Decline in interest rate

Dear Mr. Tan,
Aviva has decided to redeem the BIGe account and return the money to the investors CPF account. Where can I invest to earn a decent return, that can offset the high rate of inflation?

REPLY
If you keep money in the bank, you earn interest at 1% to 1.5%. This is lower than the rate of inflation. Your other options are:

1. Buy equities (shares) to earn a long term yield of 6% to 8%
2. Invest in foreign currencies to earn a higher interest rate
3. Invest in REITS, which gives a good dividend yield

If you are investing for the long term, say 10 years or more, you do not have to worry about the current uncertainty. It will clear off in 6 to 12 months.

You have the option to wait before investing in equities. During this time, you will earn a low rate of interest. You have to accept it as the cost of being risk adverse. But you must be ready to move in, when the market turns.