How I Started Investing

Over the past few years, i’ve slowly neglected this space of mine. As evident from the once a year annual update, I havent had the chance to write down as much as I would want to. Not that there are a lot of people reading this (due to the lack of updates).

But I’m making an effort to change that.

Due to an increase interest in the personal finance space (signs of adulting), from now on, this space will be dedicated to penning down my thoughts and sharing my experience in the personal finance space.

I have been dabbling a bit into investments, as you can see from my previous year end update.

Let me share with you my experience and how I started.

When i started to decide what to invest in, I first decided what is my risk profile.

As an impatient guy, my risk profile is quite high, hence i dabbled into US stocks. US tech stocks have been going up so i was lucky to catch some part of it since i started a year ago. US stocks is probably one of the investment product with the highest risk (daily fluctuation of 1-5%).

Understand that my investing journey will be 10-20 years, so i am more focused on building my capital now (because no money) – hence US stocks fits me best because it can provide a decent capital gain in a short period of time (can go both ways), and I can stomach the risk. Other products like ETFs, REITS etc, you can only see the return in 5-10 years for the compounding interest to kick in.

​I first bought my first 2 US stocks back in 2014 in the middle of a mini bear market (but I didnt know this back then) – Apple and Facebook and left it there. The first 2 years the portfolio was down by as much as 15% – but it was a small capital and i didnt actively manage it.

When I started to look into investing again sometime in August last year, I put in some money and picked up a few hot US stocks. I was lucky enough to ride the bull market then and made a small capital gain.

After putting in some money into the US stock market, I realize that i need to balance out my portfolio with lower risk investment products, hence i looked into funding society for p2p lending, and then a little bit in SG REITs to build my long team dividend portfolio. These are done using the capital gain from my US stocks, diverted into my smalll dividend porfolio (ie REITs).

My current portfolio now as of June 2018:

Portfolio Exposure Percentage Risk
US Equities 28.95% High
Crypto 9.39% Very High
P2P 12.44% Low
SG Reits 15.52% Medium
Cash 16.81% Zero
Bonds / CPF 16.63% Zero

Of the various investments, US equities have returned me 33% since 11 months ago, while crypto I made a small loss of 10% instead of a gain of 200% (due to extreme greed), while SG REITS is down 11% (because I don’t understand the product yet but this is for another post). P2P returned me about 9% and I’m slowly withdrawing the money out to be diverted to both US and SG stocks.

So to sum up, here’s my investment plan:

​My first 2 years of investing:

  • US tech stocks for capital gain (super high risk)
  • Balance risk of US tech stocks with p2p lending (medium risk)

My hypothetical 2-5th year of investing (not there yet this is my 1st year only)

  • Capital gain from tech stock slowly converted to SG Reits for future dividend portfolio (medium to low risk)

​My hypothetical 5th – 10 year of investing

  • Slowly build up dividend portfolio and waiting for dividend to compound the returns (medium to low risk)
  • CPF should have some money (low risk)

And some advise on whoever’s looking to invest to earn additional income – you should always remember to:

  1. Read up, follow financial bloggers
  2. Save money
  3. Reduce expenses (sometimes it is harder to think of how to make extra S$200 a month, than to cut down on S$200 a month in expenses, both resulting in +S$200 in wealth)
  4. Optimize on credit card rewards
  5. Be insured
  6. Always remember that this is a long game (10-20 years)

Will be talking more about these pointers in the future.


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