Building Up of CPF and The End of Bonds Age
With the portfolio growing, emergency funds filled and cash increased, and finally the focus of CPF returns supporting retirements, is time to slowly phase out Bonds managed in the portfolio. As CPF is not tracked in active portfolio, we will be expecting higher yield moving forward with higher volatility.
So why the focus on CPF. Stability of the returns, and roughly 4% XIRR. This beats many bonds.
Furthermore, with locked mechanism or restrictions in CPF, I view it as positive. In-addition to that, it can also be a good holding place for extra cash in OA to be withdrawn as needed after 55. Yes, rule will change but usually is for the better or rational reason. Nevertheless, is prudent not to solely depend everything on it.
This will formed a solid base and a release of 1/4 M to more active investing. The plan is to do more cash top-up via VC3AC for the next few years as I hit FRS.
Fixed Deposit is so yesterday especially in foreign currency as there aren't much good ones after AUD/NZ dramatic reductions over the years. For local currency, the only place will be temporary holding. So basically cash is best placed in investment holding accounts subject to safety of assets consideration. I hold the view that we should not be fully invested unless we are really good in stock picking. I am not there yet.
Most of equities invested are cash flow generating for dividend.
Have some shares in US which has seen almost doubled in returns over the years. I think is time to slowly sell them off with the rising market. However I need to get my W8BEN renewed. They aren't tracked in investment portfolio. Compared to more famous stocks like Nvidia or Tesla, this returns frankly is mediocre LOL. What a time !
If there is a large correction in the US market, I may consider some investments over there.
I watched the Video from this local man in utube who make millions from Tesla. Strike the cord that we have to invest into Needs of the World. I think this makes perfect sense. The result could be long term. Of-course is in context.
For example I would think Nvidia provide high end solution to Bitcoin farming machines, high end graphics and Gaming. Covid helps to push it up another few levels. There's a need for it. There aren't strong competitor.
Growth Allocation will be opportunity based.
Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.