How do I decide how to invest?
You need to establish a balance between risk and return that you are comfortable with. When establishing this balance, you should consider all the followings:
Your risk tolerance
- the amount of risk you are comfortable with and can afford to take. Can you still sleep at night if your investments have temporary short-term losses? Do you have enough savings that you can financially afford to take some investment risk?Your investment time horizon
- How long will your assets be invested? Your CPF savings are for the long term. Unless you are close to retirement or have a short-term investment time horizon for other reasons, you should generally invest for the long term, but you need to decide what "long" means to you.Your overall financial situation
- How much money will you need to sustain your lifestyle during retirement? Do you have other assets set aside for retirement besides your CPF savings? How are all of those assets invested? What are your financial commitments?