Be careful of alternative investments

Dear Mr Tan,

I do not know much about investments would be grateful for your advice.

I am X years old and my wife is Y years younger. We have a HDB Executive Apartment (almost paid up) and $Z in fixed deposits and NTUC's money market fund.

I need to ensure that I and my wife have enough to take care of ourselves. I am thinking about investing in unit trusts (like the Growth and Balanced Funds) or buying a life annuity from NTUC.

But some of my friends said that I would earn better returns in alternative investments. Will appreciate your advice.

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REPLY:

I suggest that you read the following FAQ:

Financial planning for Senior

You should avoid structured investment products as mentioned in this FAQ.

Alternative investments are like structured products, and can be risky. If you are not familiar with these products, it is best that you avoid them.

I suggest that you invest as follows:

* 50% in a life annuity (for your self and your wife combined)
* 50% in a balanced fund (such as that offered by NTUC Income)