Tuesday, June 16, 2015

Why buying index is good

2 available index funds to buy in SGX

  • Nikko AM STI ETF
These indexes act as benchmarks to the Singapore stock exchange and hold a variety of stocks that mimics the performance of the Straits Times Index.

Diagram 1 below shows a list of stocks that Nikko is holding. The chart indicates a variety of sectors of stocks the fund represents, which is attractive because it is well diversified. A retail investor might not have enough funds to construct a portfolio like this, and therefore Nikko and STI ETF are good index funds to consider investing.

Diagram 1 (Nikko AM STI ETF)

Benefits of Index
  • Well diversified portfolio
  • Low management fees
  • Easy to understand
  • Safer than aggressive stock picking/trading

Alan Greenspan, an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006 shared his thoughts on investments "The best strategy for equity investment has always been: Buy and hold and forget it,” he said. “Once you start to try and trade the market – I don’t care how good you are, how smart you are — you will not beat an index fund."

Let's all look forward to index funds :)


  1. Lancelot,

    This is my first time posting here.

    I'm just curious and asking some verification questions, no offence intended. (I sompah!)

    1) Isn't this post in conflict with your "Vision"?

    2) Are you still working as a remisier?

    Please ignore if you find my questions "bo liao".

  2. Hi,

    Especially with the recent drop in the STI, it seems like a good time to buy the index. Coupling indexing with dollar-cost averaging also presents one of the most diversified portfolio, over companies, shares and time as well........