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Is CPF really the equivalent of a 60:40 fund ?
By Growing your tree of prosperity  •  October 13, 2021
Sharp readers from BIGS forum and this blog have raised an issue on my last article which claimed that the CPF was equivalent to a 60:40 fund. The readers were rightfully incredulous. How can the CPF program which returned a fixed amount of 2.5%-4.0% be the equivalent of a 60/40 fund? I went back to trace the origins of the reference and found this link. You can take a crack at reading this paper. As it turns out the readers were right. The original paper was full of spurious assumptions that do not gel with our observed reality.
  • Singapore cash rates to be as high as 4% from 2014 - 2024.
  • Singapore government bond yields to be high as 5.3% over the same period of time.
  • Global equities to return 5% above inflation over that same period of time.
The collective effect of these assumptions was that it overestimates returns of cash rates...
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By Growing your tree of prosperity
I have recently completed my Juris Doctor and I am waiting to be called by the Singapore Bar. For the past 15 years I was an IT manager and I have worked in multinationals, financial exchanges, trade unions and even a government agency. I started my career as an AS/400 administrator and moved on to manage IT projects and operations
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