Here is how to receive $5000 for your retirement

 It seems $5000 is the magic number to live comfortably for retirement in Singapore, as I have seen a few posts on this, However, one needs to know that this amount will varies as it really depends on one's lifestyle and situation.

Anyway, given this amount, how then do you achieve it for your retirement?

Before I start, here are the assumptions:

• Attained Full Retirement Sum(FRS) at 55
• Opt for CPF payout at 65
• Sum of $408,000 invested in a ETF which gives a return of 8% or more at 55
• Retire at age 65.

The amount invested will be much lower if this is shared with your spouse. as not forgetting that your spouse will also have his/her CPF payout as well.

I have been buying these ETF since FED signalled no more rate hike

 Last night (Singapore time), the Federal Reserve kept its key interest rate unchanged and indicated that there will be one rate cute before end of this year. Now that there is clarity on the direction of the interest rates, what does one need to prepare so that he can benefit when the rate cut happens.

In this article by Schroders, both stocks and Bonds have significantly outperformed cash following the rate cut. If a recession does not ensue, stocks typically fare better than Bonds. However, in the event of a recession, Bonds generally outperform stocks. Since the initial rate hike, Bonds have faced substantial correction, but long-term bonds now offer attractive yields. In anyway, one should have a proportion of Bonds asset as part of the asset allocation of ones' portfolio. 

Fed leaves rate unchanged, what it means to us as investors

The most recent inflation data in the US exceeded last year's figures, aligning with market expectations that the May FOMC meeting would not announce a rate cut. As anticipated, the Federal Reserve Chair refrained from lowering rates and notably indicated that a rate hike is unlikely.

Given this insight from the Fed Chair, let's examine historical instances of rate hikes and their impact on the S&P 500 index when rates remained steady versus when rate cuts were eventually implemented.

Below is the chart from Forbes, 

In the chart, the historical rate hike cycles are depicted alongside the performance of the S&P 500 index during various periods when the Federal Reserve paused its rate hikes. It is observed that the S&P 500 exhibited predominantly positive returns during these pause periods before a rate cut.

Then the next question to ask, is the S&P500 now expensive? Below is the chart from gurufocus on the Shiller PE ratio of the S&P500.

As depicted in the chart, the S&P 500 has corrected to a level within one standard deviation (1SD). At this juncture, it is clear that the market is not offering cheap valuations.

Nevertheless, the market is unpredictable, echoing the sentiments of the late John Bogle, who emphasized the importance of staying the course in investing and adhering to a sound asset allocation strategy.