Here’s where to invest S$100,000 in 2026, according to wealth experts

[SINGAPORE] The investment climate is shifting. With inflation cooling and central banks settling into an easing phase, the yields on cash and traditional safe assets are retreating. 

While the environment remains supportive of equities and bonds, the era of “easy”, risk-free returns of the past few years is largely behind us.

For an investor with S$100,000 to deploy in 2026, the strategy depends entirely on their risk tolerance. Here is how experts advise allocating that capital:

Low risk appetite: the conservative investor

Stephen Davies, chief executive of Javelin Wealth Management, noted that with Singapore dollar cash deposit rates potentially dipping below 1 per cent and Singapore Government Securities hovering at around 1.2 per cent, these traditional “safe havens” may fail to keep pace with inflation.

“This proves the point that with low risk comes low returns,” he said, warning that investors sitting purely in cash will likely see their real spending power eroded.

To generate a meaningful return, he suggested moving slightly out of cash while maintaining a defensive posture. 

He recommended allocating a modest portion (around 20 per cent) of the S$100,000 portfolio to blue-chip or defensive equities yielding close to 3 per cent. 

“Since these are quoted shares trading on the SGX, you will still be exposed to market volatility as far as the capital you have invested,” he noted. 

For fixed income, investors might consider US dollar-denominated corporate bonds, which can offer yields of 4.5 per cent or higher, though he cautioned that these will be higher-risk than government securities; they also introduce currency risk if the greenback depreciates against the Singdollar. 

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Brandon Ho, head of Investment Advisory, Singapore at Arta, proposed a different structural approach. 

He argued that a bond-heavy strategy should anchor the portfolio, with 56 per cent allocated to high-quality fixed-income exchange-traded funds (ETFs) to provide predictable income. This allocation can be spread over US Treasuries, international bonds, inflation-linked bonds and investment-grade corporates to help diversify interest rate and credit risk. 

Ho would have a 25 per cent allocation to diversified hedge funds. He noted that these strategies often have low correlation to equities and bonds, offering low, “bond-like” volatility that can improve risk-adjusted returns without significantly increasing risk. 

His conservative mix is rounded out with 14 per cent in global equities for measured growth, and 5 per cent in gold as a final layer of resilience against inflation or geopolitical shocks.

Moderate risk appetite: the balanced investor

Vasu Menon, managing director of Investment Strategy at OCBC, advocated a classic 60-40 strategy (60 per cent equities, 40 per cent bonds) for new investors. 

He noted that this diversified approach offers capital upside from equities, while the bond component acts as a stabiliser and income generator.

“Compared to the 2010-2021 period, bond yields today are meaningfully higher, which makes the 40 per cent bond portion a good source of yield versus the very low current deposit rates,” he noted.

For those seeking to add alternative assets and maintain “dry powder” for opportunities, Menon suggested a slightly modified allocation:

Among equity markets, OCBC is overweight on Asia ex-Japan (China, Hong Kong, Singapore), citing superior growth potential and attractive valuations compared to the US. The bank remains neutral on US, Japanese and European equities, Menon said.

As for fixed income, he cited a preference for investment-grade bonds and selected high-quality, high-yield bonds. For those seeking protection against rate volatility, he recommends short-term (one to three years) and medium-term (three to seven years) maturities, as they are less susceptible to changes in interest rates.

“Investors already holding on to bonds with longer maturities can continue to do so as they can be a form of ‘portfolio insurance’ if the risk of a US recession rises,” he said. 

High risk appetite: the aggressive investor

For the investor with a high risk appetite, the objective shifts from preservation to maximising long-term growth. This portfolio accepts significant short-term volatility and potential drawdowns in exchange for higher long-run returns.

Arta’s Ho outlined a portfolio in which equities and private markets do the “heavy lifting”:

Public equities would be the main growth engine, and Ho splits this across US (15 per cent), developed markets outside the US (40 per cent), and emerging markets (8 per cent). This ensures broad participation in themes like technology and the energy transition.

A 25 per cent allocation to private equity can capture the “illiquidity premium” by accessing companies early in their growth cycle, though it requires a 10 to 12 year commitment, he said.

Bonds and gold play a minor role here, serving strictly as safety nets and liquidity buffers rather than return drivers.

Market outlook

Ho described the global backdrop for 2026 as “cautiously constructive”. 

He expects growth in the US and Europe to remain modest but resilient, while Asia ex-Japan is projected to be the fastest-growing region, fuelled by investments in technology and supply chains.

Menon of OCBC said: “Looking into 2026, markets will continue to face economic and geopolitical challenges, but there are good reasons to be sanguine on the medium-term investment outlook.”

He dismissed fears of a US recession, predicting instead that the US economy will maintain a steady growth pace of around 2 per cent in 2026.

Menon added that while pullbacks are inevitable in this “complex and fast-changing investment landscape”, they should not deter investors from staying the course.