I'm sure many of you would have heard of having a core portfolio whereby you utilise that portfolio for your investments. And probably a satellite portfolio for alpha generation and the like. Having various portfolios help both manage risks and also set priorities.
How I have structured my assets is a little different yet similar all-in-one. I have 3 main asset portfolios: 1. Retirement, 2. Housing and 3. Cash
1. Retirement Portfolio
- This is my bare minimum portfolio and is something that will enable me to lead a fuss-free lifestyle when I retire. You can call it the survival portfolio. I can afford to probably lose my pants off from most of my investments and yet lead a frugal yet viable retirement. This portfolio obviously consists of lower risk investments and it includes both the CPF OA (portion that has been kept aside and not used for housing) & SA, SRS contributions (which are all invested in a IG bond fund) and potential cash values of all my insurance policies.
- The current overall value of this portfolio stands at a healthy five figure amount and I project to have at least $300,000 in this 'pot' when I hit my target retirement age. Of course the fact that CPF monies can only be withdrawn at certain ages, etc have been taken into account.
- So basically this is a portfolio that can't be messed around and all investments per se have to be of quality and of lower risk. It is a survival portfolio and is used both as a hedge and for pure retirement purposes.
2. Housing
- This portion is self-explanatory. However, I will be upgrading my place at the end of the year but buying a property that doesn't stretch my mortgage obligations. I believe in spreading my eggs and I'm not as versed or excited in property as perhaps I should be. So this is purely having a roof over my head and I aim to clear all obligations way before I embark on my full time investing journey.
3. Cash
- This is where I allow myself all the fun and freedom to pursue my true passion and expertise; which is investing in companies. What gives me added assurance and flexibility to invest is due to the fact that both of the above portfolios have been well taken care of. I then am not bound by fears of inadequate retirement planning or not having a roof over my head.
- The above being said, my focus is still mainly on being invested in quality businesses and having growing dividends that are compounded over time. Just staying the course and being disciplined and mature. Thus, I remain fervent fans of Singtel, Jardine, Raffles, Comfortdelgro, Sembcorp, OCBC, companies which to me present excellent opportunities to participate in their ongoing growth and businesses.
- The finishing line is really clear and it is when I have both retirement and housing portfolios pretty secured and the cash portfolio is generating an income that meets my monthly expenditures. This would also mean to me, truly transitioning to being a full-time investor. However, what probably separates the successful and the rest is planning, the stomach to tolerate volatility, lots and lots of discipline and perhaps most important just enjoying the process. I have indeed been enjoying absolutely every minute of it and I obtain loads of joy and satisfaction when writing my blogs and discussing with fellow investors over time.
Hope the small snippets of sharing above has helped paint a picture of how you might want to construct your overall portfolio. Remember; if you fail to plan, you plan to fail. Have a great work week ahead! *and back to my books.
Signing Off
Transitioning Stock Investor
Like your choice of cash investments. 8)
ReplyDeleteThanks bro. Really really hard to not sell them at whatever cost and to stay the course for the long term but in life whatever great doesn't come easy. As long as we invest in great and stable companies, whatever the environment we stay invested and reap the dividend and growth benefits over time.
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