By Koh Hui Theng

LONG haul is the mantra in the stock market, said financial experts, as the recession in Singapore is now over and the economy is expected to expand 3 to 5 per cent next year.

Long-term investments, ranging from five to 10 years, are a more stable trading strategy, they said, urging clients to continue buying stocks.

As of the middle of this month, bourses in the West are up more than 50 per cent in six months, while emerging markets have gained close to 80 per cent, according to The Business Times.

Besides letting people park smaller sums of money in potentially higher-yielding options, going long-term also reduces the risks caused by market volatility, experts told my paper.

This paper asked four analysts - Ms Ong Lay Choo, Citibank Singapore's head of retail banking; Mr Albert Tse, Schroders Singapore's head of retail sales; Mr Leong Sze Hian, president of the Society of Financial Service Professionals; and Mr Sani Hamid, Financial Alliance's director of wealth management - for their views on getting the most out of long-term investments.

What are the top three benefits of long-term investing?

Ms Ong: A longer period of up to 10 years means investors are less likely to be swayed by short-term market movements.

Hence, they're more likely to avoid making emotional decisions during volatile times, like selling at a low and buying at a high, which leads to losses.

Long-term investments also means less capital is needed. Options like unit trusts usually require an initial minimum sum of about $1,000 and subsequent top-ups of $100 to $500.

In contrast, short-term investments require amounts ranging from several hundreds to thousands of dollars.

Since long-term investments require less monitoring, they may be more suitable for people with less spare time to manage their funds.

What type of portfolio mix should be considered?

Mr Tse: A portfolio mix refers to the blend of stocks, bonds and cash that help an individual diversify his investments and grow his money.

It works on the idea that losses caused by an under-performing investment type may be offset by better-performing ones.

There is no right or wrong allocation - it depends on one's risk appetite, age and priorities. An individual with a medium-risk appetite has $50,000. What should he do?

Mr Leong: He can put half the amount in equities, 40 per cent in bonds and the remainder in commodities.

Since March this year , global equities in emerging Asian markets and Bric (Brazil, Russia, India and China) rose 90 per cent while bonds increased 20 per cent, compared to developed markets- growth of 70 per cent and 5 per cent, respectively.

Besides going for globally diversified funds - usually equities - in different countries, regions, and sectors, like technology and health care, it's important to rebalance the portfolio every quarter to get the most out of one's investments.

Though long-term investments typically need less monitoring, their value will still come down if one simply buys the funds and leave them alone. How can one with $20,000 grow his money?

Mr Sani: Focus on India, China and Asian funds in general. Domestic consumption in India and China will ensure that their growth rates are similar to pre-crisis levels.

Other Asian countries, including Indonesia and Singapore, have close trading relationships with India and China, and would thus benefit from the robust growth there.

As a basic rule of thumb for asset allocation, investors can also place up to 20 per cent each in assets such as resources (like copper), commodities (like soya beans and cocoa) and gold, to diversify risks

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