“Diversification helps but that does not mean a well-diversified basket of stocks are as safe in the long run,” said Professor Joseph Cherian, Practice Professor of Finance, Director, Centre for Asset Management Research & Investments (CAMRI) at the National University of Singapore (NUS) Business School. Professor Cherian and Dr Brian Fabbri, Managing Director, FABBRI Global Economics, Visiting Research Fellow, CAMRI were speaking at the Invest, Save and Impact Seminar on “Strategic Investment Planning in These Turbulent Times” hosted by NUS yesterday.
The speakers talked about the facts and fallacies of dynamic asset allocation. Professor Cherian explained how a diversified wealth management portfolio comprising Singapore or global equities, bonds, cash and real estate should also include alternative investments such as hedge funds, commodities and private equity. Speaking about retirement, he advised guests to “hope for the best but prepare for the worst”. He also added that people should not only look into investing in different countries, but different sectors that are not correlated, to keep their portfolios diverse. Professor Cherian further emphasised the need for a public-private partnership in order to provide guaranteed inflation-indexed retirement life annuities for retirees, especially to address the ageing population problem Asia faces, and so that retirees’ savings will be protected against inflation, unless the government defaults.
Dr Fabbri explained how globalisation affects the business cycle and equity market synchronisation and shared some key investment tips. His advice was to think long-term and about big issues. Dr Fabbri said, “With global warming, water will be scarce. Look for companies that work with water such as desalination companies. Invest in them, they are the future. Invest in companies that produce food efficiently.” Dr Fabbri added that given the ageing population, it would be wise to invest in commodities such as pharmaceuticals, health care and prosthetics.
In the question and answer session that followed, the discussion spanned advice on investing in shipping companies, as travel routes are affected by global warming to questions to ask a wealth manager.
Mr Phillip Tan, NUS Board of Trustees member, Director, EQ Insurance Company Ltd and the brainchild behind the Invest, Save and Impact Seminar series, closed the session by talking about why he volunteers for NUS and how donors can triple the value of their gifts to NUS by taking advantage of tax rebates.
“Strategic Investment Planning in These Turbulent Times” is the second event of the Invest, Save and Impact Seminar series. Click here to read about the first event.
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