A portfolio for longer-term investors

THE importance of starting retirement planning earlier in life has been consistently publicised, but the recent revelation of poor returns on members' CPF Investment Scheme (CPFIS) portfolios has garnered much attention. A review of the CPFIS itself is underway. While the dismal CPFIS performance figures have dominated headlines, what was also crucially important was Deputy Prime Minister Tharman Shanmugaratnam highlighting that average investors can undermine their own interests by buying when the market is euphoric and selling when prices are down, among other common behavioural biases by investors.

With this in mind, we have designed and constructed a portfolio that we think is suitable for investors with a medium-to-long term investment horizon, who are able to bear more risk and can understand the volatility that comes with being invested predominantly in the stock market. Such investors are willing to take on more risk for potentially higher returns.

The portfolio aims to achieve long-term capital appreciation by typically investing 30 per cent in fixed income and 70 per cent in equities, although the target allocation could change alongside our views on and developments in financial markets.