Advice on Investing

[hozhijie]

Hi I am 21 this year and currently serving the nation. I started this thread to ask for some advices that can be given to me to help me truly start investing.

A little info about me:

- I currently have ~$8.5k set aside for investment.
- I have already set aside $3.6k for my emergency funds.
- I currently have a Regular Savings Plan going on with POSB investing in Nikko AM STI ETF.(Monthly $150)
- I currently have 1000units of SPDR STI ETF.(It was a big mistake since I bought is at $3.43 and the current value is only ~$2.91)
- I have a Investment-Linked Product insurance.(Monthly $200)
- I have a POEMS account with Philip Capital but right now I decided to use Standard Chartered Bank to invest instead since the fees are way lower.
- I have slightly higher than basic knowledge on looking at companies, analyzing them and calculating their Intrinsic Value.(Basically Value Investing)
- I would like to buy stocks that can be hold for long and earn dividend at the same time!

I have a few companies in mind that I want to look up but I am also interested in REITS but i think the way to analyze them is a little different so I don't think I know how.

I would also like to ask about websites/resources that can help me in analyzing companies other than Google/Yahoo Finance page.
I actually procrastinate for quite some times already so I have told myself that I want to delay no more.

Current plan is thoughts of putting ~$1k into Singapore Savings Bonds. But do not know if I should.

Please give me advice on what can I do for now in order to work towards my goals of financial freedom! Thank you!

 

[Perisher]

- I currently have 1000units of SPDR STI ETF.(It was a big mistake since I bought is at $3.43 and the current value is only ~$2.91)
- I have a Investment-Linked Product insurance.(Monthly $200)

Let me correct this two sentence, the big mistake is the $200 monthly ILP.
The STI ETF at $3.43 or $2.91 will turn out fine since you are averaging over decades, not just 1 year.
Will leave the others for the experts to reply you.

 

[hozhijie]

Let me correct this two sentence, the big mistake is the $200 monthly ILP.
The STI ETF at $3.43 or $2.91 will turn out fine since you are averaging over decades, not just 1 year.
Will leave the others for the experts to reply you.

Can I know why is the ILP a mistake? Would like to know more thanks!

 

[Darkzi0n]

ILP = paying money to make things worse for urself.

 

[1nd3x1nv3stor]

Let me correct this two sentence, the big mistake is the $200 monthly ILP.
The STI ETF at $3.43 or $2.91 will turn out fine since you are averaging over decades, not just 1 year.
Will leave the others for the experts to reply you.

Can I know why is the ILP a mistake? Would like to know more thanks!

In summary, because ILP is way too expensive.

When you buy ILP, the premium goes to two things: protection/insurance (mortality charges) and investment.
For the insurance part, you could do it by buying term insurance for the same protection.
For the investment part, you could get higher return if you do DIY investment. This is because insurance company charges you high upfront and yearly fees.

I think this article from the pro will give you more details why you should not buy whole life insurance or ILP:
http://www.providend.com/the-case-for-term-insurance/

 

[reinphd]

Let me correct this two sentence, the big mistake is the $200 monthly ILP.
The STI ETF at $3.43 or $2.91 will turn out fine since you are averaging over decades, not just 1 year.
Will leave the others for the experts to reply you.

Can't agree to this more. Your biggest mistake is ILP like what some people have explained. The STI ETF is one of the best moves if you consistently buy it. You do not need the RSP as you're buying into the same thing

 

[hozhijie]

Then should I actually stop my ILP plan? Current surrender value is about $300 and I have put in about $3k into it already..

 

[Darkzi0n]

Think about the opportunity cost, not the sunk cost.

Historical return of sti is about 6+% including div. while ur ILP would probably take atleast another 10 years to break even.

Do ur math and the answer will be obvious.

 

[wahkao3]

Let me correct this two sentence, the big mistake is the $200 monthly ILP.
The STI ETF at $3.43 or $2.91 will turn out fine since you are averaging over decades, not just 1 year.
Will leave the others for the experts to reply you.

ILP ish big nono

 

[Bedokian]

Besides the ILP which people here had advised you against, the other thing which you may want to do is to take a step back and assess your investment vehicles.

IMO, you have a double form of investing in the STI ETF using 2 different investment vehicles (direct ownership of the STI ETF and the POSB plan), which I would prefer you to stick to one instead (the former would be better). At least you are able to control the portfolio make-up when everything is under direct ownership.

Start with an overall portfolio in mind. There are many models to choose from, ranging from Shiny Thing's equity-bond "110 minus your age" formula to those with tens of counters. You could start off with a basic equity-bond-cash, say 70%-20%-10%, with maybe 2 or 3 different counters. As time goes by, your capital increases, you can elaborate more on the ratio, like within the equity form up the sub asset classes of maybe 20% REITs and 50% other equities.

As for your question of REITs, they are IMO far more easier to analyse than the non-REIT companies, because besides the types of REITs, other factors such as NAV, WALE, etc. are more or less similar across the board.

 

[wahkao3]

if u really want stocks, ensure you only invest into low risk, high return stocks

anything that's high risk, dont touch

 

[hozhijie]

Besides the ILP which people here had advised you against, the other thing which you may want to do is to take a step back and assess your investment vehicles.

IMO, you have a double form of investing in the STI ETF using 2 different investment vehicles (direct ownership of the STI ETF and the POSB plan), which I would prefer you to stick to one instead (the former would be better). At least you are able to control the portfolio make-up when everything is under direct ownership.

Start with an overall portfolio in mind. There are many models to choose from, ranging from Shiny Thing's equity-bond "110 minus your age" formula to those with tens of counters. You could start off with a basic equity-bond-cash, say 70%-20%-10%, with maybe 2 or 3 different counters. As time goes by, your capital increases, you can elaborate more on the ratio, like within the equity form up the sub asset classes of maybe 20% REITs and 50% other equities.

As for your question of REITs, they are IMO far more easier to analyse than the non-REIT companies, because besides the types of REITs, other factors such as NAV, WALE, etc. are more or less similar across the board.

I would love to know how to analyze REITS. I had a few reits company in mind but I do not know the way to analyze them so I am afraid to step into it.

 

[Shiny Things]

Hi I am 21 this year and currently serving the nation. I started this thread to ask for some advices that can be given to me to help me truly start investing.

Right, as a few people have already said, you've got a bit too much going on here - you're spraying your money in a lot of different directions.

Let's consolidate things.

1) If you tear up the ILP (which as you probably know is a bad way to invest), that'll free up $200 a month that you can use to invest through Stanchart. Cancel the POSB RSP (its fees are a bit on the high side) and you're up to $350 a month - that's one lot of ES3 or three lots of A35 every month, and if you buy through Stanchart that'll only cost you about 70 cents.
2) Your STI ETF isn't a big mistake. If you buy more when stocks are down here, you'll be glad you did when they go back up. Move those shares over to Stanchart and sit on them.
3) I get that you want to start analysing companies and picking stocks, but you should work on the assumption that you're going to get it wrong at first. Nobody gets everything right first time around. So it's okay to take 5-10% of your portfolio, pick a stock to invest in, and then see if that stock beats the STI. If it does, then you got it right; well done! But you need to beat the STI - if you pick a stock that goes up 20%, but the market as a whole has gone up 30%, then you'd have done better to just leave your money in the STI ETF.

Current plan is thoughts of putting ~$1k into Singapore Savings Bonds. But do not know if I should.

The SSB isn't a bad investment, but the A35 ETF is better - it's slightly higher-yielding without much more risk.

Anyway, you're on the right track. Get your investments consolidated at Stanchart; tear up that ILP; and start methodically buying ES3 and A35 (110 minus your age, remember) - and you'll be in great shape.

 

[wahkao3]

if you pick a stock that goes up 20%, but the market as a whole has gone up 30%, then you'd have done better to just leave your money in the STI ETF.

likewise if you pick a stock that goes down 20% while STI goes down 30%,its still a good pick

 

[reinphd]

And to add on, I lost about 6k in ILP after cancelling them. No regrets

Sent from Samsung SM-G900F using GAGT

 

[hozhijie]

If I were to cancel the ILP, what kind of insurance can I actually take up? I would like to still get myself protected.

 

[hozhijie]

Right, as a few people have already said, you've got a bit too much going on here - you're spraying your money in a lot of different directions.

Let's consolidate things.

1) If you tear up the ILP (which as you probably know is a bad way to invest), that'll free up $200 a month that you can use to invest through Stanchart. Cancel the POSB RSP (its fees are a bit on the high side) and you're up to $350 a month - that's one lot of ES3 or three lots of A35 every month, and if you buy through Stanchart that'll only cost you about 70 cents.
2) Your STI ETF isn't a big mistake. If you buy more when stocks are down here, you'll be glad you did when they go back up. Move those shares over to Stanchart and sit on them.
3) I get that you want to start analysing companies and picking stocks, but you should work on the assumption that you're going to get it wrong at first. Nobody gets everything right first time around. So it's okay to take 5-10% of your portfolio, pick a stock to invest in, and then see if that stock beats the STI. If it does, then you got it right; well done! But you need to beat the STI - if you pick a stock that goes up 20%, but the market as a whole has gone up 30%, then you'd have done better to just leave your money in the STI ETF.



The SSB isn't a bad investment, but the A35 ETF is better - it's slightly higher-yielding without much more risk.

Anyway, you're on the right track. Get your investments consolidated at Stanchart; tear up that ILP; and start methodically buying ES3 and A35 (110 minus your age, remember) - and you'll be in great shape.

Can I know what does the 110 minus my age represents?

 

[The Accountant]

Can I know what does the 110 minus my age represents?

It means if your age is 30, you should have an allocation of 80% stock, 20% bonds. I'm gonna qoute this from a book. "The investor's manifesto"

Picture this: imagine you are a Japanese investor near retirement in 1989. The 20 years of their bull market have made your every $1 turned into $57.23 And you should have looked forward to a retirement lush with family time, a Hawaiian condo, and all the material goods your heart can desire. The story, unfortunately, does not end happily. Over the following 19 years, between 1990 and 2008, $1 invested in Japanese stocks fell in value to less than 60 cents, even with dividends reinvested.

Had you own some bond, that will be a different story. The rule of your age in bonds allow you to avoid entering into such situation when you are retiring.

 

[Jedihan]

If possible, dont take investment insurance at all. Do your own investing. Get pure medical insurance, hospitalization etc...

 

[Ahduduha]

Hi I am 21 this year and currently serving the nation. I started this thread to ask for some advices that can be given to me to help me truly start investing.

A little info about me:

- I currently have ~$8.5k set aside for investment.
- I have already set aside $3.6k for my emergency funds.
- I currently have a Regular Savings Plan going on with POSB investing in Nikko AM STI ETF.(Monthly $150)
- I currently have 1000units of SPDR STI ETF.(It was a big mistake since I bought is at $3.43 and the current value is only ~$2.91)
- I have a Investment-Linked Product insurance.(Monthly $200)
- I have a POEMS account with Philip Capital but right now I decided to use Standard Chartered Bank to invest instead since the fees are way lower.
- I have slightly higher than basic knowledge on looking at companies, analyzing them and calculating their Intrinsic Value.(Basically Value Investing)
- I would like to buy stocks that can be hold for long and earn dividend at the same time!

I have a few companies in mind that I want to look up but I am also interested in REITS but i think the way to analyze them is a little different so I don't think I know how.

I would also like to ask about websites/resources that can help me in analyzing companies other than Google/Yahoo Finance page.
I actually procrastinate for quite some times already so I have told myself that I want to delay no more.

Current plan is thoughts of putting ~$1k into Singapore Savings Bonds. But do not know if I should.

Please give me advice on what can I do for now in order to work towards my goals of financial freedom! Thank you!

Hi mr hozhijie.
21 years old , serving ns with networth 10k+++
a lot of us with $0 saving during Ns.. Envy sio