Friday, March 25, 2016

Considerations for Retiree or lumpsum investors

Opinion: Why a 100% stock portfolio can ruin your retirement
very often we hear about ignoring stock market volatility and just keep invested or to do DCA.

However, this is only true for people with extended timeframe and who has an active income.

For retirees and lump-sum investors, it might be more prudent to keep to an asset allocation strategy and rebalance periodically. You might not get the normal equities return of 8-10% annually, but you will sleep easy with a 4% withdrawal rate. Though it comes with another risk, Inflation, which will reduce your purchasing power for the same dollar.

I have been investing for 7+yrs full time in equities/bonds ... and have come to the realisation, real estate is probably a better way to get returns for people who can afford to buy properties.

Monday, January 18, 2016

UBS outlook for 2016.

UBS 2016 Houseview

UBS has make their houseviews available online if you are interested.

Take a pinch of salt.

They are only as good as you and me.. hehe.. I don't think there is any edge.

Structured Deposits?

Understand capital-guaranteed products

capital-guaranteed product is a structured product created by a bank to be sold mainly to retail investors. It is issued usually for a term of 5 years, is invested in the manner spelled out in a prospectus and carries a guarantee from a bank that the invested sum will be returned on maturity.
Several products of this nature were created and sold by many banks in Singapore to retail investors during the years 2000 to 2005. The interest rate on bank deposits fell below 2 percent during this period and investors wanted a higher return for their savings, without taking risk. The capital-guaranteed products appeared to meet their needs.
Most retail investors did not read the prospectus as they trusted the bank guarantee and the assurances given by the marketing staff of their trusted bank.
Several billion dollars were invested in these products during these years. On the maturity of most of these products, the investors were disappointed with the meagre returns — usually less than 2 percent for 5 years, or 0.4 percent per year. This was even lower than the yield on fixed deposits.

Not a bad read on the ills of a structured products sold by banks. Only buy if you really really know what you are doing.