Saturday, January 30, 2016

Random thoughts: A kaypo thought of ST article of "Bond take Lioñ share of retiree's portfolio

The ST ran an simulated portfolio suitable for Retirees.

One very important info is missing. How much he has for FD. 

He has only 50K in emergency funds and CPF of 80K. I assume his FD is of similar size or twice as his emergency funds 50-100k.

It would means his vested amount is at least twice the size of his assets not including his property. 

I would rather have more at FD/ emergency fund and annuity or policy with Cash back features. 

I would also be more heavily tilted at bonds, at least 50% because I 吃老本。

Personally, I think REITs and ETFs are no less volatile than equity. 

There are different, but at different time, can provide different heartache. 

Also, the choice of companies at equities include cyclical aerospace SIA. 

Given his small amount in CPF and lack of other sources of income: e.g. Properties. 

I hardly think his portfolio is a "safe" one. 

Do we really still want 4-6% returns at retirement? Especially 6%?

Of course, if he FD is rice bucket then ok.

I would continue to work if I am in a similar situation. But will work at a slower pace, if health permits. 

Just a silly view 


  1. Hi SI,

    Interesting article. Have not read ST for a long while.

    Just my thought. If I'm 61years old, I would rather be watching birds than to be watching so many counters:p

    Moreover, the portfolio seems to lean a little bit more toward equities, which are more violatile than bonds.

    Given the recent market downturn, I wouldn't be sleeping well given the above portfolio.

    I believe a simple portfolio of STI ETF and VWRD/IWRD would do a similar job for the selection of equities.

    The selection of bonds look interesting though.

    Just another silly view to add onto yours😬


  2. As and when I can "retired", I think I will still look at counters, because I find them interesting.

    I most probably, will have an "trading account and amount"

    The rest will be bonds or blue chips bought at fire-sale price.

    I will set aside some money for me to “drawn down"

    I will continue to teach as a relief teacher or tutor.

    If not, maybe drive a taxi as an relief for 4-5 days a week to earn pocket/ coffee money.

    Go around asking for a drink ... LOL

    1. Ahhh. Good idea to have a trading account to keep us updated with market actions.

      Looks like we share the same aspiration! To be a taxi driver someday. Hahaha.

      I can already picture us hanging around coffee shops during our break time. 1st round on me:p

    2. LOL onz!

      We go around the hawker centers in Singapore and eat! West coast hawker nice, first Prata breakfast on me !!

    3. Sure. I'll hold you to your words then! Msg you when I get my taxi license then😉 Prata ah? That definitely makes for a great breakfast when we end our night shift man. Hahaha

      Anyway I really like this ST article. Not for its content though. But more towards how it allow us to discuss the different approach touted by the experts. Any chances you'll be sharing this kinda article more often?:D

      PS. Upper Thomson has great prata too. Lol.

    4. No prob. Peon,

      Although I won't be a driver soon, if i get an email from u, I will
      Meet west coast hawker ... My treat for Prata. Must tell
      Me earlier ... My school is just 5 min away.

      U thought of being uber?

    5. Hahah. Yup. Uber crossed my mind a couple of time but the maths don't work out since I have to rent car. And we never know how or when our Cheng Hu plans to regularized it. After all, they do have stakes in the regular taxi coys and it would not be in their interest to see their market shares get eaten up right?

      Or maybe I'm just thinking too much. lol

      Anyhow, that's all a couple of years down the road. My missus will kill me if I reveal this to her now😅

      West coast ah? Guess what? It's near my workplace too. Hahah. Jio you the next time I'm heading there for lunch :)

    6. Oh ok! On

      Lol. Not I dao huh. My afternoon free is usually thiurs and Fri

  3. Hi SI,

    Like you, I treat reit as a equity, albeit a high yielding equity. Maybe their idea is a permanent portfolio kind of thing, so no cash is needed, haha

    SO timely, must wait for bear market then announce such things. Didn't see them say all these portfolio when we're going up and up in the market, haha!

  4. Hi LP,

    Hmm how about ETF? Don't you consider ETF as equity? It is just a basket of equity managed under a fund.

    Also, there are normal ETF and synthetic ETF, with the other exposed to regulation risk beside counter-party risk. Most China based ETF are synthetic.

    Also, just an case in e.g. Of volality. STI has gone down about 25%, we all have counters that fared worse or better. Is STI less volatile ?? I dun think so.

    Effectively, he is 50% equity and 50% bonds. He is a defensive investor but hardly an retiree living off passive income. Ask CW lor LOL

  5. You're right. I would consider ETF as equities too. So he's 50% equity and 50% bonds. Good luck to his retirement plan should he need to cash out when the market goes bearish haha

  6. LP,

    Actually come to think deeper, the Crux of matter is how prepared he is in terms of 2M.

    The money component of it is actually still "ok", but he should not be under illusion that it is a safe portfolio.

    It can goes down or up, but the cash flow should be relatively stable...

    If he need cash call, he still has his emergency fund and unknown FD...

    But his CPF won't contribute much and if he gets 5% return from 400k that would be 20 K per head. Actually enough for a low expense person ( which I think he is)

    So go one round, think I am kaypo ... Lol

  7. Sillyinvestor,

    Interesting we see what we want to see ;)

    For me, this Straits Times article is another anecdotal evidence of what most Singaporean retail "investors" have experience:

    Most of us made more money in property than in others asset classes.

    Those who say HDB flat is not an "investment" are usually below 30 years of age. Understandable. More theory; less experience. What's wrong with sell high and buy higher when we upgrade?

    Without the "growth" of his HDB from $130K to $480K to "subsidise" his $900K landed terrace house, how many can afford a landed property without financial support from daddy and mommy?

    The only "problem" is he is now asset rich and CPF poor... Now that's a wonderful first world problem to have :)

    Its even more fun to listen to those who don't count the place we are living in as part of our networth. How about 99 leasehold? Cannot count?

    Well, I don't think the gentlemen's children will be too quick to write off $1.7 million based on an opinion ;)

    I'll probably make sure my name is on the will!

    Unit trust? It's never the tool; its the user. More a case of being "sold to" by tight skirts with stilettoes I suspect.

    DIY direct stock picking? He shares a common problem many who have started their stock "investing" journeys in the recent years:

    "Last time, I buy and don't sell, which was a mistake," says Mr Wang."

  8. Hi SMOL,

    Guess u caught me there. I didn't read the article repetitively.

    Agreed with your points.

    Live ... Make choices and live ... No fear no regrets.

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