Investment Strategies Guide

A guide to common investment strategies and vehicles based on risk appetite and investment size.

Investor Risk Profiles & Strategies

This table outlines suitable investment strategies and vehicles for different risk profiles, from conservative to aggressive.

Disclaimer

This information is for educational purposes only and does not constitute financial advice. Always consult with a qualified financial professional before making any investment decisions.

Risk Profile	Typical Investor & Amount	Suitable Instruments & Vehicles
Conservative Capital preservation with some income.	Retirees, risk-averse individuals. Any amount	Fixed Deposits & Money Market Funds: Very low risk. Provides stable, predictable interest income. Suitable for short-term savings and emergency funds. Singapore Government Bonds (SGS) & Treasury Bills (T-bills): Considered risk-free. Backed by the government, offering safety of principal and regular coupon payments. High-Quality Corporate Bonds (Investment Grade): Low credit risk. Debt issued by stable, large-cap companies (e.g., rated AAA to BBB). Provides higher yield than government bonds. Endowment Insurance Policies: A savings product with an insurance component. Offers guaranteed returns upon maturity, focusing on disciplined savings over growth.
Moderate Balanced growth and income.	Investors with a medium-term horizon (5-10 years). $10,000 - $100,000+	Balanced Unit Trusts (CIS): A diversified portfolio of both stocks and bonds, typically a 60/40 split. Aims to provide a mix of growth and income. Blue-Chip Equities / Dividend Stocks: Shares of large, well-established companies with a history of stable earnings and dividend payments (e.g., banks, telcos). Real Estate Investment Trusts (REITs): Invests in a portfolio of income-generating real estate. Offers regular dividend income (distributions) and potential for capital appreciation. Traded on an exchange like a stock. Investment-Linked Policies (ILPs): Combines insurance with investment in unit trusts. Offers flexibility but investment risk is borne by the policyholder.
Aggressive High capital growth.	Experienced investors with a long-term horizon and high risk tolerance. $25,000 - $1,000,000+	Growth Stocks & Sector-Specific ETFs: Investing in companies in high-growth sectors like technology or healthcare. Higher potential returns come with higher volatility. Hedge Funds & Private Equity: Complex, actively managed funds using advanced strategies (leverage, short-selling). Typically for Accredited Investors only due to high risk and complexity. Derivatives (Options & Futures): Contracts whose value is derived from an underlying asset. Used for speculation or hedging. Can lead to large gains or losses; requires deep expertise. Structured Products (e.g., Equity-Linked Notes): Complex financial instruments created to meet specific risk-return objectives. Payout depends on the performance of an underlying asset. High risk, for sophisticated investors.

Risk Profile

Typical Investor & Amount

Suitable Instruments & Vehicles

Conservative

Capital preservation with some income.

Retirees, risk-averse individuals.

Any amount

Fixed Deposits & Money Market Funds: Very low risk. Provides stable, predictable interest income. Suitable for short-term savings and emergency funds.
Singapore Government Bonds (SGS) & Treasury Bills (T-bills): Considered risk-free. Backed by the government, offering safety of principal and regular coupon payments.
High-Quality Corporate Bonds (Investment Grade): Low credit risk. Debt issued by stable, large-cap companies (e.g., rated AAA to BBB). Provides higher yield than government bonds.
Endowment Insurance Policies: A savings product with an insurance component. Offers guaranteed returns upon maturity, focusing on disciplined savings over growth.

Moderate

Balanced growth and income.

Investors with a medium-term horizon (5-10 years).

$10,000 - $100,000+

Balanced Unit Trusts (CIS): A diversified portfolio of both stocks and bonds, typically a 60/40 split. Aims to provide a mix of growth and income.
Blue-Chip Equities / Dividend Stocks: Shares of large, well-established companies with a history of stable earnings and dividend payments (e.g., banks, telcos).
Real Estate Investment Trusts (REITs): Invests in a portfolio of income-generating real estate. Offers regular dividend income (distributions) and potential for capital appreciation. Traded on an exchange like a stock.
Investment-Linked Policies (ILPs): Combines insurance with investment in unit trusts. Offers flexibility but investment risk is borne by the policyholder.

Aggressive

High capital growth.

Experienced investors with a long-term horizon and high risk tolerance.

$25,000 - $1,000,000+

Growth Stocks & Sector-Specific ETFs: Investing in companies in high-growth sectors like technology or healthcare. Higher potential returns come with higher volatility.
Hedge Funds & Private Equity: Complex, actively managed funds using advanced strategies (leverage, short-selling). Typically for Accredited Investors only due to high risk and complexity.
Derivatives (Options & Futures): Contracts whose value is derived from an underlying asset. Used for speculation or hedging. Can lead to large gains or losses; requires deep expertise.
Structured Products (e.g., Equity-Linked Notes): Complex financial instruments created to meet specific risk-return objectives. Payout depends on the performance of an underlying asset. High risk, for sophisticated investors.