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Blue-chip investing made simple, affordable

Ryan Ong wanted to dip his toes into investment waters without having to start with a lot of money. He wanted a regular savings plan that could be easily managed and would introduce him to the diverse world of investments.

POSB ADV 2014_Second issue: Portrait shot of Ryan Ong, 30-year-old, accountant. TODAY Photo by KOH MUI FONG.

POSB ADV 2014_Second issue: Portrait shot of Ryan Ong, 30-year-old, accountant. TODAY Photo by KOH MUI FONG.

Ryan Ong wanted to dip his toes into investment waters without having to start with a lot of money. He wanted a regular savings plan that could be easily managed and would introduce him to the diverse world of investments.

POSB Invest-Saver fits the bill, since it is a regular savings plan that allows customers like Ryan to start building their long-term savings from just S$100 per month. Ryan started the plan early this year and invests S$200 each month.

Ryan lives along Old Airport Road and is a gadget aficionado. He hopes to use some of the potential earnings from POSB Invest-Saver to buy a new tablet or gaming console.

Said the 30-year-old accountant: “I found that the portion of savings set aside from my monthly salary is insufficient. In order to save enough for my future, be it for my children or for retirement, I started investing through different means.”

INVESTING MADE EASY

Many people think that investing in funds that are traded on a stock exchange is complicated and expensive, as they need a securities trading account and a CDP (Central Depository) account.

However, POSB Invest-Saver lets customers invest easily in Exchange Traded Funds (ETFs) that are listed on the Singapore Exchange. Customers arrange for monthly GIRO deductions when they sign up, making it a convenient way to start investing in either the ABF Singapore Bond Index Fund or the Nikko AM Singapore STI ETF.

Said Ryan: “Subscribing to POSB Invest-Saver is relatively simple and subscriptions can be done easily via POSB Internet banking or any POSB ATMs islandwide. There are no brokers involved and no complicated forms to fill.”

After searching online for information about investment options, he realised that POSB Invest-Saver best suited his requirements.

Ryan invested in the Nikko AM Singapore STI ETF, which tracks the performance of Singapore’s top 30 blue-chip companies (based on SGX-ST’s ranking by market capitalisation).

As an ETF that tracks the STI, this gives him exposure to several key securities or sectors and pays dividends. It also offers the benefit of spreading his investment over a variety of major companies across several sectors. This reduces the risk should one sector of the economy perform below market expectations.

Ryan has no immediate plans to pursue other investment options on the stock market as he feels those present potentially greater risk.

Said Ryan: “Unlike POSB Invest-Saver, the initial capital involved in other forms of investment like purchasing individual stocks, is usually higher and a lot of effort is required to analyse and monitor these individual stocks.”

A DISCIPLINED APPROACH

As Ryan wanted to get the most from his capital, potential returns were one of the key reasons behind his decision to sign up for POSB Invest-Saver. As with all stocks, there is a possible risk of not receiving the expected returns, but Ryan is optimistic and happy with his returns to date.

“The returns were my very first consideration followed by the amount of capital needed. As I have limited capital, I had to be very careful in how I used it,” he said.

Investing fixed amounts in a disciplined manner every month means that customers do not need to time the market or be swayed by emotion or fear. This makes POSB Invest-Saver a potentially effective investment tool for the long term.

Said Ryan: “I intend to continue with POSB Invest-Saver for a minimum of three years,” adding that he may hold on to his investment longer if market sentiment was favourable after that. He’s happy with the affordability and convenience of POSB Invest-Saver, and says he wouldn’t hesitate to recommend it to others.

This is the sixth story in a 10-part collaboration between TODAY and POSB.

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