Straits Times Index ETF
A lot of my peers have been asking me what is STI ETF and why am I investing in them. I guess i shall explain a little here and my projection into the future on my STI ETF portfolio.
There are a few financial blogs online that give a very clear explanation on what is STI ETF and how does it work, so I won’t be touching on them already. If interested to find more out, you can always google STI ETF.
I am interested in STI ETF is because it provides a very stable and is a good way for us to put our money in. Basically, unless Singapore is going to be worst than what she is today. STI ETF will be tagging around and ride on her economy.
I am doing a SBP (Shares Builder Plan) with Philips Securities and RSP (Regular Saving Plans) with POSB currently, $600 and $100 respectively. I started with POSB than added SBP with Philips Securities after my girlfriend decided to embark along.
Using a compound interest calculator, you can see that if you add them all up and compound them at 7% for 10 years, you will have about $123,272. ( Which i will be 35 by then )
If you compound them at 7% for 20 years, you will have about $369,602. (Which i will be 45 by then)
The reason why i am using 7% for my projection is because based on historical data, if you invest regularly and hold for more than a period of 10 years, the chances of you losing money is very low and the average return is about 7% to 9% with dividend reinvested.
However, i like to be more conservative, i always tell my friends who is keen to invest in STI ETF to be prepared to do so and hold for at least 20 years. The reason is pretty simple, in the short term, market is very volatile, but in the long term, the market is always higher.
Why am I investing in STI ETF if I am doing my individual stock picking?
Basically, this is a back up plan for me. At least I know that, my kids education fees and some basic fees are covered.
