Global Investment Trends Report

Just read this article on the Sunday Times about Singaporeans becoming more bullish about investing (this means that people are more willing and confident about investing).

These findings came from a recent poll by Schroders Asset Management Firm (2014 Schroders Global Investment Trends Report) and below are stats based on those polled here (sg):

1. 1 in 3 are looking to invest more than $100,000 this year
2. 58% will invest their spare disposable income, higher than the global average of 48%
3. 81% will invest in equities, up from the 73% last year  (16% are looking at bonds, 19% are considering precious metals investment while only 6% is considering property, in response to the cooling measures set in place)
   For those who are not familiar, equity means stocks (ownership interest), while bond is a debt instrument whereby investor loan money to a company/government at a fixed interest rate (loan interest).
   Many people perceive bonds as ‘safer’ investment instrument because historically, bond prices fluctuate less than stock price. However, this is a general perception. Different instruments carry different types of risks)
   Hence, it appears to be true that investors are more confident of investing that a year ago.
4. The poll also shows that only 5% of repondents has time horizon of more than 10 years. 
   This is really interesting for me because unless you are already 70, you will definitely have 2 goals with time horizons of more than 10 years –Retirement and Legacy (leaving behind an inheritance). Always the curious question.

    

5. Developed markets are the next destination of choice. 22% stating U.S and Europe specifically 
   We are glad that we have had exposure in U.S and Europe since the beginning of last year.  But while our long term investment objective remains the same, many medium-term allocation/tactical decisions will change for the year ahead. This is simply because there is no market that goes on a perpetual upward trend. 

   To put things into perspective, if we look at the same poll done last year – 46% of global investors believed Asia Pacific including China to have the greatest growth potential while only 10% & 11% believed Western & Eastern Europe to have the greatest growth potential. Yet, the 2013 returns for MSCI AC Asia Pacific ex Japan Index was -0.44% while the same year return for MSCI Europe ex UK Index was 21.98%. 

   This goes to show that investors should be very wary on how they or their advisors/bankers are managing their portfolio. Making a whirlwind decision to invest 100k while at your bank is unlikely to help you enhance your wealth. Likewise, investing without a proper management and an exit strategy will probably do you more harm than good. It’s your money, so do sit down and think about your investment strategy and guiding principle. And most importantly, how you are going to manage your investment.

6. 4 in 10 also plans to put money in low risk asset such as cash and saving deposits though at the same time, some 38% of respondents cited inflation as a major concern. Funny, don’t you think… But as stated in the article, the reluctance to invest /invest more is mainly due to low risk appetite, little knowledge, as well as inertia. 

   Well, this is the point whereby I leave my email address with you. Because I believe I can assist you out of your reluctance and help you progress to a more ideal situation.
   yvonnelimzw@outlook.com / yvonnelim@fa.com.sg

Have a great week ahead.

 

The survey by Schroders consisted of 15,749 respondents, in 23 countries, who have the intention to invest in the next 12 months and have more than 10,000 Euro to invest. Info abstracted from Sunday Times -Invest Section yesterday (09/03/2014). MSCI figures extracted here