10-01-2011, 01:30 PM
Quote:I don't have real-life examples. But for example, a person bought a child education policy for 20 years in 1989. In 2008, when the policy matures, he gets a yield of 5.9%. If he puts the money in STI ETF in 1989(@1038), his return should be about 2.7% if he cashes out in 2008(@1761).
Well, this example is a bit too extreme isn't it?
One year before and after 2008, the difference in the index is as huge as 1000 pts easily.
And.. you had not factored in the dividend payment from STI-ETF.
The reinvestment of the dividend over 20 years is significant.
With the dividend payment(around 2.5% yield), even in the 2008 case, the return will easily rise to 5% and above.