Rob Howland - Senior Vice President - TallRock Capital

Seize the Opportunity - Are you making the most of your time overseas?

Singapore has long been recognized as a global hub for business and employment opportunities, attracting a significant number of expatriates from around the world. Expats in Singapore not only benefit from higher salaries compared to what they might get paid back home, but also have the advantage of doing so in a tax-friendly environment. With low income tax rates and no capital gains tax, Singapore offers an exceptional opportunity for expats to grow their wealth and ensure they’re making the most of their time overseas.

Despite having a higher surplus income, its common for expats in Singapore to neglect their retirement planning. At home they are automatically enrolled in mandatory pension schemes or superannuation, and now the responsibility for saving towards retirement falls on them. Failing to save adequately for retirement can have significant long-term consequences, which can be difficult to overcome in later years.

Expats in Singapore have the advantage of being able to access private pensions that offer international portability and currency flexibility, allowing them to transfer their retirement funds when they return home. These pensions often come with tax advantages in their home country, making them an attractive option for expats looking to optimize their tax efficiency.

Unlike traditional pensions and superannuation, there are no contribution caps to these private pensions meaning you can accelerate the growth of your retirement funds and increases the chances of achieving long-term financial security.

One of the key advantages to doing this in Singapore is the absence of capital gains tax, meaning any gains made from the sale of investments are not subject to taxation. By taking full advantage of this you can maximize your wealth accumulation and make the most of your time here.

For more information, email me at [email protected]

Sudden market downturns can be unsettling, but historically, US equity returns following sharp downturns have, on average, been positive.

A broad market index tracking data since 1926 in the US shows that stocks have tended to deliver positive returns over one-year, three-year, and five-year periods following steep declines.

Cumulative returns show this to striking effect. Five years after market declines of 10%, 20%, and 30%, the compounded returns all top 50%.

*Source - Dimensional Fund Advisors - https://sg.dimensional.com

Stock market returns are volatile, but almost a century of data shows that the good times have outshined the bad.

From 1926 to March 2020, the S&P 500 Index experienced 17 bear markets - a fall of at least 20% from a previous peak.

The declines ranged from -21% to -80% across an average length of 10 months.

On the upside, there were 17 bull markets - gains of at least 20% from a previous trough.

These averaged 56 months in length, and ranged from +21% to +936%.

When both bull and bear markets are viewed together, it’s clear equities have rewarded disciplined investors.

In the past century, there have been 15 recessions in the US.
In 11 of those instances, stock returns were positive two years
after the recession began.

Investors may be tempted to abandon equities and go to cash when there is heightened risk of an economic downturn but research has shown that stock prices incorporate expectations of a recession and generally have fallen in value before a recession even begins.

The average annualized return two years after the onset of these 15 recessions was 7.8%.

Since 1926, the US stock market has rewarded investors with an average annual return of about 10%. But it’s important to remember that returns in any given year may be sky-high, extremely poor, or somewhere in between.

• Annual returns came within two percentage points of the market’s long-term average of 10% in just six of the past 94 years.

• Yearly returns have ranged as high as up 54% and as low as down 43%.

• Since 1926, annual returns have been positive 69 times and negative 25 times.