According to the Global Investment Survey 2015 by Legg Mason Global Asset Management, it was found that:
- The majority (63%) of investors in Singapore, compared with only 22% globally, are not progressing with their goal of “avoiding depending on others in retirement.”
- Almost half (45%) of the respondents expressed they are very or somewhat lacking confidence that their CPF savings can help meet their retirement goals.
- The rate of return Singapore investors achieved is also the lowest in the region at 5.4%, compared to Hong Kong (6.3%), China (8%) and Taiwan (7.3%).
- Almost half (45%) of the respondents work with a financial advisor as compared to 35% in 2014.
- Singapore investors prefer to invest in their home market with only 78% of Singapore investors holding international investments. This is compared to 90% of Hong investors and 89% of Taiwan investors holding investments internationally.
Once again, this survey tells us that many Singaporeans are not taking action in having a financial plan because without a financial plan, it is not possible to have a goal – such as avoiding depending on others in retirement.
Despite the lack of retirement plan, a large number of people lack confidence in their CPF. It is strange as to why people feel they lack confidence and yet do not act to do something about it.
In terms of investment experience, Singaporeans are behind their Asian counterparts on two fronts.
First, Singaporean’s rate of return was the lowest despite an increase in number of investors seeking consultation with financial adviser. Perhaps they sought consultation on insurance but not investments!
Second, Singapore investors have a strong home bias compared with its more savvy counterparts. With home bias and single country concentration risk, many Singaporeans are taking significant amount of risk in their investments.
If the survey results describe you, it is time to act and have a financial goal by having a diversified portfolio instead of one with strong home bias.
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