HOW DO I DE­CIDE WHAT IN­VEST­MENT PROD­UCT TO CHOOSE?

Simply Her (Singapore) - - Beauty -

This de­pends on a few fac­tors. How long do you plan to in­vest? What’s your ob­jec­tive – in­vest short term and max­imise gains, or long term for sta­ble yield?

Also con­sider your risk ap­petite. Lower-risk in­vest­ments, such as fixed de­posit ac­counts, gen­er­ally yield steady but low re­turns; higher-risk ones, like buy­ing stocks, may gain – or lose – a lot of money over a short span of time.

More im­por­tantly, take a good look at your over­all fi­nan­cial well­be­ing. What other re­tire­ment sav­ings do you have be­sides your CPF ac­counts? What other in­vest­ments have you made and what are your fi­nan­cial com­mit­ments?

For ex­am­ple, if you’re us­ing your OA to pay off your mort­gage loan and fore­see that you may quit your job to be a stay-at-home mum, it wouldn’t be wise to max out your OA on in­vest­ments. Should you stop work­ing and thus, stop re­ceiv­ing monthly CPF con­tri­bu­tions, you’ll want to stretch your OA bal­ance to ser­vice your bank loan, so you don’t have to pay cash up front monthly.

And if, say, you just want to make a lit­tle some­thing ex­tra for the next two years while wait­ing for your new HDB flat to be ready, you may pre­fer to pick a low-risk in­vest­ment so as not to lose any of your OA that will af­fect your pur­chase.

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