Games

Returns (per play)

 Risk

How long

to lose it all

Craps (dice)

- 0.60 %

Very High

9 hours

Blackjack (21)

- 0.80 %

Very High

20 hours

Baccarat (banker)

- 1.17 %

Very High

15 hours

Baccarat (player)

- 1.63 %

Very High

17 hours

Pai Gow Poker

- 2.50 %

Very High

14 hours

Roulette (single zero)

- 2.70 %

Very High

13 hours

Three card poker

- 3.40 %

Very High

10 hours

Caribbean Stud Poker

- 5.26 %

Very High

7 hours

Sports (Nevada)

- 4.50 %

Very High

65 games

Roulette (double zero)

- 5.60 %

Very High

3 hours

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

Singapore Sweep  (Singapore)

- 45.4 %

Very High

5 tickets

Toto (Singapore)

- 46.0 %

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

+ 2.5 %

Low

 29 years

CPF ordinary account

+ 2.5 %

Zero

 29 years

CPF special account

+ 4.0 %

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.  It 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 example for 4-D, Small, it is "6 tickets".  It means that on average, a person will lose 95 per cent of their initial capital after playing 6 tickets.

(iii) The odds for the games assume perfect play such as knowing when to take another card in blackjack. For horse-racing, it assumes average skills.

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. 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) 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.