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ALTERNATIVE INVESTMENT | Staff Reporter, Singapore
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4 in 10 Singapore investors worried about shelling out cash

Is there a misconception?

According to the latest Manulife Investor Sentiment Index, 42 per cent of Singapore investors do not invest their cash because they are worried about making the wrong investment decision.

A third of Singapore investors who did not like other investment options revealed they did not shift cash into other assets because they do not understand the options available.

“It is generally appropriate for Singapore investors to hold six months of personal income in cash for their emergency fund. Despite being cash-rich, Singapore investors let their cash lay idle.

Holding too much cash for their emergency fund creates the illusion that they are getting wealthier because the money value of their assets is getting higher. However, they have to understand that inflation constantly erodes the value of their savings,” said Ms Annette King, President and CEO, Manulife Singapore.

The Manulife ISI also revealed that retirement remains the top financial priority for investors in  both Singapore and Asia overall. Ms King added

“From the survey, we learnt that saving for retirement, or simply put, being able to live a desired lifestyle without worrying about money when we retire is high on the financial agenda of most Singapore investors.

They need to make their money work harder for them and maximize their savings to secure their desired retirement.

To invest for long-term growth, investors need to move away from cash towards assets that will keep pace with and potentially beat inflation. Cash can provide capital guarantees but in the current environment it also likely to lead to ‘real return’ losses, once inflation is taken into
account.”

The Manulife ISI also found that more than half of Singapore investors have high expectations when it comes to returns on their investments.

Respondents said they expected between 11 and 15 per cent in the next 12 months on equities, bond funds and real estate even though the actual average annual returns in the past 15 years has only been less than 10 per cent.

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