Is an equity fund appropriate for a retiree?

FROM POLICYHOLDER

I have $150,000 of CPF OA in your Growth fund. I am 61 years old and will not be needing my CPF money.

At the same time I don't know whether it is appropriate for an older person who will be retiring in 6 months time to take risk. I do have additional income from rental and interests from fixed deposits.

I am thinking of switching $20,000 at least to your global equity fund as I think that bonds are not performing well at the moment. I know that the risk is lower with your Growth fund as it is a balanced fund.

Would you advise me to remain with the Growth fund or would you advise me to switch to both Global Equity Fund and Spore Equity Fund or just Global Equity Fund which I think is more diversified.

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MY REPLY

I am 58 years old, and I keep most of my investments in the Growth Fund as well. I intend to invest for the next 20 years, and to withdraw a small sum each month after I retire.

It should be all right to invest in a fund that is largely in equity. By investing for the long term, we diversify our risk.

You can also attend my educational talk. Details of my talks are shown in this weblink: http://www.income.coop/seminar/

I think that this is a good idea to switch part of your investments into an equity fund.

A few months ago, I switched about $100,000 of my investments from the Growth Fund (which is 70% equity and 30% bond) to the Singapore Equity fund. This turned out to be a good decision at that time.

For investors who look towards the long term, I think that the Global Equity Fund may be more appropriate than the Growth Fund.

For the immediate future, there is some uncertainty about the impact of high oil prices on equities, so one has to take this into account.