20 Jan 2026

SOURCE: CPF Board

If you're thinking about investing, you're probably wondering: is it right for me? The honest answer is that it depends on your investment goals, timeline, financial circumstances, and how comfortable you are with uncertainty.

Before you get started, it’s important to understand that all investments come with risks. While investing offers the potential for higher returns than traditional savings, there's a possibility that you could lose part or even all your money. This makes it extra important to understand what you're getting into before committing your hard-earned savings.

The good news is that you don't need to be an expert to get started. What matters is having a solid grasp of a few key principles. These include how long you can afford to keep your money invested, how to spread your risk across different assets and industries, and what level of volatility you can realistically handle.

Read more to find out about how these fundamentals can help you make more informed decisions in your investing journey.

1. Understand your investment horizon and upcoming expenses

Different types of investments have varying time horizons and cater to specific objectives. The first thing to note is that investments are not a get-rich-quick scheme. Rather, it’s important to stay invested for the long run to ensure there’s sufficient time for your investments to grow.

To get a better understanding of your investment horizon, plan how long you can afford to keep your money invested. Generally, the younger you are, the longer the runway you have to ride out market volatility and potentially recover from market downturns. This longer time horizon may provide you with more flexibility to consider investment options with varying risk levels.

If you are saving for a short-term goal such as taking a vacation or an upcoming home renovation, consider short-term investments that can be easily converted to cash (i.e. investments that are more ‘liquid’).

On the other hand, if you are saving for a long-term goal like your retirement, taking a longer-term view and considering a variety of investment products with varying risk levels and different liquidity would be more suitable. As you age, it’s important to rebalance your investment portfolio with investments of lower risk to reduce risk exposure as you approach retirement.

Lastly, it’s also important to keep tabs on your forecasted expenditure such as big-ticket items before setting aside money for your investments. As a rule of thumb, you should look to invest at least 10% of your income for retirement and other financial goals.

2. Diversify to protect your investments

Diversification helps to spread out risk. Think of it as not putting all your eggs in one basket. By investing in a mixture of assets, you will be able to lower the risk of having all your earnings wiped out due to a single market downturn.

To apply diversification to your investment portfolio, consider spreading your money across different assets (e.g., stocks, bonds, Exchange-Traded Funds, unit trusts). With each product bringing different returns, you can balance both risk and reward.

If you are ready to take a step further, you can also spread your investments in different geographical markets to add another layer of protection to your portfolio. For example, if one country's economy faces a slump, your investments in other regions or sectors can help cushion the impact.

3. Know your risk appetite

There is no guarantee that investments will make you money. All investors need to understand that investments might incur losses. This makes it important to stay invested through mid-level fluctuations and to refrain from panic-selling your investments.

If you’re not comfortable with potential losses, it’s extra important to understand your risk appetite and opt for investments that match it.

If you find that you have a very low risk tolerance and prefer complete certainty over your savings, you can continue to keep savings in your CPF accounts to earn the risk-free CPF interest rates. You can also consider cash top-ups to your CPF accounts, or transfer Ordinary Account savings to the Special Account, which will go towards boosting your CPF LIFE monthly payouts in retirement.

Investing with the CPF Investment Scheme (CPFIS)

The CPF Investment Scheme (CPFIS) allows you to invest your Ordinary Account (OA) and Special Account (SA) savings in a variety of investment products to potentially grow your retirement savings.

Not all your savings from your OA and SA can be used for investments. The first $20,000 in your OA and first $40,000 in your SA must be retained and cannot be invested, as the money in your CPF accounts is primarily meant for your basic retirement needs.

The risks associated with investing also apply to CPFIS, and it is equally important to be aware of the potential implications. To help you determine if CPFIS investing is right for you, take the CPFIS Self-Awareness Questionnaire (SAQ) to assess whether you have the basic financial knowledge to start investing.

Once you’ve completed the SAQ and feel confident about proceeding, visit the investment dashboard (Singpass login required) to view how much you can invest with your CPFIS account.

There are many ways to prepare for your dream retirement and investing can be one way to achieve it.

Whatever approach you choose to take, it pays to invest your time in learning about the different options and making informed decisions on how to grow your wealth that are in line with your own retirement needs. All the best in your investing journey!

Information in this article is accurate as at the date of publication.