Investment thoughts

I’m still learning the best ways to grow my money. As of now, I only invest in stocks that gives me dividends, and I’m saving towards getting real estate. I didn’t always invest that way though.

In March 2007, I ‘purchased’ 2 investment plans via AIA. One was a lump sum payment, while the other was a regular savings plan of $150/mth. The lump sum investment was made, because I didn’t want my money to be locked up in CPF once the ‘no investment on first $20k CPF rule‘ kicked in, while the $150/mth plan was because financial advisors have always been preaching about dollar-averaging over the long term. Here’s how it has fared as of today:

AIA IGP Plus (lumpsum) is in the red: -38.6%
AIA Achiver (RSP) is also in the red: -32.9%

So I guess it is true that dollar-averaging fare better than lump sum investments.

A year later, in March 2008, somehow I got involved with another fund, this time with Prudential SuperSaver Account. While markets had soften then, nobody knew that there would be a market crash in October 2008. As of today, that too is in the red at a -36.7% loss.

Now note that these are all paper loss. I haven’t really loss anything unless I sell it now. In 10 years time, I’m sure all these will no longer be in the red, but I’m skeptical about what the actual annual returns would really look like. Would it beat CPF’s interest rate of 2.5%?

From April 2008, I slowly started entering the stock market. This time round, my focus was on purchasing stocks that would give me cash, no matter whether it’s market value was up or down. This is known as ‘dividends’. Basically, companies share some of their profits with their shareholders.

Has the economic crisis affected the value of my stocks? Yes of course. As of today, I’m actually sitting on a paper loss of -41.8%. However, that really doesn’t concern me anymore. I acquired these stocks mainly because of the passive income they can give me year after year. Currently, my stocks pay out a combined dividend payment of 18.98% per annum.

Essentially what this means is that in slightly over 5 years, I would have gotten back my capital purely through dividend payouts alone. And I would continue getting dividend payouts as long as I hold on to those shares. Any dividends received after that is essentially ‘free money’, since my capital is already back in my pocket, and should I sell my shares after, the amount I get back is pure profit.

In 5 years time, if the market has recovered, and I decide to sell my AIA and Prudential funds, maybe I would have just broken even (though in reality it’s really a loss as I could have earned 2.5% pa if I had left my money in CPF).

I hope to go one step up and leverage on real estate in 2-3 years time, with the same concept of getting positive passive cash flow each month.

It’s the year of the cow, and this year, I’m planning to find more ‘milk cows’ for continuous supply of milk!

Happy ? year!

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9 Responses to “Investment thoughts”

  1. lm Says:


    I have been asked to get the lumpsum from AIA IGP plus. What are your thoughts?

    thank you.

  2. Justina Says:

    Hi Im,

    Personally I’m not inclined to get any more investment products from insurance companies. I got my 2 AIA ones early during my working life, and becoz it sold to me by my then insurance agent brother.

    Now I invest mainly in stocks that pays dividends every quarter, so regardless on whether the economy goes up or down, i get a steady payout.

  3. lm Says:

    Thanks for your advice.

    I am quite hesitant on it as well but the agent has been pushing a bit and since I have no other channel of investment, I thought this might be ok. Am looking in the stocks as well, but they seem tough esp if im to monitor it myself.

  4. Lola Says:

    Infrmaoiton is power and now I’m a !@#$ing dictator.

  5. fqmzxhtj Says:

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  6. Justina Says:

    All sorts of investment require some monitoring, including ones bought from insurance companies.

    Anyhow, if you are investing in stocks for the long term, not much monitoring is needed. I actually wouldn’t recommend you to monitor it actively (ie daily), as humans are emotional creatures, and most people end up selling low and buying high, because of unfounded fears.

    Invest in some blue chip stocks and just sit back and let the dividends roll in. When you invest for dividends, you aren’t looking to sell your stocks anytime soon. Check out this blog for some blue chip stocks that pay decent dividends:

    Or if you prefer, you can invest in the STI-ETF. It basically tracks the STI, so it’s pretty low risk.

  7. lm Says:

    Hi Justina

    Thank you for your valuable advice. Much appreciated.

    Just wondering for blue chip stocks, roughly how much funds would I need to start it off?

    Thanks once again.

  8. Justina Says:

    You need to buy a minimum of 1lot. So if the stock price is $3, you need $3000 + brokerage fees (min $25 or 0.28% of total amount).

    Alternatively, if you wish to invest on a regular basis with smaller sum, I think Phillips has this thing called ‘Shares Builders Plan‘, where you can choose what stocks you wanna invest in, and invest in odd lots and its a monthly investment. I’m not too sure of the details tho.

  9. lm Says:

    Thank you so much for your advice 🙂

    Now am looking for a broker so that i could start on getting some stocks.

    I did asked my Philips agent on this share builders plan but I get no reply from her. Terrible.

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