How to avoid dollar-lost averaging
Switching out of equities into fixed-interest investments is tricky, especially in a falling market
IT IS not easy to be an investor today. It could be even harder if we are approaching or already are in retirement. Consider this: The Singapore market is roughly 4.5 per cent lower today than at the start of the year, while the Malaysian market is worth 3.4 per cent less and the Hong Kong market has lost 14 per cent of its value.
Markets should recover, though. Until they do, we have high interest rates that could stay elevated for longer that could provide us with some respite. It is possible right now to earn a reasonable return on risk-free investments such as Treasuries, time deposits and savings accounts.
Timing the switch
The crucial question, however, is when should we lock in those high interest rates? Put another way, is it possible to time the switch from equities to fixed-interest investments?
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