If I had S$250,000, How should I invest it? (Part 2) | Expert Views
Joyce Woo, Founder, Jachin Capital
“I’d put about 50% of it in REITs or property, which would give you about 5% yield income. Then 30% to 35% would be in gold for protection. For that, I would invest in major gold miners or gold ETFs like the SDPR Gold Trust (GLD).
Then the remaining 10% to 15% would be invested in the Internet of Things (IOT), because of its long term growth trend. So that would be things like your cybersecurity, robotics, and your China e-commerce.”
Steven Tan, MD, OrangeTee & Tie
“I believe it really depends on your age, because property investment – which I am most familiar with – is not as liquid as other investments. If you are young, if you have done your sums, and you can afford to spend all S$250,000 on a property down payment, just pay.
That’s because your income would likely go up. And since you are still young, you can afford to take a higher risk.
Based on historic trends, the longer you hold your property, the more likely the price of your property will go up as well. Just look at the example of the Singapore property market. After 15 quarters of downtrend, it fell about 12%, but it won’t take 15 quarters to recover from it. It might take 4 or 5 quarters, but it will recover within a much shorter time.
But when you are older, it’s a different ball game. Now I am over 50, so I don’t need to take such a high risk, especially since I already own property and I don’t see the need to keep buying. Then that S$250,000 can go towards investing in shares which are more liquid, bonds because they are safer, or you can spend it more flexibly for travelling or for maintaining your lifestyle.”
Loy Yi Zhuo, Founder, Chamberwealth
“What you really should do is get your objectives mapped out first. This is regardless of the amount you have available, since having a clear objective will ensure your money is well invested or spent.
Your investment time frame is usually the first factor of consideration; people approaching retirement may have a shorter time frame than people who just graduated from school.
One question that you should ask yourself before buying any financial product is ‘When will I need that money again?’
Most problematic cases that we’ve encountered usually involve an unsuspecting client’s money being tied down for longer than they expected.
Diversification is another good strategy. For example, you can invest for the long term with a portion of the money, and invest in the short term with another portion. As life situations change rapidly, having such strategy will help to ease up your cash flow problems during difficult times.
Fundamentally, it is essential to know your objectives, and have the right partner to help you plan out your roadmap with you.”
Spencer Li, Professional Trader, Coach & Founder of Synapse Trading
For someone in the early 30s with $250k of investible cash and wants to start building a portfolio, I would suggest a diversified approach of various asset classes to maximise returns.
- 25% allocated to cash (war chest)
- 10% to cryptocurrencies
- 20% to trading account
- 20% to commodities
- 20% to businesses, startups, angel investments
Currently, the bulk of the holdings is in cash, since the market is pretty “risk-on” at the moment with much political and economic uncertainty about trade wars and real wars. Hence, I did not include any stock holdings, as the stock markets (S&P 500) are at 8-9 year highs, so I will wait to buy in at a lower price should the opportunity arise.
One important factor is the 20% allocation to trading account, as this generate monthly cashflow from stocks/forex trading to continue growing the total portfolio size aggressively, which can then be allocated to other asset classes within the portfolio.
10% to cryptocurrencies is considered a “wild bet” which could be a zero or hero; lastly 20% to businesses is for people who have some prior experience to invest directly in businesses, or start their own. Personally, my portfolio includes several businesses, including a cafe and pub.
I have allocated 20% to commodities, as commodities are likely at their cycle low. The GSCI (Goldman Sachs Commodity Index) is one of the main benchmark for commodity prices, and the (GSCI/S&P 500) is used to measure the prices of commodities relative to stock prices. Currently, this measure is at a 50-year low, which suggests cheap commodities as a potential investment.
I have excluded real estate from this sample portfolio, as I do not include “own stay” property as an investment asset, and S$250,000 is too small for any major property investment. For my own portfolio, i have invested in several properties as I feel that the Singapore property market will continue to rise for the next 5-10 years.
I have also excluded fixed income, as for Singaporeans, the CPF (SA account at 4%) is pretty much similar to a “risk-free” high-yield bond, hence it serves well as the fixed income component of the portfolio. For my own portfolio, I have hit the minimum sum, which will provide a good safety net for retirement.
This is a good template to start building your portfolio, but do keep in mind that ideally you should be looking to rebalance your portfolio every 1-3 months.
ZUU Investment Disclaimer: The information given above is based on our experts’ field of expertise and their own personal experience, and should not be relied on or construed as financial advice. ZUU online recommends that our readers take these pieces of advice as a starting point, to research and then assess the merits of this advice based on their own financial needs, investment goals, and risk tolerance.