Here are some facts to consider:
- The guaranteed yield for a single premium endowment is around 2% for 10 years or longer. The non-guaranteed yield may be higher, but is still less than 4% per annum.
- The yield on a low cost investment fund, such as the STI ETF, is likely to be around 5% over the long term. By accepting a higher risk, you can get a higher return.
- If the market is weak and your actual yield is lower than 5%, you have the choice (as a long term investor) to wait for a few years for the market to recover. Time is on your side. Wait for an appropriate time to achieve your long term yield.
When you buy a single premium endowment, ...