Asked by Anonymous
Not really a great idea to be too aggressive in your investment approach especially when you are saving up for your big ticket items. Unless you are confident in your investment strategy. You won't want to risk your hard earned savings and delay your life milestones.
In your case, you may wish to look at something that has a guaranteed component, like ssb or perhaps high yielding savings accounts. Hope this helps.
I'm not too sure exactly about what types of bonds or stocks that Tai Zhi has mentioned, but if you are talking about SG bonds and stocks, then I could see what he means by it being too conservative. Currently, if we take a look at SG 10 year treasury bonds, the yield currently stands at 2.272% - compared to that of the US 10 year which is at 2.759%. Stocks in Singapore, if just mentioning about the blue chips in the STI index, don't really have much price volatility, so most of your gains will come from dividend payouts. Singapore's government bonds do have rather low yields compared to other countries, so you won't be getting alot of eye raising returns there.
However, if you are looking at 10 year bonds from emerging economies like Indonesia And India, they are about 7% yield. Of course, this comes with exchange rate risks, but it can also prove to be an attractive investment avenue as well.
Basically, what I'm trying to say is that he probably is giving a very general idea that says "hey, you're still you're still young, you can use this time to really make the compounding effect of returns to roll that money for you" and I agree with that! The 80% bonds and 20% stocks thing is a general indicator that perhaps you are leaning too conservatively towards capital preservation, when your investment goal at your age (since you are planning for wedding and house) should be greater returns, so more capital appreciation.
So to answer your question - if you have a majority of investment in low return,investment grade treasury bonds and stable blue chip stocks, which will not allow you to accumulate enough capital to spend on your house and wedding by the time these expenses come, then yes, you should perhaps be seeking higher returns. But if your portfolio currently can attain that goal - then is there truly a need to go above that level if it makes you uncomfortable? Maybe not. The 80-20 is a rule of thumb, you can still get great returns with an 80 bond 20 stock setup if you diversify into bonds and stocks of higher risk.
Personally dun think one should take high risk approach for short term goal like buying house & wedding.
What if market crash? You have another 5years to wait for market to recover then get married & buy house?