Cory Diary: Year 2021 Portfolio Strategy

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 In-addition to that, it can also be a good holding place for extra cash in OA to be withdrawn as needed after 55.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.

Investment Accounts

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.

US Investment

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.

Chicken Genius

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.

Cory

2020-0116

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.

Cory Diary : Re-Balance Bonds ?

With the market rout and subsequent mini-rebound, Cory is tempted to sell his bonds for stocks. This is an action of re-balancing one portfolio to take advantage of subsequent rise. Does this makes sense ?

Fact is Bond interests are in few percentage points only. If we do trading on them, we are going to waste away the marginal returns. When we put into equity,  how confident are we to beat the cost and the dynamic of the markets. Will this further accelerate our losses if the market suddenly turn negative ?

Let's go back to basic on Cory bond investments.  To provide a damping effect so that he can sleep well. In addition to provide baseline returns. In yesterday onslaught,  portfolios turns 5% negative which compared far better than STI 13% negative range.

Ofcourse Reits come to the rescue too which managed to retard the deceleration better than many other stocks. 

So if Cory is to be greedy, he needs to be in better footing which Safe Bonds can provide. Warchest and saving should be better options to expand the investment to tap on rising market. When this happen, Portfolio bonds percentage will naturally go down.

The next question is, are we in rising Market?

This is Billions dollar question. Cory do not have good answer. Probably should Jeep slowly across the period of weeks and months.  Make sense ? One thing for sure, is a good thing to happen so that he can increase his dividends with lower cost !

Cory

2020-0310