WEBVTT - This or That: Stock picking or index fund? 0:00:00.009 --> 0:00:02.259 This is AC N A podcast. 0:00:09.579 --> 0:00:12.319 Hey, welcome back to Money Talks. I'm your host, Andrea 0:00:12.329 --> 0:00:16.440 He on the series. This or that. My guest weighs 0:00:16.450 --> 0:00:20.579 the pros and cons of two options. Now, in previous episodes, 0:00:20.590 --> 0:00:24.950 we've talked about car ownership and H DB flats. Today 0:00:24.959 --> 0:00:29.760 we turn our attention to investment. It's practically a national 0:00:29.770 --> 0:00:33.839 pastime for Singaporeans to discuss ways to grow wealth 0:00:34.027 --> 0:00:37.457 or in other words, make your money work harder for you. 0:00:37.597 --> 0:00:40.547 Go on on the days where people are content to 0:00:40.556 --> 0:00:44.597 let their savings sit in a bank account earning meager 0:00:44.606 --> 0:00:49.187 interest rates, whether it's fixed deposits, t bills, government bonds, 0:00:49.196 --> 0:00:53.326 the options are wide for those looking to grow their money, 0:00:53.527 --> 0:00:57.396 but for those with a bigger risk appetite, the stock 0:00:57.407 --> 0:00:58.376 market is always 0:00:58.473 --> 0:01:03.004 a tantalizing but also daunting option. I mean, there are 0:01:03.013 --> 0:01:07.143 so many stocks to look through. How do you decide 0:01:07.153 --> 0:01:09.704 what works best for you? What I want to know 0:01:09.712 --> 0:01:12.844 is should I be stock picking and hopefully find a 0:01:12.853 --> 0:01:16.414 winner or should I just buy index funds and let 0:01:16.424 --> 0:01:19.512 that work for me. So to help me with this question, 0:01:19.524 --> 0:01:22.823 I have Adam Wong, editor in chief at personal finance 0:01:22.920 --> 0:01:27.091 and investment website, the fifth person. Hey, welcome to Money talks, Adam. 0:01:27.100 --> 0:01:29.371 Thank you and good to have you with us. So, 0:01:29.380 --> 0:01:33.960 do you remember when you first started investing? What did 0:01:33.971 --> 0:01:37.221 you buy? Tell us I actually started investing in probably 0:01:37.231 --> 0:01:40.521 the worst possible time. It was just right before the 0:01:40.530 --> 0:01:44.541 financial crisis in 2008. Yeah. So I was looking at 0:01:44.551 --> 0:01:47.291 some of the US stocks and at that time, 0:01:47.599 --> 0:01:50.760 I was just dabbling into things and I thought I 0:01:50.769 --> 0:01:53.680 was doing the right thing. I was learning how to 0:01:53.690 --> 0:01:56.959 do it, you know, but then the crash came and 0:01:56.970 --> 0:01:59.319 everything went down and then that became the best time 0:01:59.330 --> 0:02:02.220 to invest. Actually, I know, I know like people almost 0:02:02.230 --> 0:02:04.970 wait for markets to crash just to invest. What did 0:02:04.980 --> 0:02:06.879 you buy? I bought a bank. So you bought a 0:02:06.889 --> 0:02:09.240 banking stock. Yes. And I was a custom of the 0:02:09.250 --> 0:02:11.460 bank as well. I go to its branches and almost 0:02:11.470 --> 0:02:15.038 every month looks good on the surface. But then it 0:02:15.050 --> 0:02:16.770 really takes a trained eye 0:02:17.070 --> 0:02:19.589 to have a look at what's happening, you know, because 0:02:19.600 --> 0:02:21.240 that was the start of the financial crisis. And I 0:02:21.250 --> 0:02:25.399 realized on hindsight, I wasn't well equipped enough to understand 0:02:25.410 --> 0:02:27.829 that stock and then it went down and lost a 0:02:27.839 --> 0:02:31.520 bit of money on that. Homework always helps man. So 0:02:31.529 --> 0:02:35.250 what was your motivation for getting into investments in the 0:02:35.258 --> 0:02:38.820 first place? So before you decided on buying this banking stock. 0:02:39.250 --> 0:02:42.410 What prompted you to say, hey, you know what, it's 0:02:42.419 --> 0:02:45.199 time to put some money somewhere and make it work 0:02:45.210 --> 0:02:48.059 for me. I think it starts the same with most people. 0:02:48.070 --> 0:02:50.380 You start working, you save a little bit of money 0:02:50.520 --> 0:02:52.580 and then you see the money start to accumulate in 0:02:52.589 --> 0:02:54.729 your bank account and you go the interest rates in 0:02:54.740 --> 0:02:57.850 the savings account, they don't get you anywhere. Fixed deposits 0:02:57.860 --> 0:03:00.320 are a little bit too boring for someone. You know, 0:03:00.330 --> 0:03:03.240 if you're young, you get a bit more excitable. And 0:03:04.130 --> 0:03:05.750 so you look around and say, how do I grow 0:03:05.758 --> 0:03:06.199 my money? 0:03:06.410 --> 0:03:08.910 And the natural channel is just to have a look 0:03:08.919 --> 0:03:11.679 at stocks because property is a bit for bigger investment. 0:03:11.690 --> 0:03:13.559 So you take a look at the stock market and 0:03:13.570 --> 0:03:17.029 you start looking for books, horses, youtube videos to find 0:03:17.038 --> 0:03:19.288 out more about how you can start investing and that's 0:03:19.300 --> 0:03:21.538 how I got started. And how old were you when 0:03:21.550 --> 0:03:25.769 this was happening? I was mid twenties, I think. Ok. 0:03:25.910 --> 0:03:30.210 Do you find more and more Singaporeans getting into investing 0:03:30.220 --> 0:03:33.220 because it feels like you can throw a stone and 0:03:33.288 --> 0:03:38.479 you would hit an investment, bro, or influencers as they're called. 0:03:38.490 --> 0:03:43.139 Now my talking about investing on youtube, Instagram, tiktok. There's 0:03:43.149 --> 0:03:46.850 just so much investment content out there. I even know 0:03:46.860 --> 0:03:51.809 of uncles and aunties who actively discuss bank fixed deposit 0:03:51.820 --> 0:03:54.419 rates and T bills. Ok. Do you see that happening? 0:03:54.429 --> 0:03:58.179 What's your observation? Yes, that is true. A lot of Singaporeans, 0:03:58.190 --> 0:04:00.240 especially since COVID happened. 0:04:00.630 --> 0:04:03.940 A lot of people have started to want to learn 0:04:03.949 --> 0:04:06.210 how to put their money somewhere and try to grow it. 0:04:06.220 --> 0:04:08.169 I've been with the fifth person for 10 years. You know, 0:04:08.179 --> 0:04:12.479 when we first started this website, I think Singaporeans weren't 0:04:12.490 --> 0:04:15.009 as interested in these things or maybe they were not 0:04:15.020 --> 0:04:16.630 as savvy. But 0:04:16.718 --> 0:04:21.848 nowadays, information is everywhere, like you said on social media, Twitter, 0:04:21.859 --> 0:04:26.269 youtube websites and it's so easy to learn about things. Nowadays, 0:04:26.278 --> 0:04:29.299 the data is out there. What's important is knowing how 0:04:29.308 --> 0:04:33.338 to sift through all that information. All the misinformation, you 0:04:33.348 --> 0:04:36.329 must have a framework of knowing how to understand and 0:04:36.338 --> 0:04:37.949 analyze all this data that's coming in 0:04:38.209 --> 0:04:40.600 and then you make your decisions based on how you 0:04:40.609 --> 0:04:42.290 want to invest because everyone is different, everyone has different 0:04:42.299 --> 0:04:45.709 risk profiles and financial goals and then you take what 0:04:45.720 --> 0:04:48.299 works for you and then you try and stick to that. 0:04:48.309 --> 0:04:51.459 So you're saying it's a combination of both people having 0:04:51.470 --> 0:04:54.089 just a stash of money from three years of not 0:04:54.100 --> 0:04:59.859 spending it during COVID plus the wide exposure of content 0:04:59.869 --> 0:05:00.640 on social media, 0:05:00.720 --> 0:05:05.010 the availability. It's basically instant information. It is. And maybe 0:05:05.019 --> 0:05:07.950 10 years ago, most of your information would be through 0:05:07.959 --> 0:05:10.909 your stockbroker calling you to tell you about, hey, you 0:05:10.920 --> 0:05:13.209 want to have a look at this stock or exactly. 0:05:13.220 --> 0:05:15.959 It makes me wonder what happens to the stockbrokers. Now, 0:05:15.970 --> 0:05:17.640 are they out of a job they still have a 0:05:17.649 --> 0:05:20.450 role to play. But it is increasingly just a lot 0:05:20.459 --> 0:05:22.928 more easy to just get online, get a digital broker 0:05:22.940 --> 0:05:23.149 and 0:05:23.480 --> 0:05:26.220 do everything yourself through the app or the website. Do 0:05:26.230 --> 0:05:29.170 you think there's a danger with having so much easy 0:05:29.178 --> 0:05:33.640 to digest information about investing about money? That is a 0:05:33.649 --> 0:05:36.279 great question. That was my mistake when I first started 0:05:36.290 --> 0:05:39.570 investing because a little bit of information can be dangerous. 0:05:39.579 --> 0:05:42.649 Because when you first start learning something, you get all excited. 0:05:42.660 --> 0:05:45.170 You guys, this learning curve that you kind of feel like. Well, 0:05:45.178 --> 0:05:47.380 I'm learning so many new things and then you want 0:05:47.390 --> 0:05:48.390 to apply all of that, 0:05:48.609 --> 0:05:50.910 but then too little information can be dangerous because you 0:05:50.920 --> 0:05:52.928 think you know what you know, but then you end 0:05:52.940 --> 0:05:55.880 up getting burned and then you realize that you do 0:05:55.890 --> 0:05:59.349 have to have experience in this thing because it's not 0:05:59.359 --> 0:06:02.079 just about information, it's about how you react to news, 0:06:02.089 --> 0:06:04.909 how you react to bad news, how you react to 0:06:04.920 --> 0:06:07.600 stock market crashes. All that is emotional that 0:06:07.890 --> 0:06:11.119 data or information can help you with it. Something you 0:06:11.130 --> 0:06:14.428 have to go through. That's a painful journey for everyone. 0:06:16.190 --> 0:06:19.178 Just speaking from experience. Ok? So most of us know 0:06:19.190 --> 0:06:21.750 that keeping money in the bank, it's the worst way 0:06:21.760 --> 0:06:24.809 to grow your financial wealth. You mentioned it yourself. You 0:06:24.820 --> 0:06:26.399 saw your money sitting in the bank 0:06:26.700 --> 0:06:29.320 and said, you know what? It's not moving it's not growing, 0:06:29.329 --> 0:06:32.308 let's put it somewhere else, would you say then that 0:06:32.320 --> 0:06:34.868 investing in the stock market is the way to go? 0:06:35.019 --> 0:06:38.320 It really depends on the individual. When I said putting 0:06:38.329 --> 0:06:40.260 money in the bank was terrible. And that's from my 0:06:40.269 --> 0:06:42.809 perspective because I wanted to grow my money faster than 0:06:43.079 --> 0:06:46.899 1% or 3% nowadays. OK? For someone who is retired 0:06:46.910 --> 0:06:50.510 and maybe he or she has $20 million that's totally fine. 0:06:50.619 --> 0:06:52.929 Put it in the bank is great, you know, so 0:06:52.940 --> 0:06:55.029 it really depends on where you are in life. How 0:06:55.040 --> 0:06:56.720 much you have, what are your goals? What your risk 0:06:56.730 --> 0:06:59.570 profile is in general, if you are in your career 0:06:59.579 --> 0:07:01.529 and you're saving some money and you want to grow 0:07:01.540 --> 0:07:04.540 your investments. Historically, the stock market has been the best 0:07:04.549 --> 0:07:06.329 way to grow your wealth. If you look at the 0:07:06.339 --> 0:07:07.429 data over the, 0:07:07.500 --> 0:07:09.279 the last 50 years in the US, anyway, the stock 0:07:09.290 --> 0:07:13.200 market has outperformed real estate gold, obviously cash and all 0:07:13.209 --> 0:07:15.320 of that. But does it mean it's the best way though? 0:07:15.359 --> 0:07:17.760 I think you have to look at the asset class. 0:07:17.769 --> 0:07:22.230 What are stocks? So stocks are essentially businesses and businesses 0:07:22.239 --> 0:07:25.309 intrinsically are companies that they just that want to grow, 0:07:25.329 --> 0:07:27.510 they want to improve, they want to have more customers, 0:07:27.519 --> 0:07:30.200 they want to provide better products and services. That's how 0:07:30.209 --> 0:07:31.809 they thrive. And of course, if you take a look 0:07:31.820 --> 0:07:31.850 at 0:07:31.920 --> 0:07:34.859 the stock market index is a collection of the best 0:07:34.869 --> 0:07:38.529 stocks in a particular market. So obviously, the index should 0:07:38.540 --> 0:07:40.829 grow because they will always contain, for example, the S 0:07:40.839 --> 0:07:42.890 and P 500 in the US, the best 500 US 0:07:42.899 --> 0:07:46.899 companies and there will be growth because those companies will 0:07:46.910 --> 0:07:50.519 be the ones that become successful over time. So maybe 0:07:50.529 --> 0:07:53.309 last time you would have your General Motors and stuff 0:07:53.320 --> 0:07:55.859 like that today, you have Google and Amazon and stuff 0:07:55.869 --> 0:07:56.269 like that. 0:07:56.619 --> 0:08:01.630 So naturally stocks as businesses should grow. That's right. 0:08:05.450 --> 0:08:07.920 Hello, my name is Steve Lei and I'm Theresa Tang. 0:08:07.929 --> 0:08:11.130 And we are the hosts of CNN correspondent, a podcast 0:08:11.140 --> 0:08:13.250 that takes you to the heart of the work our 0:08:13.260 --> 0:08:17.390 correspondents do across the globe from China's COVID response to 0:08:17.399 --> 0:08:20.700 the Child Care Center massacre in Thailand from the fall 0:08:20.709 --> 0:08:20.820 of 0:08:21.429 --> 0:08:25.200 to the rise of Anwar Ibrahim as Malaysia's Prime Minister, 0:08:25.209 --> 0:08:28.989 we speak to the people at the reporting frontlines. So 0:08:29.000 --> 0:08:32.250 if you want to know how the biggest global stories unfold, 0:08:32.260 --> 0:08:35.349 make sure you follow or subscribe to us wherever you 0:08:35.359 --> 0:08:36.469 get your podcasts, 0:08:41.140 --> 0:08:44.950 buying stocks can be really quite daunting. I for one 0:08:44.960 --> 0:08:47.900 don't even venture into it. I let my financial agent 0:08:47.909 --> 0:08:52.309 just handle everything for me. For a new investor. Me included. 0:08:52.320 --> 0:08:55.020 If I decide to go into stocks one day, can 0:08:55.030 --> 0:08:59.250 you walk us through how we should approach stock kicking? 0:08:59.489 --> 0:09:03.030 There's so many different ways you can invest. Some people 0:09:03.039 --> 0:09:06.520 like to invest for dividends, for example, they invest in 0:09:06.530 --> 0:09:09.089 the banks, the local banks or some of the here 0:09:09.340 --> 0:09:11.539 because they give a very steady dividend. Some people are 0:09:11.549 --> 0:09:13.429 looking more for growth. So maybe they look at the 0:09:13.440 --> 0:09:15.750 US markets because the economy, there is so much bigger 0:09:15.760 --> 0:09:19.250 company can scale across the entire US and become a 0:09:19.260 --> 0:09:22.760 huge company or in China as well nowadays. So if 0:09:22.770 --> 0:09:25.109 you're looking for growth, I think the stock market is 0:09:25.119 --> 0:09:28.169 one of the best ways you can consider doing that 0:09:28.450 --> 0:09:31.020 and how you can get started is basically you have 0:09:31.030 --> 0:09:33.429 to understand yourself, what do you want to achieve with 0:09:33.440 --> 0:09:33.968 your money? 0:09:34.320 --> 0:09:37.608 Ok. So for example, someone who is looking for passive income, 0:09:37.619 --> 0:09:39.969 then they would start looking at stocks that give a 0:09:39.979 --> 0:09:42.849 steady dividends. So let's park my money there, let it grow. 0:09:42.859 --> 0:09:44.299 I leave it alone. I don't have to think about 0:09:44.590 --> 0:09:47.179 and that achieves your investment goal for someone else who 0:09:47.190 --> 0:09:49.090 wants something else. They will start looking at a different 0:09:49.099 --> 0:09:51.468 kind of stocks that will give them what they want 0:09:51.479 --> 0:09:53.780 to achieve. So more growth. So what would be the 0:09:53.789 --> 0:09:56.429 personality of someone who goes for growth stocks? 0:09:56.500 --> 0:09:59.619 I mean, this is a stereotype but in general, someone 0:09:59.630 --> 0:10:02.510 who is younger wants to grow the money faster, it 0:10:02.520 --> 0:10:05.500 has less to lose because if someone who's already made 0:10:05.510 --> 0:10:08.049 their millions, they want to play it safe, you know, 0:10:08.059 --> 0:10:10.549 retirement funds, you don't want to touch too much of that. Yeah. 0:10:10.559 --> 0:10:14.979 So someone who is still relatively young, still working. So 0:10:14.989 --> 0:10:17.190 even if they make a mistake in the stock market, 0:10:17.200 --> 0:10:18.609 it can happen, it will happen, 0:10:18.880 --> 0:10:21.090 they lose money there, they still have active income, they 0:10:21.099 --> 0:10:22.619 can make it back, they can make it back, they 0:10:22.630 --> 0:10:25.459 can save more money. But someone who is retired, that's 0:10:25.469 --> 0:10:27.739 a little bit more risky. I think there's also differences 0:10:27.750 --> 0:10:30.089 between men and women. For example, the kind of stock 0:10:30.099 --> 0:10:32.969 that they pick, which brings me to my next question. 0:10:32.979 --> 0:10:35.780 So the alternative to stock picking is index funds, which 0:10:35.789 --> 0:10:39.539 is what I happen to be in because I literally again, 0:10:39.549 --> 0:10:41.340 don't have to think about it. Someone else does it 0:10:41.349 --> 0:10:43.659 for me, correct me if I'm wrong. It's a basket 0:10:43.669 --> 0:10:43.909 of it. 0:10:44.002 --> 0:10:46.153 Is that what an index fund is? So an index 0:10:46.163 --> 0:10:49.203 fund is a fund that tracks an index, the collection 0:10:49.213 --> 0:10:52.742 of stocks. It could you explain to us how index 0:10:52.752 --> 0:10:56.143 funds are then different from buying stocks? So what's the 0:10:56.153 --> 0:10:58.963 difference between stock picking and buying an index fund? So 0:10:58.973 --> 0:11:02.742 when you do stock picking, you are essentially telling yourself, hey, 0:11:02.752 --> 0:11:05.463 I think I know which stocks are going to be 0:11:05.473 --> 0:11:07.903 the best or going to perform or achieve whatever I 0:11:07.913 --> 0:11:09.033 want to achieve. And, 0:11:09.125 --> 0:11:11.325 and you go in doing your research and your analysis 0:11:11.335 --> 0:11:13.245 and then you come up with a thesis and then 0:11:13.255 --> 0:11:14.995 you come up with a conclusion, I'm going to buy 0:11:15.005 --> 0:11:20.585 these bunch of stocks well researched, presumably, right? But mistakes 0:11:20.596 --> 0:11:22.505 will happen. Ok. So as a stock picker, you got 0:11:22.515 --> 0:11:24.546 to back yourself that you know what you're doing and 0:11:24.556 --> 0:11:26.536 then you pick your stocks and you create your own 0:11:26.546 --> 0:11:29.426 portfolio that suits your needs. On the other hand, if 0:11:29.434 --> 0:11:31.486 you don't have the time or the interest to do 0:11:31.495 --> 0:11:34.096 all these things, you can essentially diversify 0:11:34.580 --> 0:11:37.400 your investments and just buy an index fund or an 0:11:37.409 --> 0:11:41.070 index ETF exchange traded fund that basically allows you to 0:11:41.080 --> 0:11:43.390 just own the entire basket of stocks. So instead of 0:11:43.400 --> 0:11:46.080 picking individual stocks and doing all your research, you just 0:11:46.090 --> 0:11:48.369 kind of go, you know what, I'll just buy everything 0:11:49.679 --> 0:11:51.949 and I have a piece of everything. Yeah, I have 0:11:51.960 --> 0:11:53.950 a piece of everything. So even if one of the 0:11:53.960 --> 0:11:56.520 stocks doesn't do so well, I have so many other 0:11:56.530 --> 0:11:59.489 stocks in that fund as well. So on average, you 0:11:59.500 --> 0:12:02.880 should be doing ok. So you don't expect to do 0:12:02.890 --> 0:12:06.289 fantastically well, because you're buying the entire market, for example. 0:12:06.409 --> 0:12:10.049 So you should be making market returns, average returns, but 0:12:10.059 --> 0:12:12.409 that's ok because if that's what you want and that 0:12:12.419 --> 0:12:13.119 suits you, 0:12:13.640 --> 0:12:16.539 there's a totally fine way to invest. Would that necessarily 0:12:16.549 --> 0:12:19.979 mean that there are fewer risks with buying an index 0:12:19.989 --> 0:12:23.460 fund versus stock picking in general? You could say that 0:12:23.469 --> 0:12:26.460 because then you kind of like diversify your risk across 0:12:26.469 --> 0:12:28.690 a whole range of stocks, but it depends on the 0:12:28.700 --> 0:12:31.619 index as well. So if we are talking about the 0:12:31.630 --> 0:12:35.330 broad based index indices like the Singapore S T I 0:12:35.340 --> 0:12:36.909 or the S and P 500 0:12:37.340 --> 0:12:41.710 they represent the country's stock market in a sense. But 0:12:41.719 --> 0:12:43.909 if you go with a more specific index like electric 0:12:43.919 --> 0:12:46.270 vehicle index, so that gives you exposure into the electric 0:12:46.280 --> 0:12:49.880 vehicle industry, so that one could be a bit more tricky. 0:12:50.510 --> 0:12:55.080 So there are specificities within the index fund market. There's 0:12:55.090 --> 0:12:57.700 so many different funds out there that can give you 0:12:57.710 --> 0:13:01.049 exposure to different sectors and different industries. But of course, 0:13:01.059 --> 0:13:04.109 the most diversified kinds are those that basically represent the 0:13:04.119 --> 0:13:04.989 whole market. 0:13:05.216 --> 0:13:09.216 OK. Where does an exchange traded fund or an ETF 0:13:09.226 --> 0:13:12.687 sit in all of this. So an exchange traded fund 0:13:12.697 --> 0:13:16.117 is essentially a fund. Typically you buy funds through over 0:13:16.127 --> 0:13:19.905 the counter that invest in these basket of stocks or assets. 0:13:19.916 --> 0:13:23.276 It's grown in popularity over the last 10, 15, 20 years. Nowadays, 0:13:23.285 --> 0:13:26.596 the funds are listed on the stock exchange. So they 0:13:26.606 --> 0:13:28.867 are traded like a stock so you can buy and 0:13:28.877 --> 0:13:30.877 sell any time you want based on the price at 0:13:30.886 --> 0:13:33.086 that point in time, uh gives you the liquidity 0:13:33.184 --> 0:13:35.603 of flexibility. So it is a fund but trades like 0:13:35.614 --> 0:13:37.833 a stock which gives you that flexibility as well. So 0:13:37.843 --> 0:13:41.463 that's called an exchange traded fund, which is extremely popular 0:13:41.473 --> 0:13:44.304 and the fees are extremely low as well. It suits 0:13:44.314 --> 0:13:46.924 a lot of people because it gives them diversify exposure 0:13:46.934 --> 0:13:50.044 to a particular country or sector for low fees. OK? 0:13:50.054 --> 0:13:52.642 So let's now zoom out a little bit and talk 0:13:52.653 --> 0:13:56.882 about the stock markets. They are very volatile given the 0:13:56.893 --> 0:14:01.054 current macroeconomic conditions one day, good news, 0:14:01.151 --> 0:14:03.921 the markets are rallying the next day. It's a decline. 0:14:03.931 --> 0:14:08.500 This index has lost this much. It's so unpredictable and 0:14:08.510 --> 0:14:12.270 it's almost a challenge to not react emotionally to news 0:14:12.280 --> 0:14:15.681 like that. Right. So in such an unpredictable environment, should 0:14:15.690 --> 0:14:19.721 your average retail investor just give up trying to time 0:14:19.731 --> 0:14:24.161 the markets or look for undervalued stocks and just buy 0:14:24.171 --> 0:14:27.560 and hold index funds. So for the typical person who 0:14:27.570 --> 0:14:29.060 doesn't have the time 0:14:29.280 --> 0:14:31.539 or the interest to do all these things, then definitely 0:14:31.549 --> 0:14:34.090 an ETF is a great solution to that passive way 0:14:34.099 --> 0:14:36.200 of investing. You just kind of like dollar cost. Average. 0:14:36.210 --> 0:14:38.820 Most people do that into a particular ETF that they 0:14:38.830 --> 0:14:40.770 like and then they do it over a number of 0:14:40.780 --> 0:14:43.919 years because over the long term, the stock market has 0:14:43.929 --> 0:14:46.580 performed very well. We can't say that future performance will 0:14:46.590 --> 0:14:48.289 be equal to the past as well. 0:14:48.640 --> 0:14:51.400 But in general, yes, the data historically in the US 0:14:51.409 --> 0:14:53.989 in Singapore, the stock market has performed pretty well. So 0:14:54.000 --> 0:14:57.000 the ETF gives you the exposure to the entire market 0:14:57.070 --> 0:14:59.000 and then you can just do the cost average over 0:14:59.010 --> 0:15:01.479 a period of time, 20 years from now, it should 0:15:01.489 --> 0:15:03.630 be worth a lot more. And that's the way that 0:15:03.640 --> 0:15:07.109 many people can start investing. If you are interested in investing, 0:15:07.119 --> 0:15:09.030 you really want to get into the nitty gritty and 0:15:09.039 --> 0:15:10.250 the nuts and bolts into 0:15:10.500 --> 0:15:13.270 what makes a great company great and how they can 0:15:13.280 --> 0:15:17.489 outperform their competitors or the general market. And you really 0:15:17.500 --> 0:15:20.239 like doing that then by all means you can do 0:15:20.250 --> 0:15:22.000 that as well and some people do a mixture. So 0:15:22.010 --> 0:15:25.539 maybe half of their portfolio is into a T F 0:15:25.570 --> 0:15:28.359 diversify that part and a certain part is this portion 0:15:28.369 --> 0:15:30.119 of the portfolio. I want to stop. We talked about 0:15:30.130 --> 0:15:33.130 this earlier about how there are certain stereos 0:15:33.219 --> 0:15:36.599 types where those who are older, they would invest in 0:15:36.609 --> 0:15:39.989 something that's a little bit more steady. Whereas a younger 0:15:40.000 --> 0:15:43.109 person with a longer career runway would invest in a 0:15:43.119 --> 0:15:47.640 more adventurous path. Does that change with age? I think 0:15:47.650 --> 0:15:50.530 in general that's how it works for most people. Once 0:15:50.539 --> 0:15:53.530 they realize that I can't take this amount of risk, 0:15:53.539 --> 0:15:55.849 they start to derisk their portfolio 0:15:56.250 --> 0:15:58.130 for me. I feel it as well. In my twenties. 0:15:58.140 --> 0:15:59.530 I was looking at all the exciting stuff. How can 0:15:59.539 --> 0:16:02.969 I make money faster? Right. And then now that I've 0:16:02.979 --> 0:16:05.960 saved more and invested more and then I'm in my 0:16:05.969 --> 0:16:07.619 forties now I go like, hm, 0:16:07.940 --> 0:16:09.700 maybe I should have take that risk with this amount 0:16:09.710 --> 0:16:11.419 of money that I have and put it in something 0:16:11.429 --> 0:16:14.669 that's more stable. And I'm happy with that those returns 0:16:14.679 --> 0:16:16.599 because 10 years, 20 years from now I'm going to 0:16:16.609 --> 0:16:19.099 be retired, I want to be comfortable. I don't need 0:16:19.109 --> 0:16:21.299 to be mega rich, but I really want to be 0:16:21.309 --> 0:16:25.450 comfortable and retired, enjoying my life. So then those considerations 0:16:25.460 --> 0:16:27.750 weigh on my mind at this age compared to when 0:16:27.760 --> 0:16:30.070 I was 20. Ok. Sounds like me too. 0:16:30.229 --> 0:16:35.200 What's your final advice to investors in the current market? Ok. 0:16:35.210 --> 0:16:37.280 You were saying just now the news, it sounds like 0:16:37.289 --> 0:16:39.890 the end of the world sometimes and then sometimes it's like, well, 0:16:39.900 --> 0:16:41.969 everything is doing so well. If you've been in this 0:16:41.979 --> 0:16:44.000 thing for so long, you realize it's the same old 0:16:44.010 --> 0:16:45.780 thing again and again, it is, isn't it? It's like 0:16:45.909 --> 0:16:47.770 a cycle. It is a cycle and you just have 0:16:47.780 --> 0:16:50.609 to strip away all that noise and realize that at 0:16:50.619 --> 0:16:53.200 the end of the day, if you are investing, you're 0:16:53.210 --> 0:16:55.359 in it for the long term. And if you do 0:16:55.369 --> 0:16:57.739 an ETF dollar cost average strategy, 0:16:58.109 --> 0:17:01.419 you are investing in a basket of great companies based 0:17:01.429 --> 0:17:03.820 on the index and that should grow over a period 0:17:03.830 --> 0:17:06.119 of time. So all this news that comes in and out, 0:17:06.130 --> 0:17:07.560 it shouldn't really affect you 0:17:07.828 --> 0:17:11.088 because you're diversified across maybe 500 companies. All of them 0:17:11.098 --> 0:17:13.218 are still doing business every day. They still have customers 0:17:13.229 --> 0:17:15.659 every day, they are still making money every day. So 0:17:15.769 --> 0:17:18.479 ignore all the noise and strip back to the fundamentals. 0:17:18.489 --> 0:17:21.629 What are you buying? Does it meet your financial goals 0:17:21.638 --> 0:17:23.558 based on your risk profile and all that if it is? 0:17:23.568 --> 0:17:25.677 And it's been working for, you. Stick to it. There's 0:17:25.688 --> 0:17:28.149 no point jumping from one strategy to the next, trying 0:17:28.159 --> 0:17:29.818 to learn a new thing, trying to look for a 0:17:29.828 --> 0:17:30.457 silver bullet 0:17:30.699 --> 0:17:32.839 stick. What works for you stick with it over the 0:17:32.849 --> 0:17:35.270 next 10 2030 years. And at the end of it, 0:17:35.280 --> 0:17:37.760 if you've been managing your money properly, you know, the 0:17:37.770 --> 0:17:41.329 right financial habits, you should be well ahead at the 0:17:41.339 --> 0:17:43.438 end of the day. Yeah, it's always exciting. Right? When 0:17:43.449 --> 0:17:46.530 an investment pays off and you start to see the returns, 0:17:46.729 --> 0:17:51.060 you know, any investment carries risk, so understand your own risk, 0:17:51.069 --> 0:17:54.688 appetite and do your homework before committing your hard earned 0:17:54.775 --> 0:17:57.895 money. Thanks so much, Adam for helping us weigh the 0:17:57.905 --> 0:18:01.425 options on this or that. And thanks to you, our listener, 0:18:01.435 --> 0:18:04.694 if you've enjoyed this episode of Money Talks, there's more 0:18:04.704 --> 0:18:07.625 content for you to enjoy. Simply follow us on Apple 0:18:07.635 --> 0:18:11.754 Podcasts or Spotify. Give us five stars or leave a review. 0:18:11.974 --> 0:18:15.324 The team behind Money Talks is Joanne Chan, Jacqueline Chan 0:18:15.334 --> 0:18:18.425 Christina Robert and I'm Andrea. He.