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If you have cash that is earning 0.5% per annum, and you are worried about the current level of the stock market and the uncertainty in the global economy, which option would you prefer?
- Invest the money for 5 years to get a guaranteed return of 10% (i.e. 2% per year)
- Keep the money in cash and wait for the market to drop by 10%, i.e. ST index of 2,600
- Wait for the market to drop by 20%, i.e. ST index of 2,350
- Invest in preference shares or REITS to earn a yield of 4% p.a. or more
In my view, the chance of the stock market reaching 2,600 within the next 5 years is quite high and reaching 2,350 is moderate. Read more...
