3 questions on investment strategy.

Omg! You actually reply! Thanks a lot really appreciate it!

Ok sorry but i have more questions!

1.       I read an article on facebook (sponsored article), that says if you are 30 years old you need to saveabout $700 per month on a 6% yield in order to hit i think 1m by age 65.

a.       What I want to know is, does the funds like CPF or anything other things that provides that so call xx% calculated on an annual basis? What i mean is that is there a difference if i were to save and invest lets say $1000 every month into something or at the end of the year i just invest $12000? Will i get the same returns?

b.       Next part of the question is Would it be better to have regular buy ins of a stock or REITs compared to 1 lum sum? The question mark that i have is the effect of compounding effect which you mentioned many times on your blog especially with CPF.

                                                               i.      My thoughts are that if i have an emergency fund already saved up and stashed away, calculated my monthly expenses and know how much i can spare per month in excess to invest and already have a war chest in your terms. I should first put this war chest to use to obtain dividends in terms of cash flow now at the rate of perhaps 5,7,9% whicever. And then coupled with the monthly excess that I have build up another war chest to buy in regularly? There are definitely pros and cons such as if i use everything in the war chest and have no cash upfront, then I wouldnt be able to make use of events such as the GFC to stash on more cheap buys. But just would like to know your thoughts on my thinking process and any advice on that?

2.       If i have investments in unit trusts currently, should i sell them off so that I can go into stocks and reits?

a.       I basically went into them for their historical dividends based on the information given on fundsupermart. Of course for some there were capital gains and some losses. So no read up on company fundementals, no fa or ta and just went in.

3.       I am a self employed so there is no employer contribution for cpf. Shd i then make a monthly contribution or wait till before dec ends then make a lum sum? How is the interest calculate in that case?

a.       Since that i am self employed, which option shd i go for, using the sum of money i have to top up cpf? Or use that same sum of money to buy into reits or stocks?

Thanks alot!
W

Hi W,

1 a. There will be a difference. See this:
http://singaporeanstocksinvestor.blogspot.sg/2015/01/cpf-minimum-sum-top-up-and-interest.html

1 b. Investing a fixed sum regularly or dollar cost averaging is a tried and tested approach. You become less concerned with volatility. However, having a war chest ready to buy more when Mr. Market feels depressed is a good idea. Nibble most of the time and gobble sometimes.
See this:
http://singaporeanstocksinvestor.blogspot.sg/2013/08/are-you-ready-to-come-out-on-top-from_22.html

2. I won't tell you what to do but I have given unit trusts a wide berth for many years.

3. See answer to 1a above.
I treat the CPF as a long term investment grade bond which pays an attractive coupon. Whether we believe in having an instrument like this in our portfolio will shape our decision to top up our CPF accounts or to put everything in the equities market.

Best wishes,
AK

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