Monday, August 30, 2010

Invest in STI ETF

Read this story about the actual experience of an investor who invested regularly in the STI ETF over the past 6 years.

Go to www.tankinlian.com, and click on "Latest" tab.

Direct link here:
http://tankinlian.com/admin/file.aspx?id=161
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6 comments:

david said...

Hi Mr Tan,

The direct link id should be 161. Thanks for the article.

Just confused a bit. From the table, how do we arrive at the statement that past six years was giving a negative yield?

I only see 3 year: -1.62%, and 5 year: 13.15%. I guess I'm not fully understanding the table and how it implicates the above.

Thanks!

August 30, 2010 12:02 PM
freemanland said...

No doubt that STI ETF is a good way to invest consider its low expense ratio.

However all of us so called "investor" must think carefully before entering the market.

STI is not able to stand on 3,000 so far, and it is trying,
question we need to ask is are we buying at the peak now? a

Any major economic event will send the index down hill, and fast.

I remember that Malaysia KLCI collapse at the peak of 1,300 in 1997 and take 10-12 years to recover to recently of 1,400+

August 30, 2010 1:56 PM
Tan Kin Lian said...

Hi David
If you are invested regularly over 6 years, you will get the dollar cost averaging over this period. I used a 3 year as an indication of the dollar cost averaging, but it is not a good estimate, as it could be gyrating up and down. You should not use the 6 years either. The correct gauge is to get the average of the yield for 1, 2, 3, 4, 5 and 6 years.

August 30, 2010 2:06 PM
yujuan said...

Very good reminder that the STI is struggling to cross 3,000 level.
It is safer for investors to enter when it corrects itself 20% from now, unless of course if you are a short term trader,

August 30, 2010 3:22 PM
Jamesneo said...

Yeah from the 19 year chart of the STI, there is little upside potential( peak is 3805 in oct 2007) but large downside potential(856 in 98 and 1594 in feb 2009). Moreover, with the uncertain economic climate over the next year, it might be better to be cautious to wait for some major corrections before going in.

August 31, 2010 12:47 PM
Singapore Stock Picker said...

hey james, have you considered the impact the removal/addition of companies as well as major reconstitution had on straits times index?

mr tan, in your opinion, considering that the STI ETF is a recent creation (less the singapore index fund), what is the impact of the above? according to jeremy seigel's, the future of investors, by adding new companies to the index, those buy-and-hold investors index investors actually lost ground to those who buy-and-hold the original index members.

September 02, 2010 9:22 PM

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