Earlier last week, after reading our post on the ideal minimum salary range and the thoughts on retirement, Syfe reached out to us to have a chat with us on our financials.
We subsequently agree and met up earlier today.
If you didn’t know, Syfe is a roboadvisor which adopts a hybrid model – there is the automated monthly investment portion and it is complemented with a human financial advisor.
From a methodology point of view, compared to the other roboadvisors in Singapore, Syfe believes that your investment should be more about managing its risk and if that is properly defined, you are able to see what your potential returns (and subsequently your portfolio allocation) are based on your acceptable risk.
This approach is in line with Mr Budget’s view towards investment – the first step to investing is to know what is your risk profile.
For Mr Budget, I am a rather impatient guy, and has a relatively high risk profile.
Hence when I first dabbled into investment, my first stocks that I bought were all US stocks. US stocks is probably one of the investment product with the highest risk (daily fluctuation of 1-5%). With an understanding that my investment journey will be at least 10 to 20 years old, I am more focused on building my capital now.
US stocks also fits me the best because it can provide a decent capital gain in a short period of time (although this can go both ways). I can also accept the higher risk that comes with this.
For other products like ETFs, local REITS et cetera, you can only see the return in 5-10years for the compounding interest to kick in.
So this forms the fundamentals of my investment strategy:
- For the first 2-3 years, aim for capital gain via higher risk instruments
- With the capital gain, invest them into relatively safer instruments such as REITs and subsequently fixed income or bonds.
- Rinse and repeat, and at year 5 – 10, I should have built up a strong portfolio of REITs as well as holding on to some of my US stocks which hopefully have become multi baggers by now
For Syfe, the process is largely similar, you identify your risk profile, and then you will be allocated a recommended portfolio based on the maximum drawdown you are able to take.
So for example, taking the self assessment test on Syfe, my risk profile will be the highest, and I am recommended the high risk portfolio with a potential drawdown of 25%.
This portfolio has a 100% equity allocation.
One of the pointers brought up by Syfe’s head of investments was that, for DIY investors (like us), how often do we beat the index?
More often than not, we can’t, because there are just too much information out there, and that we might miss out on some opportunities because we are caught up with other aspects of life.
And that is true, if I look at the returns I generated for my portfolio over the past few years, I have not beaten the index at all. So perhaps, our portfolio has been lacking a roboadvisor component which serves as a “professional managed” portion of our overall portfolio.
For a while now, we have been looking to try out roboadvisors, and do monthly regular investments into these platforms and let professionals manage a small portion of our portfolio for us.
Who knows, with the addition of roboadvisors in our portfolio, our overall portfolio might enjoy higher returns.
The outreach by Syfe is timely since this has been in our mind for a while now, and we will most probably be starting a regular investment into Syfe.
This post is not sponsored, and nor was there at any point did Syfe ask us to help promote the brand, but here are some personal thoughts which I like about Syfe:
- Relatively low fees (0.4% – 0.65%) + 0.15% ETF fees, with no withdrawal fees, no trading fees and no entry or exit charges
- The investment methodology is in line with my belief
- Investment team is definitely more experience than I am
- Aggressive portfolio allocation is investment in not just companies that I am similarly following (US high growth equities), but also in other industries I am not familiar in: utilities, consumers, energy etc. Would love to have some exposure to these areas which I am not familiar in.
- Access to financial advisors to periodically check in on any gaps that we may have in our financial planning process
To me, the last question I ask myself is, what is the risk for this other than market risk, which I am also exposed to. The biggest risk is that Syfe closes down, and that we will lose all of our capital. But that is minimised by the fact that they are regulated by MAS, and that they have several high profile backers. Hopefully that doesn’t happen.
So for Mr and Mrs Budget, we will most probably start to park a monthly amount to Syfe and use that as our emergency + retirement hybrid fund.
When we start doing that, we will be tracking the monthly investment gain from the portfolio and share it with you guys. 🙂For now, Mr Budget will have to go back to number crunching mode to see how much we can invest and what will the impact be towards our financials projection before committing an amount.
If you are looking to sign up for Syfe, here’s a referral code for you: SRP6X8B8Y
If this referral code, you can get $50 when you invest S$10,000.
Are you investing in any roboadvisors?
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