Saturday, September 22, 2007

Choose the right fund

Dear Mr Tan,

There are so many investment funds in the market. How do I make the right choice? Should I chooce the China and Indian funds that are likely to do well over the next few years? Any advice?

MY REPLY:

Choose a large, well diversified fund fund that have low upfront and annual expenses. Preferably, chooose an indexed funds, such as the STI ETF (exchange traded fund) or the S&P 500 fund (in America).

Invest 80% of your savings in these funds. For the remaining 20%, you can choose the fund that appears to be exciting, such as the China or India fund. However, you must select carefully, as the stocks in China are now too highly expensive.
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2 comments:

Anonymous said...

Mr. Tan,

The STI ETF is trading around 36 points, is it the right time to buy now or should we wait.

One more questions, is there such thing as a "right-time" when buy ETF?

September 24, 2007 11:06 AM
Tan Kin Lian said...

In my personal view, the stockmarket is at a high level now. This applies to individual stocks and to the ETF (exchange traded fund).

I prefer to wait for the market to correct to a lower level, before I make further investments. But, honestly, I do not know if it will correct within the next few months.

In the meantime, I have to invest to earn about 2% in fixed deposit.

It is not attractive, but it is safer.

For the shares that I bought earlier at a lower price, I will keep fully invested.

September 26, 2007 11:34 AM

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