Monday, February 26, 2007

Should I invest my CPF special account in the Growth Fund?

Mr Tan,

Would you advise a 30 year old professional to invest in NTUC Growth Fund with CPF SA even though money in the SA is guaranteed 4% interest per annum?

PL

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My reply:

At this time, when the stockmarket is high, I do not advise you to invest your special account (interest rate of 4% p.a.) in the Growth Fund (from NTUC Income). It is better to keep the money in the special account and wait for the market to correct to a more modest level.

It is all right to invest your ordinary account (interest rate at 2.5% p.a.) in the Growth Fund now, if you intend to keep for the long term.

Tan Kin Lian

3 comments:

  1. Market is bullish, when will it collapse? I am sure this will be what most of us are cincerned.

    31st Jan, I topped up the Growth Fund with my SRS. Price then was $1.778. I was given 1% bonus for the top up.

    Along the way, one can consider to part sell or top up, which make the Flexilink Policy very flexible.

    One can start with an initial amount and wait to top up later.

    If the market turns down, buy in to average and along the years, one can do top up.

    If one is to wait, one may not start and will not start at all.

    Start with $5000 and top up along the way.

    - Thomas Phua

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  2. If anyone wish to take Thomas Phua's advice, you can visit his blog. His link is in the right column.

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  3. For those who are not financially savvy IMHO I suggest NOT. CPF Special acct IR is 4% and virtually ZERO risk, unequalled elsewhere.

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