China inside out: onshore and offshore bond opportunities
Consider the income potential of China as inflation looms and rates stay low.
Are you striving to live a fruitful and prosperous life? Big decisions such as college education, career progression, marriage, buying a home and raising a family all need financial support. And most people work hard to accumulate the wealth needed to help achieve their life goals.
As you map out your financial plan, it’s worthwhile to employ a flexible approach to help you navigate any market volatility and uncertainties. And do keep the three principles below in mind as you work towards achieving your investment goals over the long term.
#1: Define your goals and craft a plan
Financial planning for your life goals can be overwhelming. Saving and spending are opposite sides of the same coin - and you’ll need to focus on balancing both throughout your life. While you are accumulating wealth, you will need to consistently save and invest, balance competing goals, such as education for your children or buying a home, and make sure you maintain a short-term cushion for unexpected expenses.
While you have no control over the market, choosing an asset allocation strategy that adjusts over time can broaden income and growth opportunities. This could also help you balance these factors and make adjustments as your life, the markets and the economy change.
#2: Stay invested and use time to your advantage
While markets can always have a bad day, week, month or even year, history suggests that opportunities for investment return are more likely over longer periods. This chart illustrates the concept. While the range of five-year stock returns has varied widely since 1950 (+28% to -3%), a blend of stocks and bonds has not produced a negative return over any five-year rolling period in the past 70 years.
Range of US equity, US bond and blended total returns
Do keep in mind the time horizon of your goals. Decide how much of your savings will be put toward goals, such as education, housing and retirement, based on your priorities. And create an investment strategy that allows you to take advantage of the longer investment horizon for goals with longer time frames.
Accessing all-encompassing China-focused solutions
#3: Be prepared to make adjustments
As a saying goes, “life can be full of variables and unexpected surprises”. As you invest for the long term, be sure to have a reserve fund of liquid short-term investments and cash so you can cover emergencies and upcoming large expenses without having to sell your investments during down markets.
For example, savings that are reserved for short-term goals can be allocated to more flexible investment schemes that are not locked in fixed terms. That way, the investment can be withdrawn more quickly in case of an emergency.
As you work towards achieving your investment goals over the long term, consider a flexible approach to help you navigate any market volatility and uncertainties while keeping three principles in mind - define your goals and craft a plan, staying invested and be prepared to make adjustments.