In September 2016, Schroders surveyed 20,000 retail investors in 28 countries, including 500 investors from Singapore. One of their biggest finding is that investors are overly optimistic about their expected returns. According to the survey, the average investor in Singapore is expecting 9.2% returns per year! That is way too unrealistic given the low interest rates environment in the current market.

THE RISK FREE RETURN (BENCHMARK RETURN)

When we talk about returns, it is always associated with the risk of investment. The higher the risk, the higher the potential returns that you can expect. In the Singapore context, the risk free return is yield derived from Singapore Government Bonds (SGS). They have a risk rating of triple A which is considered risk free. The returns for Singapore Government Bonds are as follows: ......