It means cash offers a decent return after a very long time. When markets were tanking last year, I heard experts say equities now have a real competition from cash as cash is now an asset class of its own after Fed raised rates.
Is Revhappy trying to time markets again? Are you bored?
Long-term investing should be boring. And the fact is that cash hoarding is very, very unlikely to serve you well in a long-term investment objective such as saving for retirement in India. Particularly when you’re picking the wrong currency for those purposes. Not that rupees are terrific, but you’d probably aim for a basket of currencies. CORP, a global bond index fund traded on the London Stocks Exchange, is a reasonable proxy in that way.
....But I don’t get you, Revhappy. How many years do you have until retirement? And what’s your current portfolio allocation split between stocks/stock-likes and bonds/bond-likes? Just keep plugging away in boring fashion and stop trying to guess. You’ve shown absolutely no ability to guess any better than anybody else about market timing — quite the opposite, actually, since brainless textbook investing would have outperformed you — so what makes you think your guesses are suddenly going to improve? Stop guessing, just bet on the world in a low cost and age appropriate way (note: not loading up on uninsured rupee fixed deposits), and cruise.
If you’re particularly risk averse — and I get that — and have Singapore dollars piling up that you don’t know what to do with, you might take a look at simulating CPF LIFE with a private escalating life annuity from a high quality Singaporean insurer. That’d be a reasonable thing to do, to a degree, particularly if you don’t have any longevity insurance in your pipeline. That should do a bit better than fixed deposits, and it should line up “well enough” with a retirement lifestyle in India, and it’ll de-risk the longevity part to allow you to feel more comfortable with the rest of your portfolio (invested in the boring, textbook way). You should also be able to make it joint/survivor (or joint/contingent) so that your spouse keeps receiving payouts for the rest of her retirement life if you should predecease her. (“Joint/contingent” means you can knock down the payout if you wish, to reflect lower cost of living after you pass. Something like a 20% or 25% knockdown might be reasonable.)
You’ll need to consider how India is likely to tax Singapore dollar annuity income, and that can only be a guess. There will be some currency risk (SGD versus INR), which is why it won’t be your only retirement security. But there will be de-risking in terms of combatting most India unique risks, such as a collapse in the rupee or a banking crisis. An offshore life annuity from your former working country could be a pretty nice approach, actually.
