Global financial markets experienced never before seen volatility in 2020 as the world came to a standstill due to Covid-19.

For many, this phenomenon cast doubts on their long-term investing philosophy, with the lingering fear that an unexpected event could rapidly wipe out their savings and investments. Does a buy and hold strategy encouraged by Endowus still work in these uncertain times?

0:00 Introductions

6:58 How to 10x your money?

7:42 Investment Strategies and Compounding, Compensated Risks and Returns. (Avoiding Cash Drag)

14:14 What to do about Fluctuating Markets? - Stocks and Bonds

21:38 Historical Performance of Endowus Portfolios

23:15 Endowus approach to diversification, minimising fees

31:20 Problems with trying to time the market

42:28 Why invest in your CPF? / CPF interest rates vs gains from investing your CPF

47:16 Endowus CPF investment portfolios and projections

50:11 Using your money and making it last

1:00:48 Endowus value proposition

1:03:28 QnA

Excerpts from the Webinar:

How to invest intelligently? (12:40)

Focus on what you can control as an investor. Be sure of your investment goals, such as your investment horizon and the potential costs you may incur due to market volatility and unexpected financial crisis. Pay attention to your career and asset allocation diversification. We can’t control the economy, stock market returns or short-term movements in individual stocks. But you can control your investing behaviour and finance literacy. Be diversified, take compensated, calculated risks and returns while bearing in mind the power of compounding.

Is there a right time to enter the market? (31:20)

No, timing the market is difficult and an unfruitful process over the long term. Even the largest investors in the world such as Warren Buffett and J.P. Morgan cannot be 100% confident with their market timing. Warren Buffett once said that “we continue to make more money when snoring than when active.” Again, this is the power of compounding. The worst investor in the world, despite investing $100,000 at all of the worst possible times from 1970 to 2020,  would have made a 1,552% return by 2020. All he had to do was remain diversified and let compound interest maximise his money. As J.P. Morgan famously replied on his views on the market, “it will fluctuate.”

Why invest your CPF with Endowus? (43:56)

Greg: Historical data shows that you could have a 406% total return if you invested in MSCI ACWI from Jan 1990-Jun 2020, instead of a mere 135% return by keeping your money in your CPF OA with interest rates of 2.5%. Additionally, looking at the best and worst outcomes of CPF Investing in a 20 year period, the best case is +278%, while the worst case is +94%. This is still more than CPF’s +65%. Ultimately to maximise your CPF, the power lies in the time period in which you are invested for - remember, the power of compound interest.

Endowus offers a globally diversified portfolio that mirrors the MSCI ACWI as much as possible so that you have the greatest chance to succeed, at the lowest cost possible.

How confident is Endowus in beating the CPF OA rate of 2.5% and the SA rate of 4%? (1:03:38)

Greg: It ultimately depends on how long you are invested for. If you are looking at a 1 year period of investing your CPF OA in 100% stocks, it is safe to say that there is a 65% chance of beating the 2.5%. The question then comes: Would you invest your CPF OA for only 1 year? Absolutely not. The longer you invest your CPF for, the greater the chance of beating the interest rate of 2.5%. This is illustrated previously in the worst case of +94% over a period of 20 years. Remember to ensure that you invest towards your goals at a risk level you can tolerate. Start today, and let compounding interest work for you.