My sister has an AIA insurance policy denominated in USD, annual premium, bought from rate at 1.7+++ many years ago. Every year, she would have to go money changer to change her SGD into USD to pay her premium.
Yes, and an insurance policy denominated in a specific currency (premiums, potential payouts) is a bet on that specific currency. Also on the insurance product itself, but definitely on the specific currency. I'm talking about real, simple insurance products at least, not investment products sold by insurance companies.
There are some things you can buy that are currencies or currency proxies, and thus currency bets. The currency itself (cash), bonds denominated in that currency, insurance products denominated in that currency, real estate within that currency zone (is heavily correlated to the currency), Bollywood memorabilia (probably mostly of interest to buyers in India, who prefer to pay in Indian rupees, so heavily correlated to rupees), currency options and futures, tranches of mortgages or loans in a particular currency, Amazon gift cards in a particular currency...anything that's cash, cash-like, or inherently local (within a currency zone, such as a Singapore COE or HDB leasehold) rather than global.
Know what you're buying, basically.
When I was studying in the US 30+ years ago, the USD/SGD rate was at about 2ish.
OK, so let's suppose you pushed S$200,000 into a low cost U.S. S&P 500 stock index fund back in January, 1989. That would have been US$100,000.
Excluding dividends, and factoring in the small management fee and tracking error, you'd have a little over US$900,000 today it looks like. Let's round that down to exactly US$900,000. Convert that back to Singapore dollars at 1.365 (let's suppose) and you'd have S$1.23 million, about six times as many Singapore dollars as you put in.
I think you'd be pretty happy with that result, right? And I haven't even included the dividends, which are huge, even after either 30% or 15% dividend tax withholding. (Dividends are tougher to calculate net of taxes across 30+ years, so we'll just ignore them for this little exercise. But I'm being very, very unflattering to the stock investing in this exercise without including dividends -- they're huge over 30+ years reinvested.)
Of course there was some Singapore dollar inflation over that time period, so let's adjust for that. I'm going to use SingStat's CPI calculator, "all" goods and services, 1988 to 2018. (They only have an annualized calculator, but that's close enough for these purposes.) According to the calculator, to get the same purchasing power that you had in 1988 with S$200,000, today (2018) you would need S$335,428.... But you have about S$1.23 million. Not even counting the dividends. Still happy, very happy!
"Past performance is not indicative of future results."
