Hi, wondering if anyone can share your experience with Stashaway's 36% risk index portfolio and whether it is good to start with for one who is debt-free, willing to take risk and has a stable income? - Seedly
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Shawn Teo

Asked on 02 Aug 2020

Hi, wondering if anyone can share your experience with Stashaway's 36% risk index portfolio and whether it is good to start with for one who is debt-free, willing to take risk and has a stable income?

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Augustine
Augustine
Top Contributor

Top Contributor (Aug)

Level 6. Master
Answered on 05 Aug 2020

Hey Shawn,

I've been invested in Stashaway since Oct 2018 with a 36% risk index portfolio. I've only deposited a time amount and the time weighted returns are closer to 20%.

The portfolio is spread across US equities (small cap, healthcare, consumer discretionary), international equities (Asia ex Japan, China tech, emerging markets), real estate ETF, gold and cash.

However, I would like to caution you that the portfolio has recovered to pre-covid levels and with close to 50% of your assets based in the US market (which I think is slightly overvalued at the moment based on US's GDP to market cap ratio) and the economy being rather volatile at the moment, your investment might have a risk of seeing red in the near term.

Nonetheless, if you're looking to keep this investment for a slightly longer time horizon of 2-5 years, then you should definitely go ahead with Stashaway.

Hope it helps! :)

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Jovan Lai
Jovan Lai
Level 5. Genius
Answered 1w ago

Hi Shawn,

With StashAway, it is important to view the "risk %" as how it changes your actual portfolio rather than a true indicator of risk. See how it changes your portfolio allocation across different markets and assets.

I would like to share a less talked about point on diversification. Over-diversification can expose you to more risk than it reduces.

It is important, as Warren Buffett mentioned, to stick within our circle of competence. Buying into something we do not understand for the sake of diversification can actually expose us to more risk than we think. It is the same as investing in something we have not done our research about and did it because others are doing so.

Diversification is unique, there are many takes on it, some say use the formula

110 - age = % of stocks

More conservative portfolios like Ray Dalio's all weather portfolio has a mix of bonds, commodities and equities.

Other portfolios like Bill Gates, Warren Buffett, Cathie Wood, Adam Khoo, Bill Ackman and many more, are fully or mostly into equities only. However, within their portfolio, it is diversified into different types of stocks.

Diversification is important! I’m definitely not against it! But it is very subjective and I’m just trying to point out that even though many seem to say spread it out amongst equities, gold, bonds, that is just one view on diversification. There are many great investors that argue otherwise.

Ultimately, stick with what you have affinity to, know your risk tolerance, financial goals and circle of competence. Becareful investing into something for the sake of diversification if you do not understand much about that market/industry/sector. It may cause us to make poor decisions in times of un-met expectations. i.e. sell when its low only to see it go up tremendously OR buy when its high and take ages to see any returns.​​​

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Good platform to DCA into. Lump sum investing, Vanguad's ETF is superior.

Great for trouble free, auto-balanced portfolio management. Set and forget type of strategy.

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