Wednesday, April 30, 2008

How to invest in low cost investment funds

Hi Mr. Tan,
I read your article about not to invest in structured deposit. How do I go about getting the ideal plan ID7 or ETF as recommended by you? How much do invest and for about how long? Thank you.

You can ask the business center of NTUC Income, if they can sell the ID7 plan to you. You can buy the ETF through a stockbroker.

You can invest any amount, subject to a minimum of 1,000 shares in the case of ETF. You can invest as long as you wish. Usually, you will get a better return when you invest for the long term, i.e. for 10 year, 20 years or longer.

Read this FAQ:


Anonymous said...

Just a friendly comment on investing. I am not saying that investment in ETFs is wrong or ID7 is bad.

I would like to reiterate my earlier views: exercise extreme caution.

It's better to put your money in the bank for the next 2 or 3 years to accumulate and then go into the market.

The party has not even started. I estimate the loss to reach 4 trillion and we are only just beginning. Do not be lured into the market now as people will be off loading their overpriced equities to you. No point averaging down as it will only waste your time and effort. It is better to buy at the bottom. You can consider going in when STI reaches 2400 or 1800 if you can patient enough.

For those who did not get out in time 6 months ago, now it is a good time to unwind and unload, to cut loss as there will be a lot of newbies getting in, think that the worst is over.




Morgan Stanley see big bank woes just beginning
Monday April 28, 10:45 am ET
By Joseph A. Giannone

NEW YORK (Reuters) - Morgan Stanley (NYSE:MS - News) analysts on Monday told clients to "sell the rally" in financial stocks, slashing forecasts for big bank earnings and warning that the current credit crunch is only just beginning.

In aggregate, Morgan Stanley reduced its estimates for 2008 large bank earnings by $17 billion, or 26 percent, and reduced 2009 forecasts by $13 billion, or 15 percent. The analysts expect higher loan losses and expenses, offset by higher net interest income, though profits could fall further still if the Federal Reserve stops lowering interest rates.

"More capital hikes and dividend cuts (are) coming as our credit deteriorates and forward earnings decline," analysts led by Betsy Graseck wrote in a report. "We think we are only in the third inning of the credit cycle and expect this credit cycle will be worse than (the slump in) 1990-91."

Just for the record, a baseball game usually has nine(9) innings. Morgan Stanley's declaration that we are only in the third inning of the credit cycle, simply says that the game has only just gotten started.

Anonymous said...

What a discouraging comment. It's good that you can invest right in the bottom of the market, but who knows the bottom, STI at 2400 or 1800? If someone says, wait until STI at 1000. It will set the people not to invest at all for their lifetime. When STI hit 2000 or below, there'll be chaos in the economy already, and who dares to invest, except the extreme wealthy people? I think it's better to always invest using DCA.

Anonymous said...

The article that earlier comment mentions is specifically for financial sector/banking. If you invest in ETF, it will be more diversified into different sectors. Although financial woes can drag the whole economy down, but long term wise, most sectors will recover, although not all. Take easy example, dot-com boom at early 2000?

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