Friday, October 26, 2007

Negative return over 10 years?

Dear Mr Tan,

When you say long term, what is the time-frame? Is it possible, say after 10 years, the value drops below than the current value?

REPLY

It is possible, but extremely unlikely.

If you look at any period of 10 years in the past, I do not think that you will this situation. Even if the unlikely event happens, you can wait for a few more years for the market to recover.

Remember, if the market continues to go down over 10 years, it will be spell disaster for the economic and financial system. In that case, other investments will perform poorly as well.

COMMENT FROM AN EXPERT

In Singapore, since 1980, there has never been a 10-year period when the stock market has realised negative returns.

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3 comments:

Anonymous said...

It also depends very much on your portfolio and timing. I bought 6 counters in 1993. Only 3 are positive, (one after 13 years!). Overall, even at recent highs, I suffered a net loss of 15 %, and that excludes the interest loss had the money been put in bank. But if you have bought at the market lowest in 1998 and they are blue chips, maybe hit jackpot by now!.

October 26, 2007 12:36 PM
Tan Kin Lian said...

My comment refers to investing in a large, well diversified portfolio that mirrors the market index.

It does not apply to a small, narrowly focused fund.

October 26, 2007 7:48 PM
Khiat Han Hwee Adrian said...

Thats why we must learn to invest, not speculate or gamble off our money.

Diversify our funds and speculate a small percentage like 10-20% into narrow focus funds. Review and rebalance regularly. You will get a stable and reasonable returns.

October 27, 2007 12:30 AM

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