Dear readers, it was announced yesterday that Temasek is offering a new 5-year bonds called the T2026-S$ Temasek Bond. Of the S$350 million on offer, S$100 million is offered to the public retail investors. And it is noteworthy since this is only the second time Temasek opens up its bond to retail investors. T2026-S$ Temasek Bond offers a 1.8% per annum fixed rate guaranteed notes, that will mature in Year 2026. Should you invest in T2026-S$ Temasek Bond?
Well, firstly, a 1.8% capital guaranteed return per annum, for five years seems great in today’s finance markets. One thing though, investors need to know is that by investing in this Temasek bond, you will be effectively locking your monies away for five years and this can be costly if you are already an experienced investor.
In the next five-year window, there may be a possibility that the global stocks markets correct like in year 2009. As an experienced investor, I think you would not want to have at that moment, say $100,000 in a bond earning just a 1.8% annual return since you could very likely profit even more though bargain hunting good stocks at the bottoms of the stock market crash. As the saying goes, profit is made at the time when you Buy and not Sell.
But if you are sure that you do not and will not invest in other forms of investments, even during the next stock market correction, then a 1.8% per annum return from T2026-S$ Temasek Bond, is pretty much a decent investment vehicle as its interests are better than what the banks offer.
To date, I believe the earlier tranches of the Singapore Saving Bonds, with a return of as high as 2.10% per annum over 10 years in one of the tranches, is still one of the best savings investment since investors could liquidate their investments at no cost and still earn pretty much a good interest, averaging 2% (back then in the earlier tranches) – yes, I have invested in these earlier tranches of the Singapore Saving Bonds.
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