The Ultimate Growth Portfolio for the Post-Covid World

There are Pros and Cons to both Growth and Value style investing. In today's article, we will be looking at a Growth Portfolio which I believe will do well in the "New Normal."

I will be using a hypothetical amount of $100,000 to craft out the portfolios. Why 100k? Because it is a decent amount to actually craft out a portfolio of individual stocks. Any amount lesser should be invested into ETFs or a few positions (4-6 stocks) at most. This will be an investment portfolio I myself would own if I were to have $100,000 of capital right now and my goal in mind is to compound my capital over a period of 10 years (or more).

Also given my risk tolerance: (21 Years Old, Very Aggressive), I am not afraid of short term volatility and will be holding on to this portfolio for as long as possible. The portfolios will be equivalent to a Very Aggressive Portfolio due to 100% allocation towards equities.

If you can’t stomach th_is amount of risk and volatility, you can add in some counterweights such as bonds so that you won’t panic sell during market fluctuations._ (At the expense of returns.)

I will craft out 2 different Portfolio with different focus based on geographical location.

Growth Portfolio 1: Monster Gains Machine

This portfolio will have a heavy focus and tilt towards US Stocks. Given the massive growth potential of USA as well as China, this portfolio will focus on foreign stocks instead of SG stocks. All to be denominated in USD.

US Equities

1. Invesco QQQ ETF (Tech-Heavy ETF) -$20,000

2. Tencent Holdings ADR (Chinese Tech)-$8000

3. Alibaba Group Holdings ADR (Chinese E-Commerce)- $12,000

4. Taiwan Semiconductor ADR (Chinese Tech)-$8000

5. Tesla (E-Vehicle)- $5000

6. Biogen (Biotech) -$15,000

7. Phillip Morris International (Tobacco/Consumer Staples)-$7000

8. Mastercard (Cashless Payment/Fintech) -$10,000

9. Vanguard S&P 500 ETF (Core ETF)-$10,000

10. Syfe Equity100 (Managed Allocation) -$5000

Total: $100,000

As you can see here, even with a capital of $100,000, you can’t really buy much. That aside, so why did I choose this allocation?

Firstly, this is a 100% equities allocation because I am bullish on US equities for the next decade or so. The global economy is transforming and this process is being sped up by Covid-19. With the vaccine news drawing closer each day, I do not see a reason why stocks won’t continue going up. Even if the market were to crash another 30%-50% in the next coming months, I will be extremely happy to pick up some bargains. Therefore, there is nothing to be afraid of, as long as you know what you are doing.

Portfolio 1 Reasoning

By investing into QQQ, I gain exposure to the US tech sector which exposes me to famous FAANMG stocks. Chinese stocks such as Tencent, Alibaba and Taiwan Semiconductor have extremely solid balance sheets, high growth potential, strong economic moat and more undervalued compared to their American peers (think Amazon.)

Tesla is more of a speculative play thus only 5% of the total allocation is invested in this position. Biogen and Phillip Morris International are both screened by the Magic Formula Screener which helps to identify undervalued stocks with a higher than average earnings yield and return on capital. They too have a solid balance sheet and high profit margins which prevents competitors from stealing their market shares.

Mastercard is a monster when it comes to return on equity (ROE) but that is because it is using gearing during its calculations. Regardless, cashless is the way to go in the future and currently Visa is the only true competitor when it comes to this industry.

The remaining allocation towards Vanguard S&P 500 ETF and Syfe Equity100 is to further diversify my overall holdings and to ensure that I capture the average returns of the market (through S&P 500) and a small professionally-managed portion of my portfolio dedicated to Syfe.

Do note: The individual stocks above are my own due diligence and not a BUY/SELL recommendation. Please do your own due diligence to research on the stocks mentioned above yourself before deciding to invest in it.

Portfolio 2: Diversified Growth

Portfolio 2 will focus more on diversification across different markets so as to protect the investor from concentration risk. However, diversification does not equal to no risk. There are still systemic risk involved when it comes to investing in the stock market. This portfolio’s aim is to capture gains through growth stocks and at the same time have_ some form of dividends to supplement the portfolio _when times are bad.

SG Equities (40%)

1. Micro Mechanics (Semiconductor) -$15,000

2. AEM Holdings (Semiconductor) -$7500

3. iFast Corp (Fintech) -$7500

4. Propnex (Real Estate)-$3000

5. DBS (Banking)-$7000

US Equities (60%)

1. Syfe Equity100 (Managed Allocation)-$20,000

2. Invesco QQQ ETF (Tech-Heavy ETF)-$10,000

3. Vanguard S&P 500 ETF (Core ETF) -$10,000

4. Visa (Cashless Payment/Fintech)-$8000

5. Tencent Holdings ADR (Chinese Tech) -$4000

6. Alibaba Group Holdings ADR (Chinese E-Commerce)-$8000

Total: $100,000

Portfolio 2 Reasoning

Portfolio 2 has an allocation towards SG stocks as well as US stocks. For Singapore’s allocation, we are looking at Growth Stocks such as AEM and iFast which has grown more than 100% over the past 12 months. As for Micro Mechanics, it is an undervalued stock yet to be owned by most institutional investors so it may be great if you do your due diligence and own a portion of this great growth stock, it also doubles as a dividend stock due to it’s current yield.

Propnex and DBS will form the dividend portion of the portfolio and ensure a constant stream of dividends and also capital gains in the long run. Propnex and DBS both has a solid balance sheet and will do well in the long run. In the short run however, DBS may be facing some uncertainty and a fall in Net Interest Margin (NIM) as a result of low interest rates.

For USA’s allocation, a huge portion will go towards Syfe Equity100 so as to diversify and maintain a low cost. (0.5%) QQQ ETF and Vanguard S&P 500 ETF are here to bolster Equity100 further as well as an overweight play on the broad US market, with a focus on Large Cap companies.

Visa doubles as both a growth and dividend stock but since there is a 30% dividend withholding tax involved, Visa is mostly a growth play and the reason why I chose Visa here is because it is the market leader when it comes to cashless payments. With the future trend heading towards a cashless society, Visa is sure to grow even more in the future.

For Chinese stocks allocation, Tencent and Alibaba presents an opportunity to own Tech stocks that are considered reasonably undervalued if you were to compare to US counterparts such as Amazon and Google. China’s growth has barely started and once their economy gets more sophisticated, so will its stock market. Thus, it will be great to be part of the Chinese growth story while still allocating to Singapore and USA.

Do note: The individual stocks above are my own due diligence and not a BUY/SELL recommendation. Please do your own due diligence to research on the stocks mentioned above yourself before deciding to invest in it.

Points To Note

For those fear mongers telling everyone that a crash is coming, please continue to stay by the sidelines and sit on cash. Not being able to control your emotions of fear and greed is the number 1 reason why people fail at investing. By telling yourself a crash is coming without any background research of what is actually going on and just relating to 2001’s Dot Com bubble is not only just dumb, but also the easiest way you are going to lose out on the rally and hate investing even more.

John Maynard Keynes: "The markets can stay irrational longer than you can stay solvent."

If you know how to read technicals, the current rally of the S&P 500 is is actually really healthy and it is not just tech sector that is pushing the index higher. A combination of healthcare, financials, tech and real estate are driving the S&P 500 higher and this is a good sign since investors are anticipating a vaccine cure in early 2021 and an eventual recovery of the global economy.

Even if there were to be a crash, what are the evidence suggesting so? No one can ever predict the stock market. It is best to stay invested at all times instead of trying to time the market. Most of the time, you are going to end up selling low and buying high. So for those still sitting on the sidelines, ask yourself, what’s stopping you from investing? Is it yourself? Your own fear and greed? If yes, are you going to do something about it?

Remember, the longer you drag, the longer you take to hit financial freedom. The equation is as simple as it gets: Time X Compound Interest = Returns.

So the longer you take to start due to whatever excuses you are telling yourself, you got to start now. If you are reading my post and still yet to start investing, you can do so at an extremely low capital (even $100!).

You can do so via Robo Advisors such as Syfe and Stashaway. You can read my article here and here to learn more. I will also be doing regular updates on my Syfe Equity100 portfolio every month and you can check out latest updates here.

TL;DR Syfe Promo Code

For people who are interested to invest into Syfe and wants to open an account, you can use the promo code below as a bonus.

Promo Code: SRPTH8LK3

$10 bonus for the first deposit of $500 (or more)!

$50 bonus for the first deposit of $10,000 (or more)!

$100 bonus for the first deposit to $20,000 (or more)!

Note: Bonus is applicable on the first deposit made only. The bonus will be automatically credited to your portfolio and invested along with your existing investments

I use StocksCafe to keep track of all my investments (include Robo) + research on stocks. You can also view my portfolio as well as many others so you can compare your own performance with other investors. If you are interested in signing up, you can use my referral link to sign up and access premium features for 1 extra month for new users. (3 months)

Disclaimer:

The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. In fact, the content is not directed to any investor or potential investor and may not be used to evaluate or make any investment.

Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stock broker or financial advisor.