My Asset Allocation (April 2021)
I have always thought myself to be a rather risk averse person, but given the number of people I know who are truly, truly allergic to risk, as well as those who are almost completely invested in risky stocks and cryptocurrencies, I suppose I’m quite decidedly in the more balanced region of the spectrum.
I have been putting money into the market rather haphazardly over the past year or so, mostly because I have been buying several investment products to review, and it is long overdue for me to take stock of my current asset allocation to see if it’s appropriate for my goals and risk appetite.
After a cursory look through of the various investments I’ve made, here is a broad view of my asset allocation (minus CPF and property):
Interestingly, the investment purchases I’ve made over the past few years have more or less resulted in a portfolio that is quite balanced. I have a habit of hoarding cash ever since I started working, and I’m quite happy to have slowly moved funds into equities over the past few years and riding the market upwards.
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Cash and equivalents
I’m glad to have recovered quite a bit after plopping nearly everything in my first apartment, and having cash gives me comfort and security. The low-interest environment does make it unattractive to hold cash, which is why I have been moving them towards investments. Nearly all my cash savings are in insurance savings accounts like Elastiq and Gigantiq, and in low-risk money market funds.
Having a sizeable cash position also allows me to move in when market corrections take place. Until then, I am dollar-cost averaging a portion of my monthly savings into investments.
Equities
I exited all individual stock positions and now invest in equities solely via ETFs through my broker and roboadvisers. It gives me the diversification I want, and it is a lot easier to talk the risk averse side of me into investing compared to buying individual stocks. I won’t outperform the market, but I am very sceptical most people can do so anyway.
I intend to shift 100% of my SRS savings towards equities since they are funds earmarked for the longer term. Market seems a tad high now, so I’m also DCA-ing my SRS funds into over the next year or so.
Gold
It’s a really small position now, but this is an area I’ll look into increasing, and possibly adding a cryptocurrency ETF or two.
Goals 💪🏻
Eventually, as my cash savings increase, it should take a smaller percentage of the portfolio, and my asset allocation should look more like 60-70% equities, 20-30% fixed income, and the rest in gold, crypto. Penning down my asset allocation and targets makes me feel inspired to save harder, and you should try it too!
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