Invest the year-end bonus

Hi Mr Tan,

I've been following your blog for a while. I enjoy your articles and Irecommend it to my friends. Some of them who wanted to improve on their financials are reading your blog too.

This is the first time I'm writing to you. I've been reading a lotabout the USA recession that may be coming, hence I'm hesitant about investing my bonus on global equity funds or the STI ETF.

Is bonds a better option in a pending recession? Or should I continue investing in the STI ETF?

I also read that stocks of food and utitlities companies are more resistant to cyclical movements in a recession. Are these good options?

Or should I leave my money in the bank (unfortunately, annual interest is 0.125%) and wait until the recession sets in, then go about stock picking?

REPLY

I suggest that you put your bonus in the Money Market Fund from NTUC Income for the next 6 to 12 months. You can earn 2% to 2.5% per annum. Wait until the global economic situation becomes clearer.