advice on investment

[blurblur123]

Please help me see if my plan is sound or feasible.

I am planning to save $1500 per month since I do not have much expenses.

Plan #1
(1) Open CIMB account
Save at least 6 months x my salary. (salary is around 2k.)
In case, I will save at least 10k as emergency money

Plan #2
(2) After achieving goal #1, I am planning to put 10 or 20k in fixed deposit.
Then, I will use any excess money to invest in bonds or stocks.

Also, may I know what kind of stocks or bonds are suitable for someone who prefers low risk?

 

[alexchia01]

Please help me see if my plan is sound or feasible.

I am planning to save $1500 per month since I do not have much expenses.

Plan #1
(1) Open CIMB account
Save at least 6 months x my salary. (salary is around 2k.)
In case, I will save at least 10k as emergency money

Plan #2
(2) After achieving goal #1, I am planning to put 10 or 20k in fixed deposit.
Then, I will use any excess money to invest in bonds or stocks.

Also, may I know what kind of stocks or bonds are suitable for someone who prefers low risk?

Your plan is good.

Except for "what kind of stocks or bonds are suitable for someone who prefers low risk?"

Risk depends on fundamental of the stock and also market condition.

A good fundamental stock is also consider high risk if market condition is risky.

I suggest that you learn how to identify good fundamental stocks while you are building your capital. This is the easy part.

As for market condition, it's better to get an experience investor, as a mentor, to guide you through this. This is the hard part.

 

[blurblur123]

Your plan is good.

Except for "what kind of stocks or bonds are suitable for someone who prefers low risk?"

Risk depends on fundamental of the stock and also market condition.

A good fundamental stock is also consider high risk if market condition is risky.

I suggest that you learn how to identify good fundamental stocks while you are building your capital. This is the easy part.

As for market condition, it's better to get an experience investor, as a mentor, to guide you through this. This is the hard part.

at the start, I want to use $300 plus every month to buy Nikko ETF. However, I do not understand lots of stuff regarding stocks and bonds so I am going to wait first.

 

[Knight_Rider]

Consider an endowment plan. Always better then the bank.

 

[blurblur123]

Consider an endowment plan. Always better then the bank.

I got one endowment plan already.

 

[Epps_Sg]

Plan 1 is good. Plan 2 sounds like emergency fund #2, and that's OK. Meanwhile sign up for enhanced shield plan while you are healthy - it is low cost at your age, and get term life insurance also. Accident insurance is optional. SAF Group term insurance is good choice and can form 'part' of your term insurance. Insurance is there to mostly to support your dependants in case unforeseen happens.

Once your protection is in place, you can look for passive investing using stock index funds like STI ETF, together with suitable bond funds. There are several flavors of passive investing strategy around, you may want to research one that suits your appetite, just remember to keep strategy as simple as possible. One of the simplest is to invest 50% in stock index, 50% in govt bond funds (not emerging markets bonds fund, not high yield bonds fund). Govt bond funds are not that common, so you may also consider to invest in quality short term bond funds with good track record. Rebalance asset allocation yearly. When your passive investing is on track, you can then think about setting aside a 'small' amount 'cash you can afford to lose' to do trading, if you wish. For choice of funds, choose funds that are mostly passively managed, funds with sufficient fund size (more than 100mil?), and funds that have lowest yearly fees. For long term investing it is more important to keep running costs low.

Learn to invest yourself is best - do not let others manage your money and even if you do, do so only when you understand that they are not doing market timing with your money, and you understand well what their investing strategy is. Good luck!

 

[blurblur123]

Plan 1 is good. Plan 2 sounds like emergency fund #2, and that's OK. Meanwhile sign up for enhanced shield plan while you are healthy - it is low cost at your age, and get term life insurance also. Accident insurance is optional. SAF Group term insurance is good choice and can form 'part' of your term insurance. Insurance is there to mostly to support your dependants in case unforeseen happens.

Once your protection is in place, you can look for passive investing using stock index funds like STI ETF, together with suitable bond funds. There are several flavors of passive investing strategy around, you may want to research one that suits your appetite, just remember to keep strategy as simple as possible. One of the simplest is to invest 50% in stock index, 50% in govt bond funds (not emerging markets bonds fund, not high yield bonds fund). Govt bond funds are not that common, so you may also consider to invest in quality short term bond funds with good track record. Rebalance asset allocation yearly. When your passive investing is on track, you can then think about setting aside a 'small' amount 'cash you can afford to lose' to do trading, if you wish. For choice of funds, choose funds that are mostly passively managed, funds with sufficient fund size (more than 100mil?), and funds that have lowest yearly fees. For long term investing it is more important to keep running costs low.

Learn to invest yourself is best - do not let others manage your money and even if you do, do so only when you understand that they are not doing market timing with your money, and you understand well what their investing strategy is. Good luck!

Yes I have bought insurance for H&S, term and critical illness.

Now, I am learning how to invest. Thanks for the long post! I read yr post in other threads about regarding buying SGS bonds. Thus, I am thinking of using 50% on ETF and 50% on SGS bonds or other bonds... is that alright?

 

[Dyhalt]

From past experience I'll recommend young investors to avoid buying funds when they are making new highs for obvious reason. (What goes up must comes down)

If I am in your shoes I'll first invest in myself
(IE : enhance my working capability to yield better returns for my time, you should have a goal of how much you should be earning in 5 years)

Meanwhile at the same time saves up for 1 year to see if I am the kind of person that can stick to my financial plan. From this point I'll recommend start with 50% cash (fixed or deposit account), 25% index ETF and 25% in your field of expertise (invest in what you know best). You should adjust according to the level of your expertise to yield maximum result.

 

[blurblur123]

From past experience I'll recommend young investors to avoid buying funds when they are making new highs for obvious reason. (What goes up must comes down)

If I am in your shoes I'll first invest in myself
(IE : enhance my working capability to yield better returns for my time, you should have a goal of how much you should be earning in 5 years)

Meanwhile at the same time saves up for 1 year to see if I am the kind of person that can stick to my financial plan. From this point I'll recommend start with 50% cash (fixed or deposit account), 25% index ETF and 25% in your field of expertise (invest in what you know best). You should adjust according to the level of your expertise to yield maximum result.

thank you for the comment.

 

[alexchia01]

at the start, I want to use $300 plus every month to buy Nikko ETF. However, I do not understand lots of stuff regarding stocks and bonds so I am going to wait first.

Buying ETF and buying individual stocks are pretty much the same.

If you don't understand enough to buy stocks, what make you so sure you understand enough to buy ETF?

Just because it's ETF, does not make it any less risky.

I suggest you put 70% of your capital in cash and use the 30% to play the market.

This will give you some experience while not risking too much.

 

[alexchia01]

Consider an endowment plan. Always better then the bank.

Please don't try to sell your insurance here.

He's trying to learn how to invest, not buy insurance.

 

[alexchia01]

Plan 1 is good. Plan 2 sounds like emergency fund #2, and that's OK. Meanwhile sign up for enhanced shield plan while you are healthy - it is low cost at your age, and get term life insurance also. Accident insurance is optional. SAF Group term insurance is good choice and can form 'part' of your term insurance. Insurance is there to mostly to support your dependants in case unforeseen happens.

Once your protection is in place, you can look for passive investing using stock index funds like STI ETF, together with suitable bond funds. There are several flavors of passive investing strategy around, you may want to research one that suits your appetite, just remember to keep strategy as simple as possible. One of the simplest is to invest 50% in stock index, 50% in govt bond funds (not emerging markets bonds fund, not high yield bonds fund). Govt bond funds are not that common, so you may also consider to invest in quality short term bond funds with good track record. Rebalance asset allocation yearly. When your passive investing is on track, you can then think about setting aside a 'small' amount 'cash you can afford to lose' to do trading, if you wish. For choice of funds, choose funds that are mostly passively managed, funds with sufficient fund size (more than 100mil?), and funds that have lowest yearly fees. For long term investing it is more important to keep running costs low.

Learn to invest yourself is best - do not let others manage your money and even if you do, do so only when you understand that they are not doing market timing with your money, and you understand well what their investing strategy is. Good luck!

How come so many insurance agent here?

 

[blurblur123]

Buying ETF and buying individual stocks are pretty much the same.

If you don't understand enough to buy stocks, what make you so sure you understand enough to buy ETF?

Just because it's ETF, does not make it any less risky.

I suggest you put 70% of your capital in cash and use the 30% to play the market.

This will give you some experience while not risking too much.

yes, that is why I keep this on hold and wait till I understand them better.

 

[blurblur123]

How come so many insurance agent here?

I think epps_sg's reply is just genuine, not trying to sell insurance.

 

[Shiny Things]

Please help me see if my plan is sound or feasible.

I am planning to save $1500 per month since I do not have much expenses. (snip plan)

This is a great idea. Go do it!.

Also, may I know what kind of stocks or bonds are suitable for someone who prefers low risk?

Well, see, here's the thing. If you want low risk, you're also going to get low returns. If you're young (like, under 40), and this is your retirement money, you've got a long time to ride out any swings and roundabouts in the stock market.

Here's a rule of thumb.

1) If you need the money in less than a year, keep it in the bank.
2) If you need the money in less than four years, put it in a bond fund - I like the ABF Bond Fund ETF, stock code A35 on the SGX.
3) If you won't need the money for at least four years, put it in a blue-chip stock fund - I and everyone else on here likes the STI ETF, stock code ES3 (it just buys all the stocks in the Straits Times Index), or the Nikko STI ETF, stock code G3B (exactly the same but one-tenth the lot size).

 

[blurblur123]

This is a great idea. Go do it!.



Well, see, here's the thing. If you want low risk, you're also going to get low returns. If you're young (like, under 40), and this is your retirement money, you've got a long time to ride out any swings and roundabouts in the stock market.

Here's a rule of thumb.

1) If you need the money in less than a year, keep it in the bank.
2) If you need the money in less than four years, put it in a bond fund - I like the ABF Bond Fund ETF, stock code A35 on the SGX.
3) If you won't need the money for at least four years, put it in a blue-chip stock fund - I and everyone else on here likes the STI ETF, stock code ES3 (it just buys all the stocks in the Straits Times Index), or the Nikko STI ETF, stock code G3B (exactly the same but one-tenth the lot size).

yes, currently I am in my mid-twenties. that is why I set up an emergency fund (about 10K) and will probably use the rest to invest either for short-term or long-term.

 

[crissangelz]

your take home pay ard 2k bt u able to save ard 1.5k... Wow, really mux salute u... mine pay also ard ur range bt only able to save $500 per month...

 

[teckgamer]

This is a great idea. Go do it!.

2) If you need the money in less than four years, put it in a bond fund - I like the ABF Bond Fund ETF, stock code A35 on the SGX.
.

http://www.nikkoam.com.sg/files/documents/funds/phs/phs_abf2.pdf

I have a newbie question:

There is Annual Management Fee, Annual Trustee Fee and Index Provider's licence fee. Does the current price A35.SI ($1.13 per share) has already taken into account those fees? Or I would have to pay those fees on top of the current price of $1.13 per share

 

[w3ird0lol]

Well, see, here's the thing. If you want low risk, you're also going to get low returns. If you're young (like, under 40), and this is your retirement money, you've got a long time to ride out any swings and roundabouts in the stock market.

Here's a rule of thumb.

1) If you need the money in less than a year, keep it in the bank.
2) If you need the money in less than four years, put it in a bond fund - I like the ABF Bond Fund ETF, stock code A35 on the SGX.
3) If you won't need the money for at least four years, put it in a blue-chip stock fund - I and everyone else on here likes the STI ETF, stock code ES3 (it just buys all the stocks in the Straits Times Index), or the Nikko STI ETF, stock code G3B (exactly the same but one-tenth the lot size).

hi, there, being reading your thread and posting on investment related stuff. Same as TS (Sorry to TS, don't mean to hijack),

I like your reasoning of the rule of thumb. Especially the last point, but how do I start with it?

 

[Knight_Rider]

Please don't try to sell your insurance here.

He's trying to learn how to invest, not buy insurance.

How you know I am an insurance agent? Since you can predict so well this weekend open what 4D number. He didn't say what he have how I know. Everybody knows putting in the bank sucks. Which thread you see me sell policy. Find one and prove or else **** yourself.