A good financial plan - case study

Dear Mr Tan,

I bought $40,000 of NTUC Income shares a few years ago. I am happy with the dividends. Should I keep the shares as my retirement portfolio?

I have been buying unit trusts through monthly regular savings plan. Some of these unit trusts (Asia ex Japan equities and Global equities) were bought since 1999. I have not redeemed any of the units. I plan to keep them for my retirement. The unit trusts have appreciated more than 100%.

Should I reap the profits now and continue investing through regular savings plan in a diversified portfolio comprising core and supplementary funds?

I have transferred my excess funds from my CPF Ordinary Account to the Special Account in the CPF to earn 4% interest. My flat is fully paid for 5 years ago.

REPLY:

You have managed your financial affairs very well and have earned a good return on your investments. Congratulations.

Your experience will be useful for other people. It is a good case study. My views are:

* keep your Income shares, as it gives a good dividend (5 to 7% p.a.)
* keep your unit trust investments (if the funds are large and well diversified)
* check that the expense ratio is less than 1.5% p.a (better, if less than 1%)
* you are astute in transfering the excess funds from orinary to special account in CPF to earn a higher intrest rate.