Investing for the long term

If you are investing your savings for your retirement, you should look for the following:

a) A diversified fund
b) Blue chip investments, i.e. non-speculative
c) Low cost, i.e. less than 1% per annum
d) Low upfront fee, less than 1%

If you invest in equities for the long term, you should be able to get an average yield (net of expenses) of 2% to 3% above Government bonds. This should give a net yield of about 5% to 6%.
It is important to invest in a low cost fund, so that you can keep most of the yield.

Investing in equity has its risk. You will get a high yield in some years, and a low or negative yield in other years. If you invest for many years, you will average out the good and bad years and get an average yield that is better than Government bonds.

Currently, you can achieve this goal by investing in the STI exchange traded fund managed by StateStreet. I will try to look for a unit trust that offers similar features.