What type of investment do u all usually invest in ar??? Bond/stocks/futures???? can share roughly how much % these investment vehicle yield and any platform to recommend? ~~
You know what, even though I'm not sure whether this question is trolly or not, I'm gonna answer it anyway.
The only answers you need to know are "Stocks" and "bonds". Anything else - futures, FX, commodities, interest rates, ridiculous ponzi schemes - is not a good idea for retail investors. ("Futures" isn't even technically an asset class - you can have futures on stocks, bonds, FX, interest rates, commodities, you name it.)
So!
Stocks: you know what these are. They're a tiny ownership slice of a company; you buy them on the SGX or the NYSE
aaaaaaand it's gone. (No, kidding. That does not actually happen.
Except when it does.)
Anyway! The neat thing most people don't know is that there's an easier and less stressful way to do it. Instead of having to put all that cognitive load into thinking about which stock to buy, you can buy one stock that owns
all the stocks - or at least every stock in the Straits Times Index. It's called an "ETF" - an "exchange-traded fund" - and the Singaporean one is ES3, the "STI ETF". (There's another one, stock code G3B, that has a smaller lot size, but when lot sizes get reduced early next year they'll both end up trading in 100-lot clips so there'll be no reason not to buy ES3.)
So, for your stock allocation, you just do that: buy ES3 and sit on it.
Over the very long run, stocks yield about 5% over inflation - call it 7% and you won't be too far off - but they do it with very high volatility. An "average year" for stocks is anywhere between -10% and +20%. So you need to be in stocks for a long time for the returns to smooth out: basically, stocks are appropriate investments if you won't need the money for at least five years.
Shorter than that, you should keep your money in bonds or in a bank account.
Bonds: These are loans made to a company, or to a government. You get to be the banker! (Sadly you do not get to tell them "this line is for customers only, NEXT!".)
Bonds are considerably harder than stocks to invest in. There are a few listed on the SGX, which you can buy like stocks, but generally you can't buy bonds in lots smaller than $250,000. This sucks! But again, there's a better way - and again, it's an ETF. The Singaporean bond ETF is stock code A35; it's 80% Singaporean government bonds (so you know your money's not going anywhere), with a few "semi-government" bonds from agencies like the HDB and LTA.
So, for your bond allocation, you just do that: buy A35 and sit on it.
Over the very long run, bonds yield 1-2% over inflation, with much lower volatility than stocks: a typical year for government bonds would be something like -2% to +5%. Before you ask "but why would I buy any bonds instead of stocks then, those returns are crappy", there's a reason for that: bonds are a stabiliser for your portfolio. Bonds tend to go up when stocks go down, so they smooth out the swings and roundabouts of the stock market. And once you get close to retirement age, you want to be mostly in bonds so that you don't get clubbed and lose your retirement savings if 2008 happens all over again.
So here's what you do - you put most of your money in stocks, and a bit in bonds, and then you basically just sit on it. My favourite rule of thumb (that I won't shut up about, as anyone on here will testify) is "110 minus your age in stocks": so, if you're 30 years old, you put 110-minus-your-age, or 80%, in ES3; and the rest in A35.
Then once a year, you "rebalance" it - you buy or sell stuff to bring the proportions back to 110-minus-your-age - and you head off to the pub.
Now, you asked about platforms, and that's a really good question because there are a lot of pitfalls here. Singaporean brokers are almost uniformly awful - the fees are high, the systems are shoddy, basically a little bit of consolidation wouldn't go astray. The exception is Standard Chartered: their fees are low (0.2% with no minimum), they're pretty reliable (there were a few teething problems earlier in their life, but I haven't heard much complaint about them lately), and they don't charge any bogus dividend handling fees or custody fees.
Don't bother with unit trusts. Definitely don't use investment-linked insurance; it's a bad investment and it's bad insurance. Stick to stock and bond ETFs through Stanchart and you'll be fine.
