Saturday, December 17, 2005

Started on SRS

SRS, Supplementary Retirement Scheme. Opened an account earlier this month and finally got round to contributing into it today. By doing so I have effectively reduced my taxable income and legally evaded some tax for the assessment year but now it is important to take the next step and invest the amount contributed to SRS.

If I can grow the SRS amount by more than 5%, then it will not really matter even if I make premature withdrawals since the 5% penalty will be offset. But considering that SRS is meant for penalty withdrawals after 62 years old and I do not really plan to do premature withdrawals, I will be getting the amount investing into less volatile unit trusts with low sales charges and management fees. This will help bring some stability to my current portfolio of very aggressive holdings of pure equity unit trusts bought with cash (note though that these cash UTs have actually made quite good returns this year).

An even split of the free SRS funds invested into UOB United Global Emerging Markets Portfolio(GEMS) and Philip Growth Fund appears to be the best option available. Only time will tell if I have been able to pick the right winning combination to add on to my present portfolio.

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