Only one in eight Singaporeans confident of achieving financial life goals highlights survey

Only one in eight Singaporeans feels strongly confident that he will achieve his financial life goals and one in ten agrees that he is very knowledgeable in financial matters

Singaporeans consistently rank in the bottom three among 19 markets on confidence in their financial strategy and know-how, despite Singapore being Asia’s top financial hub and the fourth most competitive financial centre in the world.[1] This, together with Singapore’s expected slowing growth for the rest of the decade[2] and the global uncertainty, starkly highlights the importance for Singaporeans to start planning for their long-term financial security.

Market Insights - Surfing the value wave


They are exposing good value. Surfing the value wave looks an attractive strategy. Many investors seem braced to do this.

Six months ago, investors were asking, “When should I buy?” They are still asking. They see the value but not the triggers that will unleash it. Moreover, as falling commodity prices and 2016’s China induced selling work themselves out, apparent value is becoming better value! Caution dominates, but it is precisely caution that often generates the best value. Despite today’s concerns, we are overweight equities.

Beyond CPF

This has been a busy year for the CPF Board as various enhancements were made to the schemes that impact the medical and retirement needs of CPF members.

With these enhancements came announcements through numerous media channels to detail and explain what people can expect next.

2016 Investment Outlook - Surfing The Value Wave

Attractive value is evident.

Higher US interest rate concerns and slower China growth fears have resulted in some good value appearing. This is particularly evident within Asia where valuations have fallen towards 1.5x price to book1. When they have fallen this low, Asian equities have historically rallied an average 95% over the next five years2.

But, it will not be plain sailing. A “profit recession” – in which earnings results do not match forecasts – is a real risk. This risk appears discounted in many instances, but it remains.
The income story also looks to have further life given the likely slow pace at which US rates will likely rise.

In the following articles, our CIOs focus on 2016 opportunities and risks they see as they surf the value wave.

1As at 16 November 2015, the price to book ratio, as measured by Thomson Reuters Datastream, was 1.52X. When Asia’s price to book ratio falls into the 1.5 - 1.75x band, equities have rallied an average 95% over the subsequent five years.
2Source: Eastspring Investments as at October 2015 based on market data from January 1996 to June 2015 inclusive.

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