Games

Returns per play

(- house edge)

 Risk

How long to lose

it all -- (details)

Baccarat (banker)

- 1.2 %

Very High

 3 hours

Baccarat (player)

- 1.6 %

Very High

 3 hours

Craps  (dice)

             - 1.6 %  details

Very High

 4 hours

Blackjack (21)

- 2.0 %

Very High

 3 hours

Pai Gow Poker

- 2.5 %

Very High

 8 hours

Roulette (single zero)

- 2.7 %

Very High

 4 hours

Three card poker

- 3.4 %

Very High

 9 hours

Caribbean Stud Poker

- 5.3 %

Very High

6 hours

Sports (Nevada)

- 4.5 %

Very High

65 games

Roulette (double zero)

- 5.3 %

Very High

2 hours

             - 8.0 %  details

 1   hour

Big 6 wheel

- 11 % to - 24 %

Very High

3 hours

Keno

- 25 % to - 40 %

Very High

2 hours

Most US lotteries

- 35 % to - 40 %

Very High

6 tickets

Slot Machines (Singapore)

- 10.0 %

Very High

30 min   

Horses (Singapore)

- 19.3 %

Very High

 14 races  

4-D, Big     (Singapore)

- 34.1 %

Very High

8 tickets

4-D, Small (Singapore)

- 42.0 %

Very High

6 tickets

Score  (Singapore)

- 40.0 %

Very High

6 tickets

Strike (Singapore)

- 40.0 %

Very High

6 tickets

Toto (Singapore)

- 46.0 %

Very High

5 tickets

Singapore Sweep  (Singapore)

- 47.5 %

Very High

5 tickets

Derivatives

Returns (per year)

Risks

How long

to lose it all

Options, futures and warrants

Negative

Very High

Can't be determined

Investments

Returns (per year)

Risks

How long to double your money

Bonds (Sng Gov, 8 yr to mat)

+ 2.5 %

Low

 29 years

CPF ordinary account

+ 2.5 % to 3.5 %

Zero

 29 years

CPF special account

+ 4.0 % to 5.0 %

Zero

 18 years

Unit Trusts and ILPs

+ 4.2 %

High

 22 years

Property

+ 9.0 %

High

  7 years

Stocks and ETFs

+ 12.0 %

High

  6 years

Small Stocks

+ 17.0 %

Very High

   4 years 

Important Information

I. Gambling: (i) It is zero-sum which means "positive returns to the middleman (i.e. casino) translate to negative returns to the player". For example, the return to "4-D, Small" is - 42.0 per cent. It means that in the long-run, you will average a loss of 42 per cent per wager.  It also means that for every $100 that is bet, Singapore Pools keeps $42 and pays out $58 to players in winnings.

(ii) The column “How long to lose it all” tells how many hours, tickets or races it takes to lose 95 per cent of your initial capital at a normal rate of play. In the case of blackjack (21), it is 3 hours based on a normal rate of play for blackjack, which is 1 game per minute.  Therefore, at a normal rate of play of one hand per minute, it will take 3 hours for the person to lose 95 per cent of their initial capital.

(iii) The house edge assumes "average play". For "optimal play", the house edge is lower.  Blackjack, for example, has a house edge of 0.8 per cent for optimal play and 2.0 per cent for average play.

II. Derivatives: (i) Options, futures, warrants and structured warrants are the most common derivatives.

(ii) Derivatives are contracts and not assets.  Because the contracts have limited lives, they are zero sum among all market participants.  At any point in time, gains equal losses among all traders, before costs. Hence the name zero-sum. After costs, the sum of all trader returns is negative. This makes derivatives less like investing and more like gambling, which is also negative-sum. 

(iii) It is not possible to estimate the size of the negative returns or "How long to lose it all" for two reasons: (a) trading costs (the numerator) vary for each type of derivative and (b) margin requirements (the denominator) vary from broker to broker. 

III. Investing: (i) ILPs are “investment-linked products”.  These are similar to unit trusts and sold by insurance companies. Both are called "funds".  ETF’s are exchange-traded funds. They differ from other funds because they trade like stocks.  In Singapore, they have much lower expenses than other funds.

(ii) Investment returns assume a diversified portfolio, and are defined as capital gains plus dividends. Returns to stocks and small stock are from US data since 1926. Small stocks are defined as having a market capitalisation (price x no. of shares) of under US$200 million.

(iii) Expected returns for funds (Unit Trusts and ILPs) are only 4.2 %.  It is for various reasons -- (more than just high expense ratios). To see how the rate is calculated, please click here: Best Returns: Funds vs. CPF.