 years down the road.

$500? hmm.. that's really hard esp I don't monitor my money constantly.

If everyday trade using half hr - 1 hour, is it enough??

 

[le0nkelvin]

Where should I start?

My risk appetite isn't that high. Losing 10-20% is more than enough for me.

Another thing, should I use the money instead to start trading commodities and silver?

Pls advice.

go stanchart open a trading account
they allow small size trading with no min
so u can buy some blue chip with $5000

 

[animeonegai]

everything is at record high, is it advisable that I should enter the market now?

 

[hwmook]

i would put 90% in high dividend yield stocks,singapore blue chip essentials or US index etfs.screw bonds,this is conservative enough.

the other 10% i would treat it as a gambling fund,just pop it in forex,or oil or penny stocks or whatever hot tip ur bookie just gave u.im not sure what it will accomplish.but hopefully u might hit on some miracle microsoft or berkshire harthaway stock and be a multi millionaire 20 years down the road.

Both are seriously lousy advice.

 

[hwmook]

everything is at record high, is it advisable that I should enter the market now?

Every economic cycle will end with a peak of 50-100% higher than previous cycle peak. The index is only breaking above the previous peak, there is still alot of meat to go before the drop but treading close to the peak also carry high risk of dropping over, if you cannot stomach the risk then its better for you to just invest in short term bond funds.

 

[Shiny Things]

Wow thanks for the wise advise! Even dividendwarrior supports..

Advice is the...yeah, I probably had that coming, didn't I?

If everyday trade using half hr - 1 hour, is it enough??

It's too much. If you buy and hold and rebalance every year or so, that won't even take you half an hour a month. There are more important things in this world than money.

with major stock markets at their 10-year all-time high, do you really want to start now?

Firstly, what's a "10-year all-time high"? Is it different from a 10-year high, or an all-time high?

And secondly, we're talking about Singapore here. The STI's nowhere near its all-time highs, or even its 10-year highs.

US stock markets are at their all-time highs, sure, but that doesn't mean it's time to sell: if you think a new secular bull market started earlier this year when the SPX broke through its double top in the 1500s, it's probably going to go straight upward for the next decade or so. The S&P 500 bottomed out around 60 in 1974, then over the next 25 years it went up in a straight line by about two thousand percent.

In the worst-case scenario, if you'd invested the day before the crash of 1987, you'd still have made about four hundred percent over the next decade and a half.

Here's a thing that everyone seems to have forgotten after the shenanigans of 2000, and 2008, and 2011, and 2013 (in emerging markets anyway): markets generally go up. Sure, it's better to invest at 10-year lows than at all-time highs, but it's not a bad idea to buy at all-time highs unless valuations are epically stretched - and they're really not.

Both are seriously lousy advice.

Then give some better advice. We're all here to learn from each other.

 

[worldir]

wait for the right time, invest by batches...

 

[sgtsickox]

Where should I start?

My risk appetite isn't that high. Losing 10-20% is more than enough for me.

Another thing, should I use the money instead to start trading commodities and silver?

Pls advice.

http://www.straitstimes.com/sites/straitstimes.com/files/ST_20121202_NEWTABLE02_3418099.pdf

What to invest on is pretty obvious.

Cheers!

 

[frenchboxers]

http://www.straitstimes.com/sites/straitstimes.com/files/ST_20121202_NEWTABLE02_3418099.pdf

What to invest on is pretty obvious.

Cheers!

lol invest in gold?why dont they do another chart from 2010 to now and see which are the biggest losers?

 

[frenchboxers]

s&p went up 2000 points?thats probably cause fed took the US dollar off the gold standard and inflation went to hell.

between when was the s&p500 created anyway?

Advice is the...yeah, I probably had that coming, didn't I?


It's too much. If you buy and hold and rebalance every year or so, that won't even take you half an hour a month. There are more important things in this world than money.


Firstly, what's a "10-year all-time high"? Is it different from a 10-year high, or an all-time high?

And secondly, we're talking about Singapore here. The STI's nowhere near its all-time highs, or even its 10-year highs.

US stock markets are at their all-time highs, sure, but that doesn't mean it's time to sell: if you think a new secular bull market started earlier this year when the SPX broke through its double top in the 1500s, it's probably going to go straight upward for the next decade or so. The S&P 500 bottomed out around 60 in 1974, then over the next 25 years it went up in a straight line by about two thousand percent.

In the worst-case scenario, if you'd invested the day before the crash of 1987, you'd still have made about four hundred percent over the next decade and a half.

Here's a thing that everyone seems to have forgotten after the shenanigans of 2000, and 2008, and 2011, and 2013 (in emerging markets anyway): markets generally go up. Sure, it's better to invest at 10-year lows than at all-time highs, but it's not a bad idea to buy at all-time highs unless valuations are epically stretched - and they're really not.



Then give some better advice. We're all here to learn from each other.

 

[genie47]

Unfortunately losing 10-20% in paper value is something you gotta accept when it comes to investing. The very first criteria to investing is to accept risk. If you cannot accept this fact, then don't invest. This is the first most important advice I will give.

Firstly look at all these lazy portfolios. They beat the S&P500 but look at 2008 when the GFC took place. 20-30% down. But look at the subsequent years.

https://docs.google.com/spreadsheet...WU1LN3Y4LU84SmNGUS1PMzdyQ0E&usp=sharing#gid=0

Why are they able to keep this up?

1. For an individual investor, don't leverage. Meaning don't borrow to invest. Markets tank, you hold your ground like the 300 with a glorious cry of "Let's dine in HELL!" and indeed they dined in hell feasting on the bones of the fallen investors who panicked.

2. The dining took place because they rebalanced their investments. The thesis of investment is still a gamble. A gamble that the instrument you bought will increase in value in the future.....or it may not. So one way to circumvent this unknown is to buy as many varied investments as possible. Varied as in different and not related. So lets take the example of the GFC. Someone posted a nice picture of gold being the best performing. Well, no. When Lehman went down the markets panicked and surprisingly the bonds are the ones that did much better. So everyone is clamoring for the sovereign bonds because there is safety in there. And gold too.

So if you at this moment have $100,000 and worked out a plan to buy some varied instruments and keep them at allocations come hell and high water, chances are you will perform just as these lazy portfolios did. So taking the GFC as the example again. If you are caught in that situation where everyone is dumping stocks and rushing for bonds which send bond prices soaring due to demand, you sell them some of your overpriced bonds and buy the stocks that they are so eager to get rid of even at a loss.

Read more. Learn but most important of all. That first advice stands above all. Do you accept risk? No? Go away and find a bank for an FD.

 

[genie47]

Part two

I suggest you start building a war chest. Fill it up with claymores, morningstars and battleaxes.

This is going to be hard. To actually budget an amount to be set aside and built filled to the point that when you open it up, you will have a hard time wondering if a the morningstar is too much for killing a mouse? Nah! I choose the warhammer.

$5000 is definitely not enough to invest at the current prices. You can only buy 1 lot of the STI ETF and after that you are quite powerless to invest in an equivalent dollar value of the ABF Singapore Bond ETF. Assuming you are going for the dependable 50/50 portfolio. 7000 seems better but then what about emergency money that forms that warchest?

Take into consideration your job, its stability, sources of credit and even a spouse. Then find out how much obligations you have including debt obligations. Plan for 6 months of emergency money.

For example, you credit standing with the banks is outstanding. You are in trouble and you can easily ask for 1 million and they gladly give it to you plus the Ferrari. Then you emergency money no need to be so big.

There is a big drawback to a big amount of emergency money. Drag.

Cash does not earn a lot in a bank. FDs can't even compete with the returns seen from investments. So there is a lot of discipline in this planning stage. Discipline in the mind to keep away from the lure of high returns from investments ignoring safety. Too much cash, lots of it sitting around doing little. Too little, disaster strikes and you are paralyzed. Plan and plan well because if the plan is screwed, everything is screwed.

 

[victorlht88]

everything is at record high, is it advisable that I should enter the market now?

Don't make the mistake of chasing the trend, made that mistake once. What goes up will come down eventually and patience is the key.

 

[Limexx]

5k put at fd which bank the best?

 

[rizhal]

Put 5k on CREE at Nasdaq and be patient.
You will thank me later