Low risk investments- ETF

There is simply too much risk for retail investors to buy single stocks. If you spend a large portion

of your savings in one of these “stocks” because you have some insider information – from who ever,  you run the risk of saying good bye to  your hard-earned money .  Besides when such information reaches you, you can be sure, it's totally outdated & it's best not to follow it!!!!

Many experts are now suggesting novice investors to stick to exchange-traded funds (ETFs). These are baskets of stocks created by big time fund managers,  which aim to replicate the performance of widely watched market indexes, such as the S&P 500, Hang Seng Index and Straits Times Index.

The advantage  is their low management costs, which can go as low as 0.09 per cent in the case of SPY - the ETF tracking the S&P 500. 

There is also no risk of the investor losing his shirt as his investment is spread out over the large number of stocks that make up the ETF, thereby mitigating the potential fallout that the failure of one counter would have. Besides that’s something quite similar to how billionaire Mr Buffett does it by his ‘buy-and-hold strategy’. Of course his is much more complicated but hey.... it's something like that...lol.....

If we want to follow in his footsteps  to buy into local blue chips, we can buy an ETF traded on the Singapore Exchange, such as the SPDR Straits Times Index ETF or the Nikko Asset Management STI ETF. And if you make some money, think of me!!!

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