TEMASEK RETAIL BOND SUBSCRIPTION: WHAT YOU SHOULD UNDERSTAND?

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Temasek Retail Bonds
Dear readers, I believe the launch of Temasek Retail Bonds must have excited some investors, especially with a return of some over 2% annually for over 5 years for a rather stable investment. But before you decide whether to apply for this bond, there are just two considerations which I would like to share with you.
First, consider the holding period of the bond. For Temasek Retail bonds, the holding period is five years and that means even if one were to receive an annual return of some over 2% annually, the fact is that the capital invested in it are hardly fluid provided one is prepared to sell the bond at some point later during the holding period, never mind the loss if any. Ask yourself whether you may foresee using the capital you intend to apply for Temasek Retail bond for some other uses. Or would you also foresee that this capital could form part of your war chest to go bargain hunting equities when the markets correct?

Secondly, despite the good brand in Temasek Holdings, investors must know that ultimately what they are investing is a Bond. Investors should know right from the onset how he wishes to allocate his portion across cash, bonds and equities such that his portfolio would not be too heavily-weighed in one asset class. It should not be the case when an investor subscribe and apply to any new bond that is issued here and then in the current markets where such products may become more and more prevalent owing to the increasing interest rate. Join the emailing list to receive regular Financial and Singapore stocks newsletters too! Like" me on Singapore Stocks Investing Facebook page to receive all posts on your Facebook as well as read more articles. Follow me on Twitter too.

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