0:29 Introduction to betterspider.com
2:22 Brief revision on the history of robo-advisors in Singapore
7:15 Comparison of offering around Endowus and other Robos
8:47 betterspider.com's experience with Endowus
13:06 Various investment strategies across different robos
15:42 betterspider.com's insight on different investment approaches
18:12 Endowus' investment strategy
21:18 Rundown of betterspider.com's investment portfolio
23:40 Why a holistic approach is the best strategy for your goals
26:57 Core-Satellite Investing Strategy to building a portfolio
30:14 The importance of understanding how market prices work
32:22 QnA: As a new investor, any advice on how to be more exposed and well read on managing my own portfolio?
betterspider.com's experience with Endowus (8:47)
Derrick: I think what really interested me the most about Endowus was the CPF offering made available by Endowus. I thought this was a very important aspect of what the company had to offer, especially for an average Singaporean where a lot of our wealth is stored in a CPF account. This is something that many other robo-advisors are unable to help you with. I liked how the company will holistically manage your entire investment portfolio across cash, SRS and CPF; a value proposition that I found to be very powerful.
I started using the platform right after the trade war started and shortly after, Covid-19 happened so the market had a major crash. Nonetheless, I held on. I think psychologically it is very challenging to watch your portfolio crash, especially when you have invested a huge amount. For example, you can lose five figures in a matter of weeks, which becomes psychologically difficult to try and not touch it but I think it is a great opportunity to review your risk tolerance. Personally, I had left mine untouched and I eventually watched the market and my portfolio recover.
Why a holistic approach is the best strategy for your goals (23:40)
Greg: What I find as the most important approach is to invest holistically. Cash drag ?leaving your money in cash ?is to me one of the biggest risks to your wealth. For example, even if you had invested in Tesla last year and sold it at its peak, it is highly unlikely that you had invested in the stock with a lot of your money. I have friends that say "oh my god, I made 300% on my Tesla" and then I ask them "how much did you invest?" and the amount is only two thousand dollars, I wonder if that amount has really moved the needle in terms of their lifestyle and wealth. Usually, the answer is no.
If you continue with this active strategy, it will eventually come back and bite you because the ability to consistently pick winners and time the entry and the exit perfectly is very difficult. So, I think having a holistic strategy is important. A lot of us are probably in our 20 to 30s, maybe some in the 40s, and most of us will live to a hundred. The average life expectancy now in Singapore is 86/87 if you manage to make it to 65.
There is a great statistic that shows that if you take US large cap companies from 1926 until now, you're at a 10,000x return. That is 10,000 times more your initial investment and it is only at a 10.2 percent annualized return. So you really want to harness the power of compounding to make multiples on your wealth. Now, if you take a bit more systematic risk, something we do with our portfolios, and you had invested in small cap US since 1926, you would have 30,000 times your initial investment. That is the beauty of having a holistic strategy, you can significantly improve your wealth.
QnA: As a new investor, any advice on how to be more exposed and well read on managing my own portfolio? (32:22)
Derrick: I don't think it is very easy for people to actually start picking up all this knowledge immediately but everyone has to start off somewhere. You have to understand macroeconomics, such as how the industry is doing and how the macro environment is looking. Then you have to understand how you want to manage your own investment portfolio(ie. Are you stock picking? Are you looking at broad market funds? etc.) For most beginner investors, this is too much to handle especially if you have a day job, which is why I really recommend looking out for low-cost robo-advisor to park your wealth. This will help you get in the game, get used to volatility and learn how you can actually grow your wealth over an extended period of time. Once you are more comfortable, I would suggest reading books and financial blogs, and watching videos.
Investment involves risk. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. Past performance is not an indicator nor a guarantee of future performance. Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.
Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endow.us Pte. Ltd (“Endowus”) and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus Pte. Ltd., its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. You may also wish to seek financial advice through a financial advisor or the Endowus platform and independent legal, accounting, regulatory or tax advice, as appropriate.