Tuesday, February 26, 2008

Hedge against inflation

Hi Mr. Tan,

Inflation in Singapore is building up to 4.5 % to 5.5%. What financial products should I invest in to earn a return over inflation?

I am interested to invest in the stock market. Which stocks should i invest in to have a good and steady dividend yield?

If you are investing for the long term (i.e. 10 years or longer), it is best to invest in a low cost, diversified investment fund. Equities provide the a good hedge against inflation. The return from equities should be more than the rate of inflation.

I suggest that you invest in the STI ETF. Read this FAQ: http://www.tankinlian.com/faq/savings.html

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