Now that we are experiencing a slow down. Do you foresee any major recession in the way? No one knows for sure when but what is your guess?
According to the available data, the manufacturing sector in Singapore is already in recession, and the rest of the economy is roughly moving sideways. The government is forecasting GDP growth of 0.5% to 1.0% for 2020, less on a per capita basis (total population generally increases slightly due to net inward migration). That seems like a reasonable forecast to me.
As far as "black swan" events, if the Chinese and Hong Kong governments don't honor the wishes of the people of Hong Kong, then Singapore will likely be the primary, one-time beneficiary of turmoil there. Let's all hope that doesn't happen.
Also, what are some safe investments at this point of time that we could look at? Stocks are not doing well.
Stocks are doing amazingly well. Just not in singapore
Actually, the Straits Times Index (STI) stocks have performed fairly well. State Street Global Advisors has very recently published the standard performance data through year end 2019 for their STI stock fund, ES3, and here it is (annualized, dividends reinvested, net of estimated costs):
1 Year: 9.00%
3 Year: 7.29%
5 Year: 2.53%
10 Year: 4.07%
Inception (April 11, 2002): 6.93%
That's pretty decent, actually. I think long-term Singapore dollar-oriented investors should be quite satisfied with that record so far.
slothbal said:
Property might crash. What are other alternatives? With Ammo of 500k cash and 1 hdb (first purchase) worth 500k fully paid. �� mid 30s
Assuming your insurance necessities are covered and you keep some emergency reserve, why not just dollar cost average into the "standard" 3 fund formula? What's wrong with that?
I would not have rushed to pay off your HDB unit (presumably financed with very cheap dollars) as you evidently did, but what's past is past.
Insurance necessities generally mean:
1. Term life insurance if you have one or more dependents, although maybe you can self-insure now;
2. Disability Income Insurance (DII);
3. A basic Integrated Shield plan (e.g. Great Eastern's Supreme Health B Plus assuming you're a citizen; extra cost/higher level plans are insurance luxuries);
4. Travel medical insurance if you venture outside Singapore.
The "three fund formula" typically means:
A. MBH for the bond leg;
B. ES3 or G3B for the local stocks leg;
C. IWDA or VWRA for the global stocks leg.
These funds are not appropriate for U.S. persons, and this list is based on having the legal ability and expectation to retire in Singapore. I personally don't feel comfortable having more than 20% of your portfolio in ES3 or G3B until you get much closer to retirement age, but there's a friendly disagreement on that point.
Have bad experience with stocks but maybe it is due to my inexperience. Got burnt.
What happened? What did you do?
But with economic not fueling up, and stock doing good, would there be a potential pitfall? Do know of some that hang on to stocks though alr depreciated in value but still drawing dividends.
Sure, stock prices could go down. Since you're in your 30s, retiring ~30 years from now, and dollar cost averaging into age appropriate, prudent investments, you would be/should be very happy if stock prices fall while you're buying. That means you're getting a better deal.
Do you buy more apples at the supermarket when the price of apples goes up, or do you buy a few more apples when they're on sale? Stocks are no different, and dollar cost averaging means you buy more shares when the price is lower and fewer shares when the price is higher.
Topped up your CPF to FRS yet? Your wife?
Those are typically safe returns.
Sorted out your insurance? Especially if you have dependents?
Buy a global index, automate as best you can, check back in 20yrs. =D
Hi there, I did not top up my FRS as I am not sure if I would make another property purchase in future as an investment.
Oy vey.
Currently your approximate net worth is roughly S$1 million, and half that net worth is already in directly held Singapore real estate. And you just got through fretting above that real estate could crash. (Yes, it could!) So do you want to raise your investment exposure to Singapore real estate from ~50% to...well, what do you feel comfortable with?
I think Okenba might have a good idea here for the initial bond/bond-like portion. Assuming you maintain adequate or better liquidity, it's tough to beat 4% Special Account interest and with tax relief on up to $7,000 top ups (one for yourself, and another $7,000 total when topping up one or more qualified family members' SAs/RAs). MBH, the bond fund I listed above, almost certainly won't beat 4% SA. There are also MediSave top ups for tax relief if you can squeeze them in, and I like those better, actually, when you're earlier in your career, as you are.
I did not load too much insurance on my kids. Only bought 200k on my life and my spouse. And also covered the kids life so they will not need to pay high premiums then.
This last bit doesn't make sense to me. Children don't have dependents, and term life insurance at circa age 30 when they start families and have dependents is not at all expensive. And nobody is paying any premiums for insurance they don't need for the ~30 years before they need it, and that means their parents (and future benefactors) -- you -- are that much wealthier and can spoil them and their children (your future grandchildren) even more.