Why I Rely on Global Equities For My Retirement

When people talk about investing, the conversation often turns quickly to returns. Should I buy DBS? How much returns can I get if I buy this investment? Which stocks can I buy to maximise my returns?

When it comes to investing for my own retirement, however, I find myself increasingly focused on a different question: what range of outcomes am I willing to accept?

For the equity portion of my retirement portfolio, I have increasingly gravitated towards globally diversified equities. This does not mean I think global equities will definitely outperform the S&P 500, individual stocks or other more concentrated investments. In fact, there will almost certainly be periods when they do not.

The appeal to me is that I do not need to be particularly right about which country, sector or company performs best. If global equities can already provide me with a reasonable chance of reaching my retirement goals, taking substantially more concentration risk may simply introduce a greater chance of missing those goals without necessarily improving my eventual retirement lifestyle by very much.

Investing for retirement is not necessarily about getting the highest return

When we are younger or still accumulating wealth, it feels natural to think that the objective of investing is simply to maximise returns. If Investment A is expected to return 8% p.a. and Investment B can potentially return 12% p.a., Investment B obviously sounds better.

But this becomes less straightforward when there is an actual goal attached to the money. For instance, you may have worked out that you need S$2 million to fund the retirement lifestyle you want. If a broadly diversified portfolio already gives you a reasonable path towards reaching S$2 million, taking much more risk in the hope of reaching S$3 million might not necessarily improve your life proportionately.

The downside, however, may remain very meaningful. A highly concentrated investment that performs badly could leave you far from the S$2 million you actually needed.

Instead of returns, consider the ranges of outcomes

One useful way of thinking about different investment approaches is to look at the range of possible outcomes. Generally, the more concentrated your investment becomes, the wider that range can become.

Putting all your money into one company could make you extraordinarily wealthy if you happen to choose the next great winner. But if you choose poorly, you could lose most of your capital. Generally, a sector ETF spreads this risk across more companies, while a single-country index spreads it further. A globally diversified equity portfolio spreads your investments across many countries, sectors and companies.

Conceptually, I think of it something like this:

Investment	Possible Outcomes
Globally diversified equities	<—●—>
Single-country equities	<——●——>
Sector-focused equities	<———-●———->
Individual stocks	<————–●————–>

This is obviously not a precise mathematical chart nor is it drawn to scale. A particular stock could be less risky than a particular country index, and markets do not behave neatly according to a diagram. But it basically illustrates what should be obvious to investors – it is all about risk and return.

As concentration increases, the chance of a truly exceptional outcome can increase. Unfortunately, the chance of a genuinely terrible outcome can increase at the same time. Diversification narrows that range.

It is extremely difficult – if not impossible – to escape the risk-return trade off. Many would claim that educated stockpicking would work, or that a particular options strategy would do wonders. For most investors, the evidence is overwhelmingly against such techniques working consistently over long periods. In fact, once you add trading costs, mistakes and the course fees often attached to learning these strategies, you may well end up worse off, and we haven’t factored in your time and effort yet. More on this topic next time so stay subscribed for that.

There is a reason it is often said that diversification is the only free lunch in investing, and I would take that free meal.

Global diversification does not guarantee success

Global diversification obviously does not make equities risk-free. Markets can still fall sharply and future returns can disappoint. What diversification does is remove risks that I do not think I need to take, like having too much of my retirement depend on one particular company, sector, or country being the right choice.

Diversification also means accepting that I will never own only the winner

There is an obvious downside to being globally diversified. If the US stock market continues to be the best-performing market over the next 20 years, someone investing entirely in the S&P 500 will probably outperform someone holding a globally diversified portfolio.

Likewise, if technology stocks dramatically outperform everything else as the AI bulls predict, a technology-heavy investor could end up considerably wealthier than those who chose to diversify. Someone who successfully chooses the next Nvidia would outperform by an even more absurd margin.

A diversified investor therefore has to accept that there will almost always be something else that performed better. That can be psychologically difficult because better-performing investments become very visible in hindsight. We can see exactly which stock, sector or country we could have owned, while nobody really talks about – much less make a TikTok or YouTube video about – their investments in sectors and companies that have faded into obscurity or bankruptcy.

If we somehow knew which investment would outperform over the next 30 years, diversification would make very little sense. But the point of diversification is precisely because we don’t have a crystal ball – even though some are confident they have precognitive abilities (tap here for relevant music).

US may (or may not) continue to dominate the equity market

The US stock market has been a popular investment in the recent decade or so because its recent performance has been so strong. Companies like Apple, Microsoft, Nvidia, Amazon and Meta have become enormous, and the S&P 500 has delivered excellent long-term returns.

Some would also say that many US companies already operate globally – Apple distributes its phones and computers globally, Microsoft sells software around the world, and Visa/Mastercard processes international payments.

This is true, but focusing solely on US means ignoring almost 40% of the global market in favour of betting on the most dominant country.

It is probably difficult to imagine US losing its dominance in the near future, but market leadership can change. Japan is a useful example. During the late 1980s, Japanese companies became such a large part of global markets that Japan’s eventual decline would have seemed difficult to imagine to many investors at the time.

I am not saying that US will definitely lose its market leadership in the decades ahead. But it is difficult to predict which market would look like the obvious winner 20 years from now.

And that is perhaps basically why I invest globally in the first place – there is no need to make such predictions. By investing globally, my portfolio is already made up of around 60% of the current market leader anyway.

Tools I use

Implementing a globally diversified strategy is fortunately quite easy and straightforward today.

Currently, I use Interactive Brokers (IBKR) as my main platform to invest in globally diversified Exchanged Traded Funds (ETFs). IBKR is one of the best options for many investors, particularly those with larger investment amounts, because of its excellent current exchange rates and low-fee structure. It also has access to London Stock Exchange which allows us to invest in Irish-domiciled ETFs that offer better tax arrangements.

The downside is that it can be quite user-unfriendly to use, which is why I have written a few guides for those who are new to the platform:

Currently, my holdings consist mainly of the popular VWRA (Vanguard FTSE All-World UCITS ETF). It is an Ireland-domiciled ETF that invests in thousands of large and mid-sized companies across both developed and emerging markets. The reasonable expense ratio is reasonable and the fund gives me exposure to companies across the US, Europe, Japan, China, India and many other markets, with the allocations roughly determined by their respective market values.

VWRA is not necessarily the only way to invest globally, nor will it necessarily remain my preferred option forever. The new VALL, launched just a week ago on 18 August 2026, looks particularly interesting because it goes even broader by including small-cap companies while charging a lower fund fee.

Stay subscribed for an upcoming piece comparing these two global ETFs. I also intend to talk more about my numbers and the rest of my investment portfolio.

The goal matters more than the numbers

This brings me back to the part of retirement investing that I think is easy to lose sight of. Retirement is simultaneously a quantifiable numbers game and a more abstract lifestyle decision. Is having a larger number at the end of the day worth the potential risk of not being able to reach financial independence at your desired age?

Here’s an analogy to illustrate how I think about it – imagine you have a flight to catch and two friends are offering you a ride and you have to be at the airport by 2PM. Friend A takes a reliable route that should get you to the airport by that time. Friend B knows another route that is less predictable: if things go well, you could arrive much earlier and have time for a massage and a lounge visit. But that route could have considerably more traffic sometimes, and if that happens you could miss the flight altogether.

There isn’t really a right and wrong answer to this because it depends on what you want. You might not even see your retirement age as a non-negotiable deadline the way a flight is, and are willing to risk that for better numbers.

Personally, I would want to catch my flight… and also would leave early to take the more reliable route so I still get my massage and lounge visit. In retirement parlance, that means investing earlier and investing more, where possible, instead of relying on taking bigger risks to reach the destination.

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Seth Wee was a licensed financial adviser representative from 2009 to 2025, with over 16 years of experience in Singapore’s financial advisory industry.

He started Sethisfy.com in 2019 to share practical insights on credit cards, banking products, and miles strategies, helping readers identify financial products that deliver the best value. Seth has been featured in CNA, Channel 8, Today, and a host of other publications. In 2025, he was also part of a panel at CPF’s Ready For Life festival.

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