The market conditions fluctuated this year. The Hang Seng Index reached over 10,000 points throughout the year. At the end of October, it hit a low of 14,597 points, a new low since 2009. The MPF investment returns of many "wage earners" also dropped sharply. The per capita loss once reached more than 60,000 yuan!
Fortunately, the market conditions improved at the end of the year, and the per capita loss narrowed.
In an exclusive interview with Hong Kong 01, Pan Jihong, chairman of the Association of Retirement Provident Fund Schemes, said that investors should not only look at short-term returns. The stock market itself has its own cycle. “It’s like a marathon. "I believe that as long as the asset allocation is done well, the MPF can become one of the important pillars of citizens' retirement protection in the long run.
The market has fluctuated this year, and many "wage earners" are concerned about the loss of investment returns on their MPF accounts.
People are animals dominated by emotions. Pan Jihong said with a smile that it is very difficult for investors to "sell high and buy low" in the stock market. According to the data released by the platform, the per capita loss of MPF this year was as high as more than 60,000 yuan, but the market situation has improved since then.
According to MPF Ratings, the return performance of MPF in November rebounded strongly. The total investment income is estimated to be about 92.9 billion yuan, which is equivalent to an average book income of about 20,300 yuan per MPF member. The loss was reduced to about 190.7 billion yuan.
After including MPF contributions, the average account balance of members at the end of November was about 227,700 yuan, a monthly increase of about 21,200 yuan, which narrowed the cumulative loss this year to about 30,000 yuan.
Pan Jihong reminded that "wage earners" should do a good job in asset allocation. At present, major MPF sponsors provide more than 400 funds to choose from, and the government has also been opening up more investment options, such as allowing investment in mainland A-shares earlier Investors can diversify their investment, and the long-term rollover makes the return of MPF more ideal.
Pan Jihong reminded "wage earners" that they should do a good job in long-term asset allocation.
(Photo by Ou Jiale)
MPFA: Do not try to capture market conditions
In fact, the MPFA has repeatedly reminded that the MPF is a long-term savings investment spanning more than 40 years, and will go through different economic cycles during this period. Scheme members must not try to catch market conditions.
If you switch MPF funds when the market drops sharply, it will easily lead to a situation of "buy high and sell low", turning short-term fluctuations into actual losses.
The bureau also pointed out that in the past 22 years, the MPF system has experienced different economic cycles and financial market fluctuations. Most of the time (14 years) recorded positive returns, and it often rebounded after negative returns. The gold system can stand the test in the long run.
The MPFA has also repeatedly reminded that the MPF is a long-term savings investment spanning more than 40 years, and will experience different economic cycles during this period. Scheme members must not try to catch market conditions.
MPF as a savings mechanism to prepare citizens for retirement
However, there are voices who believe that the MPF is a "forced" investment by the government. Under the "forced" mentality, negative emotions often appear when losing money. They think that the relevant contributions should be returned to the hands of the public, and they can decide how to use or invest. .
Pan Jihong disagreed. She pointed out that the monthly contribution to the MPF actually accounts for a small part of the income of wage earners, and everyone has different short-term goals to achieve, such as traveling, buying a car, or buying luxury goods, etc. " There are different needs at different times, but they are often ignored and save money for retirement.”
She is the general manager of the wealth and pension business of a financial institution. She said that although many wage earners hope to be able to decide how to invest for themselves, in fact, based on her personal observation and data, very few wage earners switch positions frequently.
For her, the MPF is a good mechanism to make citizens get used to preparing for their own retirement, and therefore she opposes that MPF contributions can be used for first-time home purchases or emergency situations during the epidemic. The registered permanent residence is more than 200,000 yuan, and the young Yanyan doesn’t go out to work so much, Yijia (property prices are so high) is not enough for you to get in the car.”
Consider not withdrawing funds in one lump sum after retirement
Young people hope to use their MPF to buy homes, while retirees are worried that when they enter retirement age, their "pension funds" will shrink due to this year's market conditions.
Pan Jihong reminded that people in Hong Kong have a long life expectancy. After retiring at the age of 65, they still have to plan for themselves.
Pan Jihong suggested that after allocating the funds before retirement, some of them can be considered to stay in the MPF plan, instead of withdrawing them all at once. Well." She pointed out that there are various fund options in the MPF scheme, which are also regulated by the MPFA, and there is no additional handling fee for "rollover", which is more flexible and secure than other funds or investment tools.
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