The Doubling Effect

This was an advertisement captured from Business Times. I thought it was a very good illustration of the magic of compounding interest at work using different asset vehicle.

Looking at the table above, FD will take 72 years to double at 1% interest OMG!

It looks like most of us should be able to target about 6% to 7% of return by investing in blue chips or ETFs so that our investment can doubled every 12 years.

If you want higher returns, you have to look out for hidden gems or value stocks. These are normally not under the big boys radar.

Another alternative is if you are a hardcore contrarian buying big time during global economic crisis just like the 2008 Great Financial Crisis (GFC) due to the collapse of Lehman Bro, you should be able to get 10% to 12% of return therefore doubling your investment every 6 years! However, these GFC do not happened often (touch wood!) do take advantage of it when it happens!