If I had S$100,000, How Should I Invest It? | Expert Views
Alfred Chia, CEO, SingCapital
If I had $100,000, I would first check myself with these 5 questions.
- What age am I now?
- What life stage am I at now?
- What is my risk appetite?
- What is my investment time horizon?
- Does this money make up a major part of my investible capital?
The answers to these questions will determine how I would allocate the funds.
If I am still young, I can take on a higher investment risk, because I have a longer investment time horizon. I would allocate more funds into equities, some in bonds, and even some into Bitcoin, because you can weather the volatility.
If I am close to retirement, I would take less risk. But I would still have a small portion of my money in equities. The investment time horizon may shorter, but it is important to have some returns because I can expect to live for many years more. Beyond that, I would put my money in fixed income securities, where my capital is relatively secure, and have a steady income.
Aw Choon Hui, Deputy CEO, GYC Financial Advisory
If I had $100,000 in my 20s, I would first invest about $80,000 into a low cost global equity index fund that is weighted towards academically proven sources of return.
By investing this amount from age 25 to 65 at long term global equity index returns, it should yield me about $1 million when I retire from full-time work at age 65.
Then I’ll use the remaining $20,000 to:
- Review and buy what is necessary to bring my insurance coverage to an optimum level.
- Top-up my emergency cash fund to reach a target level of at least 12 months of expenses (to sustain my expenses for at least 1 year of unemployment).
- Talk to my financial adviser to get a road-map to achieve my long-term financial goals.
- Keep about $500 to $1,000 to treat myself!
- Any more balance of funds to be added to my original $80,000 and invested.
The GoBear Team
It would depend on my life stage.
- If I am a postgrad and new entrant to the workforce, set aside at least 6 months of my emergency funds and/or clear outstanding study loans (if any) and look for any suitable investment instruments to grow the remaining money.
- If I am a newlywed with a housing mortgage loan, use it to pay off the housing loan and refinance my mortgage loan to clear off the loan faster.
- If I am married with a housing mortgage loan and young kids, set aside at least $50,000 and invest for kid’s studies and use the remaining $50,000 to pay off my mortgage loan.
- If I am in my 50s, I will divide the amount into 2 and top up into my CPF Special Account and my spouse as well, to fulfill the CPF Minimum Sum Scheme and gain the 4% interest per annum to plan for extra retirement funds.
Albert Tse, Head of Intermediary Business (South East Asia), Schroders
I would invest in multi-asset funds for their diversification benefits. Investing in a diversified portfolio across a wide range of assets such as equities, fixed income and alternatives in multiple markets allows investors to maximise risk- adjusted income.
I would also ensure these multi-asset allocations can be dynamically managed, which means the funds adapt their allocations in response to new market conditions, and as a result maintain an appropriate balance funds adapt their allocations in response to new market conditions, and as a result maintain an appropriate balance.
Kazumasa Tomita, Founder, ZUU Online
I would invest $40,000 (50%) on improving myself, invest $30,000 (30%) in hedge funds, and invest the remaining $20,000 (20%) on stocks in the entertainment and leisure sector.
What does it mean to improve myself? That means investing to build up my capabilities, like in my communication skills, building my business and personal network, and gaining new experiences. You may not see the returns now, but you will experience the returns in future, both in an economic level and on a personal level.
When I talk about hedge fund investment, I am referring to “managed futures”. That is an investment strategy that helps to support investment returns in high volatile markets by providing diversification. In fact, I expect that the period between 2018 to 2020 will see a lot of unexpected events, which may bring both good and bad news to the global markets.
Finally, why entertainment and leisure stocks? With growing capitalism, more people will increase their spending, driven by their emotions and their wants. As an investor, we need to be very logical and objective about this. So while others are spending indiscriminately, we should be investing in stocks that would benefit from this effect, like gaming, travel and sports related stocks.