Asked 2w ago
I just turned 28 year old.
Assuming I do not want to diy, how should I pick my syfe portfolio? Was initially leaning towards equity100 only but the reits+ 100% portfolio also sounded tempting.
I guess I am using my endowment as my safety net although I know it is quite high but I guess in a sense it allows me to take a higher risk with investment.
Aiming to grow my wealth but not a risk-taker so thought robo like syfe could help (on top of the endowment).
Appreciate all responses!
similary to your situation, I'm currently investing in both REITS and equity100 too! I started off at the age of 27 with an endowment plan as well.
For SYFE's portfolio, I did 50/50 as well on REITS and equity100. I started off with REITS because I'm attracted to the dividend income and it felt more "safe".
but I decided to diversity into the US market as well because I feel that at my current age I'm able to take the risk. :D
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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 asset/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.
It really depends on what you're looking at. You can look at a 50-50 allocation into the equity100 and reits portfolio. Do note that both of them are still equities related so depending on your risk profile, you can choose to opt for a diversified portfolio for equities instead of the equity100 portfolio.
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Many useful insights here!
Here's my take: When choosing financial products, always look beneath the surface and understand the details. I invest in Equity100 too, but I would not place it in the very well-diversified category given that some 44% of the portfolio is invested into QQQ. As the recent tech sell off has shown, such a portfolio may be more risky and volatile. But if you believe that tech will continue to dominate the markets, then it's probably a decent portfolio to invest in. Still, don't forget currency impact as the dollar will trend downwards given the QE measures and low interest rate environment amidst the COVID-19 pandemic.
I understand that Syfe has committed to rebalancing Equity100 twice a year. Given that it is a new product, we will have to wait and see what happens at the next rebalancing. (Some analysts have pointed out that it may be time to invest in cyclicals.)
I'm trying to follow a rather conservative 50/25/25 plan for my investments, where 50% goes to the Syfe global portfolio, 25% into syfe reits+ and the remaining 25% into eq100 along with other riskier investments (individual stocks/crypto).
This for me is pretty diversified and offers safety (e.g. last thur eq100 dipped 3.7% whereas my global managed one only dipped 0.2%). Although I'm planning to invest for the long term, I also want my capital to be relatively safe in case I need to withdraw some of it in the coming years (housing etc).
Since you already have the 'safe' part covered in the form of your endowment plan, you could split your remainder 50/50 into syfe reits+ and eq100. Reits+ do offer capital appreciation and since it's sg denominated, there's no currency impact. You also get dividends which is always nice to see. The other 25% in eq100 could offer greater capital appreciation and although it's pure equities, I would say it's already well diversified enough.
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You can split them up. If you have an endowment as an insurance for wealth and you find it adequate, you can stomach higher risk with your equity portfolio. Not to mention unlike endowments, equity portfolios are flexible and have no fixed term, it allows you flexibility to stop when circumstances change.
Statistically if your time horizon is over 20 years, I would not bother with REITs unless you are nearing retirement. Just stick to profitable companies via S&P500 Equity and you will do better with capital appreciation.
Since you have mentioned that you are not a risk taker, Stashaway might be a better vehicle, they diversify and manage risk better as compared to a 100% equity exposure.
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