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Investment Advisory
Expert guidance on building wealth through smart, diversified investments tailored to your goals and risk tolerance.
Why Invest?
Saving alone is not enough to build wealth. With inflation averaging 2-3% annually in Singapore, money sitting in a savings account actually loses purchasing power over time. Investing puts your money to work, growing your wealth faster than inflation.
The Power of Compound Interest
$10,000 invested at 7% annual return grows to approximately $76,000 in 30 years. The same amount in a 0.05% savings account grows to just $10,150. That's a difference of nearly $66,000!
Understanding Your Risk Profile
Before investing, it's crucial to understand your risk tolerance. This determines the right investment mix for you.
Conservative
Priority: Capital preservation with modest growth
Moderate
Priority: Balanced growth with controlled risk
Aggressive
Priority: Maximum growth, higher volatility tolerance
Risk Capacity vs Risk Tolerance
Your risk capacity (financial ability to take losses) and risk tolerance (emotional comfort with volatility) may differ. A good investment strategy considers both factors.
Types of Investments in Singapore
Singapore offers a wide range of investment options suitable for different goals and risk profiles.
Stocks/Equities
Own a piece of companies. Higher risk, higher potential returns.
Bonds
Loan money to governments or companies. Lower risk, steady income.
Unit Trusts
Professionally managed pooled investments. Good for diversification.
ETFs
Trade like stocks, track indices. Low cost, highly diversified.
REITs
Real estate investments without buying property. Regular dividends.
ILPs
Investment-linked insurance. Combines investment with protection.
Unit Trusts Explained
Unit trusts (also called mutual funds) pool money from many investors to buy a diversified portfolio of assets. They're managed by professional fund managers and are a popular choice for investors who prefer hands-off investing.
Types of Unit Trusts
Unit Trust Fees to Know
| Fee Type | Typical Range | Description |
|---|---|---|
| Sales Charge | 0-5% | One-time fee when buying |
| Management Fee | 0.5-2% p.a. | Annual fee for fund management |
| Trustee Fee | 0.02-0.1% p.a. | Fee for asset custody |
| Switching Fee | 0-1% | Fee to switch between funds |
Exchange-Traded Funds (ETFs)
ETFs are investment funds that trade on stock exchanges like individual stocks. They typically track an index (like the S&P 500 or STI) and offer low-cost, diversified exposure to various markets.
Why ETFs Are Popular
Popular ETFs in Singapore
- •SPDR STI ETF: Tracks Singapore's Straits Times Index
- •Nikko AM STI ETF: Another STI tracker with lower fees
- •Lion-Phillip S-REIT ETF: Singapore REIT exposure
- •ABF Singapore Bond Index Fund: Government bonds
Real Estate Investment Trusts (REITs)
REITs allow you to invest in real estate without buying physical property. They own and manage income-generating properties and are required to distribute at least 90% of taxable income as dividends.
Types of S-REITs
Why Singapore REITs Are Attractive
S-REITs offer dividend yields of 4-8% annually, well above bank deposits. They're regulated by MAS, must distribute most income, and provide exposure to quality properties across Asia-Pacific.
Bonds and Fixed Income
Bonds are loans you make to governments or corporations. In return, you receive regular interest payments and your principal back at maturity. They're generally lower risk than stocks but offer lower returns.
Bond Options in Singapore
Singapore Savings Bonds (SSB)
Government-backed, flexible, no capital loss if held to maturity. Maximum $200,000 per person.
Singapore Government Securities (SGS)
Treasury bills and bonds. Risk-free, traded on SGX.
Corporate Bonds
Higher yields but credit risk. Minimum $250,000 for retail investors.
Bond Funds
Pooled bond investments managed by professionals. More accessible entry point.
Investment-Linked Policies (ILPs)
ILPs combine life insurance with investments. Your premiums are used to buy units in investment funds, while providing insurance coverage. They offer flexibility but require understanding of both insurance and investment components.
ILP Considerations
Advantages
- • Protection + investment in one product
- • Flexibility to switch funds
- • Premium holiday options
- • Potential tax benefits on maturity
Considerations
- • Higher fees than direct fund investing
- • Insurance charges reduce investment
- • Early surrender penalties
- • Investment risk borne by policyholder
Building Your Investment Strategy
A sound investment strategy is personalized to your goals, timeline, and risk tolerance. Here are key principles for success.
Define Your Goals
Are you investing for retirement, children's education, or wealth building? Different goals require different strategies.
Determine Time Horizon
Longer time horizons allow for more aggressive investments. Short-term goals need conservative approaches.
Diversify
Don't put all eggs in one basket. Spread across asset classes, geographies, and sectors.
Stay Consistent
Regular contributions through dollar-cost averaging smooth out market volatility.
Review Regularly
Rebalance annually to maintain your target allocation as markets move.
Frequently Asked Questions
How much do I need to start investing?
You can start with as little as $100/month through Regular Savings Plans (RSPs). Robo-advisors typically have minimums of $1-$1,000. Direct stock investing may require more depending on brokerage minimums.
Should I invest my CPF?
CPF OA earns 2.5% guaranteed. Only invest CPF if you're confident of beating this return after fees. Consider that CPF also earns extra interest on the first $60,000. Many experts suggest keeping CPF in the account.
What's the difference between active and passive investing?
Active investing tries to beat the market through stock picking. Passive investing (index funds/ETFs) aims to match market returns at low cost. Research shows passive often outperforms active over long periods.
How do I choose a financial advisor?
Look for licensed representatives who are transparent about fees, understand your goals, and recommend suitable products. Avoid those who push high-commission products without considering your needs.
Ready to Start Investing?
Get personalized investment advice tailored to your goals and risk profile. Our certified advisors will help you build a portfolio that works for you.