Good Investment - OCBC Preference Shares

OCBC 5.1% NCPS is a good investment at its current price. It is suitable for investors who want to beat inflation and the current pathetic bank's interest rates.  At yesterday's closing price of S$102.5, I have calculated the YTM (yield to maturity) to be 4.66%.  This means that of you invest S$102.5 in this preference share, and hold it till maturity on 20 Sept 2018, you will earn for yourself 4.66% annually.

I have about half of my savings invested in strong singapore preference shares and bonds.  I like to invest in this asset class for the following reasons:

1. Stable returns - Bonds have outperformed the equity market since 1997. (See above)
2. No currency risk - Strong Sing dollar
3. Little credit risk - Well managed economy with strong corporate governance
4. Better yields than savings and fixed deposits
5. Reasonable yields compared with property yield without hassles, fees.

Note : This is not a trade for capital gains.  It is a long term investment for fixed income gains.

If you like to get know more about corporate bonds and preference shares, drop me a line.  I will be happy to share what I know, I have nothing to gain and I will not be selling you anything!