A Personal Finance and Investment Arm of The Business Times


How many 10 years do you have in your life?

After giving more than a thousand talks and presentations in my 35 years in the financial services profession – the Q and A segment has always been the most interesting and arguably, challenging.

A simple, but “challenging” question?

Perhaps the most “challenging” that I had recently, was a question that asked “I find investing to be very complicated as so many people tell you so many different things.  Can you tell me the simplest way to invest, if I am investing for the long term for my retirement and I don’t want to have to monitor, think about or do anytjing at all, until I retire in about 20 years time?

To simplify matters, I am only investing some of my money through one financial institution called ABC.

The bulk of the rest of my money are in fixed deposits in S$.”

A layman’s approach?

As I wanted a fresh approach to this question – I asked one of my former interns who is a layman to research this issue. And of course his only tools of research would be “google”.

“Buy and hold” strategy?

His approach was to have a simple “buy and hold” strategy, using 4 funds in equal proportion (25% each) from ABC financial institution, so as to simplify matters without him having to open any new accounts or investment vehicles – in global equities, global bonds, commodities and global property.

The last 5 years’ annualised returns in S$ were 10.29, -1.22, 3.82 and 12.0%, respectively.

The last 10 years’ annualised returns were 2.59, 0.16, 2.0 and 5.0%, respectively.

The above gives a total portfolio annualised returns of 6.22 and 2.44%, for 5 and 10 years, respectively.

He had used actual net fund returns instead of index returns which are theoretical, in computing the returns.

(Note: For certain longer time periods for which the annualised returns are not available from ABC’s funds’ historical returns, the underlying fund managers’, benchmark or closest proxy benchmark were used in computing the returns in S$.)

When the person needs to make withdrawals in retirement on a monthly or quarterly basis, the funds with the highest returns will be liquidated first, to enhance the overall average rate of return of the portfolio.

Robin Han
Leong Sze Hian

Dr Leong Sze Hian is the Past President of the Society of Financial Service Professionals, an alumnus of Harvard University, has authored 4 books, quoted over 1500 times in the media , has been host of a money radio show, a daily newspaper column, Wharton Fellow, SEACeM Fellow, acting managing editor and columnist for theonlinecitizen, columnist for Malaysiakini, a Member on the CIFA International Advisory Board, executive  producer of the movie Ilo Ilo (8 international awards), treasurer of Maruah, and invited to speak more than 100 times in more than 25 countries on 5 continents. He has served as Honorary Consul of Jamaica and founding advisor to the Financial Planning Associations of Brunei and Indonesia. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.