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Excerpts from PIMCO Webinar

PIMCO Webinar: Navigating Inflation Risks and Market Volatility with PIMCO

Inflation threatens to reduce the value of our investments. As we plan for retirement, it’s important to create a portfolio that grows and can withstand market volatility. InsureDIY invited Ms Alice Lo, Senior Vice-President of PIMCO Singapore, on 14th September to share with our clients on how to create an investment portfolio capable of navigating inflation risks and withstanding market volatility. 

Alice Lo (Alice) is the Senior Vice-President in PIMCO’s Singapore office and head of the Singapore retail business. She focuses on building distribution partnerships with financial intermediaries in the region. Prior to joining PIMCO in 2016, she was with NN Investment Partners (formerly ING Investment Management) as a Vice President and Account Manager in the Asia ex-Japan wholesale business development group, responsible for client coverage across Singapore and Hong Kong. She has 14 years of investment and financial services experience and holds a Bachelor’s Degree in Business Administration, with a major in finance from the National University of Singapore.

Shujun Lim (Shujun) joined InvestDIY in 2015 as a Director and licensed Financial Adviser. Prior to joining InvestDIY, Shujun was in the Strategic Planning Team with a MNC insurer in Singapore and was also previously a Consultant providing advice to financial institutions.

Shujun is a qualified Actuary and obtained a BSc in Economics and Statistics from University College London. 

Excerpts from the Webinar : Navigating Inflation Risks and Market Volatility

The COVID-19 pandemic is slowly starting to stabilise towards the end of 2021. While there are still concerns about the Delta variant, many countries are slowly starting to re-open and move towards an endemic status. This means that the world economy is slowly starting to recover again.

Governments will start to withdraw policy support, such as stimulus checks or government grants that were previously issued to help support the economy and fuel its growth during the pandemic. With the removal of these economic support, we’re expecting that the growth of the economy will decrease slightly. It is believed that when the economic growth tapers, inflation rate will also decrease. 

We noticed a spike in inflation rates this year, but PIMCO believes that it is just a temporary spike due to reopening of countries and we are expecting that it will eventually be lowered. While the market is expecting interest rates to increase and for the US Federal Reserve to announce rate hikes starting next year, PIMCO believes that inflation is temporary, and it will return to below the central bank target of 2% next year. Moving forward, interest rates are predicted to move sideways from here. With inflation remaining relatively subdued, we also think that the FED US is likely to keep the interest rates on hold, and will only hike rates in 2023.

While we do believe that interest rates will eventually decrease, we also recognise that there is still a lot of uncertainty surrounding the pandemic. So, although it is most likely that inflation rates will decrease, we will also need to be prepared for the worst case scenario of high inflation. At times like this, it is important to diversify your investment portfolio and ensure that it is solid enough to hedge against inflation, with Inflation Link Bonds and High Quality Bond Funds. 

Bonds have been proven to help protect against downsides during Q1 of 2020, when the S&P 500 was down 19.60% due to the COVID-19 pandemic, but the Barclays Global Aggregate Index, an index of high quality bonds, delivered a slight positive return. This shows how bonds can help to protect and balance against your riskier stocks. By significantly reducing volatility and loss with bonds, you can make more money in the long term, without the need to make up for lost capital. 

InvestDIY Solution: Achieving Diversified Returns

At InvestDIY, we believe in giving customers flexibility. We emphasise on letting our customers invest at their own risk tolerance, in bonds or equities or thematic equities of their preference, as well as to change their investments according to their needs. 

InvestDIY leverages on the expertise of world-class fund managers, such as PIMCO, JP Morgan, Black Rock etc., to help our customers get the best returns, while ensuring that their portfolios are well-diversified. 

We also believe in active monitoring, where our experienced in-house investment team will constantly monitor the market and make recommendations for portfolio rebalancing, without any rebalancing fee.

For example, last month, we reduced our equities in the China market due to the authorities’ scrutiny,  but continue to maintain an allocation, as we believe in participating in China’s long-term growth. 

What is the advantage of investing through InvestDIY?

At InvestDIY, we carry out active monitoring of our fund managers and the market, to ensure that all portfolios remain current and updated. Good fund managers can outperform the benchmark, and that is what we at InvestDIY aim to help our customers achieve. For example, for every investment solution InvestDIY provides, we only choose the top 3 best fund managers. Our funds are also both cash and Supplementary Retirement Scheme (SRS) approved. 

Interested to know more?

Email (best way to reach us): [email protected]

WhatsApp: +65 9151 5963 (Mon to Fri: 9am – 5pm)

Posted in Investments, Webinar