Thursday, October 30, 2014

CPF Fund - To Invest Or Not To invest? That Is The Question

CPF Fund for stock investmentJust like anything and everything in life, there are usually many school of thoughts for the same thing. As usual, there is no right or wrong way, just the preferred way. Just take stock investing as an example, you can adopt Value Investing, Growth Investing, Momentum Investing or even Trading approach and all roads lead to Rome, as long as you know what you are doing.
Talking about stock investment, one area that many retail investors (including myself, initially) might faced with dilemma is whether to invest (in stocks) using their CPF Fund or not?
Personally, I do use my CPF Fund to invest in some counters with the intention of long term holding. I've shared my portfolio earlier and also received a number of advices/comments from the peer bloggers that it is better to leave our CPF Fund out of the investment since the current interest rate of 2.5% (for Ordinary Account) and 4.0% (for Special and Retirement Accounts) might be hard to beat consistently. Which is true, by the way. Obviously, I did the reverse...! lol 
With my intention of holding on to the stocks for long term, one of my "strategy" in picking the suitable stocks for my CPF Fund is the criteria of consistent annual Dividend Yield (which is higher than the current CPF Interest Rate). Of course, I do aware that future dividend yield is not guarantee but still....I have a better chance of receiving consistent dividend with the track record.  
With this in mind, any capital gain (at the end) will be an added bonus. Following are the two counters that I vested using my CPF Fund :
1. King Wan (554)       - consistent Dividend Yield of 4.7% since 2011.  
2. Super Group (S10)  - consistent Dividend Yield from 3.1% to 6% since 2010
Of course, it might not be wise to invest all your available eligible CPF Fund in stocks as some sort of diversification is still important.
What about you? Are you using your CPF Fund to invest in stocks and why?


  1. I went for 6% perpetuals instead.

    1. Lizardo : thanks for dropping by, do you mind sharing which counters had such an attractive dividend yield consistently? ;-)

  2. Richard,

    Hyflux 6% CPS
    Olam 6.75% b180129 US$

    These are not dividend yields. Preference shares, perpetuals, bonds.


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