5 Things to Kickstart 2023
At our recent client event, we were happy to have an overwhelming response to our 5-question quiz. Within these answers include important tidbits for investors and Singaporeans — How many of these would you have guessed correctly?
1.
Which has the highest growth
of $1 invested over 46 years?
The Global Stock Market
By investing in a globally diversified portfolio, it not only helps to reduce sector-specific risk (e.g. investing in airlines shortly before a pandemic) but it also allows you to invest in the largest reputable companies from around the world (as well as the up and coming dark horses) — it’s an evergreen, evidence-based, and battle-tested method of investing.
2.
Which expenditure among the options
has risen the most since 1961?
Food
Transport
Household Durables
Transport
Amongst the three categories listed above, the cost of Transport has risen by 426% (2.8% per annum). Other notable increases includes costs for Healthcare (435%), Food (380%), and Education at a whopping 577% (3.2% per annum). Inflation doesn’t affect everyone’s household equally. Are your assets positioned to combat inflation in the long-term?
3.
If you had invested $1 in 1970
into the global stock market,
and held it through all the crises
and market meltdowns, how much
would it have grown by 2020?
$80
If your portfolio is globally diversified, you can be sure that you’re holding something of value. When that happens, one of the most important and potent factors for investment growth is time in the market. As you can see, despite numerous and varied political and socio-economical crises, investing in the world will result in steady long-term returns.
4.
What level of accuracy do I need
to forecast market returns,
in order to achieve enough returns
to beat a simple coin toss?
Above 70%
In order for a market forecast or prediction to lead to a tangible returns for investors, 2 key decisions need to be made successfully: when to buy, and when to sell. Simple probability means that an accuracy of less than 70% will lead to a 49% chance (0.7*0.7) of success. Sure, it may work out the first time, but every subsequent success becomes less and less likely. The key question is ‘Would you place your hard earned money on the result of a coin toss?’
5.
If you are a young investor,
how much do you need to start with
to accumulate $1 Million in 35 years
(by investing in global markets)?
$5,000 + $600 per month
Unfortunately in Singapore, $1 Million dollars will unlikely get you a landed property, but for many, accumulating that sum by retirement might seem like an elusive goal. However, with discipline, sound advice, and the right portfolio, it’s only a matter of time. Our Mustard Seed programme is a savings and investment plan that helps those who are just starting out to accumulate $1 Million dollars in a selected time frame with contributions as low as $5,000 + $600 per month.
For more advanced solutions please feel free to contact us.
