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MPFA blog - Stay calm in the face of market volatility, especially scheme members close to retirement

MPFA Chairman Dr David Wong published his latest blog post today (5 April). He said that the COVID-19 pandemic continues to spread worldwide posing a huge impact on the economy and employment. Moreover, the global stock market has been unprecedentedly volatile recently. He appealed to scheme members to remain calm and try not to time the market at this critical time. Instead, they should take a long-term view of their investment strategy.

Dr Wong said that the investment performance of the MPF System will inevitably be affected by the COVID-19 pandemic and that it was normal for scheme members to be worried about their MPF investment. However, he stressed that despite the many challenges faced by the MPF System over the past 20 years, the System has continued to see steady long-term growth. The MPF is an investment spanning 30 to 40 years, so scheme members should not be unduly worried about short-term market fluctuations. He reminded scheme members to manage their MPF regularly and to be sure they understand the investment risks of different MPF funds, while taking into account the number of years before retirement when making investment decisions.

Dr Wong also noted that according to the MPFA’s statistics, scheme members close to retirement still tend to choose MPF funds with higher risks. He reminded scheme members that if the MPF is a major part of their retirement savings, they should be particularly cautious, as investments focusing on higher risk funds may be disadvantageous to them. He suggested that if they don’t consider the market conditions to be favourable for the withdrawal of their MPF upon retirement, they may consider withdrawing their benefits by instalments or keeping their benefits in the MPF System for continuous investment.

For the full version of the article, please visit the MPFA blog. The blog is in Chinese only.

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5 April 2020

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Last Review Date: 03/04/2020