ETF – ENJOY THE FUN while investing!

Joshua Chim, CFA, FRM
Joshua Chim, CFA, FRM27 Jan 2025 3186 Views
ETF – ENJOY THE FUN while investing!

Have you ever wondered which scenario feels more painful? Scenario A: missing out on a 10x return on a single stock, or Scenario B: a 100% wipeout of your portfolio due to owning a single stock?

Both scenarios can be devastating, but in different ways. Missing out on a potential 10x return can be frustrating, especially if you had high hopes for the stock's performance. On the other hand, a 100% wipeout of your portfolio can be catastrophic, leaving you with significant financial losses and a long road to recovery.

However, the likelihood of either of them happening is greater than you would expect. Just in 2024, we saw more than 400 companies get delisted from the US exchanges. Even though delisting might not equate to getting back nothing from your position, it is not always a straightforward process to sell or receive back proceeds from a delisted company.

GOLDEN RULE

Hence, one of the golden rules when it comes to investing, which I have learned throughout my investment journey, is to always have a diversified portfolio. And what better way to do so than by investing through a Unit Trust or an Exchange Trade Fund (ETF)?

Both Unit Trust and ETF offer a convenient and cost-effective way to gain exposure to a broad range of assets, sectors, and geographic regions, thereby reducing risk and increasing potential returns.

Different Types of ETF

Besides the diversification benefits, ETFs can be structured in many interesting ways. Currently, on the listed exchanges, there are ETFs that track the major indices, such as the Vanguard S&P 500 ETF (VOO), but there are also sector ETFs that track a particular sector, such as the VanEck Semiconductor ETF (SMH).

More interestingly, there are ETF issuers out there that have launched leveraged or inverse ETFs. For those who are not familiar with such ETFs, these ETFs are usually for more sophisticated investors who wish to take a more aggressive position, either a bullish or bearish stance, in a particular sector or company. Leveraged ETFs aim to provide a multiple of the daily return of the underlying index or asset, while inverse ETFs aim to provide the opposite of the daily return of the underlying index or asset.

Enjoy The Fun

At the end of the day, I believe investing should be boring, systematic, and automatic, and an ETF is a good way to do so. Instead of staring intensively at the stock price chart daily, you should be spending your precious time on other hobbies that spark joy. This would allow you to enjoy the fun in life while still remain fully vested to capitalize on market returns.

And to make investing simple and affordable (I know Singaporeans, or in fact, everyone loves a good deal), FSMOne has recently launched a flat fee pricing for ETFs across SGX, US, and HKEX – S$3.80, US$3.80, and HK$38 respectively. The same flat fee applies whether you are investing $1,000 or $100,000, making FSMOne the most ideal platform for ETF investing.

Take Advantage

I hope you can take advantage and make full use of our flat fee pricing and grow your portfolio in a smart and enjoyable fashion. If you need help with advice or recommendations on which ETF is the best, you can look up our ETF Selector, ETF Focus List, or email us at advisory@fundsupermart.com.

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