As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

Currently; it about 54% to destination!

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Thursday, 14 October 2021

Is CPF really the equivalent of a 65:35 fund ?

Read? Is CPF really the equivalent of a 60:40 fund ?

Hor!  Of course; it is! LOL!

The 35% CPFIS tool is there after AFC when the MIW shifted CPF 100:100 to 65:35 and stop f... MIW for not protecting your retirement fund if you lose your money in your investment! 

Read? Resident wants ban on CPF cash for investments

Read? Panda Investor Who Made Extraordinary Realized Returns From His CPFIS In An Uninspiring Singapore Stock Market (2)

Read? What Is Missing in 1M65 CPF Strategy???


  1. CW,

    Eh... I think you forgot your reading glasses...

    When they say 60:40, they meant 60% equities and 40% bonds, but we get what saying you ;)

    The retired sailor's story is even more sad when we factor in the MAX he can possibly lose is 35% of his CPF, if he had dabbled directly into individual stocks.

    Although ILP and endowment policies "suck" as earn more products, they cannot make him lose $350K. So insurance is not to blame.

    We can also rule out bonds since he can't use CPF to buy junk or perpetual bonds.

    Which means we are left with UNIT TRUSTs and ETFs!?

    Are they the culprits for his massive losses???

    If not for the fact the first $20K of CPF OA and $40K CPF SA cannot touch, he would indeed be penniless playing with "not fit for purpose" CPFIS...

    Which was introduced with the best of intentions, during an era where most asset classes were outperforming CPF.

    Now the pendulum has swung to the other end with 1M65. I chuckled when property expert now also cheerleading clients not to pay housing loans with CPF??? He must be quite bearish on our Singapore property market going forward...

    But I see a disturbance in the force...

    A financial services firm has now bravely started "cheerleading" why settle for measly CPF 2.5% returns when we can use CPF to invest in US S&P index and get up to 9% compounded returns.

    Ah! The Empire strikes back!


    1. Hahaha, SMOL, it was a real disturbance alright.

      The S&P500 was mostly flat prior to Uncle Sam's QE moves in 2008/9 to save their own skin. And the QE series went up to QE 5?

      Their debt ceiling problem was kicked down the road just this month and will rear its head again in Dec. I am quite sure the debt ceiling will be raised again. It does not seem to cost the Americans anything and the world cannot do anything about it.

      But will there be another QE? If not, will the S&P500 continue to shine at 9% pa or stay flat or even decline?🤷‍♂️

    2. mysecretinvestment,

      Glad you can also appreciate the "spear and shield" humour!

      Singapore's STI can also do wonders if big daddy were to print money and buy into our STI ETFs like Japan ;)

      That's why I want to avoid Japan even though frontrunning Japan's Central Bank is a no-brainer trade.

      Except when the music stops.

      Its the same for US indexes. The game is to test the Fed with -20% bear markets to "force" the Fed hands,

      "Just kidding! No taper, no taper. Boys, we're letting the printing press run again. I've got your back! In Central Bankers you shall trust!"

      Yup, just buy the freaking dip!

  2. Uncle8888,

    LOL, Smol beat me to it.

    Yeah the notation should be 35:65.

    Btw, GIC's reference portfolio is 65% global equities & 35% global bonds.

    So far they've been producing higher than 5% over the long term. Otherwise we'll soon see major parliamentary action to reduce CPF Act to below 2.5% and 4%!


    ILPs are basically UTs with additional costs for embedded term insurance. So it's more of which particular funds that sailor had chosen (or been encouraged to choose).

    In the 2000s, the sexy funds were emerging markets (remember BRIC?), Asia ex-Japan, and commodities slightly later on. These all suffered at least -60% drawdown during GFC.

    Looking at the time period i.e. March 2010, it's likely that he sold pretty much at the bottom, perhaps in 2009.

    2 learning points:
    -- if you're in a broad enough asset e.g. Asia ex-Jap, you can hold on for the recovery. Or make a switch to another broad asset with more developed markets e.g. global index. Being forced to sell at a major loss possibly tied to 2nd point below.

    -- when you know that you're approaching retirement, it's good to build up a safe stash of 2-5 yrs of living expenses for such negative returns sequence. If CPF-OA makes up most of your retirement savings & you put it all into stocks or commodities, you're just dancing with Lady Luck.

    Anyway CPF has improved on their accepted UTs. I took a glance at the approved UTs for CPFIS ... slightly better overall than in the past, with expenses & charges capped. But that doesn't mean many won't have -50% drop in a major bear LOL.

    As for that fintech cheering CPF investment, to be fair, they're advocating more of a global diversified approach. But they have tied-up with Mr 1M65 to talk-up investing CPF-OA. Mr 1M65 has long been advocating investing CPF in S&P 500 even before that fintech was setup.

    But I'm not sure how Mr 1M65 could have invested his CPF into S&P index before, as there isn't any approved CPFIS index fund even till today, other than going through that fintech.

    1. Spur,

      Exactly. That meant Mr 1M65 made his S&P gains OUTSIDE of CPF. Shh...

      Sure, do the Save More path diligently for 40 years starting from age 25, and retire at age 65 as CPF millionaire.

      Finally at long last, you've earned the "right" to take on more risks to switch to the Earn More path and invest in S&P 500 from age 65 to 90 as Earn More bei kambing???


      That's the opposite of what old fogey Tarzans are doing here...

      As for ILPs, they are the worst of the worst versions of "unit trusts". But one redeeming good is you are "forced" to Buy-and-Hope forever and ever. So you're less likely to sell in panic or capitulation at the lows compared to plain vanilla unit trusts or ETFs.

      That's why even if buyers of ILPs became financially literate years later, they still cannot bring themselves to "cut-loss" the ILPs they've bought during their bei kambings days...

      Just wait till the day they die and the insurance portion finally kicks in to dilute the pain!

    2. ILPs. LOL!

      I finally woke up and realized how the protection part was rapidly eating into the remaining units of the Investment part and can seriously deplete the investment value over multiple bear markets. So I bite the bullet and terminated the ILP at loss.

      Read? Timeless Issue And Debate On ILP

    3. Uncle 8888

      Used to be snakes oil insurance agent, but no sell ilp, that's why become "used to" .

      ILP( I lose permanently), the protection part is like a fixed deposit, 1% more.

      The vital parts are the likely surrender value loss, the surrender cost and administration fees involved. All these unknowingly can add up to double digit % in terms of cost to money you got back.

      Now, they have a "smarter" version of ilp that allows people to do it online.


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