This is a reply from Brendan, in response to my post, Is this a Good Deal? – Great Eastern Annual Cashback Endowment Plan. Brendan has gladly allow me to post it here. This will be his first guest post! (Brendan is an Investment Specialist and Financial Advisory Director at SingCapital. He is currently teaching other financial advisers/practitioners in Module 4: Investment Planning under the CFP® program. He is also a sought-after speaker and a MoneySense representative.)
Good point about the long term benefits of buying term invest the rest. Of course as you mentioned, the investor needs to be able to stomach the risks associated with the stock markets.
If they only employ a buy-and-hold strategy, the confidence would really be shaken in a worst-case draw-down scenario. In the 2008 financial crisis, it would be -62.3% (STI from 3862 to a low of 1456). To any …