Home  My Blog History repeats itself
|
|
Written by Wilfred Ling
|
|
Monday, 18 February 2008 |
|
I understand that capital protected products or structured deposits are now selling hot. People are staying away from traditional long-only equity products like unit trusts. To me history is repeating itself. In years 2000-2002 when this happens, many people put a lot money into structured deposits with long lock-in period. When the product matures, they found that their returns cannot even beat inflation. This means net of inflation they suffer a lost. At the same time traditional long-only equity products shot up like nobody business. Thus they suffer double whammy - lost of money due to inflation and opportunity cost due to not invested in equity markets. It is human to buy capital protected product when times are bad but the irony is that this is the wrong behavior. I have advised many of new investors to do a RSP. The RSP can be a percentage of their regular salary or RSP based on a capital which they otherwise would have invested lump sum. However, many feared of investing even for RSP. Many of course prefer capital protected products. I want to put it in this blog entry so that when it come to past people will not say my advise was based on hingsight.
|
|
