Cory Diary : An Insight into DBS CIO Hou Wey Fook

I chanced upon an article about DBS Chief Investment Officer Hou Wey Fook. I have noticed him since his appearance in The Woke Salaryman interview. As an engineer who has excelled in finance, his educational background likely provided a solid foundation. I admire his advice and thinking, so I wanted to do a quick comparison for reference.

Hou Wey Fook's Investment Strategy

1. The Barbell Strategy

   • Income Generators: Assets that generate consistent income, such as Singapore T-bills, government bonds, Singapore REITs (Real Estate Investment Trusts), and Singapore bank stocks for their dividends.
   • Growth Equities: Investments in companies that are innovators, disruptors, enablers, and adapters. These are best-in-class global companies with wide economic moats – competitive advantages that enable them to maintain profit margins and market share in the long term.

2. Measured Exposure in Gold ETFs

3. Additional Retirement Income from CPF SA income for retirement.

4. Well-Diversified Portfolio: Prefers bonds ETFs rather than single bonds.

5. Income and Growth Allocation: 60% of his portfolio is in assets that generate regular income streams, while the remaining is primarily in growth stocks. It is likely that, closer to retirement, the 60% weightage of income-oriented investments will rise further.

6. Universal Life Policy: Acts as a mortgage protector, ensuring that in unforeseen circumstances, his wife and children can continue living in the house without the burden of servicing the housing loan.

7. Drafted Wills: This saves his children from unnecessary emotional stress.

8. Real Estate and Lifestyle: He bought a landed home 20 years ago and owns a Tesla.

My Portfolio and Comparison

It looks like we have a similar strategy regarding the Barbell approach. Recently, I added Russell ETFs and iBIT. These are small positions, but I hope to grow the Russell ETF smoothly, in addition to the similar growth stocks we have. iBIT is an insurance product that seems to match his measured exposure in Gold ETFs.

He is 61, which is seven years older than I am. However, my growth assets are significantly lower at only 11%. I think my allocation is too conservative on the income side and may not be less risky considering the amount of REITs in the portfolio. This is something I need to address.

Regarding insurance and wills for the family, this is something I need to plan for the mid to long term. I don't think I can do much about owning a landed home as he does.

His top investing tips

Time in the market beats timing the market. Frequent traders often fall prey to anchoring bias, a cognitive bias where investors place excessive emphasis on an initial value, and fail to adjust it adequately as they acquire new information about the company or market conditions.  

Conduct thorough due diligence and invest in securities with strong long-term potential. With comprehensive research, investors are less likely to panic over short-term market volatility and make impulsive decisions that could harm their portfolio.

Start investing early, and limit what you borrow. To borrow the words of physicist Albert Einstein, compound interest is the eighth wonder of the world.

Cory Diary

2024-0728

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Disclaimer: The articles presented in this blog reflect personal opinions and are intended for informational and sharing purposes only. Not responsible of errors. Readers are advised to seek professional guidance when making financial decisions and should take full responsibility for their choices.