Not everyone has time to spend researching stocks to buy.
If you buy a stock, you need to spend time researching and keeping up with the latest developments of the businesses behind the stock.
Hence, the more stocks you own, the more time you will need.
Under this setting, the time needed might be too heavy a commitment for our busy readers out there.
Yet, with inflation unmistakably on the rise, keeping money in the bank may not be your best option.
You still need to find a way to prevent your money from shrinking.
Index your way to reasonable returns
Thankfully, there is more than one option today when it comes to investing.
As the late John Bogle once quipped, you don’t have to look for the needle in the haystack, you can buy the whole haystack.
For instance, the SPDR STI ETF (SGX: ES3) is an exchange-traded fund (ETF) that mimics the movement of the Straits Times Index (SGX: STI) that consists of 30 major companies in Singapore.
In other words, the ETF offers you the option to own 30 Singapore stocks at one go.
Furthermore, the SPDR STI ETF has offered a decent return on investment.
From its inception on 11 April 2002 up till the end of October 2021, the total annual returns of the ETF is a decent 6.6%.
At this rate of return, investors would double their money every 11 years or so.
Become a real estate mogul
Beyond the STI ETF, there is also the option of investing in ETFs that hold real estate investment trusts (REITs).
Today, there are five REIT ETFs on the SGX, offering the busy individual the choice of gaining exposure in different geographical markets and different industries.
For instance, the Lion-Phillip S-REIT ETF (SGX: CLR) and CSOP iEdge S-REIT Leaders Index ETF provide 100% exposure to Singapore-listed REITs.
NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (SGX: CFA), on the other hand, has a strong base of Singapore REITs and exposure to other REITs listed in Asia.
For the more adventurous, Phillip SGX APAC Dividend Leaders REIT ETF (SGX: BYI) holds REITs predominantly from Australia, Singapore and Hong Kong.
Finally, the latest addition, the UOB APAC Green REIT ETF (SGX: GRN) is billed as the first Asia-Pacific Green REIT ETF where the REITs it owns are scored and weighted according to environmental performance indicators.
As you can see, as a REIT ETF investor, you can become a real estate mogul without all the work needed to maintain the properties.
Supercharge your returns with “index plus a few”
If there is more space on your timetable, another approach would be the “index plus a few” strategy.
As the name suggests, the majority of your investable money – say, 80% to 90% – would be parked in index funds.
The remainder of the money could be devoted to a handful of individual stocks that you have interest in.
The idea here is to focus your limited time on these one to five businesses, making it more manageable as an investor.
The select group of stocks may serve to provide a small lift to your portfolio’s returns.
For example, if the index portion of your portfolio returns 7%, and two stock picks you own return 15%, then your portfolio’s overall return would be 8.6% — assuming an 80/20 mix between the index-tracking ETF and individual stocks.
Let us do the heavy lifting
Of course, I would be remiss if I didn’t mention The Smart Dividend Portfolio.
Started in January 2020, we have managed to amass a collection of 23 dividend paying, Singapore-listed stocks and have generated a return of 26% at the end of November 2021.
That’s 3x the average returns of the STI, a result that we are proud of.
In the end, the choice to start investing goes back to the busy individual.
As I have outlined above, the options to invest even when you are busy are there.
All you have to do is take action for the betterment of your financial future.
This could be the fastest way to jump from a “newbie” investor to a seasoned pro. Our beginner’s guide shows everything you need to know to buy your first stock and beyond. Click here to download it for free today.
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Disclosure: Chin Hui Leong owns shares of Singapore Exchange.
