“The S&P 500 has clocked new highs again as investors find support in the phase one US China trade deal and recent stronger economic data has also eased worries over global economic growth. Financial markets are also unconcerned on President Trump’s impeachment as they are expecting the Republican-controlled Senate to vote against removing Trump from office. Based on the daily chart for S&P Futures, prices are still above the 50 and 200 moving averages, which signifies a bullish trend.
With the newly launched micro e-mini futures, a large capital is not needed to speculate the US markets. If you have $1000 for investing, you can take a view by investing in 1 lot of S&P futures and essentially control a basket of US stocks (S&P 500) valued at about USD 15,000. As futures trading is bi-directional, you may also short the index if you view that the bull run is coming to an end.”
Ethan Li, strategist at Phillip Futures
How you invest really depends on your age. When you are younger, you can take more risk. You could consider Singapore Savings Bonds, or Unit Trusts which have higher risk but pay dividends.
When you are older, you need to plan your retirement, so you could consider putting some money in your CPF account, contributing to your Supplementary Retirement Scheme account, and putting some money in fixed deposits.
Steven Tan, CEO, OrangeTee & Tie
The idea of investing monthly is good, because it applies the Dollar Cost Averaging strategy, instead of investing a lump sum of say $10,000. You might not be able to time the market right, so dollar cost averaging stretches out your investment and lets the math ease off the volatility. I always advise people to do a monthly investment, to apply dollar cost averaging.
What is more important is putting your money into investment, and not into an endowment plan. With an endowment plan, you are just putting your savings with an insurance company, and is only suitable for a low risk investor. If you have a balanced to high risk profile, you should invest. Even investing a small amount of money can bring a lot of advantages.
How can you tell your risk profile? That would depend on your investment objective and your investment horizon. If you are looking to retire in 20 years, you can afford bigger risk. If you are saving for property in 3 years, you need to have a more balanced risk profile. If you are saving for your children’s education, you should have a low risk profile.
SingCapital is hosting its annual Investment Outlook Seminar for 2020 on Feb 8, supported by PropNex, Phillip Securities, and Aberdeen Standard. The seminar will touch on the investment and property outlook for 2020, and I will be talking more about the financial strategies that can help investors take advantage of the current market environment.
Alfred Chia, CEO, SingCapital
No one can perfectly time the market, the best strategy is to stay invested. In a volatile market environment, a Regular Subscription Plan (RSP) is an effective investment strategy that investors can adopt. By signing up for a RSP, you make fixed monthly investment regardless of market conditions. You will hence buy fewer investment units when prices rise, but more units when prices fall. Over time, your average unit cost will be lower than a lump sum investment over the same period of time, especially during a volatile market period. With $1000 per month, you can sign up for a RSP and buy into a few funds of different asset classes, to diversify your portfolio.
The other recommendation is to save effectively by participating in a bundled savings programme. By simply parking several banking transactions or investments with one single bank, the customer can earn better interest rates on the savings account. An example is the Maybank Privilege Save Up programme where a customer can earn up to 3% per annum interest on a Maybank savings account with a selection of at least three products or services. There are 10 options to choose from, ranging from credit card spending, salary crediting, home or car loan, insurance and investing in dual-currency products, structured deposits or unit trusts.
Adam Tan, Head of Maybank Privilege and Branch Distribution, Maybank Singapore
(By Gwyneth Yeo)
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