“Young investors...should look to developing a portfolio via a buy-and-hold strategy and a strategic asset allocation, paired with opportunistic and tactical investments”— Johnny Escaler

What advice would you give to senior citizens who want to invest?

It is a common misconception that investing is for the young. However, at every stage of your life, there is a suitable solution for your unique circumstance.

Senior citizens would be best served investing their funds into safer and more liquid securities assuming drawdown would be required. Estate planning is also something which the senior citizen could look into.

It is always best to consult your relationship manager or financial adviser who can help you understand your needs, and be able to offer tailor-fit investment solutions. In terms of stages of life, senior citizens would be in the wealth preservation and maintenance stage. We would recommend looking at more liquid and stable investments, such as fixed income or unit trusts that provide steady coupons or dividends. They should also structure legacy planning for the next generation [trust, foundation planning etc].

To what extent should an investor use borrowed funds for an investment?

One must always consider liquidity needs and investment objectives. Using borrowed funds for an investment is only for experienced investors who understand the risks, and are able and ready to take the volatility and possible losses, that come with any investment.

Under proper risk/reward considerations. It would make sense, for example, to take funding through a EUR loan at relatively lower interest rates to buy a EUR-denominated security with a decent dividend yield or coupon, so that the dividend yield or coupon exceeds the funding costs. USD, EUR, CHF, and JPY are decent funding currencies as the interest rates are relatively lower, compared to, perhaps, the AUD.