When Chenny Wulandari realised she was only earning $2 every month on her savings, she knew something had to change.
A 29-year-old communications consultant, she’d put a fair amount into her savings but it just wasn’t doing anything for her.
Like millions of others, Wulandari decided to turn all of her time in lockdown into cold hard cash by investing.
“It seemed like such a missed opportunity to have a lot of my money sitting in a long term deposit because it was practically collecting dust, when I could have made my money work harder for me,” she told Yahoo Finance.
“The ultra-low interest rates definitely gave me the push I needed to diversify my investment portfolio.”
The investment and the returns
Wulandari decided to invest in exchange-traded funds, or ETFs, through the Selfwealth platform.
Selfwealth is a low-cost share trading platform allowing access to the ASX and US share markets.
“I just jumped into it. I put 80 per cent of my investment money into ETFs…which basically allowed me to get a basket of shares with a single trade,” Wulandari said.
With the remaining 20 per cent, she invested in individual company stocks.
“For me personally, I go for tech companies.”
She put $12,000 in her first investments last year and has since added another $1,000 at the beginning of this year.
She plans to top that up with another $1,000 or $2,000 every quarter.
“It was a set and forget investing mentality. I’m just too busy to be trading every day, so it’s about that incremental growth.”
Investing in the BetaShares Australia 200 ETF and the iShares S&P500, she’s since made 12 per cent in profit.
Why the 80:20 ratio?
Wulandari said she deliberately chose to put the vast majority of her money into ETFs as a way to manage her risk.
She knew that picking individual stocks came with a higher risk of volatility and of losing money: a bad safety report, corruption in the executive team or a global pandemic could easily sink an individual stock.
However, investing in an ETF meant she was spreading the risk of that over hundreds of companies.
“I think it’s worth certainly investing in individual company stocks, but a lot of younger people get drawn to ‘quick and dirty’ cash, and they don’t realise that it can be quite volatile,” she said.
One of the individual companies that Wulandari invested in hasn’t done as well as she’s expected, so she’s glad that she adopted her 80:20 approach early on.
“The 80 per cent in ETFs [should] offset any losses I’m making in individual company stocks, but a couple of the [individual stocks] are performing really well.”
For individual companies, she likes to look at companies like Airtasker that she understands and uses.
The experience and the lessons
Wulandari likes to check her investments every day or so, but is careful not to react emotionally when things go south.
She knows that investing is a “long term play” and it’s not healthy to fixate over dips.
“One thing I would suggest, and I shared this with my friends who are thinking of jumping into the stock market, is don’t put all your eggs into one basket,” she said.
“Some people put all of their savings into it, which is really scary because you don’t have an emergency fund.”
However, while she cautions against going all in, Wulandari said the overall process of investing has been easier than she thought.
“It’s not as scary or as complicated as I thought it would be. I definitely wish I did this when I was in my mid- if not early-20s,” she said.
“Imagine the amount of money I could have made if I had put my investment in earlier.”
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