Portfolio Allocation / Management

[Temperament]

The expenses you're making which has impeded you from reaching your target are in my opinion, worthwhile. I'll never trade money for an ideal home/family; you should feel proud of the effort you have put in.

It is normal to be deep in the red, from time to time. And given that you're invested sum is not huge, you should be glad that you're making mistakes on smaller sums now rather than in the future when your investment capital is likely to be much larger (and the fallout from mistakes more amplified). Don't be too bothered by the red, and don't stop looking for good buys.

i agree with you on all what you said except "It is normal to be deep in the red, from time to time."
i think one should try not to use leverage if possible. Because not only it's "abunai", you won't be able to accumulate anything until your debt is cleared. i hardly can remember i take a loan except company's FOI car loan, in my life.
And may i add, of course i could afford buying the car with my own money. Therefore i were actually making money from FOI sum of loan.

[karlmarx]

I think you've mistaken. I wasn't actually referring to loans. I'm not a big fan of loans myself.

[CityFarmer]

I would love if more people can advise on the fund allocation portion and average down especially in the case if you have low capital.

I re-started investment in year 2006 after i read books on value investing. I had 70k to invest. if you can recall that year 2006 to 2008(?) is the bull run and its really damn easy to earn money. However, i stuck with 90% cash (63k) cos i felt the stock prices are really too high. My fren all laugh at me on keeping so much cash. They say i can wait another 10 years and i wont be able to use that cash. Come 2008 or 2009, when stocks started to fall, i started to buy slowly all the way till STI hit 1.5K? Due to my limited funds, i focused on only 2 stocks. Yap, 63k of money all in just 2 stocks buying all the way down. I have to be damn confident of the 2 stocks i am going to wack. I survived the crisis and is seating on 110% (out of my initial total investible cash of 70k) of profit/paper gain.

Now my portfolio is 120k in stocks. Again mostly in 2 stocks and just 5% in another stock. 300k+ in cash (comes from salary savings and profit from stocks). I dont believe i have to wait another 10 years before i can use all my 300k+ cash into stocks because i am confident know they will fall. And i am confident i will earn at least 100% profit on my 300k+future salary savings when the next crisis comes.

People can laugh at me for losing 5% annually due to inflation for holding cash. But i know my time will come.

The strategy is good and proven. But to feel so confident to achieve two-baggers on 2 stocks alone is worrying.

Sincerely, i wish you all the best in the next crisis.

[Temperament]

I think you've mistaken. I wasn't actually referring to loans. I'm not a big fan of loans myself.

Sodesune!

[shanrui_91]

Hi all, need some input on this matter

If someone were to provide you with a $36000 4 years interest free loan, what will you do with it? You can choose to repay in full amount before the 4 years are up and you will not have to pay any interest. However, if you fail to repay in full, you will be charged 4.75% interest rate annually.

Will you put it in fixed deposit (ICICI 1.55%) , retail bond (F&N 2.48%) or dividend stock(SPH 5-6%) or in any other proportion?

[mrEngineer]

Hi all, need some input on this matter

If someone were to provide you with a $36000 4 years interest free loan, what will you do with it? You can choose to repay in full amount before the 4 years are up and you will not have to pay any interest. However, if you fail to repay in full, you will be charged 4.75% interest rate annually.

Will you put it in fixed deposit (ICICI 1.55%) , retail bond (F&N 2.48%) or dividend stock(SPH 5-6%) or in any other proportion?

Sounds like study loan to me. haha

[shanrui_91]

Sounds like study loan to me. haha

cannot escape your eye

Yes, that is 90% of my total school fee. it is so expensive that I have to do something about it.

[KopiKat]

Sounds like study loan to me. haha

cannot escape your eye

Yes, that is 90% of my total school fee. it is so expensive that I have to do something about it.

I didn't know study loans are given in one lump sum and to the student! I thought the banks pay it directly to the school on a term by term basis. (I'm assuming it's from the banks and not from your friends/family).

I'm the wrong person to ask since I'm a die-hard SPH fan. The answer is thus obvious, invest in SPH (or another Yield stock) and if you have the time, 'actively manage' it for extra returns.

As a possible hedge, apply for scholarship / bursary (if you qualify) for extra free cash or take on some part time job like giving tuition. If not, you'll need a friend / parent who's willing to tide you over in case your share price is underwater..

PS. Don't take my post too seriously!

[shanrui_91]

I didn't know study loans are given in one lump sum and to the student! I thought the banks pay it directly to the school on a term by term basis. (I'm assuming it's from the banks and not from your friends/family).

I'm the wrong person to ask since I'm a die-hard SPH fan. The answer is thus obvious, invest in SPH (or another Yield stock) and if you have the time, 'actively manage' it for extra returns.

As a possible hedge, apply for scholarship / bursary (if you qualify) for extra free cash or take on some part time job like giving tuition. If not, you'll need a friend / parent who's willing to tide you over in case your share price is underwater..

PS. Don't take my post too seriously!

it is not given in 1 lump sum, but I am inclined to view it as 1 lump sum to make it easier. The bank will put the money into bank account and I settle with the school. Basically, if I never take the loan, I will borrow from my parents to pay first. Now that i take up the loan, I can borrow from both parties and use the bank loan to pay for it.

while it's not exactly interest-free given that I am borrowing from my parents, I am still better off than if i did not take up the loan and use my parent's money to pay it directly.

I am definitely not going to actively manage it as this is money that I cannot afford to lose. I am slightly inclined to put a portion of it in SPH-alike stocks since the dividend yield is higher than the interest rate. Hence, if the bear market struck and SPH drops by 50%, my dividend yield will still exceed the bank interest rate of 4.75% and I am not worse off. However, as i said earlier it seemed to be going against the rule of thumb of not investing money that you cannot afford to lose in stock.

[Temperament]

Since you can also borrow from your parents, then your parents can be your guarantors.