How should you build your portfolio? I guess everyone is different – we have different priorities, we take different amounts of risk, we have different amounts available for investment, and we are all at different stages in life.
Here’s my portfolio in Aug 2019:
Just a quick look at my portfolio and you can see I’m invested heavily in US stocks. I’m not sure if this is good with all the talks about quantitative easing and the dollar devaluation, so I thought it was important to have some other forms of assets.
I do like the US stocks that I’m holding onto for the moment so I wouldn’t be selling any time soon. The 56% of portfolio US stock is there to invest in good companies – healthcare, tech. I believe good companies are global and the Singapore market is really too small. How else do we get access to be a part of something like Amazon or Google?
My target for this is to just stay relatively at the same amount and I would be contented. If it grows, good for me. If it falls, it hurts but it’s too bad. Nevertheless, I won’t be adding anything more here for now.
Another thing immediately obvious is that I have zero in real estate. Nada. I’m still renting and haven’t owned any property, but real estate is quite expensive now so it might not be a good time. Everyone rushed in to get property so I really don’t want to play the same game. Hopefully, I can wait it out until 2020 – 2023 when the market falls due to oversupply. Then I would be eyeing both resale HDB and private property, whichever would be more sound.
I do believe that real estate is a vital component in any investor’s portfolio, just that the time isn’t for me right now.
33% of my portfolio is in SG stocks. They consist of real estate investment trusts (REITs), local banks, and some micro companies I would like to support. I love the exposure the REITs give me in terms of commercial, logistics and industrial properties, both local and overseas. This is the pie I want to grow, and where I would pump in to. In the end, my goal is to have about $400k in SG stocks, which could give me about $1.5k per month in dividend yield. I’m still many, many years from that but hey, I can dream, no? Ultimately I see this as being about 50% of my portfolio.
My cash reserves are there for buying opportunities. And for future expenses. And rainy days. I know it might not be such a good idea to have it assigned for various purposes, but I do have liquidity in the form of monthly salary and selling stocks if I really had to. I would keep the amount of cash relatively constant, so the proportion of it is likely to go down as I build up more of the stock component.
And finally that 1% in gold. I do hope to grow this to about 10% of my portfolio. With its current price, I can maybe only buy a bit once every year. That might take 10 years which is an awfully long time, but hey we’re playing the long game here.
There are many supporters of gold, especially for those bearish on the US market. Knowing that many countries are moving away from the US Dollar, I think it could be sensible to have a little bit to hedge (especially since my exposure to US stock market is so great).
So about 90% of my portfolio is stock. I think that’s pretty aggressive, but I’m young so losing it all is still manageable. Who knows when the market will swing, but we’ll just have to hold steady and keep our sanity.