The Straits Times Index (STI) has underwent a major correction of at least 15% in the last 4 weeks. A lot of investors and stock holders in the local market are definitely feeling the pain. This includes myself. My gains over the last 1.5 years were all gone in the last 4 weeks.
I have been buying the STI ETF since Aug 2013. I have invested about S$26,800 from my Supplementary Retirement Scheme (SRS) account using the OCBC Blue Chip Investment Plan to purchase the ETF on a monthly basis accumulating close to 8000 shares of Nikko AM STI ETF. With the recently major correction, I am down slightly more than 9%.
Read: Topping up SRS Account For The 3rd Consecutive Year
So what if the STI really goes down at 5% every month for a year? The Nikko AM STI ETF is designed to mimic the STI. Therefore, if the STI carries on to fall, so will the price of Nikko AM STI ETF.
Read:
Exchange Traded Funds - Simplified
STI ETF is a Simple Way to Profit
As of yesterday, 21 August 2015, the STI ended at 2,971.01 points. The Nikko AM STI ETF ended the week at S$3.05.
In the next few years, I believe I will not stop purchasing the ETF through the OCBC Blue Chip Investment Plan. The plan is to constantly use S$1,4000 monthly to purchase ETFs and average the price. I wonder what my portfolio of STI ETF will look like in 12 months if the STI carries on its downtrend.
Just looking at the calculation, after investing another S$16,800 (S$1,400 *12), the project market value will still be approximately the same as my current market value with the 7,971 shares I have. I would have accumulated more shares and slightly higher dividend payout.
I just have to stay calm. Time is on my side.
We can never time the market. When will the next bull run be? Will the STI reach 5,000 points in the future. Or will it really drop to 1,500 points? Since buying the ETF is something I am doing for the long run, I should not be too bother with the price now.
Fingers crossed. Hoping for a slight correction only.
Read: Dollar Cost Averaging the Index ETF
Hi Pi Trooper,
ReplyDeleteThanks for sharing!
Am keen to find out how you normally buy your Nikko AM STI ETF? Normal brokerage firm or via POSB/DB ETF Regular Savings Plan?
Just wondering how to the transaction price like if I am buying Nikko AM STI ETF from normal brokerage firm.
HI SeeKay, i am using the OCBC Blue Chip Investment Plan,pretty similar to the POSB one.
DeleteSeeKay, i do not really understand your second question. If you are asking about the prices of Nikko AM STI ETF, it is the same whether you purchase from a normal brokerage firm or not.
I might be wrong, but I assume he is referring to the brokerage fee etc... I remember it is the same.
Delete