Stocks fall after agency cuts Portugal debt rating

NEW YORK (AP) -- Major stock indexes fell from their 2010 highs Wednesday as weakness in the housing market and rising European debt loads revived investors' pessimistic view of the economy.

The Dow Jones industrial average fell about 53 points. It was only the Dow's second drop in 12 days. Broader stock indexes also slid.

Treasury prices tumbled after a government debt auction drew only modest demand for a second straight day. That raised concerns that the government will have to pay higher interest rates to attract buyers for its debt. Washington has been issuing record amounts of debt to help revive the economy.

The drop in stocks came after Fitch Ratings lowered Portugal's credit rating. The agency said the country's recovery will be slower than others that use the euro. Fitch contends that could hurt Portugal's ability to repay its debt.

Deficit problems in Europe have been one of the few drags on stocks this year. Rising debt in Greece, Portugal and other nations that use the euro have investors worried that troubles there could upend a nascent global recovery.

I'm sure this has been one of the major weakness in the market, which it would not recover so fast. Anyway just stay alert for the time being for slow recovery.

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Make your money work harder

MOST Singaporeans opt for safety first when it comes to investing their cash, but they still expect to reap decent returns.

The findings - from a global survey on retirement planning by French financial giant AXA Group - show that for many people, risk is something to avoid at all costs.

Sixty-seven per cent of working adults and 64 per cent of retirees in Singapore prefer products such as bank fixed deposits, which offer minimum returns without any financial risks, according to the survey.

In fact, 75 per cent left their savings in the Central Provident Fund (CPF) to earn an annual, risk-free interest of about 2.5 per cent or more.

Only 23 per cent of working Singaporeans and 13 per cent of the retirees were willing to accept a higher return with a higher financial risk.

Singapore's low-risk appetite is in line with global trends, with about 70 per cent preferring low-risk products.

AXA's annual survey, conducted in July and August last year, gauges attitudes towards retirement, health and how people want to spend their retirement.

It polled 18,202 people in 26 countries, including 300 working and 306 retired adults in Singapore.

Ms Annette King, chief marketing and strategy officer of AXA Life Insurance, said yesterday that setting goals and saving would not be enough when accumulating a nest egg.

She said Singaporeans should invest and make their money work harder.

She also believes many people are not aware of the opportunities they are missing by holding back from investing in other instruments, such as equities and unit trusts.

The survey also indicated another worrying local trend - heavy reliance on CPF for retirement funding.

Personal and employer contributions to the CPF, as well as SRS savings or maturity rollover plans, were the top three sources of retirement funding for Singaporeans, the survey found.

'The heavy reliance on CPF savings for retirement is worrying because these will provide only a quarter of the funds needed for the average Singaporean.

'Furthermore, 77 per cent of working Singaporeans use their CPF to pay for their property mortgage, so it is crucial to examine what remains of their CPF savings by the time they retire,' said Ms King.

Working Singaporeans typically start planning for retirement when they have children and on reaching 40 or 50 years of age.

There was a positive note in the survey: The average monthly amount saved for retirement here has increased from $824 in 2006 to $907 last year, higher than Britain's $627 and Canada's with $694.

Safety first

More working adults and retirees in Singapore prefer products such as bank fixed deposits, which offer minimum return without any financial risk, according to AXA's annual survey on retirement planning.