Cash is still king for many investors: Survey

[Musicwhiz]

The Straits Times
www.straitstimes.com
Published on Jul 13, 2012
Cash is still king for many investors: Survey
Residential property is No. 2 investment choice, in sign of 'growing caution'

By Magdalen Ng

INVESTORS may be turning more cautious on the property market, according to a Credit Suisse survey.

It found that 34 per cent ranked cash as their top investment vehicle, followed by residential property at 27 per cent, and the stock market at 23 per cent.

Only 21 per cent of the 300 households polled by the Swiss bank about three weeks ago said they would consider buying a property within the next 12 months; 40 per cent did not intend to buy any time soon.

Out of the 300 respondents, 78 per cent live in public housing, and 88 per cent own their homes. They are aged between 21 and 70.

Credit Suisse analysts Yvonne Voon and Chok Sing Ping said these sentiments suggest transaction volumes will moderate after strong showings in the first four months of the year.

This is despite strong household balance sheets, with 47 per cent of the respondents saying they have no mortgage while 46 per cent have only one housing loan.

Taking into account other liabilities such as car loans and credit cards, 83 per cent have less than 30 per cent of their household income directed towards mortgage payments.

Affordability is also not an issue for many, with 30 per cent having more than $100,000 in cash that can be used for a down payment.

About 30 per cent of the respondents would enter the property market for investment purposes, while nearly 70 per cent of to-be buyers had 'genuine' reasons such as upgrading.

Nearly half of those surveyed think housing prices will increase, 35 per cent expect them to fall, while 60 per cent expect more cooling measures.

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[wsreader]

quote ".....with 47 per cent of the respondents saying they have no mortgage while 46 per cent have only one housing loan....."

meaning 7% has more than one mortgage. I wonder who were the survey targets.
78% live in public housing, can the sample size drawn from average sg households?

[added after 2nd thoughts]
In another thread, shanrui mentioned that around 12% of our population participates in equity. This survey showed 23% of respondent households invested in stocks. So I guess it must be the mid-upper households being surveyed. No wonder 7% own more than one property.

[pianist]

cash is paper king for the investors

[wsreader]

cash is paper king for the investors

.....until the effect of inflation is felt

[Temperament]

"Definition of Fiat Money on Investopedia - Currency that a government has declared to be legal tender, despite the fact that it has no intrinsic value ..."

So beware (especially for the long-term). No $millionaire or $thousandaire hold their surplus assets all in FIAT MONEY. And not all FIAT MONEY have equal "status of recognition." And usually after a world war, Fiat Money has no value left. Why?

Since mankind has innovated or invented this current media of exchange, no amount of it can satisfy us. Not enough of it just print & print as far as US & Europe are concerned. Hey how about the BRIC? If they do the same thing can the world accept? Or the BRIC has actually done the same thing? Can they do it on the sly?
Civilization is really fantastic. Nevertheless, will FIAT MONEY system collapse one fine day?
i at times have a "strange feeling" when i exchange pieces of paper for something "solid". And everyone is happy doing it with out question or a thought about it. Do you have any feelings? And are you happy with it?

[freedom]

BRIC can print, but unlike USD, EUR, which are commonly accepted as international currency by a lot of other countries, it will cause great inflation within their own country as the money is only circulated within.

Think about Singaore. If hot money comes in, MAS need to print the equivalent amount of SGD. the more the hot money is in, the higher the inflation will be 'cause, SGD can only be used within Singapore.

[Temperament]

So in that sense, the more US & Europe print the faster their money "devalue" in relationship with other countries currencies. In a way US & EUROPE are forced borrowing money from the world. Right? Doesn't it also cause inflation in their own countries (US & EURO) in the long run?

[freedom]

US government is very smart in this sense. They know, if they print too much USD, it will cause high inflation in US. But US government does not allow foreign USD entering US directly. If any foreign entity holds USD, the only thing they can buy is US treasuries. Although FED continues to print USD, only controlled and limited amount of USD comes back to US through treasuries. That also means, US will inflate the whole world with USD printing, but not necessarily causing inflation in US.

[Temperament]

So the BRIC countries have try come to an agreement that they can exchange their money freely -thereby bypassing collecting more and more $US & $EURO.
Now that China is officially recognized as the world 2nd largest economy (actually compare to US + EURO it is still a small economy), China tries to internationalized RMB. Will they succeed? Will the world accept?

[freedom]

the question is more about, will US allow it to happen? will EU allow it to happen?

the international fund market is only that big. with US already borrowed so much, there ain't much left for EURO, that could well be one of the reasons of EU debt crisis. If RMB comes in, both US and EURO could have less or maybe US and RMB will kick out EURO and split its share. who knows, it is a game still being played.