SINGAPORE: Singaporeans have a powerful tool to secure their financial future: the Central Provident Fund (CPF) scheme.
While the CPF Ordinary Account (OA) offers a steady 2.5% interest rate, savvy investors know that to truly outpace inflation, they must look beyond traditional savings.
According to a report published at Yahoo.com, the CPF Investment Account (IA) allows you to invest your hard-earned funds in stocks and unit trusts, potentially accelerating the growth of your retirement nest egg.
Sheng Siong: A Supermarket Chain with Superb Growth
First on the list is Sheng Siong (SGX: OV8), a household name in Singapore’s supermarket scene.
With 73 outlets island-wide, Sheng Siong is a go-to for fresh seafood, daily essentials, and more. The retailer’s financials for the first half of 2024 (1H 2024) are nothing short of impressive.
Revenue climbed 3.4% year-on-year to S$714.2 million, and gross profit improved by 4.8% to S$215 million. The company’s gross margin also saw a slight increase, and net profit rose 6.8% to S$70 million.
Sheng Siong’s expansion plans are equally robust, with new stores opening and more in the pipeline. CEO Lim Hock Chee is confident about the company’s prospects, with HDB set to offer seven new store tenders in the second half of 2024.
The retailer’s presence in China is also growing, with its sixth store opening in June 2024.
Grand Banks Yachts: Luxury on the Rise
For those seeking a slice of luxury, Grand Banks Yachts (SGX: G50) is a name to remember. This high-end recreational motor yacht manufacturer reported a stellar fiscal year ending 30 June 2024, with revenue up 17.1% year-on-year to S$133.7 million.
Gross profit surged nearly 38%, and net profit more than doubled, marking the company’s highest-ever net profit.
The group’s order book stands at a healthy S$120 million, and it’s expanding its manufacturing capabilities with new machinery and a larger facility in Pasir Gudang, Malaysia.
 StarHub: Connecting the Future
Last but certainly not least is StarHub (SGX: CC3), a telecommunications giant that’s more than just a telco.
With a diverse portfolio ranging from mobile and broadband services to corporate solutions like cybersecurity and AI, StarHub’s 1H 2024 earnings are a testament to its resilience and growth.
Total revenue increased 1% year-on-year to S$1.1 billion, and net profit grew 8.7% to S$83.3 million. The company’s strategic priorities, including the completion of DARE+ investments and the introduction of cross-product bundling, position it well for continued success.
CPF: What some Singaporeans say
One Reddit online forum user said we should consider it similar to the bond component of an investment portfolio—a conservative asset that will generate a steady income for the person during retirement.
According to him, younger individuals with more years until retirement might be better served by index funds, which typically yield higher returns over extended periods.
Meanwhile, another netizen says it’s the optimal choice if one is unaware of other options.
For those in Singapore who lack financial knowledge, according to him—and he thinks there are many—this is the best option available. It offers a fair interest rate, guarantees the principal, and involves no risk.
Investment risks
Before making any investment, it’s crucial to understand that all investments come with the risk of losing money, which can vary based on market conditions.
Evaluating the risks associated with different investment options is essential to align them with your financial goals, risk tolerance, and personal circumstances.
Define your investment goals clearly. For instance, if you’re saving for retirement, your goal might be to grow your savings to a specific amount over 25 years. This clarity helps you tailor your investment strategy effectively.
Assess your risk tolerance. This involves considering how much risk you are willing and able to take. Questions to ask yourself include: How much loss can you tolerate? Can you withstand short-term dips in your investments?
Do you have a financial cushion to absorb potential losses?
Consider the time horizon of your investments. For long-term goals like retirement, a more aggressive investment strategy might be suitable, as you have more time to recover from market fluctuations.
However, if your investment horizon is shorter, you might need a more conservative approach to minimize risks. Understanding these factors will help you make informed investment decisions that align with your financial objectives and risk appetite.
CPF: A game-changer for retirement savings
Investing your CPF funds in the right stocks can be a game-changer for your retirement savings. Sheng Siong, Grand Banks Yachts, and StarHub are three Singapore stocks offering strong financial performance and clear paths to future growth.
If you’re considering where to park your CPF savings, these dependable options are worth a closer look.