Policy makers have many reasons to weaken or strengthen the local currency. Arguably the most prominent consideration would be Singapore’s import/export sector. But how much does the shifting value of our currency affect your global investments?

Inflation and FFR forecasters have had to reverse their positions dramatically this year — relying on forecasts to make investment decisions has historically been ineffective and costly.

At the beginning of the year, many advocated for the holding of bonds over equities due to interest rate predictions. During this short period, stocks have opened up a +10% gap from bonds.

The Japanese stock market has been a hot topic as its returns have so far outpaced a globally diversified stock market index at 10% vs. 8.9% this year. While it’s easy to be caught up what’s happening currently, don’t let our inherent recency bias prevent us from assessing the bigger picture.

This financial signal has historically predicted every recession since 1976. But two years since, markets have had large gains, with no recession in sight.

When the market is up for most, it’s easy to feel smart, but the truth is, historical evidence shows that investors lose out by large margins when they trade frequently or try to pick the winning asset or stock.

If you had known that markets would go through two bear markets over the next four years, would you invest? The first (Jan-Mar 2020) resulted in a decline of -21.37% . The second bear (most of 2022) saw global stocks decline -25.63%. And yet, the cumulative returns over the past four years is +44.22%.

2024 & 2020 is starting to look pretty similar — all-time market highs, Federal Reserve looking to cut interest rates, and yet another Biden vs Trump election contest. Yet, investors who stayed the course during this period would’ve been rewarded with around +40% (global markets) from then to now.

Interest rates are almost inherently impossible to predict with any practical level of accuracy, and thus making financial decisions based on their forecast is a fool’s errand.

Let’s examine dividend paying stocks, REITs, and the total-return portfolio approach when it comes to generating an income in your later years.

With current interest rates, many investors are unwilling to leave the safety of cash with more than US$6 trillion sitting in money market funds now. However, sitting in cash and earning 5% per year has actually been costly for investors.

There are various ways to structure sustainable, and long-term income generation from your investment assets which reside out of the CPF scheme.

The value of a real adviser can often times be hard to quantify because following good advice tends to keep you out of trouble — and like looking through a good pair of glasses, you often forget they’re there, until they aren’t.

The cost you pay for high levels of certainty in investment is reflected in the difference in return you receive compared to riskier assets.

Despite global stocks giving positive returns 74% of the time since the 1970s, the individual investor experience can starkly differ based on the regime of market that you were in.

Higher interest rates means a higher cost of borrowing for both you and companies, but it also means better opportunities to grow your savings through instruments like T-bills and our Capital Holding account

Research and data show that for both developed and emerging economies, there is no clear pattern to linking market returns with the economy. GDP reports and recession calls are just one of many data points to consider in investments.

Research shows that global markets give a historical average return of 7% p.a., however almost none of the individual years gave that exact return. The actual investment experience has to account for the variability in annual returns, e.g. 2022(-18%) and 2023 (+22%).