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Chitchat CPF Investment Scheme fails for 30 years - "not fit for purpose"

scroobal

Alfrescian
Loyal
Started in 1986, under a different name, it allowed CPF members to invest in stock and shares, unit trusts and gold. The Govt knew that less than 20% of members actually cleared 2.5% in returns yet allowed it to continue year after year. It saw changes over the years where even more products were made available.

Now Tharman concedes that it is not "fit for purpose" (his own words) and is now under review.

You already can see the "talent" that we have in this forum discussing stock and shares and various investments.
 

gongkia

Alfrescian
Loyal
My Cpf investment on AIA global fund lost money, every time I called my agent to cancel it he asked me to hold on.
 

johnny333

Alfrescian (Inf)
Asset
The CPF investment scheme had plenty of restrictions as to which companies you could invest in. Something like who is allowed to run for president of Spore:rolleyes:
 

scroobal

Alfrescian
Loyal
The restrictions stopped highly volatile investments and those that do not have a decent track record to be excluded and save the ignorant from killing themselves. Yet it did not help.


The CPF investment scheme had plenty of restrictions as to which companies you could invest in. Something like who is allowed to run for president of Spore:rolleyes:
 

maxsanic

Alfrescian
Loyal
Such poor investment track record isn't restricted to Singapore though, there's a wide body of academic research that shows that active layman AND professional investors consistently fail to produce adequate risk adjusted returns. Restricting choices of investments into broad categories, the direction the government is heading, isn't going to help much. It isn't that the instruments themselves that are producing sub par returns most of the time, it's the psychology of the investors that are causing it.

Most people are just plain not cut out to be doing investments on their own whether it's actively picking particular stocks/bond/derivative or switching around various professionally managed funds. That is the hard truth. We see the standard destructive behavior patterns like greed, loss aversion, market timing, sunk cost trap, short-termism and herd mentality in those that 'play' stocks in this forum as well. Most people are doing it in such a juvenile manner that it is totally unsurprising they would fail to even protect principal over the long term.

My personal preference would be to terminate the CPFIS scheme and grandfather whatever accounts that are left remaining. The small minority of good investors that can make consistent high returns probably do not need to tap on CPF savings anyway while those who need to are simply not in a position to be swimming among sharks.
 
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lifeafter41

Alfrescian (Inf)
Asset
My Cpf investment on AIA global fund lost money, every time I called my agent to cancel it he asked me to hold on.

Reminds me of the Schroeder can't recall what fund. Bought it, hold for a few years, also lost money. Kns. I remember at that time , buying into all these funds was the rage, glad to have got out early, else now lagi bigger hole.......
 

lifeafter41

Alfrescian (Inf)
Asset
Such poor investment track record isn't restricted to Singapore though, there's a wide body of academic research that shows that active layman AND professional investors consistently fail to produce adequate risk adjusted returns. Restricting choices of investments into broad categories, the likely change to be adopted by the government, isn't going to help much. It isn't that the instruments themselves that are producing sub par returns most of the time, it's the psychology of the investors that are causing it.

Most people are just plain not cut out to be doing investments on their own whether it's actively picking particular stocks/bond/derivative or switching around various professionally managed funds. That is the hard truth. We see the standard destructive behavior patterns like greed, loss aversion, opportunistic market timing, sunk cost trap and herd mentality in those that 'play' stocks in this forum as well. Most people are doing it in such a juvenile manner that it is totally unsurprising they would fail to even protect principal over the long term.

My personal preference would be to terminate the CPFIS scheme and grandfather whatever accounts that are left remaining. The small minority of good investors that can make consistent high returns probably do not need to tap on CPF savings anyway while those who need to are simply not in a position to be swimming among sharks.


So, it's better to leave it there and earn what 2.5 or 4% or whatever 1 % on top of that sum.....myraid of thingy.....:biggrin::biggrin::biggrin:
 

maxsanic

Alfrescian
Loyal
So, it's better to leave it there and earn what 2.5 or 4% or whatever 1 % on top of that sum.....myraid of thingy.....:biggrin::biggrin::biggrin:

Absolutely. Historically speaking, the CPF blended returns have been more than adequate to cover inflation, which should be the primary purpose of any mandatory retirement/pension account. There's too much erroneous thinking of using one's nest egg to 'make big money' as a result of the CPFIS scheme.

The result is a disaster of 75% negative returns, 10+% sub-par below 2.5% returns and a miserable 10+% people who make >2.5%. Even then I suspect the 10+% who make >2.5% are majority borderline 2.5-5.0% types which does not make sense when you consider the added risks they are taking on.
 

JohnTan

Alfrescian (InfP)
Generous Asset
Most sinkies should not think they can get better returns than professional fund managers. There are enough idiots out there who think just because they read all the warren buffet books or attended some seminar, they can invest with the Midas' Touch. They are better off leaving their money in CPF SA and collecting 4.5% pa .
 

SNTCK

Alfrescian
Loyal
Absolutely. Historically speaking, the CPF blended returns have been more than adequate to cover inflation, which should be the primary purpose of any mandatory retirement/pension account. There's too much erroneous thinking of using one's nest egg to 'make big money' as a result of the CPFIS scheme.

The result is a disaster of 75% negative returns, 10+% sub-par below 2.5% returns and a miserable 10+% people who make >2.5%. Even then I suspect the 10+% who make >2.5% are majority borderline 2.5-5.0% types which does not make sense when you consider the added risks they are taking on.

I used my cpfis investment fund 10k to invest in Aberdeen China fund in 2008. Last 2 years it just break even but I didn sell and now back to suffering losses again.

Well almost 9 years and I am not only losing my capital but also cpf compound interest.
 

scroobal

Alfrescian
Loyal
Absolutely agree. And the fact that the scheme has already restricted the scope to relatively safer investment grades yet we have such high poor returns from those who take part in this scheme.

Agree that the whole scheme in its current form has to be terminated. I am aware that Old Man relented to open a country with one of the highest savings rate to bring into more financial institutions and fund managers. He was particularly peeved for many years why DBS or the local banks did not go the way of HSBC in terms of global reach.

Such poor investment track record isn't restricted to Singapore though, there's a wide body of academic research that shows that active layman AND professional investors consistently fail to produce adequate risk adjusted returns. Restricting choices of investments into broad categories, the direction the government is heading, isn't going to help much. It isn't that the instruments themselves that are producing sub par returns most of the time, it's the psychology of the investors that are causing it.

Most people are just plain not cut out to be doing investments on their own whether it's actively picking particular stocks/bond/derivative or switching around various professionally managed funds. That is the hard truth. We see the standard destructive behavior patterns like greed, loss aversion, market timing, sunk cost trap, short-termism and herd mentality in those that 'play' stocks in this forum as well. Most people are doing it in such a juvenile manner that it is totally unsurprising they would fail to even protect principal over the long term.

My personal preference would be to terminate the CPFIS scheme and grandfather whatever accounts that are left remaining. The small minority of good investors that can make consistent high returns probably do not need to tap on CPF savings anyway while those who need to are simply not in a position to be swimming among sharks.
 

Papsmearer

Alfrescian (InfP) - Comp
Generous Asset
Started in 1986, under a different name, it allowed CPF members to invest in stock and shares, unit trusts and gold. The Govt knew that less than 20% of members actually cleared 2.5% in returns yet allowed it to continue year after year. It saw changes over the years where even more products were made available.

Now Tharman concedes that it is not "fit for purpose" (his own words) and is now under review.

You already can see the "talent" that we have in this forum discussing stock and shares and various investments.

I don't know what you are talking about. the whole CPF is not fit for its purpose, and it has not been fit since Sept 1st 1968. The stated purpose of CPF is allow for retirement funds for the contributor. But once they allow CPF funds to be used for HDB down payments and monthly payments, the purpose is then defeated. U cannot touch retirement funds, and you cannot pay for your living expenses with your retirement money. Any idiot financial planner will tell you that. If you put in $100 into your retirement fund every month, and withdraw $50 to pay for your rent, then its not going to be much of a retirement fund. In this regard, CPF has already not been fit for its purpose since Sept 1968, when CPF allowed people to use their money for housing payments.
 

halsey02

Alfrescian (Inf)
Asset
The restrictions stopped highly volatile investments and those that do not have a decent track record to be excluded and save the ignorant from killing themselves. Yet it did not help.

They were allowing the CPF investors take their money to invest, was like those fishermen in China, fishing with the cormorants. Every time, the investors caught a 'big fish' they 'fisherman' will take the "fish" & give the investors " a few IKAN BILIS". They charge you, interest on your money, in which you have to pay back from the profits, plus costs....isn't that 'fishing with a cormorants"...

Not only that, they created a parallel market in Malaysian CLOB shares, that made KLSE livid, Dr. M. & company was studying ways to "pull the plug" for a long time, & they were blowing "smoke & fire coming out of their nostrils' for sometime. They did issue warning time & time again...are they going to say they were 'prepared like the zika virus'?....when KLSE pull the plug...a lot of CPF investors..lost their pants. Didn't mee siam mai hum, say, he will bring them to ICJ?? International Court Of Justice?....this was Dr.M. masterstroke...

The ignorant did not kill themselves....they will killed by the 'cormorants fishermen"...THEY KILLED THE "CORMORANTS"...surprisingly those who didn't 'die' but bot scalded went on to vote for the "cormorants fishermen"...their threshold of pain is really amazing...:eek:
 

scroobal

Alfrescian
Loyal
The whole world is flush with cash and thus the historically low interest rates from banks and they are now talking about charging fees for deposits openly. People begin to hunt for higher returns and many don't even know what a bus chip is (not Singapore or SGX definition). They don't even know why Apple has been going up.

For many if they invested more in education, overseas placement and work stints and property things would have been much better.

So, it's better to leave it there and earn what 2.5 or 4% or whatever 1 % on top of that sum.....myraid of thingy.....:biggrin::biggrin::biggrin:
 

zhihau

Super Moderator
SuperMod
Asset
Now Tharman concedes that it is not "fit for purpose" (his own words) and is now under review.

Just think about it: would a bag be water-tight if holes were punched into the bottom?

CPF, HDB & NS, the trident skewered deep into the peasants' arses...
 

kkbutterfly

Alfrescian
Loyal
My Cpf investment on AIA global fund lost money, every time I called my agent to cancel it he asked me to hold on.

my ex agent very often tell me how much profit he earns for his clients using OA investment. always tell him to show me his fat wallet but to no avail.
never the less, I still give him chance.
channeled $35000 OA to help me invest in pru super fund or something.
everytime loss. fired him and I do my own gold investment with return around 8% per annual
 

Bigfuck

Alfrescian (Inf)
Asset
I do not need Tharman the dumb man to tell us this. Go read "Social Insecurity in the New Millennium: The Central Provident Fund in Singapore" Linda Low was tasked to write this and was published in 2004. 12 years to come to this conclusion is a sign of senility.
 

johnny333

Alfrescian (Inf)
Asset
Most sinkies should not think they can get better returns than professional fund managers. There are enough idiots out there who think just because they read all the warren buffet books or attended some seminar, they can invest with the Midas' Touch. They are better off leaving their money in CPF SA and collecting 4.5% pa .

The biggest problem with the CPF investment scheme is tha management fee you have to pay the bank e.g. DBS
That is why mutual trust(unit trust someone) is going out of fashion. The management fees eat into your profit & the banks don't contribute anything.

Disadvantage of unit trust is that you do not get any of the dividends if any are issued by the company.

I use my own money to buy shares that are giving me dividends. So if the CPF is suppose to be for our retirement, why are they forcing Sporeans to buy an instruments that don't benefit them?
 
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