Contributed by: warriortan
A summary of the Key Takeaways from our first business lunch on 23/2/2017:
1. It is important to diversify your investment portfolio.
2. It is not expensive to build a diversified portfolio. Building it with individual stocks, bond and especially with unit trusts and engaging “experts’ help” can be very expensive. Should consider using ETF. Look for large diversified ETF with low expenses. The cost of these ETFs can be as low as 0.05% versus unit trusts of ~ 2% and that is not including any forgetting the purchase and sale fees that the financial institutions charge you.
3. SGX offers ETFs on STI and (very safe) Singapore Bonds. Looking further, the US exchanges offer a lot more options on ETFs provided you can stomach the currency risks and the 30% withholding tax on dividend. Would suggest considering a mixed bags of ETFs from both exchanges and in equity indexes AND bonds.
4. If you are investing for income, dividend yields, the ability of the company to sustain and grow its dividend will be the most important considerations. Perhaps contrary to many people beliefs, a consistent 5% dividend yield year in year out is very good already!
5. Always stay invested through the “ups” and especially during the “downs” -when it is the best time to unlock your war chest to meet the black swan event. DBS offers regular saving plan that is worth checking out …. it helps take the emotions out and stay stress free (relative) …
6. US has Inverse ETFs which allows you to buy and short the market to profit from any downturn … is this the time to get loaded with some of these inverse ETPs? For the riskier investors among us, do you want to consider “leveraged inverse” ETFs? BUT please be very carefully … speculate only with the money you can afford to lose. Yes, I think it is speculating.
7. Individual stocks
a. UOB – its scrip dividend discount is very attractive but unfortunately its share price went up too fast after the announcement of results and dividend …. patience
b. Singpost – is it time to get out at current level?
c. Parkwaylife Reit – we like this but can we get it at lower price?
d. Ho Bee – will it consider privatization too?
e. Phillip SGX AP DIV Reit – a good diversified Reit ETF to consider … it has exposure to Australia, Singapore and Hong Kong … no Japan though.
f. Phillip Real Estate Income Fund – alternatively, a unit trust that invests mainly if not all in Singapore Reits… consistently delivering around 5% dividend yield. Expenses ratio is higher than the above at around 1%. (In US, Vanguard has a globally Reit ETF)
Last but not least, the implementation of the carbon tax in Singapore may not be as bad as we think … but one thing is sure, higher inflation is just round the corner.
Till the next time we meet, take care and good luck. Stay invested!
(friends, did I miss anything?)